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Charlie Sheen's exit poses quandary for Warner Bros.

Now that Charlie Sheen has been fired from "Two and a Half Men," Warner Bros. faces tough decisions about the show's future. Tens of millions of dollars are at stake.

March 09, 2011|By Joe Flint, Los Angeles Times

The decision by Warner Bros. to fire Charlie Sheen, star of the hit CBS comedy "Two and a Half Men," may alleviate one headache for the studio and network.

But it creates several new ones and raises knotty financial questions that will need to be resolved quickly because tens of millions of dollars are on the line for the parties.

The first decision facing CBS and Warner Bros. along with the program's executive producer, Chuck Lorre, is whether to keep "Two and a Half Men" in production without the star who has become inextricably identified with its success. CBS is only two months away from unveiling its new fall lineup, and advertisers will be keen to know whether one of the hottest shows on TV will be back and if so, the actor who will replace Sheen.

"Two and a Half Men," the network's No. 1 comedy, is a linchpin of CBS' schedule. Advertisers pay north of $200,000 for a 30-second commercial, according to industry estimates, to reach viewers of one of the network's youngest-skewing shows.

"This could be a significant loss for them," said Brent Poer, a senior vice president at MediaVest USA, an advertising firm, whose clients include Wal-Mart and Procter & Gamble.

CBS said in a statement that the "financial impact of the shutdown is not material to the network" and that "any ratings declines will be more than offset by the reduced programming costs for episodes lost this season." At $4 million per episode, "Two and a Half Men" is CBS' most costly comedy.

However, such short-term savings don't take into account the value of "Two and a Half Men" as a vehicle to promote the network and the beneficial effect for shows that follow it on Monday night. CBS' new comedy, "Mike and Molly," is doing well largely because it comes right after "Two and a Half Men."

The boost lasts all the way through to the network's remake of "Hawaii Five-O," which airs at 10 p.m.

"There's a potential ripple effect," said Bill Carroll, a vice president at industry consulting firm Katz Television. "What would 'Mike and Molly' be without the lead-in number from 'Two and a Half Men'?" he asked rhetorically.

CBS has been airing reruns of "Two and a Half Men" for almost a month and plans to keep doing so at least for several more weeks. A network spokesman said that later CBS might try different shows in the "Two and a Half Men" slot.

The idea of "Two and a Half Men" continuing without Sheen, who plays a rogue bachelor living with his uptight brother Alan (played by Jon Cryer) and his nephew Jake (Angus T. Jones), may strike fans as preposterous. After all, the character lives for drinking and womanizing and seems to be drawn from Sheen's off-stage life. Indeed, at a 2007 Paley Center for Media panel celebrating the show's 100th episode, Sheen joked, "I knew all those experiences would come out favorably eventually."

Given how hard it is to develop successful shows, CBS, Warner Bros. and Lorre may bet that even a weaker "Two and a Half Men" would still perform better than most programs. "The odds are stacked against you that something will be a hit, so you try to keep these things on the air," Poer said.

Of course, if history has shown anything, it's that actors can be replaced.

Sheen himself knows this above all: He took over Michael J. Fox's role on the ABC hit "Spin City" when Fox was forced to quit because of Parkinson's disease. And "American Idol," despite contrary speculation, is doing fine without Simon Cowell.

If the show were to return to the air, CBS could have a case to force down the $4-million-per-episode license fee it pays Warner Bros. Sheen is described in the show's contract as a "person of essence," according to people familiar with the agreement between the two companies.

Plainly speaking, Sheen is a key component of the show, and without him its value would diminish.

In the long run, it is Warner Bros. that has the most to lose financially if "Two and a Half Men" is finished as a TV series.

The Time Warner-owned studio has earned hundreds of millions from rerun sales of the show, but it will be leaving money on the table if the 32 episodes it was expecting to make under the current contract with CBS — eight episodes for this season and 24 episodes for next — are never produced.

For example, the cable channel FX pays about $800,000 per episode for reruns of "Two and a Half Men," people with knowledge of the pact said. That translates to $6.4 million in forgone revenue for the eight episodes that won't be made this season. The number jumps to more than $25 million in forgone revenue after factoring in the 24 episodes that would have been made next season.

On top of FX, the local TV stations that carry repeats of "Two and a Half Men" collectively pay more than $1 million per episode in addition to Warner Bros.' selling a portion of the ad time in those reruns. So if the show goes away, that is at least an additional $30 million or so gone.

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