From Los Angeles Times, August 28, 1999
Posted by EPHESIAN on the XF newsgroup

Exploring the Unknown: 'X-Files' Future
by Paul Brownfield

The plot thickens with rising production costs, David Duchovny's suit against Fox and accusations of 'hush money.'

Fans of "The X-Files" have grown accustomed to season-ending cliffhangers, but the biggest mystery now involves the future of the Fox network series beyond the coming season.

Although series star David Duchovny and creator and executive producer Chris Carter have given indications that this is likely the show's final season, there has been speculation all along that Fox wouldn't want its most popular series to vanish from its prime-time schedule.

An already cloudy situation became cloudier two weeks ago, when Duchovny filed a breach-of-contract lawsuit against 20th Century Fox Film Corp., producer of the drama, alleging that the studio cut sweetheart syndication deals with its FX cable channel and other Fox-owned outlets, rather than selling "X-Files" rerun packages on the open market. The suit contends that Duchovny, whose contract calls for him to participate in profits from the show, is thus deprived of his fair share of "The X-Files" bonanza, estimated to be in excess of $800 million.

The lawsuit's most noteworthy detail, however, has an "X-Files"-like conspiracy-theory tinge to it--that Carter was in on the collusion and took "hush money" to remain quiet about Fox's self-dealing. A spokesperson for Carter declined comment.

Such an accusation doesn't exactly lend itself to calm waters as the series gets set to debut in its seventh season. But sources on various sides deny the show will be much affected by the lawsuit alone. Indeed, the future of "The X-Files," say insiders, has a lot less to do with Duchovny's grievance than with the prohibitive costs of producing the show and the way business is done these days in vertically integrated broadcasting companies.

Last season, "The X-Files," which airs Sunday nights at 9, was Fox's highest-rated show, averaging 15.2 million viewers a week. Devoted as those fans may be, however, the price of producing the show--estimated to be in excess of $3 million an episode, roughly twice what a typical network drama costs to produce--is ultimately going to drive any decision about the show's future.

For Fox, that could mean pulling the plug on its most popular show and thus weakening its own network, even though, a source acknowledged, "it's awfully hard to let go of something that's been so much a part of your network identity, on your most important night."

But, the source added, "this is going to be a cost-benefits scenario that gets played out over the next couple of months," with the decision being based on Fox's wider corporate interests, not just what's good for the network.

With a hit show, a studio will usually pass along growing production costs to the network by increasing the licensing fee. But because Fox Corp. owns the Fox network, that would entail passing along costs to itself.

A very similar story played out last year, when Disney, which owns ABC, ultimately decided that the enduring popularity of the network's hit sitcom "Home Improvement" wasn't worth the show's rising production costs to the studio.

And so, while viewers may be used to equating strong ratings with a show's success or demise, the corporation is staring at different figures--the overall financial benefit to the corporation.

* * *

For Fox Corp., the cost of producing "The X-Files" increased considerably last year, when Duchovny insisted the show move from its base in Vancouver to Los Angeles so he could be closer to his wife, actress Téa Leoni. That meant losing out on the tax breaks and cheaper labor costs afforded productions in Canada.

Additionally, unlike other TV shows, each episode of "The X-Files" is closer in scope to an independent movie, and executive producer Carter doesn't have a reputation for cutting budgetary corners. One episode alone last season that was set on a ship and featured flashbacks to the 1940s cost more than $4 million to produce, an astronomical fee for a television series.

In recent conversations with the press, both Duchovny and Carter--who has another sci-fi series, "Harsh Realm," debuting on Fox in the fall--have left the door open to continuing "X-Files." Co-star Gillian Anderson's pact already covers an eighth season.

"I wouldn't say 'never' about anything, but as of right now, my contract is up at the end of this coming year, so I'm living my life as if this would be the last year, and I'd be fine if it were the last year," Duchovny said at this year's annual summer gathering of television reporters in Pasadena.

Losing "The X-Files" would leave a major void in Fox's Sunday lineup. There has been talk about continuing the program strictly as a series of movies, after the feature film released in 1998, and Duchovny has indicated that he would be willing to remain part of the film series. There are already discussions regarding a second film.

The question, however, remains: How well can two guys work together when one has accused the other of taking "hush money"?

"David still cares very much for Chris," said a source close to the actor, adding that the two are writing an "X-Files" episode together. "This isn't about Chris. He just happens to be involved peripherally."

A spokesperson for Duchovny declined comment.

Brownfield, Paul. August 28, 1999. "Exploring the Unknown: 'X-Files' ' Future." Los Angeles Times.