Whatever deal is cut, it is likely that Burnett will be poised to reap more financial rewards than in a typical arrangement. When Burnett—in partnership with Dreamworks SKG's television unit—presided over a fierce bidding war a few months ago, the scuttlebutt was that he had managed to reap a $2 million package from the Peacock. At the time, according to execs close to the situation, Burnett's lucrative spoils comprised of the network license fee, a cut of the advertising revenue, as well as a separate integration fee from brands.
As one Madison Avenue holding company entertainment maven said, speaking under the condition of anonymity, "the Burnett thing of getting integration fees for 'The Contender' [really got the attention of] the production community. It set the stage for negotiations between studios and networks for the share of the [advertiser's] money."
"There are a lot more deals this year where they're asking for separate fees in addition to the media buy," said Guy McCarter, senior VP-director of OMD Entertainment.
Another media buyer said: "They're separating more and more—I've seen four deals in the last few weeks from broadcast networks that have separate integration fees contingent upon buying media, at least in larger deals." According to this exec, one deal from a network revolved around a relationship with a scripted prime-time series that had multiple product integrations baked into episodes throughout the season. "There was a seven-figure integration fee that they acknowledged went to the producer and the studio. And on top of that was the media buy, which was negotiated at a standard CPM with no premium."
%%PULLQUOTE_LEFT%% One broadcast network executive said cutting in studios could open up a Pandora's Box. "What's stopping us now from doing it is our concern about everyone sticking their hands out, including the talent. We've had people try to cut side deals. Studio heads react by saying that I don't want producers who I'm deficiting, getting money from brands. On the flip side, the producers hear the studio is getting paid and will get angry when they feel they're the ones doing all the work."
This exec went on to say, however, that if more producers start deficit-spending themselves, then "we might think differently about paying integration fees to the studios and the individual producers." And with the increasingly prohibitive economics of television, this exec said that there are already projects at studios currently with this model.