Showtime at the Apollo: A new deal?
I saw on BET news last week that there has been opposition to this "deal".
It's deal time at the 'Apollo'
Wed Aug 21, 6:11 AM ET
Cynthia Littleton
LOS ANGELES (The Hollywood Reporter) --- A new chapter in the storied life of Harlem's Apollo Theatre is set to begin today with a news conference there that will formally unveil a deal for a new producer and distributor to take over "It's Showtime at the Apollo." The syndicated TV variety series has been at the center of a long-running controversy involving profits from the show.
Emmy-winning producer Suzanne de Passe and Heritage Networks, the indie distribution outfit headed by Frank Mercado Valdes, have been awarded a one-year contract to handle the hourlong series for the 2002-03 season. De Passe Entertainment and Heritage Networks will take over from the companies that launched "Apollo" in 1985, Inner City Broadcasting and distributor Western International Syndication.
Officials with the Apollo, which is owned by the state of New York and run by an 18-member board of directors chaired by AOL Time Warner CEO Richard Parsons, are heralding the new "Apollo" deal as the start of an aggressive new campaign to capitalize on the Apollo's legacy with new TV projects, a music label and other merchandising.
Among those expected to attend today's news conference in a show of support for the Harlem institution are Sean "P. Diddy" Combs and Russell Simmons.
"The Apollo board is making every effort with this new business development plan to maximize and build on the Apollo brand," said Nicole Bernard, senior vp new business development and communications at the Apollo Theater Foundation, whose board oversees the theater's operations. "It's been a long time in coming."
Bernard said that Heritage Networks fielded the most competitive offer for the rights to "Apollo," which came up for bid earlier this year with the expiration of the most recent three-year contract between Inner City and the Apollo.
In 1998, Inner City chairman Percy Sutton, a former Manhattan borough president and longtime figure in New York City politics, and former Apollo officials were sued by the New York state Attorney General's Office, which accused the Apollo board of cutting a sweetheart deal with Sutton and failing to collect more than $4 million owed to the theater by Inner City.
In the early 1980s, Sutton led the charge to reopen and revitalize the Apollo after it had spent more than a decade in disrepair. The launch of the "Apollo" syndicated series in 1985 was part of that push.
But the 1998 lawsuit was sparked in part by Mercado Valdes' first attempt four years ago to bid for the rights to "Apollo" after he learned that Inner City was paying only a $50,000 annual licensing fee to the theater for the use of the Apollo moniker and a 25% share of the profits. The suit alleged that the arrangement was motivated by long-standing political ties between Sutton and then-Apollo board chairman Charles Rangel, a longtime Democratic congressman.
The suit was settled in 1999 through a complex deal that, among other provisions, called for Rangel to step down as Apollo chairman and for Inner City and its financial backers to pay $1 million to the theater. (Sutton and Rangel have maintained they did nothing wrong, and the settlement included a declaration that both men acted in "good faith" to resolve the matter.) Time Warner contributed $300,000 of that $1 million settlement in exchange for the right to appoint several new Apollo board members and establish other corporate ties to the theater.
Mercado Valdes' bid for "Apollo" during the tumultuous period of the lawsuit was rejected in part because his company at the time did not have any experience in producing a weekly musical-variety series, though his effort to mount a competitive offer forced Inner City to hike its license fee to $650,000 a year.
When the latest round of bidding for "Apollo" began earlier this year, Bernard said the board realized it would not have the time to evaluate all of the long-term offers it had received in time for production to begin on episodes for the coming season, so the board opted for the interim move of awarding a one-year contract.
The board got caught in a time crunch, Bernard said, because the most recent "Apollo" contract gave Inner City an exclusive window for renegotiating that ran from January through the end of May, plus the right to match any bids that came in after May 31.
Bernard said Inner City and Western were given the chance to field a bid for the one-year contract, but "they never responded to us." Sutton did not return calls seeking comment. Western International president and CEO Chris Lancey disputed Bernard's account, saying there were informal discussions about an interim one-year deal, but no written proposal was ever presented to Western.
The Apollo's new deal calls for Heritage to pay a license fee of $1.6 million plus 75% of the profits from the show, estimated to gross about $12 million a year.
After losing the rights to "Apollo" earlier this month, Inner City and Western decided to field a competing talent-variety show and have contacted the 100-plus stations that carry "Apollo." The NBC-owned stations, the key affiliates for "Apollo," have opted to retain the new show coming from De Passe Entertainment and Heritage Networks. Lancey said Western will announce clearances for its still-untitled series within a few days.
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