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Disney wants to limit profit participation on its new TV shows

Walt Disney Co., which became a dominant player in television production with its acquisition of Fox assets earlier this year, is pushing to transform how TV show creators are compensated for their work.

For decades, the brass ring for showrunners was seeing their series hit the 100-episode mark.

Shows reaching that milestone — usually achieved at some point in the not easily attained fifth season of a network run — became ripe for syndication, and the rich financial rewards that came with it.

These payments have gone to creators, powerful stars, and anyone else who owned a piece of the “backend.” For a hit show, such payouts could dwarf the fees earned during the early years of a show’s run.

But the streaming revolution that has upended the TV business is starting to disrupt this compensation system, which has helped finance the purchase of many a Bel Air mansion.

As of this summer, Disney is pressing TV producers and other profit participants in its shows to accept a new formula offering profits sooner in exchange for complete control of any future licensing revenue, the Los Angeles Times has learned from conversations with Hollywood agents, attorneys and union representatives. Such deals would limit the financial windfall a major hit like “The Simpsons” or “Grey’s Anatomy” could generate.

Disney wants its payment system in place as it approaches the launch of its streaming service Disney +, scheduled for November.

Although Netflix and Amazon have been making such deals for the last few years, Disney would be the first legacy media company to require them for all new TV shows — whether on cable, broadcast or streaming. The change could make it easier for other studios to follow suit, given Disney’s dominant role in the TV production business as the owner of 21st Century Fox TV, ABC Studios

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