The Carsey-Werner Company, L.L.C.

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The Carsey-Werner Company, L.L.C.

4024 Radford Avenue
Studio City, California 91604
U.S.A.
Telephone: (818) 655-5598
Fax: (818) 655-5930
Web site: http://www.carseywerner.com

Private Company
Founded: 1981
Employees: 130
Sales: $199.00 million (1999)
NAIC: 51211 Motion Picture and Video Production; 51212 Motion Picture and Video Distribution

Founded in 1981 by programming veterans Marcy Carsey and Tom Werner, the Carsey-Werner Company, L.L.C. is one of the few remaining independent television production studios in Hollywood. Creating sitcoms is the heart of the company, which is valued at more than $ 1 billion. Its top-rated television shows include such hits as the Cosby Show, Roseanne, and 3rd Rock From the Sun. Carsey-Werner has enjoyed success on each of the top four broadcast networks, and during one stretch in 1988–89 became the first studio of any size to take the first three slots in the annual rankings. Over the years, the company has created its own distribution arm and film operation, and also became a partner in Oxygen Media, which integrates television and Internet content targeted at women.

Background

Marcy Carsey graduated with a degree in English from the University of New Hampshire in the mid-1960s with a vague interest in acting. She moved to New York and used her job as a tour guide at NBC to become a production assistant for the Tonight Show, based in New York at the time. It was there she met an associate producer who became her future husband, writer John Carsey. She also worked as a program supervisor at William Esty Advertising before moving to Los Angeles with her husband, who had been hired to write for Rowan and Martin’s Laugh-In. She went to work as a story analyst for Tomorrow Entertainment, becoming executive story editor, then accepted a job at ABC-TV in 1974 to serve as a general program executive assigned to comedy programming. Carsey systematically rose through the ranks of the network. In 1976 she was named vice-president of Prime Time Comedy and Variety Programs, then in 1979 became senior vice-president of Prime Time Series, responsible for the creation, development, and supervision of all prime time series on the network.

Carsey’s future partner, Tom Werner, graduated from Harvard in 1971 and worked as a documentary filmmaker for two years before taking a position in ABC-TV’s planning and development department. He was manager of Prime Time Program Development, East Coast in 1975 when he met Carsey. She was Director of Comedy Programming at the time and hired him as manager of Comedy Programming. They worked so well together that for the sake of convenience they set up shop in the same office. Their collaboration helped to produce hit shows from the period that included Taxi, Soap, Dynasty, and Barney Miller.

One of their most popular shows, Mork and Mindy, was created by the pair while on a flight to New York where scheduling meetings were to be held. With the goal of coming up with an eight o’clock hit for the network, Carsey and Werner worked out a tentative comedy to star Robin Williams, a little known stand-up comic, who had impressed them with a guest appearance on Happy Days in which he played an alien. They decided to team Williams with Pam Dawber, who had done an earlier pilot for them. Footage from Happy Days episodes was cobbled together to make a presentation. Management, however, balked at the idea. Even though the series was little more than a tentative concept, Carsey jeopardized her reputation and position by insisting that the project be produced. The show became a hit and the reputation of both Carsey and Werner was only enhanced in the industry.

Early 1980s Company Origins

In November 1980, dissatisfied with a change in management, Carsey left ABC, took out a second mortgage on her home, and started her own production company. Werner succeeded her as head of series television, but less than a year later he was persuaded to join her as an independent producer, forming the Carsey-Werner Production Company in 1981.

The existence of Carsey-Werner was immediately threatened in its first year by a writers’ strike and an actors’ strike. The company then produced a number of pilots that failed. Its first series to reach the air was Oh, Madeline!, starring Madeline Kahn, that ran on ABC during the 1983–84 season. The company also produced a made-for-television movie, Single Bars, Single Women, based on a Dolly Parton song. Financially, however, Carsey-Werner was suffering. Networks and studios offered production deals, but Carsey and Werner valued their independence and decided to persevere. Their company desperately needed a hit, a show that would run long enough to become a viable product for syndication, where the profits could be made.

Although the numbers have changed since the early 1980s when Carsey-Werner began to independently produce television shows, the fundamental economics have not. Bill Carter in a 1996 article for the New York Times describes the reality for production companies: “All series are produced at a deficit because networks do not pay enough in license fees to cover the costs of making a show. A typical episode of a half-hour comedy costs between $500,000 and $600,000 to produce and runs a deficit of $100,000 to $200,000. Without a big bankroll, it is almost impossible to absorb those deficits while waiting for the payoff that a big hit brings: the hundred of millions of dollars that can be made in syndication.”

The breakout hit for Carsey-Werner was the Cosby Show. In the early 1980s Bill Cosby was a well-known and popular stand-up comedian with a couple of fairly successful television series to his credit, but to the networks he was deemed risky. Carsey-Werner believed in Cosby, and its confidence was rewarded with a show that, beginning in 1984, became a consistent ratings leader. Eventually it would reap close to an unprece-dented $1 billion in syndication money. With the success of the Cosby Show, more offers were made to Carsey-Werner, but by now the company’s existence was assured.

Another personality that Carsey and Werner believed in was a comedienne they discovered on the Tonight Show: Roseanne Barr. The producers considered her for roles in all of their shows under development. Finally they decided to take a chance and develop a series around Roseanne. The result was another hit show that would run for many years, providing the profits in syndication that would subsidize Carsey-Werner efforts that proved less popular with the public, such as Chicken Soup (1989). Another hit show of the 1980s for Carsey-Werner was the Cosby Show spin-off A Different World, which aired on NBC beginning in 1987. The following season, 1988–89, the company would accomplish the unprecedented feat of producing the year’s three highest rated shows: Cosby at number one, followed by Roseanne and A Different World.

Carsey and Werner were given an opportunity by CBS in the late 1980s to run all of the network’s programming. They declined, again preferring to keep their independence and the ability to shop their ideas to all of the networks. That flexibility had proven to be critical in more than one situation. Carsey-Werner was able to place the Cosby Show with NBC after ABC had rejected the idea. Later, NBC would reject Roseanne, and the company was able to turn to ABC. In the 1990s Carsey-Werner hits Cybill and 3rd Rock From the Sun would also be rejected by the first network to which the shows were offered, only to be picked up by a rival. If Carsey-Werner had been tied to an exclusive deal with one network, almost all of its hit shows might never have been produced.

A key addition to the Carsey-Werner management team was Stuart Glickman, who became chief executive officer in 1987. Originally a trial lawyer, Glickman became involved in the entertainment industry in 1968 when he became Assistant Counsel for American International Pictures. In 1970 he be-came director of business affairs for CBS Television. Glickman then worked as an entertainment lawyer for 15 years, providing legal and business advice to top companies and talents, including Carsey-Werner. After becoming the CEO, Glickman expanded on the company’s production success with a mandate to create a diversified, global entertainment company with multiple revenue streams. He oversaw the creation of a distribution operation, reacquiring Carsey-Werner’s library of shows from Viacom, then brokered a number of innovative syndication deals. He helped to create Carsey-Werner Moving Pictures, to position the company to produce feature films. According to Variety, Glickman helped turn Carsey-Werner into a “tiny powerhouse.”

Carsey-Werner endured a lull in the early 1990s. Shows that failed to succeed were Grand (1990), Davis Rules (1991), Frannie’s Turn (1993), a Bill Cosby update of the Groucho Marx quiz show You Bet Your Life (1993), and She TV (1994). At one point Carsey-Werner had only one hit show running, Roseanne. Fortunes were revived with Grace Under Fire in 1993 and Cybill in 1994. Then Carsey and Werner looked to a past success, Mork and Mindy, to create one of their most popular sitcoms, 3rd Rock From the Sun.

Company Perspectives:

As one of the few remaining independent production companies, Carsey-Werner has had an unprecedented impact on television as an art and as a business.

The concept for the show, “aliens on a field trip,” was given to the husband-wife writing team of Bonnie and Terry Turner, who shaped it into a vehicle that would allow for wry observations about the human condition. To star in the show Carsey-Werner brought in film veteran John Lithgow, and Jane Curtin, famous from her days with Saturday Night Live. With the show in development, another tempting offer was made to Carsey and Werner, this time from the head of Disney-ABC, Michael Eisner, who wanted the producing team to take over the network’s troubled entertainment division. Rather than abandon the shows they had in development, they turned down the offer. A year later, in 1996, one of those shows, 3rd Rock, would begin to air on NBC and become an immediate hit. Two other shows that premiered in 1996, however, did not succeed: Townies and Cosby, the latter of which was an attempt (same stars in a different situation) to recapture the magic that had launched the production company a decade earlier. In 1998 Carsey-Werner scored another success with That 70s Show for the Fox network, giving the company the distinction of having placed hits with the four largest broadcast networks.

At a time when most of the few remaining independent producers joined forces with a studio or network, Carsey-Werner maintained its independence throughout the 1990s, managing its profits carefully and using its money to expand its business, as Glickman steered the company “in an industry increasingly hostile to non-vertically integrated companies,” in the words of Variety. A major part of the company’s formula was to offer ownership stakes to key personnel. Generally that meant the star of the show, such as Bill Cosby, who became even wealthier through his association with Carsey-Werner. According to Richard Zoglin in a 1996 Time article, “Carsey and Werner have also become experts in a more conventional TV game: appeasing stars with big egos. Both Roseanne and Brett Butler, the star of Grace Under Fire, have driven out a succession of writers and producers with whom they’ve clashed over scripts. Cybill executive producer Jay Daniel has just been ousted after a falling out with star Cybill Shepherd—she had been trying to assert more control over her series, reportedly even fighting for more close-ups as shows are being edited. Some criticize the team for invariably caving in to the stars in these disputes. One producer claims that Carsey-Werner is particularly inhospitable to writers, who are seen as expendable. The duo reply that they’re just doing what is best for the show.”

Despite individual success, and the wealth that came with it, both Carsey and Werner remained unassuming, preferring to keep their lives private. They continued to share an office and were known to choose the commissary over expensive restaurants. Werner did indulge himself in 1991 when he purchased the San Diego Padres baseball team, a venture that proved disastrous and lasted only three years. In the summer of 2000 he became fodder for gossip columnists when he began a bi-coastal romantic relationship with Today Show star Katie Couric.

In an effort to stay in the forefront of a rapidly changing media landscape, Carsey, Werner, and company president Caryn Mandabach created an entity known as Carsey-Werner-Mandabach, which formed a partnership with Oprah Winfrey and Geraldine Laybourne (formerly with Nickelodeon and Disney) to create Oxygen Media. The new company, announced with much fanfare in 1998, was conceived as an integration of Internet web sites and a cable television channel targeted at women. On the television side of Oxygen, Carsey-Werner-Mandabach planned to use its three-year, $325 million budget to produce programming for “themed blocks of time.” Weekday prime time, for instance, would feature the comedy-oriented Oxygen Tent from six to eight p.m., consisting of live and taped comedy sketches and a mix of other material, followed from eight to ten p.m. by Pure Oxygen, in which the emphasis would be on women’s real stories, augmented by a live online presence via chat rooms and surveys.

Launched in February 2000, Oxygen had trouble finding room on basic-service cable packages. Whereas other new channels were paying cable systems to carry their programming, Oxygen asked for 19 cents for each subscriber. By July only 13 million of the country’s more than 70 million cable homes were able to receive Oxygen, providing too few viewers to be counted by the Nielsen ratings service, a serious shortfall, since advertising rates are based on those numbers. Oxygen’s five-year plan called for a budget of $450 million, but only $300 million had been raised. Online, Oxygen quickly dropped two of its shopping-related sites, opting to steer away from direct sales. Moreover, Oxygen’s viewers did not respond well to its initial offering of low-budget television programming that consisted of too many people “talking on couches.” Two of its shows were soon taken out of production: the morning news show and “Trackers,” a teenage gab-fest. Whereas most new channels filled out their schedules with popular, previously-aired material, Oxygen was further hampered by the unavail-ability of the Carsey-Werner library until 2002. Oxygen officials remained optimistic, however, insisting that the media company always expected that it would have to find a successful formula. The company received encouraging news August 2000 when, for the first time, women, Oxygen’s target audience, outnumbered men online.

The fortune of Carsey-Werner’s core business, in the mean-time, was mixed in 2000. The company’s attempt to break into animation, God, the Devil and Bob, was pulled from NBC after only four episodes, unable to compete opposite ABC’s hit quiz show, Who Wants to be a Millionaire? The company did add a major new star, however, when it announced in May that Steve Martin had signed a production deal. Perhaps most important of all to Carsey-Werner’s future may have the announcement in June that its CEO of 13 years, Stuart Glickman, would be leaving the company to “explore new business and investment opportunities.” The company’s fall production plans had just been concluded, with the return to network television of That 70s Show and 3rd Rock From the Sun, plus the addition of a new comedy, Don’t Ask. “I wanted to wait for an orderly time when all things were done,” Glickman explained to Variety, adding “I feel like I’m leaving the company in good shape.” Glickman also agreed to help in the search for his replacement.

Principal Divisions

Carsey-Werner Distribution; Carsey-Werner Moving Pictures.

Key Dates:

1981:: Carsey-Werner Company is formed.
1984:: The Cosby Show becomes first hit show for Carsey-Werner.
1987:: Stuart Glickman is named chief executive officer.
1989:: Carsey-Werner takes top three slots in television rankings for the season.
1996:: Carsey-Werner sitcom 3rd Rock From the Sun begins run on NBC.
1998:: Carsey-Werner partners with Oprah Winfrey and Geraldine Laybourne to create Oxygen Media.