NBC’s Retrans Proxy Plan Looking Doubtful

NBCU’s effort to convince affiliates to give the network proxy power on retransmission deals is unlikely to bear fruit this year, if ever, according to sources who spoke with TVNewsCheck.

“It’s on hold till further notice,” one source said. “No matter what they say, it’s not going to happen this year,” said another source.

The general sentiment is that it will never happen.

“It was a noble try,” said another source. “An industry-wide global solution would be nice but I don’t think it’s going to work.”

NBC executives were en route from the NAB Show in Las Vegas and unavailable for immediate comment, a spokesman said.

The key sticking points: crafting an agreement that would address the varying needs of all affiliates, small and large, and network negotiators handling details of local retrans deals, including negotiating fees for digital subchannels that carry non-NBC programming.

“NBC has no interest in that,” a source said.

Another complicating factor: The recent death of Joseph Donnelly who had been working four days a week as NBC’s chief financial officer. Donnelly, who sources said was intimately involved in the proxy effort, died March 9 in a New York hospital after suffering a heart attack the previous day. Donnelly, formerly Comcast’s CFO, was instrumental in bringing about the Comcast-NBCU merger.

NBC has been attempting for a year to craft a proxy proposal that all affiliates would find palatable. Many of NBC’s affiliate agreements expired at the end of 2011. Those affiliates agreed to extend contracts for three months, which carried them through March.

But with the proxy proposal apparently permanently mothballed, and barring further extensions, it appears NBC and affiliates will soon be returning to contract negotiations.

The general outlines of NBC’s proposal included a 50-50 split of retrans fees, with affiliates getting the first 25 cents and NBC the next 25 cents; the network and affiliates would then equally split additional money.

The network’s proxy proposal came shortly after its acquisition of Comcast closed and Fox’s contentious take-it-or-leave-it demand that its affiliates either let the network negotiate retrans for them or face being dropped by the network. Fox and several affiliates, including some owned by Nexstar, were unable to reach agreement on Fox’s call to get a 25-cent “network compensation” fee in the first year of affiliate contracts. That amount ratchets up to 50 cents in year-four of the contract.

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