My faith in the TV biz has been restored. From today's Variety...

"Deadwood" lives.

After a month of what seemed like public negotiating, HBO and "Deadwood" creator-exec producer David Milch have kissed and made up, as it were, agreeing to produce a pair of two-hour specials that will serve as the show's series finale.

While Milch's grisly Western had been presumed a goner last month after HBO announced it would not be renewing options on the large cast (Daily Variety, May 12), HBO said Sunday that the series and its fans would get closure in what amounts to a four-hour event.

HBO will have to renegotiate new deals — now for a pair of two-hours as opposed to a full season — with all of the players. Although no one is locked into continuing with "Deadwood," an HBO rep said the network was confident in reaching all the deals necessary to proceed with the show in its new incarnation.

No decisions had been made about a production start date or a premiere date.

Insiders say HBO was uncomfortable with the hefty costs of holding the actors over an indefinite amount of time now that Milch would be splitting his time between another season of "Deadwood" and his new surf noir pilot "John from Cincinnati," also set up at the pay network.

"Deadwood" rotated in at least 20 major characters during season two. In addition, each episode of "Deadwood" is said to cost around $5 million to produce and require 15-16 days of shooting — a hefty tab even for HBO.

And although both Milch and HBO say the parties had always intended for the series to end after four seasons, economics at the cablercabler have changed. "The Sopranos," which begins production on its final episodes shortly, is more expensive than ever, while new series — including the expensive $100 million first season of "Rome," a co-prod with the BBC, and "Big Love" — haven't exactly ignited ratings or subscriptions.

For Milch, keeping "Deadwood" alive in some form saves him having to prematurely end the show or work with a truncated fourth season of six episodes, which HBO had initially offered (Daily Variety, June 2). He is said to have worked with the network over the weekend to give "Deadwood" a proper conclusion.

A shorter order was problematic for Milch because each episode in the first three seasons of "Deadwood" represented a single day, and he could not see how to wrapwrap up the stories in just six days. By instead producing a pair of special event presentations, Milch will be able to write the finale using a different format and space of time.

"I am thrilled that we were able to figure out a way to continue," Milch said in a statement. "No one was ready to let go of the show, and I'm really glad we've found a way to proceed that works creatively."

Decision to continue also spares HBO brass criticism that they were prematurely pulling the plug on a series with both critical acclaim and a loyal following — two elements that earned lauded but ratings-challenged crime drama "The Wire" a fourth season, due this fall.