NAB 2011

Fox Gives No Ground On Retrans Sharing

Several station representatives come away from the meeting of Fox affiliates dismayed over the network’s continuing hard-line stance on retrans sharing. One manager said Fox repeated that it would no longer try to negotiate with the affiliate board, and reiterated that individual stations would have to agree to Fox's price tag or risk losing their affiliation. “It sounded like a threat to me.”

The Fox affiliate meeting held at the NAB convention on Tuesday apparently turned into an adversarial afternoon between the network and its affiliates, who are arguing over Fox’s demand that stations pay what their owners feel is an excessive amount of their retransmission consent fee revenue back to Fox.

Several sources said that during the three-hour meeting Jon Hookstratten, the network’s EVP for national distribution, and Mike Hopkins, the president of affiliate sales and marketing, told the affiliates, “We hear you” in an attempt to stem their concerns.

But station executives buttonholed after the meeting weren’t filled with warm thoughts about the afternoon, which ended with a stream of affiliates walking out quickly, most of them not lingering to chat with each other or Fox executives. Nor did all of them believe they were being heard.

“It’s not like it used to be,” one GM said. “It’s not a partnership anymore between the network and affiliates. They admitted that during the meeting.”

This manager said Fox repeated that it would no longer try to negotiate with the affiliate board, and reiterated that individual stations would have to agree to Fox’s price tag or risk losing their affiliation.

“There were a few of us in that room that didn’t just fall off the turnip truck,” that source said. “It sounded like a threat to me. All they kept saying was, ‘We hear you, we hear you.’ “

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According to two other station executives, Hookstratten and Hopkins got into a tense question and answer volley with Brian Brady, the sometimes voluble Fox affiliate president. These sources said the compensation issue took up about a third of the meeting.

Sharing money from cable retransmission consent fees is prominent in the business plans of networks and broadcast groups. Networks argue they deserve a large cut because without network programming, the station wouldn’t have many viewers.

Stations say it’s their local roots, community outreach, promotion and local news that attract viewers for the network.

This Fox squabble has gotten attention in part because of the stinging words each side has hurled, but all of the networks are having similar negotiations with their affiliates.

“From our perspective, the [negotiating] committee has been largely non-responsive to our views and unwilling to negotiate in good faith,” Hopkins said in a letter he sent in February, stopping a nine-month negotiation attempt by the board to come up with a master agreement for Fox affiliates. “Rather than continue to waste time on fruitless arguments, we feel it is time to move on and negotiate an equitable and practical [retrans sharing] agreement with each of you.”

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Hopkins sent that letter after Fox affiliates president Brian Brady sent his own letter to affiliates, spelling out the wide disagreement Fox over the fees, and declaring: “We can either stand and fight together or we may die apart.”

Once source earlier told TVNewsCheck that Fox wants 25 cents per subscriber from what affiliates receive in retransmission consent fees from cable operators, going up to 50 cents in the fourth year, a steep rise, particularly for stations in smaller markets.

Affiliates also complained to Fox about the network’s arrangement with Time Warner cable systems in which Fox would provide its signal to the cable company in markets where Time Warner and a Fox affiliate couldn’t agree on a carriage deal.

Fox had planned to avoid discussing the retransmission consent flap altogether at the meeting Tuesday after the rift developed between the network and the affiliate board. But one of the station sources called it “the 800-pound gorilla in the room all day long.”

In the Hopkins letter he told affiliates: “We realize our proposal may not work for every company. If that should be the case, Fox will have to pursue different distribution channels to receive fair value for our programs. We don’t want that to sound like a threat but it is a fact.”

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A spokesman said Fox has successfully concluded negotiations with several stations since then, but said it would not allow Hopkins or others to talk to the press about the dispute or those deals.

After the affiliates meeting, Fox and the Fox affiliate chairman provided these statements:

“Meeting with our local affiliates once again reaffirmed just how valuable our partnership is to Fox and to each of their local communities,” said Mike Hopkins, president, Fox Networks Affiliate Sales and Marketing. “Every day, viewers across the country start and end their days with their local news and entertainment programming, and that’s an incredibly powerful connection that only local stations provide.”

And Brian Brady, chairman of the Fox Affiliates Board, said: “We appreciate the opportunity that Fox gave us to voice our questions and concerns today, and we’re grateful for their ongoing dedication to quality. We are aligned in our goals to create a material dual revenue-stream business for both the stations and the network, and we know that together, our partnership combines on a local and national level to deliver the most compelling and engaging programming to viewers.”


Comments (6)

Leave a Reply

Paul Gourley says:

April 13, 2011 at 9:40 am

The Fox network is win- lose. They treat their employees like that as well.. Glad you let Rupert Murdoch(a foreigner) buy a network aren’t you FCC? Answer this question . What has the FCC done right?

    Janet Frankston Lorin says:

    April 13, 2011 at 11:06 am

    That’s a pretty short list!

Christina Fleming says:

April 13, 2011 at 11:02 am

Without Rupert we would have never had he Tea Party or Glen Beck. America would be kinder and more gentle and without a faux news organization.

    Lidia McCall says:

    April 13, 2011 at 4:35 pm

    BULL…S…H…I…T…what an f…ing laugh…a kinder and more gentle…the threats and anger come from the radical liberal left. The real news comes from FOX…and the mainstream liberal media admits it…even Walter Cronkite admitted before his death that he loved manipulating the news to his perspective…GROW UP!

Carol Zillgitt says:

April 13, 2011 at 11:32 am

Stations must remain united in this battle. It is time for broadcasters to stand firm and not feel threatended. FOX needs distribution, or they have no network. With the NFL strike looming, it’s time to work together. 2012 is going to be a good year for local TV with or without football, but FOX will suffer on the national level without it. American Idol and a hand few of other shows are not enough to make them invinsible. By the way, check out this years ratings for Idol. Those broadcasters with heavy debt load need to take a different tact, bot those of us that bought right, and have a firm business model must stick together and FIGHT FIGHT FIGHT.

Barb Palser says:

April 14, 2011 at 3:32 pm

None of the FOX Network’s top brass have ever worked at a TV station. Hopkins is just a “4 year cable-cycle guy”. They don’t understand what we do, and they don’t care if we are profitable or not. They cry that they aren’t profitable when Newscorp just posted record profits. The large media conglomerates understand and accept that their networks may be “loss leaders”. They don’t include the syndication and O/O station revenues in their #. On the other hand, for many local staions, FOX’s retrans extortion is TRULY the difference in being profitable or not. FOX’s programming typically represents about 35% of a station’s total weekly audience. Our local news and syndicated platforms are as important to them as their platform is to us. They just don’t get it.


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