New ‘Star Wars’ to Hit Network TV Before Cable

George Lucas’ current box-office hit, “Star Wars: Episode I The Phantom Menace” will appear on free television long before it ever airs on cable--a growing trend in which the rules governing what happens to a big Hollywood movie after it leaves the theaters are increasingly being bent.

Under the deal that Rupert Murdoch’s News Corp. struck with Lucas last year, his 20th Century Fox movie studio released the sci-fi saga on the big screen last week, then will release it subsequently on home video. It then turns the film over to the Fox network for its television debut, bypassing cable.

That course deviates from the once-standard practice of sending movies, after their home video run, directly to pay cable channels such as Home Box Office and Showtime, before they appear on network television.

The model governing the TV airing of theatrically released films has been thrown out the window for a variety of reasons. The biggest is that media conglomerates such as News Corp., Time Warner Inc. and Walt Disney Co. now own movie studios as well as multiple cable and broadcast outlets, and aim to leverage those films in every way possible to fully exploit them across all lines of business.

Increasingly, movies made by 20th Century Fox are used to build the company’s Fox broadcast network, while those produced by Warner Bros. studio typically are funneled first to one of Time Warner’s entertainment channels such as the TNT cable channel.

While Fox does not own or control the “Star Wars” franchise, it’s no wonder a powerful filmmaker such as Lucas would align his lucrative property with a media company such as Fox with the promotional and distribution muscle and the international reach to fully exploit the film worldwide.

It’s also little wonder that Murdoch would lock in rights to air “The Phantom Menace” on the Fox network first to give the network a boost. As an added bonus, it’s stealing from the playbook of his archenemy, Ted Turner.

While Turner’s cable channels used to get big-event movies several years after their broadcast runs, they can now get the first bite on Warner Bros. films because they are sister operations. All fall under the Time Warner umbrella.

Even before merging his cable empire with Time Warner in 1996, Turner bought the rights for his TNT and TBS cable channels to big movies like “Dumb and Dumber” and “The Shawshank Redemption,” which were made by two movie companies New Line Cinema and Castle Rock Entertainment, respectively, that Turner had acquired.

Time Warner gave Turner an even bigger pool of films and TV shows to draw upon, with such big Warner Bros. theatrical hits as “The Matrix” and “Analyze This” getting early play on his cable networks. Turner has applied the formula to television properties as well, directing reruns of Time Warner gems such as “E.R.” and “Friends” to his cable channels rather than to broadcast outlets exclusively.

Turner’s strategy has brought substantial ratings increases to his channels, which he argues is more valuable in the long run than if Time Warner simply auctioned off its movies to the highest bidders.

Drawing an increasing number of viewers and advertisers, the top-rated cable channels now have the economic footing to outbid the networks on big event movies. While USA Network, TBS, TNT and Lifetime Television frequently outbid broadcasters, television executives expect more niche-oriented services such as Comedy Central to eventually join the bidding.

In addition to deeper financial reserves to draw upon, cable channels can often pay more than broadcasters for movie packages that include blockbusters because they have more time slots available for airing movies and can rerun the same picture over and over. And for networks such as USA and TBS, movies are a programming staple.

The financially challenged broadcast networks have been forced to become more selective in their theatrical acquisitions because of tight budgets as well as the pressure to target their programs to narrower audiences.

In landing the theatrical distribution rights to the new “Star Wars” trilogy, Fox made sure it tied up the TV rights to the first of the three films, “Phantom Menace.”

Fox television executives would not comment on the deal with Lucas, but the hit movie is expected to bypass pay cable channels and go straight to the Fox network, presumably in time for the November sweeps in 2000. That would be a little more than six months after the assumed video release of the film, in the spring of 2000.

Viewership during the sweeps period determines TV advertising rates, so a big audience for “Phantom Menace” would give Fox a financial boost. In addition, Fox can endlessly promote its other shows to the audience tuning in for the film.

This is the second time Fox has recently snatched the rights to a blockbuster Hollywood movie. Last year, the network paid a hefty $80 million for Steven Spielberg’s “The Lost World: Jurassic Park” from distributor Universal Pictures. That price, which bought out both broadcast and pay television rights, covered 12 runs over a 12-year period. It also keeps the film off off rival pay television networks until 2010.

But the ratings for the film’s airing were soft, proving that the strategy doesn’t always work as hoped.

It is unusual for major event movies to appear on network TV before cable simply because of the exclusive “output deals” that studios have with such services as Showtime, HBO and Starz that guarantee them rights to a certain number of showings over a specific period of time. Although Fox has such a deal with HBO, Lucas--who controls the “Star Wars” properties--does not.

But television executives speculate that even those contracts may be challenged when they come up for renewal now that studios have so many more choices. Daily Variety last year speculated that when Fox renegotiates its output deal with HBO, it will try and exclude any movie that grosses more than $150 million at the domestic box office.

Assuming Fox gets the TV rights to the next two “Star Wars” installments, those films will no doubt fall into that category.