Veteran Fox TV exec talks star showrunners and super-sized budgets

Harris Katlemen, who ran TV production at Fox from 1980-1992, talked to Business Insider about how much has changed during his 70 years in the TV business.

There's a lot more money floating around now than there was then, he said. But other things, like the value of experienced TV producers, are still the same.

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When Harris Katleman, who was president and CEO of 20th Century Fox Television in the 1980s and early 1990s, entered the TV business in the 1950s, there were three big broadcast networks, cable didn't exist, and streaming media was decades away from being invented.

The former TV agent, producer, and executive, who is now 90 years old, gawks at the amount of money that companies including Netflix, Amazon, Disney, WarnerMedia, and Apple are spending on TV productions to compete for viewers' attention.

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“The whole business is topsy turvy,” Katleman, who recently released with grandson, Nick Katleman, a memoir, “You Can't Fall Off the Floor: And Other Lessons from a Life in Hollywood,” told Business Insider. “Netflix is spending money like it's going out of style ... The networks can't compete with that.”

Traditional TV companies including Disney and AT&T's WarnerMedia are coughing up more money to hold onto their biggest hitmakers amid competition from Netflix and others.

WarnerMedia is reportedly nearing a $500 million megadeal with JJ Abrams and his Bad Robot production company following a bidding war with Apple, Disney, and others for the producer. Netflix nabbed Shonda Rhimes from ABC and Ryan Murphy from Fox last year in multi-year deals that were each worth hundreds of millions of dollars.

“They are the superstars,” Katleman said, of writers and producers, who are the hitmakers in TV, unlike in film, where actors and directors often land the biggest paydays. “But the pressure on them ... They better deliver.”

As Katleman recalled, even the most successful TV producers have their flops. The late Steve Bochco, creator of “Hill Street Blues” and “LA Law,” was a star TV producer of his day. He signed a $50-million deal with Fox's TV studio in the late 1980s, which was one of the biggest production deals at the company at the time, Katleman said. Bochco also had a 10-series commitment from network ABC.

In 1990, he created a series called “Cop Rock,” “a police drama that masqueraded as a Broadway musical,” as Katleman described the show in his book. It was a fast failure, and was cancelled after 11 episodes.

Netflix has upended the TV model

Fortunately for Bochco, and ABC and Fox, Bochco followed it up with “NYPD Blue” in 1993. It ran for 12 seasons and was ABC's longest-running hour-long drama until it was passed by Rhimes' “Grey's Anatomy” in 2016. “NYPD Blue” brought in $250,000 for the studio, Katleman said, thanks in part to syndication.

Katleman said while he was at Fox, a successful show could fetch a few hundred thousand per episode in the syndication market once it hit the magic number of 88 episodes.

“Today, that model wouldn't work,” Katleman said.

The long tail economics of shows on Netflix is unclear, he said. It's unknown what a show like “Stranger Things” will be worth in 10 to 20 years. Netflix, which operates a global TV service, doesn't usually syndicate its TV series now. It is starting explore other opportunities, such as licensing its IP.

“It's hard to put my finger on,” Katleman said. “What's the ultimate payoff？”