All This And Candid Camera, Too

Michael King, president of top TV syndicator King World Productions Inc., never misses a chance to knock the competition. Especially when it has been knocking him. Last year, his rivals gleefully predicted that one of a rash of new game shows would finally knock out King's seven-year-old Wheel of Fortune. "It was the only way they could sell their programs," says King. "But you have to whup the champ first. It didn't even last a round." Wheel finished 1990 on top (chart), and many challengers ended up in TV's graveyard.

Lately, King has been deriding his competitors' lack of imagination. For the new selling season, which moves into full swing this month at the National Association of Television Program Executives (NATPE) convention in New Orleans, syndicators are offering the usual: game shows, "reality" tabloids, and a bunch of talk shows. "We're the only ones who came up with something different," sneers King.

SLOWER WHEEL. King and his brother, Roger, chairman of the company, will try to persuade station managers at NATPE to sign up for the fall launch of an updated version of Candid Camera, to be hosted by comic Dom DeLuise and produced by Vin Di Bona, creator of ABC's hit America's Funniest Home Videos. If it works, it could be an important growth vehicle for King World.

Trouble is, TV station managers, squeezed by a pullback in advertising, are skittish about paying up for new shows. But while that may make Candid Camera a tougher sell, it will probably prolong the shelf life of the Kings' older hits. In tough times, stations tend to go with what's working. Even though Wheel's household rating has eroded steadily from 19% in 1986 to 13.4% recently, "nothing else has come along to bump it off," says Dick Kurlander, director of programming at Petry Television Inc., which represents TV stations in negotiations with syndicators.

Picking hits, then strong-arming stations into long-term deals, is key to King World's success. The brothers were the first to insist on three- and four-year contracts--and with monster hits such as Wheel, Jeopardy!, and The Oprah Winfrey Show, stations had little choice. These contracts, which guarantee more than $1 billion in license fees through 1993, will help buffer the company from a slump that's already hurting other syndicators (box).

King World has had its share of flops: Rock `n' Roll Evening News and Nightlife with David Brenner bit the dust in recent years. But the money the winners bring in has helped spur profit growth at a torrid 46% average annual pace since 1986. Lately, the company has been spending more on producing its own shows, such as Inside Edition, rather than just licensing and distributing others' programs. Higher costs, in part, meant a less heady 15% growth in net income in fiscal 1990, ended Aug. 31, to $84.1 million on $453.7 million in revenues. King World's stock, at 22, is 20% off a recent all-time high, which was fueled by takeover speculation. But the King family, which founded the company 25 years ago by syndicating reruns of Little Rascals, controls 37% of the stock--and doesn't appear ready to sell.

GRAND OPRAH. Growth may come harder now. Besides license fees, King World gets to sell some ad time for the shows it syndicates. It's not immune from the softness that has hit TV ad sales, which account for an estimated 25% to 30% of revenues.

That, and the falloff in ratings for Wheel, probably explain why Roger King is crisscrossing the country, trying to get early renewals of contracts for Wheel and Jeopardy! He's playing typical King World hardball: If the station won't renew, the contract is offered to a competitor. Robert Hyland, general manager of KCBS in Los Angeles, says he was stunned this summer when King World wanted a renewal through 1994 for the two game shows--just nine months into the first year of a contract that expires in August, 1992. He says he balked "because both shows were showing audience erosion. Who knows what numbers they'll be doing two years from now?" So King World promptly sold the 1992-94 rights to rival KABC. So far, King World has snagged renewals at stations reaching 40% of the country.

Oprah, the top syndicated talk show, shows no signs of audience disaffection. And news magazine Inside Edition, given little chance for survival when it was launched two years ago, is finally making money: Considerably classed up, it's 16th in the ratings among syndicated shows. The newer Instant Recall, a nostalgia magazine, is floundering. King World is also testing a talk show with Tim and Daphne Maxwell Reid, the former stars of CBS's Frank's Place. And it produces an hour-long weekly entertainment magazine for cable.

The need to diversify is clear. Some 83% of King World's revenues come from Wheel, Jeopardy!, and Oprah. King World would like to produce more syndicated shows for cable and even some TV movies for the networks. But what it could really use is another hit in syndication--to take up the slack when Wheel and all those long-term contracts finally go into a ditch.

      Syndicated show                   Household rating*
      Red denotes King World show    (Aug. 27 to Dec. 23)
       1. WHEEL OF FORTUNE               13.4
       2. JEOPARDY!                      12.1
       4. OPRAH WINFREY                   9.0
       5. THE COSBY SHOW                  8.4
       6. ENTERTAINMENT TONIGHT           8.3
       7. MGM PREM. NETWORK III           8.2
       8. WARNER BROS. VOLUME 28          8.2
       9. A CURRENT AFFAIR                7.9
      10. WHEEL OF FORTUNE (weekend)      7.4
      *Each rating point equals 921,000 households
Before it's here, it's on the Bloomberg Terminal.