1 00:00:00,320 --> 00:00:09,680 Speaker 1: H M. Welcome to Strictly Business Varieties weekly podcast featuring 2 00:00:09,720 --> 00:00:13,600 Speaker 1: conversations with industry leaders about the business of media and entertainment. 3 00:00:14,040 --> 00:00:18,360 Speaker 1: I'm Cynthia Littleton, business editor for Variety Today. My guests 4 00:00:18,360 --> 00:00:21,319 Speaker 1: in New York are Mort Marcus and Ira Bernstein, co 5 00:00:21,520 --> 00:00:26,440 Speaker 1: presidents of Debmar Mercury. Debmar Mercury is now Lionsgate Syndication. 6 00:00:26,560 --> 00:00:29,800 Speaker 1: Arm Mort and Ira are industry veterans who know the 7 00:00:29,840 --> 00:00:33,600 Speaker 1: content licensing business inside and out. They've been partners since 8 00:00:33,640 --> 00:00:36,199 Speaker 1: two thousand three, when they were brought together by the 9 00:00:36,280 --> 00:00:40,720 Speaker 1: mission to sell South Park into broadcast syndication. Debmar Mercury 10 00:00:40,760 --> 00:00:43,920 Speaker 1: today is active in first run syndication as the home 11 00:00:44,000 --> 00:00:47,720 Speaker 1: of daytime TV staples, including The Wendy Williams Show and 12 00:00:47,840 --> 00:00:51,479 Speaker 1: Family Feud. This fall, they're taking two big swings with 13 00:00:51,520 --> 00:00:53,760 Speaker 1: the launch of a daily talk show hosted by Nick 14 00:00:53,840 --> 00:00:58,680 Speaker 1: Cannon and a magazine show, Central Avenue from producer Will Packer. 15 00:00:59,160 --> 00:01:02,440 Speaker 1: As always with and Ira, it's a lively discussion about 16 00:01:02,480 --> 00:01:05,720 Speaker 1: the business of selling television shows and taking the pulse 17 00:01:05,720 --> 00:01:09,560 Speaker 1: of the podcast TV landscape in big cities and the heartland. 18 00:01:10,080 --> 00:01:12,960 Speaker 1: It's a fun and candid conversation from the leaders of 19 00:01:12,959 --> 00:01:16,280 Speaker 1: one of the most successful TV startup businesses of the 20 00:01:16,319 --> 00:01:22,720 Speaker 1: past fifteen years. Mart Marcus and Ira Bernstein of deb 21 00:01:22,760 --> 00:01:24,880 Speaker 1: Mark Mercury, thank you so much for taking the time 22 00:01:24,920 --> 00:01:29,520 Speaker 1: to speak with us. See here, this is a big 23 00:01:29,640 --> 00:01:32,400 Speaker 1: year for deb Mark Mercury. You're taking two big swings 24 00:01:32,400 --> 00:01:35,240 Speaker 1: in the fall in First Run Syndication. You've got a 25 00:01:35,280 --> 00:01:38,000 Speaker 1: talk show with Nick Cannon, who is pretty much all 26 00:01:38,040 --> 00:01:41,040 Speaker 1: over the airwaves these days, and you also have an 27 00:01:41,080 --> 00:01:45,480 Speaker 1: interesting magazine type show called Central Avenue from producer Will Packer. 28 00:01:46,040 --> 00:01:49,960 Speaker 1: Let's talk about what it is about this particular year 29 00:01:50,000 --> 00:01:52,720 Speaker 1: that you see this coming fall, that you see opportunity. 30 00:01:53,200 --> 00:01:55,800 Speaker 1: And let's talk about the First Run syndication marketplace, because 31 00:01:55,800 --> 00:01:58,760 Speaker 1: it's been kind of a sleepy environment for the last 32 00:01:58,760 --> 00:02:02,200 Speaker 1: couple of years, but you and other companies in the 33 00:02:02,280 --> 00:02:05,320 Speaker 1: past twelve months have started to really bring some big 34 00:02:05,400 --> 00:02:07,720 Speaker 1: name and some big talents out. What is it that 35 00:02:07,800 --> 00:02:12,920 Speaker 1: you're seeing in First Run these days? Oh, you know, 36 00:02:13,040 --> 00:02:15,280 Speaker 1: I it is a big year for us, but it's 37 00:02:15,320 --> 00:02:19,480 Speaker 1: not We didn't time it to be. In other words, 38 00:02:19,520 --> 00:02:23,040 Speaker 1: I think we're a little bit like sometimes if you 39 00:02:23,120 --> 00:02:25,480 Speaker 1: have the right show, then you bring it out. So 40 00:02:26,200 --> 00:02:30,440 Speaker 1: in this case, we we're lucky enough to find Nick 41 00:02:31,520 --> 00:02:34,400 Speaker 1: Um and then we've been working on stuff with Will Packer, 42 00:02:34,600 --> 00:02:37,840 Speaker 1: So it just it just coincides with the fact that 43 00:02:37,880 --> 00:02:40,040 Speaker 1: they're coming out at the same time. Whenn't we We 44 00:02:40,040 --> 00:02:42,760 Speaker 1: weren't saying, oh, let's put two shows on UM in 45 00:02:42,760 --> 00:02:46,160 Speaker 1: the fall of twenty but look, we're just we're excited 46 00:02:46,160 --> 00:02:49,040 Speaker 1: to have Nick. From a standpoint that a lot of 47 00:02:49,080 --> 00:02:53,799 Speaker 1: times people do talk shows. Not everybody, but a lot 48 00:02:53,800 --> 00:02:55,120 Speaker 1: of times they do. When you get some of the 49 00:02:55,160 --> 00:02:58,280 Speaker 1: big names, they'll do talk shows when they're on the 50 00:02:58,280 --> 00:03:01,360 Speaker 1: the downside of their career. Maybe they can no longer 51 00:03:01,360 --> 00:03:04,639 Speaker 1: get a movie as often or a TV roll as often, 52 00:03:05,240 --> 00:03:08,200 Speaker 1: and they kind of want to then come into the marketplace. 53 00:03:08,360 --> 00:03:10,839 Speaker 1: I've always wanted to do a talk show. We're getting Nick, 54 00:03:12,080 --> 00:03:14,600 Speaker 1: he's on the up in his career, so we're really 55 00:03:14,600 --> 00:03:17,040 Speaker 1: excited about it. I think the issue is it's all 56 00:03:17,080 --> 00:03:18,720 Speaker 1: kind of I mean, the bigger question is it was 57 00:03:18,760 --> 00:03:21,919 Speaker 1: content driven, and we're developing stuff all the time. So 58 00:03:22,000 --> 00:03:26,520 Speaker 1: I think when Nick substituted for Wendy, which was a 59 00:03:26,639 --> 00:03:30,079 Speaker 1: year ago now, we were always developing shows, but we 60 00:03:30,120 --> 00:03:31,960 Speaker 1: literally saw him do the show and we kind of 61 00:03:31,960 --> 00:03:33,960 Speaker 1: looked at each other and said, oh my god, he 62 00:03:34,000 --> 00:03:36,280 Speaker 1: looks like he's been doing this for twenty years. It's 63 00:03:36,320 --> 00:03:39,000 Speaker 1: like it's natural. He's not nervous, he's fun, he's exciting. 64 00:03:39,200 --> 00:03:40,400 Speaker 1: You want to listen to him, you want to see 65 00:03:40,440 --> 00:03:43,400 Speaker 1: him again tomorrow. And so that's what started that conversation. 66 00:03:43,480 --> 00:03:45,320 Speaker 1: It wasn't we got to have a new talk show 67 00:03:45,320 --> 00:03:47,360 Speaker 1: for a fall twenty And then in the case of 68 00:03:47,400 --> 00:03:49,880 Speaker 1: Central Avenue, we've been working with Will for a couple 69 00:03:49,920 --> 00:03:53,080 Speaker 1: of years developing a number of different things. This one 70 00:03:53,320 --> 00:03:55,520 Speaker 1: sort of bubbled to the top at this moment. We 71 00:03:55,640 --> 00:03:58,800 Speaker 1: tested it with Fox. It did really well, but that 72 00:03:58,840 --> 00:04:01,440 Speaker 1: was an example of the market actually was a little 73 00:04:01,440 --> 00:04:03,720 Speaker 1: bit crowded, which is why we moved to do a 74 00:04:03,760 --> 00:04:07,800 Speaker 1: weekend hour. So we kind of backed into the distribution 75 00:04:08,040 --> 00:04:11,480 Speaker 1: form of that show because the market was crowded. But again, 76 00:04:11,520 --> 00:04:14,440 Speaker 1: it was driven by the content that we happened to 77 00:04:14,520 --> 00:04:17,839 Speaker 1: have created at that moment in time, not by we know, 78 00:04:17,920 --> 00:04:19,920 Speaker 1: we need a show for Saturday night at eleven or 79 00:04:19,960 --> 00:04:23,479 Speaker 1: seven o'clock. It was driven by the content and well, 80 00:04:23,600 --> 00:04:27,800 Speaker 1: Nick is a call it alive. It may not be live, 81 00:04:27,839 --> 00:04:32,640 Speaker 1: but a lot effectively alive. Daily UM one hour talk 82 00:04:32,680 --> 00:04:37,240 Speaker 1: show Central Avenue was driven by what Iver said. We 83 00:04:37,320 --> 00:04:39,480 Speaker 1: had a lot of it, spent a lot of time 84 00:04:39,600 --> 00:04:42,200 Speaker 1: Will Packer trying to come up with ideas they wanted 85 00:04:42,240 --> 00:04:44,800 Speaker 1: to do something with him, and we kind of looked 86 00:04:44,800 --> 00:04:50,080 Speaker 1: at two things. One because there's no or so few 87 00:04:51,240 --> 00:04:55,040 Speaker 1: sitcom's coming off the off of the network that stations 88 00:04:55,080 --> 00:04:58,400 Speaker 1: can run. Most of the station was certainly the Fox, 89 00:04:58,880 --> 00:05:02,520 Speaker 1: CW and mind Us stations make most of their money 90 00:05:02,960 --> 00:05:08,200 Speaker 1: selling airing older sitcoms from six to eight o'clock at night, 91 00:05:08,240 --> 00:05:10,760 Speaker 1: like Friends or Two a Man or something like that. 92 00:05:10,760 --> 00:05:14,760 Speaker 1: That's the sweet spot for advertising and the most amount 93 00:05:14,760 --> 00:05:16,960 Speaker 1: of money that you can make and when most people 94 00:05:17,000 --> 00:05:21,359 Speaker 1: are watching TV, and those stations make a huge percentage 95 00:05:21,360 --> 00:05:24,240 Speaker 1: of their profit from sixtight o'clock at night, and they're 96 00:05:24,279 --> 00:05:29,800 Speaker 1: just aren't any new sitcoms to buy. So it's waning, 97 00:05:29,839 --> 00:05:32,760 Speaker 1: has been waning for years. The hits are farther and 98 00:05:32,839 --> 00:05:35,919 Speaker 1: farther between, and so what's happened is you start to 99 00:05:36,000 --> 00:05:41,799 Speaker 1: look out into the two years not twenty two years away, 100 00:05:41,800 --> 00:05:47,400 Speaker 1: but there's there's even less and so plus with the 101 00:05:47,480 --> 00:05:51,359 Speaker 1: streaming services taking Friends in the Office and those things, 102 00:05:51,920 --> 00:05:53,840 Speaker 1: and not even sure if they're gonna let them be on, 103 00:05:54,160 --> 00:05:56,000 Speaker 1: or maybe they will, but the ratings will be lower. 104 00:05:56,839 --> 00:05:59,240 Speaker 1: What are these stations going to run? And so when 105 00:05:59,240 --> 00:06:03,039 Speaker 1: you start looking at availably from six to eight o'clock, 106 00:06:03,520 --> 00:06:06,800 Speaker 1: we believe that the stations are going to be much 107 00:06:06,880 --> 00:06:10,120 Speaker 1: more in the business of looking at brand new, original, 108 00:06:10,480 --> 00:06:13,960 Speaker 1: first run productions for those time periods. Central Avenue was 109 00:06:14,040 --> 00:06:19,120 Speaker 1: made on the theory that Entertainment Tonight and Inside Edition 110 00:06:20,240 --> 00:06:23,640 Speaker 1: have gotten really old and and and and honestly too 111 00:06:23,640 --> 00:06:27,039 Speaker 1: white as a as a business. Too white. Because the 112 00:06:27,080 --> 00:06:31,159 Speaker 1: marketplace and that's watching TV, is a much more multicultural viewer. 113 00:06:31,680 --> 00:06:35,080 Speaker 1: So we set out to and will sent out to 114 00:06:35,200 --> 00:06:39,400 Speaker 1: make something that would address the needs of the Entertainment 115 00:06:39,400 --> 00:06:42,840 Speaker 1: Tonight Inside Editions address those people who want to watch that, 116 00:06:43,080 --> 00:06:46,080 Speaker 1: but take a little more multicultural point of view. Aimed 117 00:06:46,160 --> 00:06:48,479 Speaker 1: to air from six to eight o'clock. We just thought 118 00:06:48,480 --> 00:06:50,600 Speaker 1: it was a little too crowded in twenty and that's 119 00:06:50,640 --> 00:06:52,000 Speaker 1: why we're going to do it as a once a 120 00:06:52,040 --> 00:06:54,560 Speaker 1: week show and hopefully we'll work and then we'll bring 121 00:06:54,560 --> 00:06:57,240 Speaker 1: it out as a five day run show later. And 122 00:06:57,279 --> 00:06:59,320 Speaker 1: then one of the show we're doing, which we haven't mentioned, 123 00:06:59,320 --> 00:07:01,679 Speaker 1: but we're bringing out. We've already sold it. His Ship's Creek, 124 00:07:02,200 --> 00:07:05,120 Speaker 1: and that's not first run, the rerun rights to rerun 125 00:07:05,200 --> 00:07:08,360 Speaker 1: rights to that, that's sort of all that's and that's 126 00:07:08,440 --> 00:07:10,400 Speaker 1: in those in those same spots, and we've already we 127 00:07:10,400 --> 00:07:12,880 Speaker 1: had already sold that. But but that's kind of an 128 00:07:12,880 --> 00:07:16,360 Speaker 1: interesting show that has gotten ridiculous number of awards and 129 00:07:16,400 --> 00:07:19,320 Speaker 1: accolades all over the place. They keep getting them in 130 00:07:19,360 --> 00:07:23,040 Speaker 1: their sixth season, and we're really excited about that one too. 131 00:07:23,120 --> 00:07:25,680 Speaker 1: And that's you know, on Fox stations and clear throughout 132 00:07:25,680 --> 00:07:28,120 Speaker 1: the country. That's a show that kind of came to 133 00:07:28,160 --> 00:07:31,360 Speaker 1: prominence in its third season off of Netflix, meaning it 134 00:07:31,400 --> 00:07:34,240 Speaker 1: was running on Pop, the cable network, and it's produced 135 00:07:34,240 --> 00:07:37,320 Speaker 1: out of Canada, and all of a sudden, the show 136 00:07:37,440 --> 00:07:39,760 Speaker 1: became this hot thing. A few years ago we acquired 137 00:07:39,760 --> 00:07:42,240 Speaker 1: the rights, and now it's in its sixth season, going 138 00:07:42,280 --> 00:07:45,440 Speaker 1: into its sixth season, and we're all living in this 139 00:07:45,480 --> 00:07:49,200 Speaker 1: world where the TV business is changing so much, so 140 00:07:50,320 --> 00:07:56,280 Speaker 1: nobody really knows. There's not there's very few shows that 141 00:07:56,400 --> 00:08:00,200 Speaker 1: have been sold coming off of a streaming plat form 142 00:08:00,320 --> 00:08:03,840 Speaker 1: into a free platform. We we're actually the only ones 143 00:08:03,880 --> 00:08:10,320 Speaker 1: who've ever sold a original streaming show um and on Netflix, 144 00:08:10,680 --> 00:08:14,480 Speaker 1: which was bo Jack bo Jack Horseman. We sold it 145 00:08:14,560 --> 00:08:18,600 Speaker 1: to Comedy Central this one. While it's it's there's been 146 00:08:18,640 --> 00:08:21,920 Speaker 1: shows sold off cable, which is what Pop is. But 147 00:08:22,040 --> 00:08:25,240 Speaker 1: Pop is such a small network that almost nobody watched 148 00:08:25,240 --> 00:08:27,680 Speaker 1: it on Pop and they all watched it on Netflix. 149 00:08:28,120 --> 00:08:31,559 Speaker 1: And so now we're going to syndicate this it's coming 150 00:08:31,560 --> 00:08:33,880 Speaker 1: off Pop, but really it's kind of coming off Netflix. 151 00:08:34,440 --> 00:08:37,920 Speaker 1: So the question is it's coming off to be aware 152 00:08:37,960 --> 00:08:40,800 Speaker 1: of by Netflix? Right? So, and by the way, I mean, 153 00:08:41,120 --> 00:08:44,760 Speaker 1: you know, we're we're realist about this. We think Ship's 154 00:08:44,760 --> 00:08:50,360 Speaker 1: Creek is absolutely hysterically an amazing show. You think it's 155 00:08:50,360 --> 00:08:53,000 Speaker 1: the kind of show that should have legs in syndications. 156 00:08:53,080 --> 00:08:55,360 Speaker 1: It's a little quirky. I mean, it's a little quirky, 157 00:08:55,440 --> 00:08:58,199 Speaker 1: then say it to enough manners. It's not quite a 158 00:08:58,320 --> 00:09:01,520 Speaker 1: straight down the middle shot, but it's legit funny. But 159 00:09:01,559 --> 00:09:06,880 Speaker 1: it's coming off Netflix, so is that our people are 160 00:09:06,960 --> 00:09:09,960 Speaker 1: just finding out about it. So we're hoping it catches fire. 161 00:09:10,720 --> 00:09:12,280 Speaker 1: But you know, like I said, I think we're all 162 00:09:12,320 --> 00:09:15,800 Speaker 1: living at a different time these days that if this 163 00:09:15,920 --> 00:09:19,760 Speaker 1: was you know, thirty years ago and Ship's Creek was 164 00:09:19,800 --> 00:09:22,600 Speaker 1: coming off of CBS and it's as good as it is, 165 00:09:23,480 --> 00:09:27,520 Speaker 1: this would be a huge deal. But because it's Pop 166 00:09:27,600 --> 00:09:30,320 Speaker 1: to Neflix, I mean, we don't know the stations that 167 00:09:30,400 --> 00:09:33,760 Speaker 1: nobody really knows what the value of the proposition is. 168 00:09:34,240 --> 00:09:35,719 Speaker 1: But we're all going to try it. You're gonna find 169 00:09:35,760 --> 00:09:39,200 Speaker 1: out interesting when you sit and talk to a station 170 00:09:39,240 --> 00:09:42,000 Speaker 1: manager or a station group buyer and you talk about, 171 00:09:42,160 --> 00:09:44,320 Speaker 1: you know, well, this is coming off of Netflix, or 172 00:09:44,360 --> 00:09:47,199 Speaker 1: this is coming like, what kind of questions do they 173 00:09:47,240 --> 00:09:49,800 Speaker 1: ask you because this it seems like this is all 174 00:09:49,840 --> 00:09:52,439 Speaker 1: such a world of unknowns. Let me go back to 175 00:09:52,440 --> 00:09:55,240 Speaker 1: our roots, which is we started the company with with 176 00:09:55,360 --> 00:09:58,160 Speaker 1: South Park. And so the only thing you can say, 177 00:09:58,280 --> 00:10:00,960 Speaker 1: because this isn't coming off of it's not an ABC 178 00:10:01,120 --> 00:10:02,760 Speaker 1: sitcom that you can say, God if it breaks at 179 00:10:02,800 --> 00:10:05,240 Speaker 1: one point seven rating and it does that for three years, 180 00:10:05,240 --> 00:10:07,720 Speaker 1: it's going to do this in syndication. This is coming 181 00:10:07,720 --> 00:10:10,320 Speaker 1: off a Pop which has really low ratings, but it's 182 00:10:10,360 --> 00:10:13,280 Speaker 1: the highest rated show that they have by a wide margin. 183 00:10:13,440 --> 00:10:16,240 Speaker 1: Just like fifteen years ago or eighteen years ago whatever. 184 00:10:16,280 --> 00:10:18,360 Speaker 1: With South Park. We were sitting there saying, I still 185 00:10:18,360 --> 00:10:20,320 Speaker 1: remember the presentation because that's how we started the company. 186 00:10:20,320 --> 00:10:22,680 Speaker 1: It was a three hundred and sixty five percent index 187 00:10:23,120 --> 00:10:26,280 Speaker 1: to the regular rating on Comedy Central. So when something 188 00:10:26,559 --> 00:10:30,480 Speaker 1: outperforms whatever its environment is, to that great an extent, 189 00:10:31,080 --> 00:10:33,000 Speaker 1: we just think you have something. It just means that 190 00:10:33,559 --> 00:10:35,480 Speaker 1: three and a half times the amount of people that 191 00:10:35,520 --> 00:10:37,880 Speaker 1: normally watched watch of this. You know, people come to 192 00:10:37,960 --> 00:10:41,840 Speaker 1: the right come to find it. So so I think 193 00:10:42,400 --> 00:10:44,760 Speaker 1: we know that it has that ability to it. But 194 00:10:44,840 --> 00:10:48,640 Speaker 1: it is also on Netflix, so not exclusively, so you 195 00:10:48,640 --> 00:10:50,439 Speaker 1: can say, yeah, I'm just gonna watch them and watch 196 00:10:50,520 --> 00:10:52,880 Speaker 1: them all tonight. I don't mean but but people watch 197 00:10:52,920 --> 00:10:55,680 Speaker 1: TV differently, you know. So the people that are watching 198 00:10:56,080 --> 00:10:59,560 Speaker 1: Channel five or Channel eleven, um, you know in this 199 00:10:59,679 --> 00:11:03,760 Speaker 1: mark it in New York are are watching TV passively. 200 00:11:03,800 --> 00:11:10,480 Speaker 1: They're not choosing two on. They may say tonight, after dinner, 201 00:11:11,280 --> 00:11:13,160 Speaker 1: my wife and I are gonna sit down and we're 202 00:11:13,160 --> 00:11:17,160 Speaker 1: gonna put Netflix on and watch. Um I'm sure they're 203 00:11:17,160 --> 00:11:21,800 Speaker 1: gonna watch right, But right now I'm home and I'm 204 00:11:21,840 --> 00:11:25,960 Speaker 1: flicking around the channels and I've stopped at you know, 205 00:11:26,040 --> 00:11:29,240 Speaker 1: TMZ or I'm watching Ship's Creeker. I'm and that's how 206 00:11:29,240 --> 00:11:33,719 Speaker 1: they watch. So it's so hopefully they'll they'll watch naturally 207 00:11:33,800 --> 00:11:36,160 Speaker 1: like that. The people to watch TV watch that way 208 00:11:36,280 --> 00:11:40,240 Speaker 1: and hopefully it will coincide nicely. Even though it's on Netflix. 209 00:11:40,600 --> 00:11:42,560 Speaker 1: By the way, Friends has been on Netflix, it's been 210 00:11:42,600 --> 00:11:47,679 Speaker 1: on broadcast, So it is it a different viewer. I mean, no, 211 00:11:47,679 --> 00:11:50,559 Speaker 1: nobody knows, nobody, There could be all kinds of research. 212 00:11:51,480 --> 00:11:53,720 Speaker 1: No one really knows what's going on. There's a there's 213 00:11:53,760 --> 00:12:00,120 Speaker 1: a teutonic shift in what's happening, and yet most the 214 00:12:00,160 --> 00:12:03,280 Speaker 1: money that's being made is still in the old version 215 00:12:03,880 --> 00:12:08,719 Speaker 1: and the old live linear. Yeah. I mean, so everything's 216 00:12:08,800 --> 00:12:12,000 Speaker 1: up in the air. But we're all, you know, trying 217 00:12:12,040 --> 00:12:14,760 Speaker 1: to figure out how to stay in business. And there's 218 00:12:14,840 --> 00:12:18,199 Speaker 1: plenty of business and um, but I do think we're 219 00:12:18,200 --> 00:12:21,840 Speaker 1: at a time where there's just so many things changing. Um, 220 00:12:21,960 --> 00:12:23,800 Speaker 1: you gotta keep your hand the ball. What is the 221 00:12:23,840 --> 00:12:26,880 Speaker 1: mood when you talk to people? I always think of stations. 222 00:12:26,880 --> 00:12:30,120 Speaker 1: Are the retail level of television in the local markets? 223 00:12:30,160 --> 00:12:32,320 Speaker 1: When you when you talk to people in local markets, 224 00:12:32,400 --> 00:12:36,959 Speaker 1: especially outside of the top five markets, UM, what do 225 00:12:37,040 --> 00:12:40,280 Speaker 1: you hear? Do you hear concerned? Do you hear handwringing 226 00:12:40,320 --> 00:12:42,480 Speaker 1: about all of what we've been talking about, or do 227 00:12:42,520 --> 00:12:45,880 Speaker 1: you feel like there's still that that there is still 228 00:12:46,520 --> 00:12:49,600 Speaker 1: people still feel very positive about broadcast television. I think 229 00:12:49,640 --> 00:12:52,560 Speaker 1: the issue is they're all very challenged. Everybody's challenged, but 230 00:12:52,600 --> 00:12:56,760 Speaker 1: the broadcast TV business operates that depending on what group 231 00:12:56,760 --> 00:12:58,800 Speaker 1: you're looking at, between you know, A thirty five and 232 00:12:58,840 --> 00:13:03,760 Speaker 1: its profit margin. So yes, they're all being squeezed because 233 00:13:04,000 --> 00:13:06,679 Speaker 1: they're most of these are owned by public companies. So 234 00:13:06,720 --> 00:13:09,199 Speaker 1: if you're making a billion dollars and you'r the X 235 00:13:09,320 --> 00:13:11,600 Speaker 1: y Z big, one of the big groups, you know, 236 00:13:11,640 --> 00:13:14,280 Speaker 1: your whole goal is to make a billion and fifty 237 00:13:14,520 --> 00:13:16,800 Speaker 1: next year. So it's really hard to make the billion, 238 00:13:17,040 --> 00:13:20,040 Speaker 1: and it's even harder in what is basically an amazing 239 00:13:20,080 --> 00:13:24,040 Speaker 1: business but relatively flat slight growth that extra fifties really 240 00:13:24,080 --> 00:13:28,120 Speaker 1: hard that if you ask them what was the five 241 00:13:28,200 --> 00:13:35,160 Speaker 1: year plan on your business plan revenue, most of them 242 00:13:35,200 --> 00:13:38,280 Speaker 1: would tell you that it's at least flat that they 243 00:13:38,320 --> 00:13:43,360 Speaker 1: made They at least made it. Yeah, that continue that 244 00:13:43,480 --> 00:13:46,560 Speaker 1: not their profit, but that their revenue should be around 245 00:13:46,640 --> 00:13:50,040 Speaker 1: flat like the and they don't think it's going down. 246 00:13:50,280 --> 00:13:53,120 Speaker 1: It is soft. There's just so Here's the other thing 247 00:13:53,160 --> 00:13:55,960 Speaker 1: is that advertising. You know, with all these streaming services, 248 00:13:56,600 --> 00:14:01,440 Speaker 1: advertiser needs places to go. So the local TV station 249 00:14:01,600 --> 00:14:05,280 Speaker 1: is still a great you self. I mean, the reason 250 00:14:05,360 --> 00:14:08,000 Speaker 1: people buy ads on the local TV stations, They've been 251 00:14:08,000 --> 00:14:10,440 Speaker 1: around a long time now, these local TV stations. The 252 00:14:10,520 --> 00:14:13,800 Speaker 1: reason people are buying ads is it sells their product. 253 00:14:15,200 --> 00:14:17,360 Speaker 1: If you want to sell the Toyota on Saturday, there's 254 00:14:17,360 --> 00:14:19,240 Speaker 1: a lot of things you can do. But even want 255 00:14:19,240 --> 00:14:21,920 Speaker 1: to actually pile you know, eight thousand people in your 256 00:14:21,920 --> 00:14:25,040 Speaker 1: local Toyota dealership, You're gonna take some broadcast ads out 257 00:14:25,080 --> 00:14:27,800 Speaker 1: because that's on Thursday and Friday. It's right. And by 258 00:14:27,840 --> 00:14:31,360 Speaker 1: the way, why do the why do the candidates spend 259 00:14:31,440 --> 00:14:36,000 Speaker 1: so much money on the local team? They want their Toyota. 260 00:14:36,000 --> 00:14:38,920 Speaker 1: People are watching it and you're reaching a person in 261 00:14:38,960 --> 00:14:41,960 Speaker 1: a city. And and again I don't know how far 262 00:14:42,000 --> 00:14:44,680 Speaker 1: tangent you want to go, but like, what's really happening 263 00:14:44,680 --> 00:14:48,640 Speaker 1: here is is that on a big picture basis, we 264 00:14:48,720 --> 00:14:53,640 Speaker 1: all have heard of cord cutting. Well, what what's happened 265 00:14:53,640 --> 00:14:55,200 Speaker 1: is is that I don't know the year that it 266 00:14:55,240 --> 00:14:58,920 Speaker 1: was the peak, but let's say that the top cable networks, 267 00:14:59,520 --> 00:15:01,200 Speaker 1: it was probably maybe ten years ago. If I had 268 00:15:01,200 --> 00:15:02,840 Speaker 1: to get I'm not looking at it thing, so I 269 00:15:02,920 --> 00:15:06,440 Speaker 1: called it ten years ago, they were probably all around 270 00:15:06,760 --> 00:15:10,920 Speaker 1: a hundred million homes full distribution to it was about 271 00:15:10,960 --> 00:15:13,360 Speaker 1: eight years ago, I believe about a hundred million homes. 272 00:15:13,760 --> 00:15:20,720 Speaker 1: Those now are about millions and drop heading to and 273 00:15:20,800 --> 00:15:24,200 Speaker 1: so when the cable network, if the guy who had 274 00:15:24,200 --> 00:15:28,280 Speaker 1: a hundred million homes has now eight dropping frat fast 275 00:15:28,360 --> 00:15:31,400 Speaker 1: can probably in the seventies as we're speaking, um going 276 00:15:31,480 --> 00:15:34,120 Speaker 1: to most of them think it's going to fifty. So 277 00:15:34,160 --> 00:15:38,800 Speaker 1: what happens is those cable there's other than Fox News 278 00:15:38,880 --> 00:15:42,760 Speaker 1: or CNN or ESPN. Maybe if you're just a general 279 00:15:42,840 --> 00:15:48,200 Speaker 1: Comedy Central, USA, T and T whatever, they can't get 280 00:15:48,240 --> 00:15:51,520 Speaker 1: in front of more homes. There's no other option for them. 281 00:15:52,080 --> 00:15:55,120 Speaker 1: So for the most part, when they're getting cord cut, 282 00:15:55,280 --> 00:15:58,480 Speaker 1: they're losing. And yes there's some services that are having 283 00:15:58,520 --> 00:16:00,800 Speaker 1: skinny bundles they're getting some of back, but for the 284 00:16:00,840 --> 00:16:03,840 Speaker 1: most part, their footprints going from a hundred going down 285 00:16:03,880 --> 00:16:07,840 Speaker 1: to fifty. So if you're on a TV station, there's 286 00:16:07,880 --> 00:16:10,800 Speaker 1: good and bad news. The good news the bad news. 287 00:16:10,840 --> 00:16:14,680 Speaker 1: The bad news is your cable universe is a little 288 00:16:14,720 --> 00:16:19,240 Speaker 1: smaller because the cable operator has less subscribers, and your 289 00:16:21,080 --> 00:16:26,560 Speaker 1: commend that the good news is right now there's twenty 290 00:16:26,640 --> 00:16:29,160 Speaker 1: two million of people. Don't even I can't believe people 291 00:16:29,320 --> 00:16:32,760 Speaker 1: talk about this. There are twenty two million homes in 292 00:16:32,760 --> 00:16:36,520 Speaker 1: the United States then watch their television on an antenna, 293 00:16:37,240 --> 00:16:41,600 Speaker 1: old fashioned over the air in the back of the TV. 294 00:16:41,640 --> 00:16:45,840 Speaker 1: It's really so much. It's more like an Apple device's antenna. 295 00:16:46,240 --> 00:16:48,680 Speaker 1: But when they say antenna, they also have it's not 296 00:16:48,760 --> 00:16:50,880 Speaker 1: like the old guy or the you know, the guy 297 00:16:50,920 --> 00:16:53,280 Speaker 1: I ate TV, but I'll just do the antenna. It's 298 00:16:53,320 --> 00:16:56,840 Speaker 1: the younger demographic. Actually, that's the cord cutters. So they 299 00:16:56,920 --> 00:16:59,560 Speaker 1: might be watching this. Two constituents of antennas. One is 300 00:16:59,560 --> 00:17:02,000 Speaker 1: the older and that's a bit of what we're thinking 301 00:17:02,040 --> 00:17:04,399 Speaker 1: about when you think about who watches on antenna, But 302 00:17:04,560 --> 00:17:07,760 Speaker 1: the majority of it are younger people, you know, eighteen 303 00:17:07,800 --> 00:17:10,919 Speaker 1: to thirty four, who are cord cutters, who say, I 304 00:17:10,920 --> 00:17:12,880 Speaker 1: don't want to do a deal with you know, Time, 305 00:17:12,880 --> 00:17:16,040 Speaker 1: Warner Cable or Cox Cable whatever. I will do my 306 00:17:16,160 --> 00:17:19,240 Speaker 1: antenna and then I'm gonna buy Netflix. I'm gonna buy Apple, Hulu, 307 00:17:19,680 --> 00:17:24,560 Speaker 1: um and three other services. By the way, these this 308 00:17:24,640 --> 00:17:30,359 Speaker 1: is a growing business. And think about this. Your little 309 00:17:30,359 --> 00:17:33,280 Speaker 1: Fox station gets a much higher rating in the antenna 310 00:17:33,320 --> 00:17:36,640 Speaker 1: home than it ever did in the cable and there's 311 00:17:36,680 --> 00:17:41,080 Speaker 1: not an opportunity ative more than you think. And then again, 312 00:17:41,080 --> 00:17:42,240 Speaker 1: I don't we don't want to get to Front of 313 00:17:42,240 --> 00:17:44,840 Speaker 1: the Week. But you obviously have the digit nets, so 314 00:17:44,880 --> 00:17:48,320 Speaker 1: the multi cast channel. So if you stick your antenna, 315 00:17:48,760 --> 00:17:50,879 Speaker 1: you do have like thirty five forty channels, but you 316 00:17:50,920 --> 00:17:54,080 Speaker 1: don't have a hundred, fifty or thousand when you get cable. 317 00:17:54,359 --> 00:17:59,200 Speaker 1: And really some of the digit nets are relatively entertaining, 318 00:17:59,200 --> 00:18:01,840 Speaker 1: and they're decent, they're not as good. They're not spending 319 00:18:01,880 --> 00:18:04,000 Speaker 1: the kind of money USA or T and T or 320 00:18:04,080 --> 00:18:07,160 Speaker 1: COMBEDT cential word yet, so the product is older generally, 321 00:18:07,240 --> 00:18:10,280 Speaker 1: some of the movie prints are a little acting exactly so. 322 00:18:10,440 --> 00:18:13,119 Speaker 1: But my point is, so if you're a TV station, 323 00:18:14,440 --> 00:18:17,720 Speaker 1: you're getting some of the people the cord cut are 324 00:18:17,760 --> 00:18:20,040 Speaker 1: going to an antenna, and not all of them. And 325 00:18:20,080 --> 00:18:23,159 Speaker 1: then but almost all of them that go to a 326 00:18:23,200 --> 00:18:26,320 Speaker 1: skinny bundle get a broadcaster. So as we sit in 327 00:18:26,359 --> 00:18:30,040 Speaker 1: the universe that we are right now, broadcast stations are 328 00:18:30,080 --> 00:18:34,240 Speaker 1: still covered in the United States where the cable nets 329 00:18:34,280 --> 00:18:39,920 Speaker 1: are getting down to So if you're an advertiser, again, 330 00:18:40,680 --> 00:18:42,880 Speaker 1: where are you gonna go? You got less places to go. Yes, 331 00:18:42,880 --> 00:18:45,199 Speaker 1: there's there's a lot of a V O D and 332 00:18:45,280 --> 00:18:48,440 Speaker 1: things like that, But at the same time, networks are 333 00:18:48,440 --> 00:18:51,800 Speaker 1: fully covered and stations are fully covered. And as the 334 00:18:51,840 --> 00:18:55,760 Speaker 1: cable net was dropped further, that spread gets even bigger 335 00:18:56,240 --> 00:19:01,320 Speaker 1: between antennas skinny bundling. I think the broadcast broadcast business 336 00:19:02,040 --> 00:19:04,200 Speaker 1: is not going anywhere anytime soon. Well, I think when 337 00:19:04,240 --> 00:19:07,199 Speaker 1: you look at the upfronts, that's really the most illustrative 338 00:19:07,200 --> 00:19:10,320 Speaker 1: at this point because every year since I did my 339 00:19:10,400 --> 00:19:13,400 Speaker 1: first presentation, I think it was like six on how 340 00:19:13,440 --> 00:19:16,119 Speaker 1: the networks were declining and how could this check demand. 341 00:19:16,440 --> 00:19:19,080 Speaker 1: It's the same exact thing, you know, thirty four years 342 00:19:19,200 --> 00:19:22,359 Speaker 1: later because what's happening, and it's even more exacerbated today 343 00:19:22,359 --> 00:19:24,280 Speaker 1: because of all these other things. So you have a 344 00:19:24,359 --> 00:19:26,359 Speaker 1: decline in rating. It's not huge, but it's a slight 345 00:19:26,400 --> 00:19:29,159 Speaker 1: you know, the chip keeps chipping away. But because the 346 00:19:29,160 --> 00:19:32,639 Speaker 1: advertisers have to place that money, the increase in the 347 00:19:32,680 --> 00:19:35,359 Speaker 1: cost per thousand or the cost per point locally is 348 00:19:35,359 --> 00:19:40,199 Speaker 1: outpacing the decline in the available for some years. Overall, 349 00:19:40,240 --> 00:19:42,600 Speaker 1: if you look at ten years net net, you're probably 350 00:19:42,680 --> 00:19:45,280 Speaker 1: up a little bit. As a broadcast Sometimes that sometimes 351 00:19:45,280 --> 00:19:49,160 Speaker 1: that networks are flat in revenue, but because their rating 352 00:19:49,200 --> 00:19:50,800 Speaker 1: drops about the same. In general, if you look at 353 00:19:50,800 --> 00:19:54,080 Speaker 1: a ten year trend, they're all up as all the stations. 354 00:19:54,119 --> 00:19:56,600 Speaker 1: If you look ten years ago to today, there's blips, 355 00:19:56,640 --> 00:20:00,520 Speaker 1: but you're getting more for their a way of with 356 00:20:00,640 --> 00:20:04,280 Speaker 1: the smaller rating, right or they're getting more per point, 357 00:20:05,160 --> 00:20:09,240 Speaker 1: so they're offsetting the decrease with a higher higher cost 358 00:20:09,280 --> 00:20:11,199 Speaker 1: per point even though the ratings are lower. And the 359 00:20:11,240 --> 00:20:13,639 Speaker 1: same thing with the syndicated shows, you know, are all 360 00:20:13,680 --> 00:20:16,280 Speaker 1: of the shows are getting lower ratings than they used 361 00:20:16,320 --> 00:20:19,919 Speaker 1: to get for the same reasons, but they're getting higher 362 00:20:19,960 --> 00:20:24,879 Speaker 1: CPMs which offset some of that um default. Let's talk 363 00:20:24,920 --> 00:20:28,119 Speaker 1: about Let's talk about your company, Denmark Mercury, because I 364 00:20:28,200 --> 00:20:31,800 Speaker 1: love your story. You guys came together. You both had 365 00:20:32,040 --> 00:20:36,240 Speaker 1: long careers in syndication and in advertising more you worked 366 00:20:36,240 --> 00:20:38,640 Speaker 1: for Disney IRA, you worked for Reischer, and you worked 367 00:20:38,640 --> 00:20:43,480 Speaker 1: in advertising for many years and through the vagaries of 368 00:20:43,480 --> 00:20:47,280 Speaker 1: of you know, consolidation and changes in the business, you 369 00:20:47,320 --> 00:20:50,720 Speaker 1: guys both wound up. You had your own companies late 370 00:20:50,800 --> 00:20:54,159 Speaker 1: nineties early two thousand's. You came together in two thousand 371 00:20:54,320 --> 00:20:57,680 Speaker 1: three for a specific project by comedy Central to come 372 00:20:57,720 --> 00:21:01,040 Speaker 1: in and help them monetize south Park, which was racking 373 00:21:01,080 --> 00:21:03,680 Speaker 1: up episodes, had become an institution for them. But and 374 00:21:03,800 --> 00:21:07,439 Speaker 1: somebody realized, hey, there might be and yet another afterlife 375 00:21:07,440 --> 00:21:09,320 Speaker 1: for this that could come that could bring in a 376 00:21:09,359 --> 00:21:12,840 Speaker 1: couple of bucks. Um. And you never intended to build 377 00:21:12,840 --> 00:21:15,760 Speaker 1: Devmar into the you know, to quite the shop that 378 00:21:15,840 --> 00:21:18,200 Speaker 1: it is today. Well, we never actually did a business 379 00:21:18,200 --> 00:21:21,919 Speaker 1: plan that we never did a power point, and we 380 00:21:21,960 --> 00:21:25,359 Speaker 1: never did any of those things. We just don't. We 381 00:21:25,440 --> 00:21:28,520 Speaker 1: still don't. We literally just you know, it's the old 382 00:21:28,600 --> 00:21:30,359 Speaker 1: fashioned you know, how did you make all this money? 383 00:21:30,400 --> 00:21:31,679 Speaker 1: Is that? Well, we bought stuff for a dollar and 384 00:21:31,680 --> 00:21:33,480 Speaker 1: we sold it for two dollars. It's kind of a 385 00:21:33,600 --> 00:21:36,000 Speaker 1: version of that. And on south Park, mort was acquiring 386 00:21:36,000 --> 00:21:38,080 Speaker 1: it asked me to join him. I was actually a 387 00:21:38,080 --> 00:21:40,520 Speaker 1: Lionsgate had a worldwide TV at that point, but I 388 00:21:40,560 --> 00:21:43,560 Speaker 1: had Mercury because this was early days of Lionsgate. It 389 00:21:43,600 --> 00:21:46,359 Speaker 1: wasn't the you know, eight billion dollar company it was today. 390 00:21:46,359 --> 00:21:48,359 Speaker 1: It was, you know, a few hundred million making some 391 00:21:48,480 --> 00:21:50,879 Speaker 1: movies and some TV shows here and there. And I 392 00:21:50,880 --> 00:21:54,560 Speaker 1: had started their international distribution. There wasn't even domestic, wasn't 393 00:21:54,560 --> 00:21:57,280 Speaker 1: a need for domestic. So I had kept Mercury as 394 00:21:57,320 --> 00:22:00,639 Speaker 1: a separate company and my deal with them, and this 395 00:22:00,760 --> 00:22:02,800 Speaker 1: was a couple of years into it, and more approached 396 00:22:02,800 --> 00:22:05,320 Speaker 1: me and it just seemed like a fun thing to do. 397 00:22:05,760 --> 00:22:07,240 Speaker 1: I was allowed to do it. I went back to 398 00:22:07,320 --> 00:22:11,080 Speaker 1: John Feldheimer and basically it became so much more fun. 399 00:22:11,119 --> 00:22:13,679 Speaker 1: I said, I'm gonna quit because this is what I 400 00:22:13,720 --> 00:22:15,399 Speaker 1: really want to do, but I'll take care of you. 401 00:22:15,480 --> 00:22:17,480 Speaker 1: And I basically made an exit deal with him and 402 00:22:17,560 --> 00:22:20,520 Speaker 1: hired my replacement and went off and parted with Morton. 403 00:22:20,600 --> 00:22:22,480 Speaker 1: It was turned out to be a really smart thing, 404 00:22:22,760 --> 00:22:25,040 Speaker 1: and you know, we have had a good time. I 405 00:22:25,080 --> 00:22:26,800 Speaker 1: will tell this is a really quick story. I told 406 00:22:26,800 --> 00:22:29,919 Speaker 1: it at the Irish Wards, which was that yes, we 407 00:22:29,960 --> 00:22:32,600 Speaker 1: acquired south Park in two thousand three, but you got 408 00:22:32,600 --> 00:22:34,840 Speaker 1: to go back five years to get the actual story. 409 00:22:35,320 --> 00:22:39,400 Speaker 1: It's pretty brief. But I'm working at Disney and President 410 00:22:39,400 --> 00:22:42,600 Speaker 1: when it was a television running overseeing all syndication. Yeah, 411 00:22:42,640 --> 00:22:46,560 Speaker 1: for Disney, this show called south Park comes on the 412 00:22:46,560 --> 00:22:49,400 Speaker 1: air and it's like the most amazing thing I've ever seen. 413 00:22:50,280 --> 00:22:54,159 Speaker 1: So I called Doug Herzog, who's the press of Comedy Central, 414 00:22:55,000 --> 00:22:58,119 Speaker 1: and said, I'll tell you, what if you get to 415 00:22:58,240 --> 00:23:03,119 Speaker 1: a hundred episodes, I'll pay twenty million dollars and have 416 00:23:03,280 --> 00:23:07,480 Speaker 1: the syndication rights for Disney will syndicated in sharing the 417 00:23:07,480 --> 00:23:09,680 Speaker 1: money with you, and we'll all make a bunch of money. 418 00:23:09,880 --> 00:23:14,359 Speaker 1: And Doug wanted to do the deal. And but he's 419 00:23:14,480 --> 00:23:18,119 Speaker 1: much wiser than me. He realized I was a little 420 00:23:18,200 --> 00:23:21,199 Speaker 1: rogue out there as the I was president. I was 421 00:23:21,240 --> 00:23:23,960 Speaker 1: the president of the division. But it is the Walt 422 00:23:23,960 --> 00:23:26,320 Speaker 1: Disney company. So he said more, I respect you a lot, 423 00:23:26,400 --> 00:23:28,600 Speaker 1: but honestly, I need I just need you to make 424 00:23:28,600 --> 00:23:31,960 Speaker 1: sure it is the Walt Disney South Park. Can you 425 00:23:32,119 --> 00:23:35,480 Speaker 1: least ask your boss, if at the time was Steve Burke, 426 00:23:36,400 --> 00:23:39,320 Speaker 1: if if you can actually make this deal? Because here 427 00:23:39,320 --> 00:23:41,280 Speaker 1: I am offering twenty million dollars and I didn't even 428 00:23:41,320 --> 00:23:44,200 Speaker 1: ask anybody. So I got probably a good idea. So 429 00:23:44,800 --> 00:23:47,199 Speaker 1: so I called Steve Burke. He hadn't seen it. I 430 00:23:47,200 --> 00:23:49,560 Speaker 1: sent him a couple of episodes, and a couple of 431 00:23:49,640 --> 00:23:52,720 Speaker 1: days later I get a response from him saying, Okay, 432 00:23:52,800 --> 00:23:55,760 Speaker 1: that is the funniest show I've ever seen in my 433 00:23:55,880 --> 00:23:58,400 Speaker 1: entire life. And there's not a one percent chance you're 434 00:23:58,400 --> 00:24:01,000 Speaker 1: doing this for the Walt Disney Company and that was 435 00:24:01,080 --> 00:24:03,480 Speaker 1: the end of that. Five years later, they had yet 436 00:24:03,520 --> 00:24:07,480 Speaker 1: to sell Comedy Central indsyndication and it was still available. 437 00:24:08,600 --> 00:24:13,120 Speaker 1: So and so and so South Park is sold. It's 438 00:24:13,160 --> 00:24:15,719 Speaker 1: a it's a success. You you and I remember at 439 00:24:15,720 --> 00:24:18,160 Speaker 1: the time there was like, who's gonna buy this? It's 440 00:24:18,160 --> 00:24:22,440 Speaker 1: on Comedy Central all day and night. Yeah, we kind 441 00:24:22,440 --> 00:24:25,600 Speaker 1: of built the company on doing things that any sane 442 00:24:25,640 --> 00:24:28,080 Speaker 1: person had said, like, there's no chance, not that you 443 00:24:28,080 --> 00:24:29,920 Speaker 1: wouldn't really succeed at it. You can't even get on 444 00:24:29,960 --> 00:24:32,400 Speaker 1: the air, forget about it. I remember somebody who still 445 00:24:32,480 --> 00:24:34,320 Speaker 1: go nameless was like, you're not even You're just not 446 00:24:34,359 --> 00:24:36,040 Speaker 1: gonna sell it. You're gonna have to realize you're not 447 00:24:36,080 --> 00:24:37,720 Speaker 1: gonna sell it. And then it looked like we got 448 00:24:37,800 --> 00:24:39,800 Speaker 1: some trashally what you might sell it, but you're never 449 00:24:39,800 --> 00:24:42,440 Speaker 1: gonna get cash. And then we started getting cash when 450 00:24:42,440 --> 00:24:44,320 Speaker 1: they said, what you might get a little cash, but 451 00:24:44,359 --> 00:24:46,000 Speaker 1: it's not gonna be like a regular sitcom. You're gonna 452 00:24:46,000 --> 00:24:47,760 Speaker 1: get like a year or two, and so lo and behold. 453 00:24:47,760 --> 00:24:49,879 Speaker 1: We sold it for five years cash plus bar the 454 00:24:49,920 --> 00:24:52,280 Speaker 1: whole thing, and that's how the company was started. And 455 00:24:52,320 --> 00:24:55,560 Speaker 1: then we the next big thing. It was actually Tyler Perry. 456 00:24:55,680 --> 00:24:59,199 Speaker 1: But wait, wait, in between, there must have been a 457 00:24:59,200 --> 00:25:00,959 Speaker 1: point when you looked at Chather and said, let's keep 458 00:25:01,000 --> 00:25:03,119 Speaker 1: this going. But one of the things that's interesting in 459 00:25:03,119 --> 00:25:06,720 Speaker 1: South Park was that time. So we're in the deal, 460 00:25:07,480 --> 00:25:11,480 Speaker 1: there was a clause that said, if we don't do 461 00:25:11,640 --> 00:25:14,439 Speaker 1: that well with it, they were actually nervous about it. 462 00:25:14,440 --> 00:25:16,959 Speaker 1: So there if we don't sell it so deep they 463 00:25:16,960 --> 00:25:19,680 Speaker 1: even wanted to buy it back because they were concerned 464 00:25:19,680 --> 00:25:22,000 Speaker 1: it was gonna hurt. Even though they wanted to do it, 465 00:25:22,160 --> 00:25:24,359 Speaker 1: they were concerned. They kind of had both sides and 466 00:25:24,480 --> 00:25:27,120 Speaker 1: they were actually nervous. So it finally goes on the air, 467 00:25:28,440 --> 00:25:31,760 Speaker 1: and at that so in two thousand three, Duggers I 468 00:25:31,840 --> 00:25:34,199 Speaker 1: wasn't the president of Comic Central. It was a man 469 00:25:34,280 --> 00:25:37,840 Speaker 1: named Larry Divney, was a great guy. Divney left and 470 00:25:37,840 --> 00:25:40,120 Speaker 1: by the time it aired in two thousand five, Duggers 471 00:25:40,240 --> 00:25:44,200 Speaker 1: was back Central again. As the world turns up by it, 472 00:25:44,600 --> 00:25:46,800 Speaker 1: and he calls up and he says, I am really 473 00:25:47,080 --> 00:25:50,480 Speaker 1: really concerned that this is going to kill South Park? 474 00:25:51,320 --> 00:25:53,760 Speaker 1: Are you you really have to do that? That we've 475 00:25:53,800 --> 00:25:59,080 Speaker 1: sold it percent of the United stage fifty stations. It 476 00:25:59,240 --> 00:26:02,160 Speaker 1: is done it's on. He was really nervous about it. 477 00:26:02,359 --> 00:26:04,640 Speaker 1: So that was like early September. It goes on the air, 478 00:26:05,160 --> 00:26:08,240 Speaker 1: six weeks later, were gonna call from Doug. He goes, 479 00:26:08,760 --> 00:26:13,240 Speaker 1: oh my god, it's helping me. It's helping the ratings 480 00:26:13,720 --> 00:26:16,200 Speaker 1: because I didn't realize that a lot of people didn't 481 00:26:16,200 --> 00:26:18,320 Speaker 1: even know that it was on the air, and they're 482 00:26:18,359 --> 00:26:23,040 Speaker 1: finding it in syndication and they're watching the originals on 483 00:26:23,359 --> 00:26:26,439 Speaker 1: Comedy Central and so he goes keep it going. So 484 00:26:26,520 --> 00:26:28,639 Speaker 1: he didn't even realize that. So they're even back to 485 00:26:28,680 --> 00:26:31,760 Speaker 1: the same thing with kind of what's probably happened with 486 00:26:31,800 --> 00:26:34,239 Speaker 1: Pop and Ship's Creek, and we're hoping the same thing 487 00:26:34,240 --> 00:26:36,600 Speaker 1: will happen with Ship's Creek because still so many people 488 00:26:36,640 --> 00:26:39,639 Speaker 1: have haven't discovered it yet. But that's what happened. So 489 00:26:39,680 --> 00:26:43,080 Speaker 1: the broadcasters they're running at the same time, they weren't 490 00:26:43,119 --> 00:26:45,480 Speaker 1: hurting each other, they're actually helping each other. And is 491 00:26:45,520 --> 00:26:47,800 Speaker 1: it still because I know that it is going to 492 00:26:48,440 --> 00:26:52,480 Speaker 1: HBO Max, so it's no longer in syndication, So so 493 00:26:52,560 --> 00:26:55,720 Speaker 1: for us that had happened. And I know you're asking 494 00:26:55,760 --> 00:26:57,720 Speaker 1: the other question, like when did we decide we got 495 00:26:57,720 --> 00:27:01,639 Speaker 1: to really do this kind of didn't. I still, you know, 496 00:27:01,680 --> 00:27:07,919 Speaker 1: we were doing South for the Revolution and we got 497 00:27:07,960 --> 00:27:10,000 Speaker 1: Revolution movie from Joe Rock. But the next big thing 498 00:27:10,960 --> 00:27:13,199 Speaker 1: we we then decided, you know, well Tyler Perry was 499 00:27:13,240 --> 00:27:16,440 Speaker 1: coming up. But in between that and and that time, 500 00:27:16,480 --> 00:27:18,639 Speaker 1: that was a couple of years. So at this point 501 00:27:18,800 --> 00:27:22,879 Speaker 1: we're like, I'm selling stock and we're using savings and 502 00:27:22,920 --> 00:27:24,760 Speaker 1: we're living. There's no money. I mean, you don't you know, 503 00:27:24,960 --> 00:27:26,320 Speaker 1: you sell a show, you don't get money for a 504 00:27:26,320 --> 00:27:29,000 Speaker 1: couple of years later. So it was a classic small business. 505 00:27:29,320 --> 00:27:32,280 Speaker 1: We then incorporate. We did join because we had to 506 00:27:32,320 --> 00:27:34,600 Speaker 1: get a loan. So when we had all the receivables 507 00:27:34,600 --> 00:27:36,200 Speaker 1: from South Park, we said, well, oh my god, we 508 00:27:36,280 --> 00:27:39,040 Speaker 1: have you know, call it, you know, fifty sixty million 509 00:27:39,080 --> 00:27:42,400 Speaker 1: of cash receivables. We can actually bank that and take 510 00:27:42,400 --> 00:27:44,880 Speaker 1: out a loan to actually do this company. So I'll 511 00:27:44,880 --> 00:27:47,640 Speaker 1: never forget being like I'm in my car driving here 512 00:27:48,080 --> 00:27:49,720 Speaker 1: and Mort's in l A and the lawyers on the 513 00:27:49,720 --> 00:27:51,360 Speaker 1: phone and they have to file the papers in order 514 00:27:51,359 --> 00:27:52,960 Speaker 1: to be a company in order to then file for 515 00:27:52,960 --> 00:27:55,280 Speaker 1: the loan. And the guy says, well, okay, I have 516 00:27:55,320 --> 00:27:57,280 Speaker 1: a couple of questions, Like, first of all, what's the 517 00:27:57,359 --> 00:27:59,320 Speaker 1: name of the company. And we said, well, you know, 518 00:27:59,359 --> 00:28:01,800 Speaker 1: we've talked about this. We agree on pretty much everything. 519 00:28:01,800 --> 00:28:03,760 Speaker 1: We argue about everything, but we ultimately agree and everything. 520 00:28:03,760 --> 00:28:05,120 Speaker 1: We can't agree on the name of the company. So 521 00:28:05,320 --> 00:28:09,080 Speaker 1: he's Debmar Mercury. It's called Debmar Mercury. Everybody said, well, 522 00:28:09,119 --> 00:28:11,040 Speaker 1: that's a silly name, okay, but that's what it. Just 523 00:28:11,080 --> 00:28:13,359 Speaker 1: write it down, write it down for the paper. And 524 00:28:13,359 --> 00:28:16,239 Speaker 1: then he says and secondly like, who are you guys said, well, 525 00:28:16,440 --> 00:28:18,440 Speaker 1: we're partners, so no, no, no no, you need a title. 526 00:28:18,440 --> 00:28:20,440 Speaker 1: I have to fill out this form and said, well, 527 00:28:20,680 --> 00:28:22,760 Speaker 1: it's just we have this one show. I mean, chairman's 528 00:28:22,800 --> 00:28:25,280 Speaker 1: kind of pretentious. We're presidents, but we're both presidents, so 529 00:28:25,359 --> 00:28:27,960 Speaker 1: we're co president. Fine, we'll be co presidents. What else 530 00:28:28,040 --> 00:28:30,639 Speaker 1: you got? And that's how we filed the paper. We 531 00:28:30,680 --> 00:28:33,320 Speaker 1: then go to get the loan and the bank says, 532 00:28:33,520 --> 00:28:35,439 Speaker 1: it's really impressive. You got it's just the two of 533 00:28:35,480 --> 00:28:37,400 Speaker 1: you guys. Is really great. By the way, we're gonna 534 00:28:37,400 --> 00:28:40,840 Speaker 1: need your houses to give you the loan. So we 535 00:28:40,960 --> 00:28:44,200 Speaker 1: literally put our houses as collateral to get the loan. 536 00:28:44,560 --> 00:28:47,920 Speaker 1: And then as we do working together more, it's thinking, well, Okay, 537 00:28:47,960 --> 00:28:49,840 Speaker 1: now that our entire lives are on the line, not 538 00:28:49,920 --> 00:28:52,200 Speaker 1: that they weren't before, but now they really are. What 539 00:28:52,360 --> 00:28:55,120 Speaker 1: happens if the show doesn't go for more there's like 540 00:28:55,160 --> 00:28:57,560 Speaker 1: a hundreds of episodes they're in a vault goes well, 541 00:28:57,600 --> 00:29:00,720 Speaker 1: what if the volt goes on fire? So we started 542 00:29:00,720 --> 00:29:05,800 Speaker 1: looking into all of that. It had its own set 543 00:29:05,840 --> 00:29:09,800 Speaker 1: of problems that had content issues that we the stations 544 00:29:09,800 --> 00:29:13,800 Speaker 1: were nervous about. And if something really bad happened, maybe 545 00:29:13,800 --> 00:29:16,360 Speaker 1: advertisers wouldn't be in it, you know, so all your 546 00:29:16,360 --> 00:29:18,040 Speaker 1: projections could be wrong and had a lot of it 547 00:29:18,120 --> 00:29:20,920 Speaker 1: had hurdles in its way. We you know, I think 548 00:29:20,920 --> 00:29:23,040 Speaker 1: we did a really good job, you know. We we 549 00:29:23,040 --> 00:29:26,680 Speaker 1: we put up we had we created a board from 550 00:29:26,760 --> 00:29:30,280 Speaker 1: stations who bought it and ran the edits by them. 551 00:29:30,480 --> 00:29:32,920 Speaker 1: So when we had episodes that we were trying to 552 00:29:32,960 --> 00:29:35,920 Speaker 1: clean up a little bit, um, we'd say what about 553 00:29:35,960 --> 00:29:38,120 Speaker 1: this scene? What about that scene? And they was hacking 554 00:29:38,160 --> 00:29:39,560 Speaker 1: live with that. I can't live with that. We had 555 00:29:39,800 --> 00:29:43,000 Speaker 1: we had sec attorneys, um, so we really really went 556 00:29:43,040 --> 00:29:45,520 Speaker 1: out of our way because the stations understood what they 557 00:29:45,520 --> 00:29:47,400 Speaker 1: were bying. They really liked the idea of it, but 558 00:29:47,440 --> 00:29:50,120 Speaker 1: they also were concerned about it because it is they're 559 00:29:50,160 --> 00:29:53,280 Speaker 1: pretty rough, pretty It sounds like all this based on 560 00:29:53,440 --> 00:29:56,960 Speaker 1: your years of knowledge of what your customer would want, 561 00:29:57,040 --> 00:29:59,080 Speaker 1: what kind of TLC they would want in a situation 562 00:29:59,120 --> 00:30:01,280 Speaker 1: where they were be some concerns. By the way, did 563 00:30:01,320 --> 00:30:03,080 Speaker 1: two things. It made them more vested in the show, 564 00:30:03,600 --> 00:30:07,520 Speaker 1: but it also um allowed us to with confidence to 565 00:30:07,640 --> 00:30:09,880 Speaker 1: know that we were editing it the way that our 566 00:30:09,880 --> 00:30:12,400 Speaker 1: clients needed it. At the end of the day, by 567 00:30:12,440 --> 00:30:16,400 Speaker 1: the way, we had a hundred and fifty episodes, I 568 00:30:16,400 --> 00:30:19,520 Speaker 1: think we only three, only lost three. We couldn't air 569 00:30:19,600 --> 00:30:24,600 Speaker 1: the one one of our favorite, the Ship seven times. 570 00:30:25,440 --> 00:30:28,200 Speaker 1: You wouldn't have been able to edit that because I've 571 00:30:28,240 --> 00:30:30,600 Speaker 1: ever seen the ship where they have a counter. Yeah, 572 00:30:31,080 --> 00:30:35,920 Speaker 1: So that's definitely the next evolution in the company. The 573 00:30:36,000 --> 00:30:39,360 Speaker 1: biggest thing was being as Tyler And this is now 574 00:30:39,440 --> 00:30:41,480 Speaker 1: a year and a half later, and Tyler had come 575 00:30:41,520 --> 00:30:45,960 Speaker 1: to us through marketing and Wayne Morris because he was frustrated, 576 00:30:46,000 --> 00:30:48,960 Speaker 1: as we talked about earlier, with the creative process. He 577 00:30:49,080 --> 00:30:52,080 Speaker 1: was in that process of trying to sell shows shows 578 00:30:52,120 --> 00:30:54,280 Speaker 1: and could you put a blonde girl next door and 579 00:30:54,280 --> 00:30:56,400 Speaker 1: you could make his best friend a little redheaded boy, 580 00:30:56,480 --> 00:30:58,680 Speaker 1: and he was just like, I'm not doing that. If 581 00:30:58,720 --> 00:31:00,640 Speaker 1: I fail, I want to fail my way. So, long 582 00:31:00,680 --> 00:31:03,760 Speaker 1: story short, we we got a business with Tyler. We 583 00:31:03,840 --> 00:31:06,840 Speaker 1: fund all the marketing. We're still writing our own personal 584 00:31:06,920 --> 00:31:09,200 Speaker 1: checks to Nielsen kind of thing, which is painful thing 585 00:31:09,240 --> 00:31:12,960 Speaker 1: to do. And we're now have the Tyler shows and 586 00:31:13,240 --> 00:31:16,200 Speaker 1: we're sitting there and we had the classic small business 587 00:31:16,200 --> 00:31:18,880 Speaker 1: because this is now a six in business three years, 588 00:31:19,160 --> 00:31:21,520 Speaker 1: we have a we have a you know, call it 589 00:31:21,560 --> 00:31:24,280 Speaker 1: a five six million dollar line. We've paid half of 590 00:31:24,320 --> 00:31:26,880 Speaker 1: it down because the cash flow is coming in, and 591 00:31:26,960 --> 00:31:29,640 Speaker 1: yet we're looking at the projection saying, you know, in 592 00:31:29,760 --> 00:31:31,880 Speaker 1: six months, we're gonna be out of money, even though 593 00:31:31,880 --> 00:31:33,960 Speaker 1: we have way more money coming in down the line. 594 00:31:34,480 --> 00:31:36,880 Speaker 1: And so that's when we decide we got to do something. 595 00:31:37,440 --> 00:31:39,480 Speaker 1: And then we looked at more new Michael Eisner, we 596 00:31:39,480 --> 00:31:40,960 Speaker 1: talked to him, we talked to a lot of other 597 00:31:41,000 --> 00:31:45,240 Speaker 1: people about selling, and then ultimately worked it out with Lionsgate. 598 00:31:45,360 --> 00:31:48,360 Speaker 1: Lion Skate came in, sold the company to lions Gate, 599 00:31:48,440 --> 00:31:52,920 Speaker 1: and fourteen years now and we've done three deals. Because 600 00:31:53,280 --> 00:31:55,840 Speaker 1: each time you do a deal to do an employment agreement, 601 00:31:56,280 --> 00:31:58,800 Speaker 1: that agreement comes to an end and basically we re 602 00:31:59,320 --> 00:32:02,520 Speaker 1: up three time. Some they have been great partners and 603 00:32:02,600 --> 00:32:09,520 Speaker 1: clearly you have reached the finish each other sentences stage. Yeah, ago, exactly, Yeah, 604 00:32:09,560 --> 00:32:14,120 Speaker 1: that's true. Is there a certain yin and yang as 605 00:32:15,120 --> 00:32:17,240 Speaker 1: I mean, I get the sense you're both very analytical, 606 00:32:17,280 --> 00:32:19,240 Speaker 1: but is there like, is there a division of labor 607 00:32:19,280 --> 00:32:21,320 Speaker 1: at all or do you kind of both do do 608 00:32:21,360 --> 00:32:23,840 Speaker 1: a little bit of everything and here's a little more 609 00:32:23,880 --> 00:32:25,760 Speaker 1: sales than me. But for the most part, we just 610 00:32:26,040 --> 00:32:28,440 Speaker 1: any big decision, we're just we just we just basically 611 00:32:28,480 --> 00:32:31,920 Speaker 1: roll play it out. We make the decision quickly, but 612 00:32:32,080 --> 00:32:34,560 Speaker 1: we don't always look at it the same way, obviously, 613 00:32:35,160 --> 00:32:38,360 Speaker 1: and but we try to. It's rare that we really 614 00:32:38,400 --> 00:32:41,840 Speaker 1: really really can't come to the same place. It's been 615 00:32:41,880 --> 00:32:47,320 Speaker 1: pretty good. It's a great business success story, entrepreneurial success story, 616 00:32:47,520 --> 00:32:50,720 Speaker 1: and you know, be very interested to see what we 617 00:32:50,960 --> 00:32:53,400 Speaker 1: what is to come this fall from Nick Cannon and 618 00:32:53,480 --> 00:32:56,000 Speaker 1: Central Avenue. And thank you so much for taking the 619 00:32:56,000 --> 00:32:57,880 Speaker 1: time to sit and talk with us about the business. 620 00:32:57,920 --> 00:32:59,680 Speaker 1: Thank you. And by the way, by the way, I 621 00:32:59,720 --> 00:33:02,480 Speaker 1: will say, you know a lot of people think that, 622 00:33:02,840 --> 00:33:05,840 Speaker 1: you know, the TV business is mature, and it is, 623 00:33:06,320 --> 00:33:09,200 Speaker 1: but we're still bullish on it. We still think there's 624 00:33:09,200 --> 00:33:12,440 Speaker 1: a real business out there and your end of the 625 00:33:12,600 --> 00:33:15,280 Speaker 1: distribution is where the rubber meets the road for monetization. 626 00:33:15,600 --> 00:33:22,320 Speaker 1: So hopefully, thank you, thank you, m thanks for listening. 627 00:33:22,640 --> 00:33:25,120 Speaker 1: Be sure to tune in next week for another episode 628 00:33:25,120 --> 00:33:26,000 Speaker 1: of Strictly Business.