USA Hits Road, So TBS Goes Home

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In a wild and surprising twist, TBS Superstation jumped in
to acquire Home Improvement at a slight discount, after USA Network's deal for
the sitcom fell through at the last minute.

USA reportedly balked over Chicago superstation
WGN-TV's move to buy national rights to the show.

TBS sewed up the off-network, nonexclusive rights to Home
Improvement
, the ABC comedy series that stars Tim Allen, from Buena Vista Television
during the weekend of May 16 to 18.

TBS will be paying "significantly less" for Home
Improvement
than USA was supposed to ante up, according to TBS president Bill Burke,
who is gearing up for the start of negotiations next month for the second cycle of Seinfeld.
The battle over Home Improvement may be a bellwether of the kind of competitive
bidding that will most likely take place among cable networks for the hyped-and-hot Seinfeld.

There are widely varying explanations of what happened with
Home Improvement. The week before last, USA officials were telling the press, as
well as executives in the cable industry, that they had acquired Home Improvement
for an estimated $125 million, beating out other bidders, such as TBS and FX.

Burke wouldn't comment on how much TBS wound up paying
for Home Improvement, but it is reportedly between $300,000 and $325,000 per
episode, compared with the $375,000 that USA would have paid.

But Buena Vista and USA had apparently just exchanged final
papers on the rights acquisition, and they hadn't totally closed the deal. In fact
USA, which declined to comment last week, never put out a press release on the deal
because it wasn't totally done, sources said.

When lawyers were looking over the deal points and contract
clauses, they discovered that Buena Vista had also just sold the show to WGN. This meant
that Home Improvement would be seen by WGN's 42.7 million subscribers -- in
effect competing with USA's airing of the series -- and it became a stumbling block.

"It was not palatable to us," one USA source
said.

In contrast, Janice Marinelli, Buena Vista's executive
vice president of sales, maintained that WGN's deal for Home Improvement
didn't derail USA's purchase.

"Both USA and TBS had made us strong offers, and we
were very close with USA," Marinelli said. "But there were some outstanding
issues that couldn't be resolved with USA. So we started talking with TBS
again."

Marinelli insisted that USA and TBS knew all along that Home
Improvement
had already been sold to WGN.

"Obviously, a deal isn't a deal until all of the
'T's' are crossed and the 'I's' are dotted," said Bill
Carroll, vice president and director of programming for Katz Television Group. "With
the competitive nature of cable, it doesn't surprise me. TBS, in essence, didn't
take 'no' for an answer."

TBS resumed its talks with Buena Vista May 15, and it
announced its deal for the show May 18. Burke said WGN's acquisition of Home
Improvement
impacted on the price that TBS was willing to pay for the sitcom, but it
obviously didn't sour TBS on the deal.

"It influenced the value that we put on the
show," Burke said. "We have bought shows in this configuration before, like Saved
by the Bell
[which also airs on WGN]. So we factored that into our valuation of the
show, but it didn't scare us off."

TBS will get Home Improvement in 2002 if one more
season of the show is done for ABC, and in the spring of 2003 if ABC gets two more seasons
of the program, according to Burke.

Home Improvement, along with shows such as Friends
and The Drew Carey Show, fits very nicely into TBS' programming strategy,
Burke said.

"At TBS, we're very focused on off-network
sitcoms, but we're being selective about it," Burke said. "The network
numbers [ratings for Home Improvement] are still great, and syndication is still
good."

TBS will also be an active bidder, among many other cable
networks, for the second cycle of syndication for Seinfeld shows, Burke said. Those
talks are expected to start next month.

Although Seinfeld is produced by a sister company to
TBS, Castle Rock, its distributor is Columbia TriStar Television. The second cycle also
has a cable window, which is expected to draw offers from a variety of cable programmers.

"In a month or so, we will be talking to them,"
Burke said. "We are very eager to have our network submit a bid, but we will pay what
we think is fair, and no more than that."

The initial sale of Seinfeld reruns to TV stations
roughly three years ago garnered an estimated $50 million.

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