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At $12M, Cold War Makes Cold Cash

10/11/1998 8:00 PM Eastern

In August 1994, Pat Mitchell was at breakfast in St.
Petersburg, Russia, when her boss, Ted Turner, uttered the words that would send her on
the kind of odyssey that few producers or executives ever get to make.

"Cold War. I want to do a documentary series on the
Cold War," Turner told Mitchell, now president of Time Inc. Television-CNN
Productions.

Four years and an estimated $12 million later, the series
envisioned by Turner (now vice chairman of Time Warner Inc.) and crafted by Mitchell, with
Sir Jeremy Isaacs as co-executive producer, is Cold War -- a 24-hour epic that
premiered on Cable News Network Sept. 27 and that will air almost every Sunday night for
the next six months.

And thanks to careful planning, adroit salesmanship and a
global topic, the project that began with a five-year projection of breaking even hit the
airwaves in the black, Turner officials insisted.

"It is going to go on the air in the black. It was a
surprise to me and Ted," Mitchell said a few days before the first episode debuted.

Between sponsorships, international sales -- "which
were so much bigger than we anticipated" -- and home-video-sales projects, the
company is far ahead of projections, Mitchell said, adding, "Then, you consider the
long-term value: This should be a revenue source for the company for years to come."

CNN turned Cold War into a more immediate paying
proposition by selling four hefty sponsorships and by agreeing to keep the series off CNN
International until 2000 to enhance foreign syndicate sales.

Some of the accounting is based on high expectations by
parent company Time Warner's home-video division for the $119 package that was
released last week to capitalize on the holiday gift season.

Four sponsors -- Ford Motor Co., Qwest Communications
International Inc., Archer Daniels Midland Co. and Unisys Corp. -- each agreed to pay
about $5 million for a series-long media buy. In return, CNN promised exclusivity,
extensive cross-promotion on other Turner Broadcasting System Inc. properties, partial
sponsorship of an elaborate Web site (www.coldwar.com) and participation in related
efforts, like the companion teaching kit and book.

The fee could be lower if the series doesn't average a
rating of 0.8 -- something that Mitchell is careful to mention when she discusses the
finances. Each episode will air six times per week.

When it came time to sell advertising, Turner and CNN
executives knew that the series was too massive for one sponsor, but they feared the
clutter from spot sales.

"We wanted to make it special. We wanted to make it
exclusive. And we wanted to allow advertisers to identify it with billboards and with
events," explained Larry Goodman, president of Turner Broadcast Sales. "If we
had done it just with spot, we could have ended up with 50 different advertisers in
there."

They chose the number four because it was manageable and
because they thought that they could get four different categories that would be
noncompetitive.

Production was still very much in progress when Goodman and
his troops set out to sell Cold War 18 months ago. They could show prospective
advertisers some rough cuts and the detailed plans for the series. They also had Pat
Mitchell, Goodman said.

"She brought it alive. She was almost evangelical
about what this would mean and what it would represent. That was a huge advantage --
having someone who believed in it the way that she believed in it, and who could convey
that enthusiasm and real sense of vision to advertisers," Goodman said.

Ted Turner's outspoken support was another big plus.

Bob Igiel, executive vice president of Young & Rubicam
Inc., admired the way Cold War was sold.

"No. 1, Pat Mitchell did a great job of positioning it
properly, and they had a lot of lead time in order to sell it," Igiel said.
"They had the time to find the right advertisers, and I think that prior planning is
always a wonderful luxury."

CNN also tapped into a good market.

"First and foremost, there are lots of advertisers
that are interested in a good documentary product that's going to appeal to more
affluent, educated viewers," said Igiel, whose ad agency has the Lincoln-Mercury
account for Ford, one of the sponsors.

"We'll have to wait for the numbers to come in on
a continuing basis, but certainly, it looks like it's structured for success,"
he added.

Part of that structure extends far beyond the U.S. Cold
War
has a uniquely global subject deliberately told from a neutral point of view,
rather than an American point of view. Narrator Kenneth Branagh was even asked to use a
mid-Atlantic accent, instead of British or American tones, to lend to the air of
neutrality.

It would seem like a natural way to gain an even higher
profile for CNNI and its various non-English offshoots, but in order to get premium
prices, CNN agreed to keep Cold War off its own international channels.

"For instance," Mitchell explained, "in the
United Kingdom, when we licensed this program to the [British Broadcasting Corp.], the BBC
was not about to pay what they paid to license this and then let it also be shown on CNN
International, even though CNN International is a cable service, and they're a
broadcast service and, at one time, they could have cared less."

The same held true in Germany, even though
public-television network ARD is showing the series with German narration. Mitchell
pointed out that the English version wouldn't be direct competition, but ARD held out
for a one-year exclusive license, as did networks in Japan and Australia. It was even more
complicated in the United Kingdom when Channel 5 licensed Cold War exclusively for
the following season.

Instead of splitting the feed, CNNI will not air Cold
War
until 2000, when it can be shown in every market.

"It's kind of good news for CNNI. [I told them]
'Look, guys, they think that you're big enough to worry about now,'"
Mitchell joked.

In addition to making money, company officials said the
decision to take CNNI out of the equation helped to achieve Ted Turner's mandate to
tell a global story by making it possible for audiences around the world to see the series
on their major national networks and to hear the narrative in their own language.

September