Several cliff-hangers have unfolded at Turner Broadcasting System Inc. during the past few months. Primetime ratings for Turner Network Television and TBS Superstation took a pounding in the first quarter. Part of that can be blamed on double-digit drops in viewership for both World Championship Wrestling and professional basketball-a sport Turner paid a bundle for. TNT was once No. 1 in primetime, ahead of USA Network: Now it has dropped to No. 5, behind Lifetime Television. So Brad Siegel, president of general-entertainment networks at TBS Inc., has lots of fires to put out. As the result of a promotion last fall, Siegel now oversees TNT, TBS, Turner South and Turner Classic Movies. During a recent interview in New York with Multichannel News programming editor Linda Moss and senior editor Steve Donohue, Siegel discussed the steps he is taking to revive WCW and beat USA's World Wrestling Federation, with his game plan including bringing back former WCW head Eric Bischoff to handle the creative side of the business. Siegel also gives his views on the WWF teaming up with NBC on XFL football, among other topics. An edited transcript follows:
MCN: To what extent have you started to flesh out the impact that Time Warner Inc.'s merger with America Online Inc. will have on your own division and what the potential applications are for your networks?
BS: It's a little too early to tell. We are very excited about it because there's no duplication in anything we do. This is a merger with a business that is so different from the day-to-day business that we are in.
On the network side, what we are so excited about, and on the WCW side, is the online platform, the new dimension that AOL offers us-their strong distribution, their loyal following.
MCN: What's the potential on the WCW end?
BS: WCW is the second-most-visited Web site of all of the Turner/Time Warner sites, second only to CNN [Cable News Network]. And it's always been that way. Wrestling fans are fairly ravenous, and they crave information.
The wrestling audience is an audience that is perfect for the online business and the online world because it is such a community of people. They love to interact, they love to chat and they love to get information that is literally of the minute.
MCN: The first quarter was tough in terms of ratings for a lot of cable networks, yours included. CBS Corp. executive vice president of research and planning David Poltrack has said this has been coming. You've got a whole slew of new cable networks that are cannibalizing the veterans like TNT and USA. Is that what has happened, or were there unusual circumstances?
BS: Our ratings were not strong in the first quarter. There is no question about that. But you've got to go and look at it versus the fourth quarter of'99, and then also look at it versus the first quarter of'99. Compare the same quarters, and then compare the trend that was happening versus the fourth quarter.
Take TBS. TBS had its strongest fourth quarter in history. It had experienced something like 25 percent growth in 1999 over 1998. And everything was hitting on all cylinders. Network-premiere movies were premiering. The originals, like First Daughter, did extremely well.
And then also, the new fringe lineup came into play, with Roseanne, with [The] Cosby [Show], with Fresh Prince of Bel Air. That lineup just fueled primetime. So TBS had a whole new lineup in the afternoon, and then a lot of new, very highly rated programming coming into the schedule for the fourth quarter. So the network fared very well from there.
Now there hasn't been that much of a decline since then. There's been a little bit. But it's just because the first quarter has not had the influx of all of that new programming.
Quite frankly, what we try to do is to move our biggest programming to where most dollars are. So the advertiser dollars are in the second quarter and the fourth quarter, and the programmers at TBS really try to take advantage of that.
We are not programming these networks strictly for ratings all of the time. You have to balance when you can be the most profitable with your programming.
MCN: And what about TNT?
BS: TNT had a rough fourth quarter and a rough first quarter. There have been four factors that have been holding TNT back, and this is going to reverse.
One is that three nights of primetime programming are down and softer in the ratings than they have ever been.
WCW on Monday night-which is almost all of primetime on Monday-is down almost 30 percent. Still, Monday night is one of the top-10-rated basic-cable shows every week. But from what it was to where it is now, it's about a 30 percent decline.
TNT has two nights of NBA [National Basketball Association], Tuesday and Friday. The NBA is down right now almost 30 percent-27 percent.
When you have three nights of your primetime that are down that much, it's going to drag down the rest of your schedule because if those nights are down, you have fewer eyeballs seeing your promotion for your other nights. So it all affects everything.
And then ER has been soft as a prime leader at 7 p.m. So those three things combined, just numerically, are bringing the numbers down.
But there is a more important factor with TNT. TNT is in a transition period. With both [TBS and TNT], we are branding these networks and positioning these networks for different audiences.
MCN: Is there going to be a big push to rebrand TNT the way there was with TBS?
BS: There will be. The consumer side is still mired in 10 years of being a classic-movie network. It takes a long time to shift out of something that you were launched with historically. And that's what TNT is going through right now.
TNT does not want to be known as a Western network or a network that appeals with more rural, heartland type of programming. We are trying to make TNT much more contemporary, much more appealing to baby boomer couples.
MCN: If TBS is the regular-guy'network, then what is TNT?
BS: It's an upscale couple. TNT's target audience profile is a couple, about 37 years old, living in a suburb of a major city, a top-20-market city, $75,000-plus household income, kids, husband and wife could be working. College-educated. They probably watch about 15 percent to 20 percent less television than the average American, but what they are looking for are quality programs on television. And that's where TNT is positioning itself.
MCN: With that positioning, how are you going to get the network back to No. 1 in primetime, and how big of a priority is that?
BS: Well, it's a priority to strive to be No. 1 again. It's not as important on a household basis. It's important with our key demos: with adults 25 to 54 and adults 18 to 49. We are really not in the household business. That is not what we sell. But as we go through this transition and we have identified this new target audience, we know it's more elusive.
MCN: Could we expect to see that kind of rebranding or trying to hone that brand later this year? What's the timetable on TNT?
BS: TNT you'll see in the latter part of the year. There are parts of the TNT schedule that are already playing to that. Saturday-night new classics is a perfect example. All of our research shows that these new classic movies are the movies that our target audience grew up with, loved and will watch over and over, so we're presenting them every Saturday night as a franchise. So that's the first initiative we've had, and we've seen huge growth there.
In the latter part of the year, we'll be premiering something that will be a huge initiative, which will be premiere Sunday nights. Every Sunday night will be a premiere program-the first time it will be on commercial television.
MCN: Are you talking about theatricals, originals, or both?
BS: It'll be a mixture. It'll be TNT Originals. It could be some sports programs, like a figure-skating event. It could be the network-premiere movies, original specials-like the Joni Mitchell show-original documentaries.
I'm very optimistic about the [NBA] playoff ratings. The teams that are out there and the new players are going to start to get seen much more in the playoffs. There are going to be close games. I'm confident that the ratings for the playoffs are going to be better than they were last year.
The way we have things planned for TNT, all of the programming, we're going to use the playoffs to promote TNT's original series, Bull, which we'll be launching in the summer, and some of the newer, bigger movies that we've got, like Nuremberg, Running Mates with Tom Selleck.
MCN: You're going to invest $890 million on your NBA contract. The first year suffered from the lockout. First-quarter ratings on TNT are down 40 percent, and down 30 percent on TBS. Are you concerned that the contract is going to pay off for Turner?
BS: We're confident that it'll pay off. I am concerned at the softness of the ratings right now. There is a lot of basketball programming out there. There is a lot of sports programming on television right now.
I still believe that the NBA contract we have is the premiere national sports franchise. It's the only national sports deal or package that has extensive playoff coverage that is exclusive to cable anywhere.
MCN: But it seems like there is less interest in national games without people like Michael Jordan. The regional networks are doing OK. But if it continues to be difficult to draw people to national games and ratings continue to struggle, would you renew your NBA contract?
BS: We have to work with the league to try to figure out a smarter contract and a smarter way to schedule the games so that the national games are not competing with the regional games because you're right, the regional games are doing OK. People are generally fans of their hometown teams.
And with as much sports programming as there is on television, it is hard to do big numbers when you are competing against that much regional coverage.
But again, I come back to the regular season. The ratings may be soft in the regular season, but the playoffs-it's like part two of the season.
You have as many games and more games. You have as many games essentially in the playoffs almost as the regular season. And those ratings are huge. They're exclusive to cable, and you're also not competing against regional coverage.
MCN: In hindsight, do you regret not topping ESPN's bid for the National Football League contract? Their ratings were up slightly, but it seems like they might do OK with their contract.
BS: I don't know how economically you could really make it pay unless you ram a rate through to the operators, and then they have to ram it through to the consumer. And the price got to the point where we just had to say, We're not willing to do that to the operator, and we're not willing to do that to the consumer.'
MCN: We have heard that Harvey Schiller and YankeeNets are talking to a lot of media companies, including TBS Inc., about launching a regional network for the New York market. Are you talking with Harvey about what you can do together? And how much of a priority is it for you guys to launch additional regional networks modeled after Turner South?
BS: Well, I'm not going to comment on any discussions that are happening right now with Harvey and the Yankees. And it's not necessary for us to launch additional regional networks.
Turner South is a unique business. It's the first regional general-entertainment network. It's sort of a model like TNT and TBS, but it's a regional one.
It already has a strong brand identity. It already has captured the psyche of people living in that region. There is demand for the service. People are loving what they see already. As a network, for the first year out of the box, it came out very strong with a lot of popular demand. We have to see how big that business is.
MCN: Is that just a unique situation because of your position in the South and the sports rights you have in that region? Or was there an opportunity to do those in other markets?
BS: There is potentially an opportunity to do it in other markets. The South is the unique one for us, being an Atlanta-based company and understanding the people who live in our region and understanding what they are like and their musical tastes, their culinary tastes. And when you look at the original programming on Turner South, that is so much of what has really captured people's imaginations.
MCN: On the current WCW programming, you've launched a lot of changes in the past year. Despite those changes, ratings and pay-per-view buy-rates are at an all-time low.
BS: This is a cyclical business. For 86 straight weeks, WCW Monday Nitro led in the ratings by a huge margin. WCW Monday Nitro came out of nowhere from what everyone perceived as a little regional promotion to totally reinvigorating the business and the industry.
And at that point, the WWF was in the same position that WCW is in now. And for 86 straight weeks, TNT and Monday Nitro were posting 5.0 and 6.0 ratings. WCW got out over its skis a little too far. They added a second night of programming. So we're doing four hours of live television per week, and then a fifth hour on TBS.
Eric [Bischoff, the former WCW executive vice president] was trying to do a lot in a lot of different areas, on the movie side and on the television series. All of those were the right ideas for the business, but the infrastructure of the business was not strong enough to support that.
And Eric was trying to do a lot of it himself. And the business was not able to absorb all of that activity. And what happened was the eye was taken off of the core show, off Monday Nitro.
And there wasn't-again, I keep going back to the infrastructure-there weren't the people in place, there weren't the systems in place to handle all of that activity, and it started to disintegrate. It started to come apart at the seams. And so, that's where we left it. That is sort of what I inherited.
The good thing is that what I've also inherited is probably the best talent roster in the business, and something that only has one way to go, which is up [group laughs]. So we're going to fix it in a few ways.
I separated the business side and the creative side. Everyone said, You can't do that.'I said, I'm going to do it, and it's going to work.'
I brought back Eric Bischoff, who was brilliant creatively. If he focused on that side of the business, we would have been in great shape. So I brought Eric Bischoff to do what Eric Bischoff does best.
MCN: Do you have a contract with him now? I know he announced right before he came back that he had worked out a deal.
BS: We have worked out a deal. And yes, we have a contract. And I teamed Eric up with [writer] Vince Russo, whom we had put on the sidelines for a while.
There was a controversy within WCW about which way the business should go. There was an old school that felt that it needed to be about wrestling. And then there was a new school that the story line and the things other than what's happening in a wrestling match really are the things the fans want.
It's a combination of both, and Eric clearly understands that. The combination of both of them-Eric Bischoff and Vince Russo-is what could be one of the most formidable combinations of creative juice in the business.
MCN: Does this mean you have to go to the lengths that the WWF goes to in terms of content?
BS: No, absolutely not.
MCN: Graphic sexual references, the whole thing?
BS: No, I don't think you need to go there at all.
MCN: Isn't there a bigger challenge for you, though, where a lot of these older wrestlers whom you brought in under large contracts-the big names like Hulk Hogan, Terry Funk-are getting older, and your younger wrestlers are walking across the street to the WWF? What's your plan to turn those younger wrestlers into stars and let them beat Hogan and let them beat Ric Flair, which is what a lot of the fans want to see?
BS: If I told you, I'd be giving away the story.
MCN: Are you considering shutting down WCW or selling it?
BS: No.
MCN: You're not under any pressure with the AOL-Time Warner merger to move.
BS: I'm under pressure to turn it around. But everybody-[Time Warner Inc. vice chairman] Ted [Turner], [Time Warner chairman] Jerry [Levin], [TBS Inc. president] Steve Heyer and [TBS Inc. chairman] Terry McGuirk-has faith that we will do that. It's not going to happen overnight, and it is a big turnaround, but I believe it can be done.
MCN: If USA loses the WWF, is that a cause for huge cheer for you?
BS: No. It's going to help some other network. Right now-and again, it's cyclical-I don't think the WWF is going to continue to sustain at the rate. They're going to start to slide. We're going to start to grow. That's what we have seen in this business, and we are starting to see signs of that already.
It will, in the short term, help another network. It's just like the NFL can help to drive a network. So the way things are looking now, from everything we hear, if they end up with Viacom [Inc.], they keep their place on UPN [United Paramount Network], and then they go to TNN [The Nashville Network]. So you give TNN an opportunity to potentially really change who they are and their look and their feel.
MCN: Would you consider moving Nitro to another night so you don't compete head-to-head with the WWF?
BS: No. First of all, it's called Monday Nitro. And we wanted to be on Monday night. It's our place. The scheduling-don't read too much into the scheduling of it and trying to avoiding head-to-head competition. Three hours of live program was too much for our organization to produce and our wrestlers to work.
So it was absurd to keep thinking that we can do three hours of live television every week and then come back and do two hours two nights later. It was too much.
Eric had been crying to get it back to two hours. Vince was like, "This has got to be two hours," and I made the decision to bite the bullet.
Again, that's another reason why when you say ratings are down in primetime, we lost one hour of highly rated programming in that third hour. And then when you leave yourself exposed, when you've got a wrestling audience there, you are basically giving yourself no lead-in. They're going to run over to watch the WWF. But it was a decision I needed to make.
MCN: Turner and NBC: You studied launching a football league for two years. You scrapped the plan. You attributed not going forward to your new National Association for Stock Car Auto Racing contract. What was your reaction when NBC cut a deal to launch the XFL with the WWF?
BS: Well, we were surprised. We were surprised that NBC would choose to have [WWF parent] Titan Sports Inc. [now WWF Entertainment Inc.] as a partner.
MCN: You had the opportunity to launch with NBC, but you decided not to. When you say you're disappointed that they partnered with the WWF, does that mean you're disappointed that they didn't partner with you?
BS: No. My comment was surprise. I was surprised. I'm not disappointed that they partnered with the WWF. I question their choice of a partner, not that we're not the partner. We both mutually decided that the business and business plan we had was not a good one, and we didn't want to go forward with it at the time.
I don't know what the WWF's business plan is. I can't comment on whether it's going to be successful or not because I don't know what their plan is.
MCN: Surprised in what sense? About NBC getting in bed with the WWF?
BS: The WWF stands for certain things, and it has an image and a reputation that the industry chooses to question. And you get a squeaky clean company like GE [NBC parent General Electric Co.], it's just.it's interesting bedfellows.
MCN: What else can you do with NBC as a partner in sports?
BS: Well, we are doing [the All England Lawn Tennis & Croquet Club] Wimbledon [Championships] with NBC. There are great opportunities for a broadcast network and a basic-cable network to partner on these packages. NASCAR is the first example. Wimbledon is the second example, where we split our coverage of these major events.
MCN: On NASCAR, ratings for Winston Cup races this year have been flat or declining. Is this cause for concern, considering that Turner, NBC and Fox Broadcasting Co. just signed a $2.8 billion rights deal?
BS: Again, ratings go up and down. Baseball ratings-everyone said baseball was dead three years ago. And everyone said the NFL was dying, and ratings go up.
NASCAR, in terms of fan popularity, is as strong as it's ever been. And with the networks that now are embracing it, we're going to see upward movement again with NASCAR.
MCN: Will you be forced to pass some of the new rights fees, some of the costs of that, on to your cable affiliates?
BS: Inevitably, the cable operator pays us a license fee. We try to make that price-value relationship as in line as possible for the operator.
We've been told by, whether it's advertisers or cable operators, that there's a tremendous amount of value-and value meaning the value of our brand, the value of the kind of programming that we are offering packed into TBS and TNT.
Even the off-network programming-and I know cable operators sort of discount that, but it's still among the highest-rated programming in their package, and we look at what TBS has coming up. You've got Cosby, Fresh Prince. You're going to have Friends. You're going to have Seinfeld. You're going to have [The] Drew Carey [Show]. Not in primetime-just late-afternoon sitcom blocks. That's the stuff their subscribers are watching.
MCN: Should they expect an increase, though?
BS: Well, I didn't say they should expect an increase. But that programming needs to get paid for, and the pricing of TBS is probably below what it should be at.
We try to not be in the business of just going out and buying a ton of stuff, and then ramming that through to cable operators. We have worked very hard to try to extract and build the value on the ad-sales market, the national ad-sales market, and to pull dollars out of broadcast and bring them to cable.
And quite frankly, Turner Broadcasting has done that on behalf of the whole industry. When you look back at the work that Steve Heyer has done with [Turner Broadcasting Sales Inc. executive vice president of research and marketing] Barry Fischer, and the Millennium Project, and the whole issue of parity with the broadcasters, that not only served the Turner networks, but it served the entire industry.
And that ultimately benefited all of cable and ultimately benefited cable operators, because it sucked a ton of dollars out of broadcast to basic cable.
Now we are trying to work with affiliates to show them how to pull those dollars from the local broadcast markets. And that's how cable operators will begin to really essentially totally offset their license fee for us with local ad revenue.
MCN: I know you like the idea of perhaps doing more regional entertainment services. What about other networks?
BS: We are always looking at new-network opportunities. We are in the network business-that is what we do. But we also have a number of networks existing right now that need distribution that are high-quality networks.
When you look at Turner Classic Movies, which is approaching 40 million subscribers, you look at Turner South, you look at CNN/SI-we have built networks that are some of the best program networks out in the marketplace, and they are not receiving the distribution they should.
When you look at any survey of consumers-whether it's ones we do, ones local operators do-TCM comes up No. 1, 2, or 3 every single time. It is a service that's written about. It gets more press in major publications, national and local, than any other network does.
MCN: I guess the question is how tough is distribution?
BS: Distribution is really tough. And the game is not about just having a high-quality service and selling it in well. There are many other factors that go into getting launched.
MCN: You're not a shoo-in to get distribution on Time Warner Cable systems?
BS: No, we are not.
MCN: Is that frustrating? Some people say, Oh, come on,'but Turner South is still not on Time Warner Cable systems.
BS: Well, it's extremely frustrating. But we understand their business and their needs.
MCN: So there is this arm's-length relationship?
BS: Yes, there is. The good news is that right now, we are in the process of working through those differences in trying to get a deal structured that will get Turner South distributed and TCM more distributed.
It does frustrate us very much when we see other services launched on Time Warner Cable, or by any other [MSO], that are not even in the same league-from a program quality and from a consumer-demand point of view-that services like TCM, Turner South and CNN/SI are.
But to our credit, we don't back down. When you look at the networks like Turner South and TCM, you see continued investment in the programming, continued marketing investment. We believe, and I hope, that it will pay off, and that ultimately, the product will prevail.
MCN: You guys don't have retransmission consent.
BS: No, we don't.
MCN: To get distribution?
BS: Right.
MCN: How frustrating is that situation?
BS: It's not frustrating because we don't have it, so there's nothing to be frustrated about.
MCN: But what about when you see SoapNet get launched and TCM not?
BS: That's just the reality we have to deal with. It's other networks that get launched that are not part of a retrans deal-those are the frustrating ones.
MCN: You're entering with Bull, on TNT, one of the most competitive arenas in programming, the hour-long drama. Why get into that arena, and what's it going to do in terms of how one hit can define a network?
BS: It is a tough world. For original series on cable, there are two schools of thought, and they are both right. One school of thought says the only way basic cable can have a hit series is [if it is] an absolute alternative to the broadcast networks. Professional wrestling is a perfect example.
There is another school of thought that says you don't have to have extreme alternative programming, but if you could create a series that is executed at the absolute highest level-where the writing, the characters, you have something that is critically acclaimed that audiences find and love-you can build a hit.
What you need to do, though, is try to find arenas that have not been tackled or overly tackled by the broadcast networks.
MCN: Not a law office or a hospital?
BS: Right, where you're not in a hospital, you're not in a law office, you're not in a courtroom.
MCN: You're not in a game show.
BS: You're not in those arenas that traditionally have been played in all of the time.
So look at what we have cooking. Bull is the first one, which is Wall Street-not an arena that's really been tackled yet. The second show we're doing a pilot on is Breaking News-ER in a newsroom. We haven't seen in drama. We've seen it in The Mary Tyler Moore Show, in a sitcom arena.
We've seen that with our original movies, if we execute extremely well and choose subjects that resonate with people, we can get very big ratings. And I believe that we can do that on the original-series side, as well. It is a risky game, but when you get a hit, it can be defining, and it has a tremendous amount of value.
