The chairman of the NBC affiliates board says he likes the fact that his network has given its stations three ways to work with NBC. He’s especially intrigued by the “Gold” option in which the network would negotiate retrans deals for the affiliates. Another plus, he says, is the new deal with NBCU’s Weather Channel that will give the affils help with their digital and moblile ventures.
In Executive Session last week, NBC affiliate relations chief John Eck outlined the bold three-level plan by which affiliates could now partner with his network.
Affiliates can opt for the bronze level, a continuation of the current relationship, simply swapping distribution for ad inventory. Or, they can step up to the silver level and become partners in NBC’s local and national Internet ventures. At gold, affiliates would also turn over their retransmission consent rights to the network, which would represent them in negotiations with cable and satellite and share in the revenue.
Here, in an interview with TVNewsCheck Editor Harry A. Jessell, Mike Fiorile gives his thoughts on the NBC plan as chairman of the NBC affiliate board and president and COO of the Dispatch Broadcast Group, a two-station group that includes the NBC affiliate in Indianapolis, WTHR. He says that he could be persuaded to go gold.
And in the latest development, Fiorile also says the affiliate board has agreed to a deal with NBCU’s Weather Channel. Affiliates will give the cable network access to local weather reports in exchange for help with digital and mobile ventures.
An edited transcript:
At the May affiliates meeting, NBC Universal CEO Jeff Zucker made that strong statement that NBC has no intention of bypassing stations and going direct to cable. Are you satisfied?
Yes, for now.
But do you always feel that hanging over your head?
In any partnership that’s not forever, you have to worry about futures, but, for now, yes, I’m very satisfied. I don’t think abandoning the affiliate system would be a wise financial move for NBC in the foreseeable future.
I’ve talked to some people who’ve run the numbers. It doesn’t seem to make sense in a lot of different ways.
That’s what I think. Now, in the future, is there a different financial model? Will the landscape change? Will it become viable? Maybe. I don’t know how. But for now I don’t see it as a possibility.
What about this three-tier approach to network-affiliate relations — gold, bronze, silver — that the network laid out for you? What’s your overall reaction to that?
I like it. I think it’s creative. It gives the affiliates an option as opposed to “this is what we’re going to do and you’re going to have to do it.” Affiliates can opt in or not. I think there are benefits; I think there are pitfalls.
Let’s discuss a few of these proposals. Do you want to be partners with NBC on local Web sites? For instance, they would want you to be NBCindianapolis.com.
Frankly, I don’t have a lot of interest in that. I’m already NBC Indianapolis. If someone does a search for NBC Indianapolis, I’d sooner they come to a site that I own as opposed to a site that I’m a partner with somebody else on.
Well, this could be a second site for you because NBC is proposing lifestyle sites as opposed to the news site you’re now doing.
Yes, but I’d rather have all the NBC Indianapolis traffic come to visit me.
As part of silver, NBC is offering you a chance to participate in Hulu and nbc.com, the distribution of broadcast primetime programs on the Web. What about that?
An offer to participate in Hulu or nbc.com is certainly interesting and welcome, but I would need to know what the deal entails. How much inventory do I need to give up to get there? The great thing about these programs is they are optional and it is not one size fits all.
The big proposal in the gold package is having NBC represent you in retransmission negotiations and share in the retrans revenue.
There’s a lot of upside there. If NBC can aggregate a big enough footprint and negotiate on behalf of a large number of NBC affiliates and make a reasonable business deal with me, they may be able to do better than I’m doing alone. I’d have interest in that. I’m speaking for my own station.
Do you think you could end up getting more money with NBC than you could get on your own, even if you had to split the take with NBC?
I would want to be assured of that before I entered into the arrangement.
What if you were going to get less money, but you knew that the money was going to go into NFL football or primetime shows or Olympics or something like that?
Well you know, it depends on the deal. It depends on what NBC’s renewal of NFL football is going to cost me as an affiliate versus what I would give up if I went by myself on retrans. Let’s say I can get 50 cents a home per month on my own. Now, NBC may be able to get 60 cents, but willing to share only half of that — 30 cents — with me. I may be giving up more money in retrans than what it would cost me to participate in an NFL deal.
Is there any reverse comp now? Are you paying for any of this stuff now?
I probably shouldn’t comment on our own contract. As far as what NBC’s doing with other affiliates, you’ve got to ask them. I don’t know.
I know it’s tough for you to speak for all of the affiliates, but, in the general sense, are the affiliates receptive to this whole retrans idea?
It depends on how well you’re doing. If you’re not doing a very good job in retrans negotiations, it’s more attractive. In our company, we’re rather comfortable with where we are with our retrans deals so I’d have to be careful to give up what we’re doing for the chance of doing better.
But, as you said, for this to work for NBC, it’s probably going to have to have a critical mass of affiliates.
Yes. If they had a critical mass and they could assure me, once I’ve shared with them what my financials are on retrans, I think I would participate, but I would need some assurances before I would give up what we’re doing, what we’re getting.
What’s the latest on the Weather Channel?
We just finished negotiating a deal for NBC News Channel to partner with the Weather Channel and recommended to the affiliate body that this is a partnership that you would want to participate in.
How is that thing going to work? When you say partnership, what do you mean?
The affiliates will contribute video to News Channel. Do you know what News Channel is?
It’s the network-affiliate news exchange operation out of Charlotte.
Right. The Weather Channel would have access to the affiliates’ local reports and the Weather Channel is going to work with us on digital and mobile features. This is a deal for a year. If it goes the way we anticipate it will go, we’ll renew it for long term.
What about Leno at 10? Are you feeling better about that these days?
We were skeptical at the onset, but, again, our relationship with them is such that we wanted to participate, we wanted to do research. They’re listening; they’ve responded. I think there could be a pretty big opportunity.
How have they been responsive?
Well, the research we did suggested that it would be a great opportunity to push people through to 11 o’clock and they’ve agreed to let us do that.
What was another of your ideas?
Shortened or no credits and the last I heard this is still coming together. I don’t think there’re going to be any credits until Friday night. I don’t think there’ll be end credits all week.
What happens if this thing flops and you’re sitting there in January without any decent programming at 10? Has NBC discussed that with you?
No. They’re not talking about that yet.
Are there any sticking points in your relationship with NBC these days? Are you otherwise happy with them?
Actually, I’m pretty happy. The board listens to the affiliates and the folks that we deal with at the networks these days are very smart, very reasonable to deal with. They obviously have their own interests at heart, but for the most part, it’s a pretty mutually beneficial relationship these days.
Any hope for the broadcast business in the second half of the year?
I’m not seeing a whole lot yet. We’re hearing from car dealers, from home builders that traffic is picking up. I talked to a national home builder who’s based here in Columbus, builds homes in a half a dozen states, and they’ve had two plus months and it’s the first two plus months they’ve had in 15 months.
Well, that’s good.
And I hear from car dealers that people are coming into the showrooms again, but I’m not seeing it in revenues.
It hasn’t bubbled up to you yet.
No, not yet.