Wait, Silverman may not be returning for season 3? And this is a bad thing how?

Trouble on ‘Sarah Silverman’ set
Executive producers threaten to quit amid budget cuts
By Nellie Andreeva

March 1, 2009, 11:00 PM ET

The economic downturn is jeopardizing “The Sarah Silverman Program,” one of Comedy Central’s signature series.

The show’s executive producers — Silverman, Dan Sterling and Rob Schrab — have threatened to quit after the cable network told them the budget for their series would be slashed by more than 20%.

More than two months after “Sarah Silverman” ended its second season, the show has yet to be renewed for Season 3. (In 2007, the second-season pickup came 11 days after the series’ premiere.)

At the center of the holdup is the proposed budget for Season 3. Citing cuts imposed on the network by parent company MTV Networks, Comedy Central had proposed that the trio bring back the WGA Award-nominated show at about $850,000 an episode, sources said, down from the $1.1 million an episode for the show’s second season.

In broadcast, single-camera comedies are produced for about $1.5 million-$2 million an episode, and the budget for any series normally climbs from year to year.

“Sarah Silverman” is a single-camera comedy that also features animated sequences and musical numbers.

The contracting ad market during the recession is hitting networks hard. MTV Networks’ parent Viacom in December laid off 7% of its work force, though Comedy Central largely was spared because it had been through the ringer following the 2003 acquisition of Time Warner’s 50% ownership in the network and had little left to cut.

Amid the economic woes, ABC Studios and 20th TV asked all of their showrunners to cut 2% of their series budgets. The proposed budget cut on “Sarah Silverman” is more than 10 times that.

Concerned they won’t be able to maintain the integrity of the show at the discounted price, Silverman, on behalf of the three executive producers, informed the network late last week that they can’t proceed with a third season. The move reportedly sent shock waves through Comedy Central’s executive offices, with top brass jumping into action to find a budget compromise that would keep the flagship live-action series on the air.

As of Friday night, the situation remained at a standstill. Both sides continued their back-and-forth during the weekend.

A resolution is expected as early as today, and people familiar with the situation were optimistic that the two sides would agree on financial terms to bring back the show.