Over in Facebook, Dale Herbest wrote to ask…
Garfield and Friends was one of my favorite Saturday Morning cartoon shows when I was kid and I was always upset that it only ran for six years. I feel it should have gone on another two or three seasons. Officially, what was the reason and/or cause of the show's demise?
I'm probably going to "over-answer" your question here but I've been asked this and similar questions a lot so here's a rough explanation of how it used to work and sorta still does.
When a network buys a series from an outside supplier, they pay a license fee for it. The fee gives them X number of runs for Y number of dollars. Infinite variations are possible on X and Y, which are negotiated and then renegotiated and then re-renegotiated, etc. The contract also usually specifies that the network can order additional seasons. Almost always, and this was the case with Garfield and Friends, a "bump" is built into the deal which says that every time the network picks up another season, Y goes up.
If you're a producer and you sell a series, you have three choices. You can try to produce the show for less than the license fee and then the difference becomes immediate profit. This usually means you won't produce a very good show but that doesn't bother some people.
Or you can try to produce the show for the license fee — in other words, break even on its initial network airings — and then make your profit when you sell those shows into syndication or on DVD or overseas.
Or you can dig into your deep pockets — you need deep pockets to produce a TV series — and do the show for more than the network is paying you. This is called deficit-financing. You take a loss on each episode you produce but this results (usually) in a better show. You do this because you figure a better show will lead to more success, more demand, more overseas sales, a bigger syndication payoff, more merchandising, etc. If the show only runs one season, you're not going to have enough episodes to sell to other countries. You're not going to have much of a syndication package for stations to purchase. The folks now selling the syndication package of Seinfeld are making millions per year of pure profit. They wouldn't if it had only lasted a season or two.
And of course, if you have a long-running hit, you have the clout to negotiate a higher license fee from the network. So most shows deficit-finance to some extent.
The initial order for Garfield and Friends was for two seasons and a pretty high license fee. Networks rarely commit for two seasons but The Cat was a highly-desired property and the two main guys behind the show — Lee Mendelson and Jim Davis — had the clout to get what they wanted and, equally important, the willingness to say no if they didn't get what they wanted. So they got a deal for 26 half-hours. Thirteen would air the first year and thirteen would air the second. As soon as it hit the air though, it was apparent that it was a huge hit and CBS asked, almost immediately, if the show could become an hour for the following year. So we just kept making more and more and by the time we'd reached the end of what turned out to be our last season, we'd made 121 half-hours. So you kind of got nine and a half seasons of shows in six years.
CBS never had the rights to air all 121 shows in rotation. As per the terms of the contract, every time they ordered a new season, they got the rights to air the new shows and they got the rights to retain a certain number of older episodes in what is called "the library," meaning a selection of older episodes which can be reaired along with the new episodes and reruns of the new episodes. The network folks would pick what they thought were the strongest past episodes to retain for their library and we were then free to sell the other episodes elsewhere.
Once 73 half-hours had fallen out of the CBS library, our producers felt we had enough to make a strong syndication library…so those 73 episodes were sold to local stations and they ran over and over and over. In the meantime, all the episodes that were produced were syndicated to other countries. They easily earned back all the money that the producers had put up to deficit-finance the show and to also make a very nice profit. In fact, the 73 reran so well in this country that we never bothered to syndicate the other 48 episodes in the U.S. once CBS turned loose of them. The math was such that we could make just as much money syndicating a package of 73 as opposed to a package of 121.
After we finished Show #121, CBS said they wanted to order another season but they wanted to renegotiate the deal. Because of the annual bumps in the license fee, the show had gotten very expensive. At the same time, the viewing audiences for all of Saturday morning TV had declined. When we went on the air in '88, the main place kids could watch cartoons was on CBS, NBC and ABC on Saturday mornings. By the time we went off, you had your Cartoon Network and Nickelodeon and the WB Network and Fox and a few others airing cartoons every day, in some cases morning, noon and night.
And there was another problem. A lot of those cartoon shows were being produced at a loss, mostly funded by toy companies. If we're such a company marketing a new doll called Braindead Duck, we want all of the kids in America to know of him and love him. It might be financially prudent for us to spend a few million underwriting a Braindead Duck cartoon show and to go to stations and say, "Hey, we'll give you this show real cheap if you'll put it on the air." We might lose a lot on the show but make it up selling more Braindead Duck merchandise.
I'm occasionally asked to be the show runner on such programs. One time, I told the man trying to hire me that I didn't think it was a very good idea for a show and asked, "Why would a network buy this?" He said, "Because we're going to offer it to them for one-fourth what a new series usually costs them." A number of shows have gotten on the air that way. His did. Sometimes, the toy company gives a local station the show for free and advertises its other toys in half the commercials. Then the station airing the show can sell the other commercials and keep the money they get for them. (Again, there are many variations.)
So CBS said to us, "We want another season of Garfield and Friends but we want it much cheaper. You're making so much off the domestic and foreign syndication — to say nothing of what it does for the cat's popularity in general — that we think you should do it for us for about a third of what we've been paying you." That, of course, would have meant a lot more deficit-financing from our side if we wanted to maintain the same level of quality.
Our producers did the math and decided the numbers didn't make sense. As I noted, we weren't even putting all the episodes we had into domestic syndication. What the additional episodes would have made in foreign syndication didn't really make up for the deficit costs. Also, with the reruns doing so well in syndication, Garfield didn't really need the exposure of being on Saturday morning…so our producers declined. CBS gave our time slot to a show that did cost about a third of what our show cost them and got about a third of the ratings. We would have probably dropped a lot over the next year or two because fewer and fewer kids were even bothering with the three major networks on Saturday morning by then. And that's more than you probably wanted to know but this is the weblog that always does that.