CBS Shifts Mark Burnett's Flopped Show to Cable

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NEW YORK -- CBS confirmed today a decision to axe the upcoming Monday night episode of Mark Burnett Productions’ Rock Star: INXS, shifting the show to sibling cable music network, VH-1. While CBS is keeping the Tuesday and Wednesday night episodes, it
'Rock Star,' which has been plagued with low ratings, is being shifted to cable by CBS.

plans to end the show two weeks earlier than expected in September.

Even before those scheduling changes were announced, numerous Madison & Vine executives have been pondering the wisdom of the marketers who signed up to back the show, which is struggling to get anywhere close to the ratings success of Mr. Burnett’s other productions, such as Survivor and The Apprentice.

SLS gives up part of company

Those marketers include SLS International, an audio-equipment company that has given Mr. Burnett the right to buy between 3% and 5% of the company; MSN, which is said to have spent $5 million to be part of the show; and two of the show’s lead sponsors, Verizon Wireless and Honda.

Back in June, audio equipment company SLS International awarded Mr. Burnett the right to buy 2 million shares in the company, and potentially own a 3% to 5% stake of the entire operation. In return the company would land a three-year partnership with the producer’s company that would include product integration into Rock Star.

$5 million Web site

Separately, Microsoft portal MSN brokered a deal to pay $5 million for the right to set up a Web site for the reality show -- -- and partner with Mr. Burnett’s production company to sell online ads. Verizon Wireless and Honda are both lead sponsors on the site. The two companies are also integrated prominently into the show.

However, since the premiere, struggling ratings for the show, in which singers compete to serve as the lead singer of INXS, have prevented some from whistling a happy tune, and leading some to question the wisdom of the deals.

According to Nielsen Media Research, the half-hour episode that aired Aug. 1 attracted 5.5 million
'Rock Star,' which has been plagued with low ratings, is being shifted to cable by CBS.

viewers total, with the biggest demographic being people between 35 and 54 years old -- certainly not the youngsters that CBS, or even the show’s promotional partners, had hoped for. The show, which airs Monday, Tuesday and Wednesday, with weekend encores, is averaging 5 million viewers since its debut July 11, not good for a broadcast network.

Despite the ratings slump, advertisers officially remained optimistic.

At Honda, Tom Peyton, senior manager of national advertising of the Honda brand, said the only downside to the deal is "we'd like to see a little bigger ratings." He added that "we would sign up in a nanosecond for a second one" because Honda is very pleased with the reach for the 18-to-34 audience and the show's "tonality."

Verizon spokeswoman Brenda Boyd Raney said the company was "very happy" with the Mark Burnett relationship.

SLS International did not immediately return calls for comment, while a spokeswoman for MSN said the company was officially “thrilled” with its association with the show, despite the ratings.

'Paying him for something he needs'

However, one executive familiar with the dealmaking for the show, suggested that MSN should have been much more aggressive not only about dialing down the fees, but also in promoting its involvement in the show, if it was going to make its investment worthwhile. “He [Mark Burnett] reserved the online rights and then teamed up with MSN. They are paying him for something he needs.”

Similarly, Tom Meyer, president at entertainment marketing agency Davie-Brown Entertainment, said SLS has barely had a presence in the show.

Mr. Meyer, who has helped five brands negotiate integration deals on The Apprentice, said marketers still tend to get all glossy-eyed in the presence of Mr. Burnett. “There is no doubt that Mark Burnett appearing at a meeting can sway the outcome. He’s a good pitch man for his product.”

But Mr. Meyer cautions clients not to get starstruck when brokering integration deals and warns them to negotiate hard to protect themselves from ratings failures that can occur.

'Everybody has to protect themselves'

“Anybody that’s doing a deal with Mark Burnett has to have some savvy people at the client or agency side, that can cut a pay for performance deal, or offer some kind of make-good, or is paying less per ratings point,” Mr. Meyer said. “Everybody has to protect themselves.”

Another senior TV executive in the branded entertainment world agrees and says the pressure is on Mark Burnett Productions to prove its worth when ratings don’t meet expectations. “They are realizing they have to come up with value. If they don’t deliver, then they [Mark Burnett Productions] need to give value in the next show. They don’t want to upset clients. They have to figure out a way to satisfy them.”

Things could have been worse.

Initial proposed fee: $11 million

Despite the millions that brands like MSN, Verizon and Honda paid to be part of Rock Star, Mr. Burnett’s company first approached advertisers with an integration fee of $11 million to appear in the show, marketers said. Sticker shock forced Mr. Burnett’s company to significantly reduce the asking price as talks took place.

Rock Star: INXS becomes the second high-profile show, after NBC’s boxing series The Contender, to stumble out of the Mark Burnett Productions stable and fail to live up to the company’s roster of hits, like Survivor and The Apprentice.

However, The Contender looks destined to gain new life after NBC, where it originally aired, and perhaps offer its initial round of integrated sponsors a second chance. Boxing company Everlast gave Mr. Burnett stock in the company to be featured in the first round, while Toyota reportedly spent millions on its association with the show. Walt Disney Co.’s cable network ESPN has said it will soon have a deal to pick up a new season of the show, though for now some marketers are giving it a pass until the deal is at least signed.

Pressure of competition

But one major issue for marketers is valuing not only the price of entry, but the cost of sitting out the deal and passing it up to a competitor.

Mr. Meyer said: “The one thing I would point out about these guys is that there’s no such thing as a long-term partnership. They’ll follow the money like a network would do, they don’t give exclusivity. If you are a brand you are going to react to the fact your competitor might be talking to them.”

Mark Burnett Productions, for instance, has deals in place with MSN for Rock Star while working with MSN rival Yahoo on sites for The Apprentice and The Contender. It has also held conversations with Home Depot and big-box rival Lowe’s about their involvement in the show. McDonald’s held talks about an integration in last season’s The Apprentice, though Burger King ultimately paid the fees to be featured in season three.

Yet despite the poor performance of Rock Star and The Contender and even the sagging ratings of The Apprentice, advertisers are likely to continue to be interested in integrating into Mr. Burnett’s shows in the future.

'Apprentice' defended

Jak Severson, CEO of Madison Road Entertainment, which was recently involved in a major legal tussle with Mark Burnett Productions, now resolved, said that despite season-to-season ratings declines for The Apprentice, the show is “still the greatest marketing vehicle next to the Super Bowl.”

“Mark is a superstar. ... You can’t always paint the Mona Lisa,” Mr. Severson said.

Still others think that Mr. Burnett has learned much at the knee of the ultimate wrangler, Donald Trump, who fronts The Apprentice and co-owns The Apprentice: Martha Stewart, set to debut in September.

One Hollywood executive said Mr. Burnett is revisiting an idea that would capitalize on renewed interest in space travel. A new show concept would center around the winner of a reality show winning a voyage into space.

The cost of partnering on that particular project? Priceless.

~ ~ ~

Alice Z. Cuneo and Jean Halliday contributed to this report.
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