"No Dorothy, We're Not In Bloomingdales Anymore"

It's 115 degrees in the shade, and there is no shade. A man lost in the desert for three days without food or water has almost given up hope of living to see another sunset. He crawls to the top of a sand dune and for a moment believes that he is saved when he sees a man wearing a suit and a tie sitting under a huge umbrella next to a table piled high with tie's. Our dying man staggers over to the man with the ties and notices a sign, "Tie's for Sale $750". With his last bit of strength he groans, "Water, water, please I must have water." He is devastated when the man with the ties tells him that he, "Has no water but would he be interested in buying a tie for $750 dollars?" He then says, " There is however a restaurant fifty yards ahead where you can get water." Our dying man crawls over the next sand dune and arrives in front of a big restaurant. He is about ready to go in when he sees a sign over the front door, "ABSOLUTELY NO SERVICE WITHOUT A TIE!"

When it was announced that ABC paid 70 million dollars for the first Harry Potter movie, all of the knowledgeable and unknowledgeable pundits had something to say about the deal. Many said ABC paid too much and many others (like me) said that they wanted it, and they went out and got it. I admire them for stepping up, big time.

Films, unlike items sold in department stores, do not come with price tags. Films are not sold in Bloomingdale's. The question is invariably asked by bankers, studio executives, film salesman and others, "What is a particular picture worth?" For over forty years I have been suggesting that it is only worth what someone is willing to pay for it, no more, no less. The marketplace answer is the only answer that really counts.

It was in the late 70's, while at Columbia Pictures, I wanted to buy the distribution rights to the ABC comedy, "Soap". I absolutely loved the two pilots (starring Billy Crystal among others) and sent them to New York to my company president saying that I was going to need a lot of money to buy the syndication rights to the series. My president called the next day and said to me, "Look Norman, we produced eleven Network pilots this year and sold none and I have a board meeting next week. If I don't do something significant in television I will get killed. I want you to do a deal for this series, and I don't care what you have to pay for it. If you screw around and lose it I will be very upset, so don't be cute and don't try to cut the best deal in the world, just make a deal." I did indeed make a deal which probably cost Columbia a couple of million dollars more than it might otherwise have cost, but it was well worth it to everyone particularly my president.

In 1970, CBS Enterprises was being spun off from CBS into Viacom. I made a deal to acquire the distribution rights to the ABC series Dan August from Quinn Martin. This made a statement that Viacom was serious about continuing in the business. A couple of days after making the deal I ran into my old boss from Screen Gems at the Beverly Hills Hotel having breakfast at the Polo Lounge when he loudly announced, for all to hear, "Good God Norman, you really over paid for Dan August, I thought you would have known better."

In the early 60's Screen Gems was selling its feature films to Television in Argentina for $2000 dollars each. The Otto Preminger movie, The Cardinal, (a mediocre movie at best) became available and I sent a cable to the station that was playing our movies asking for $27,500 dollars for this superior Catholic film that was to be available in this very Catholic country. I received a reply offering $2,750 dollars along with an indication that I had perhaps lost my mind. After taking care of some niceties with buyer number one, I offered The Cardinal to buyer number two for $27,500 dollars and closed a deal for $25,000 dollars.

Twenty-five years ago I was involved in the sale of a large group of features in Australia and obtained $8,000,000 dollars. A few years ago when reminiscing with the buyer who said to me that his boss considered him a hero in that he was authorized to pay as much as $10,000,000 dollars for the movies. He laughed when I told him that I was authorized to accept $6,000,000 dollars. As a seller I never made a deal that I believed was as good as it could have been, and I'm sure that there are many producers out there from whom I have bought many programs who would say in retrospect that they would have "Taken less" as well as countless station people who would say that they would have "Paid more".

Was a tie worth $750 dollars to the man dying of thirst? Absolutely.

Was Soap worth an extra couple of million dollars to my president? Absolutely.

Was Dan August a worthwhile deal for Viacom? Absolutely.

Was The Cardinal worth $25,000 dollars to buyer number two? Absolutely.

Were the movies worth 6,000,000 dollars in Australia? Absolutely.

I cite these examples not to say how smart I am, but rather how elusive pricing is in the television business.

I cannot conceive of a more valuable or durable film than Harry Potter. Other than the general benefits that would accrue to ABC from this purchase, I would expect that ABC (and it's affiliated companies) will generate huge ratings for this film during its ten year exhibition term. Having said that, what I think about the film and its ability to perform doesn't matter, nor does it matter what anyone else thinks. All that matters is that ABC was a willing buyer, and Warner Bros. a willing seller.

ABC can better utilize Harry Potter than their competing Networks. They will play it on the Disney Channel, the former Fox Family Channel and will probably at some point figure out a way to play it on ESPN. Additionally I would believe that Disney will use their ownership of Harry Potter to deal with the cable carriage issues during its licensed term.

Now the real unanswered seventy million dollar question...... Why did AOL/ Time-Warner, a company purportedly dedicated to developing incredible levels of synergy, "Let the really, really, really BIG ONE get away?" I have a few ideas, what do you think?

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