Fox network distribution chief Mike Hopkins says his network hopes it “can get through the [affiliate negotiation] process and get deals done with everybody we have today.” But, as it’s shown recently, it will switch affiliation if it can’t reach a deal. He added that the network’s demands on its affiliates stem from the realization that the “value equation” between network and affiliate had shifted and the network had wound up on the short end.
According to an essay being circulated by the American TV Alliance, broadcast TV needs to be deregulated, but primarily so it can fall off its own weight. ATVA is populated by cable operators, satellite operators, and others seeking reforms to the retrans system they say benefits broadcasters to the detriment of cable operators and their customers.
Under the network’s new “proxy” plan, it would receive 50% of the affiliates’ retransmission consent revenue in return for taking over negotiations. “Every affiliate will be treated exactly the same,” said NBC affiliate board head Brian Lawlor of Scripps.
NBC and its affiliates have worked out a deal that would see the network handle retransmission consent negotiations with subscription TV providers on behalf of its partner stations. The bulk of the pact, which has been worked on off and on for the past two years, was ironed out at the affiliate board meeting Monday in New York, the day of NBC’s upfront presentation. The “proxy” deal would be optional for affiliates.
Although I’ve been critical of Fox’s tactics, I agree fundamentally with what it is trying to achieve. If the Big Four are going to survive and prosper, they are going to have to keep pushing up the revenue they derive from retrans, directly through O&Os and indirectly through their affiliates. But Fox needs to recognize that every affiliate is different. If Fox is determined to negotiate with each station group individually, it should treat them as individuals, tailoring their demands to reflect each group financial situation. Insisting that each coughs up the same fee as if every business were the same makes no sense.
The FCC proceeding seeking comments for possible reform of its retrans rules doesn’t square with history as I remember it. For one thing, contrary to what the FCC suggests, broadcasters have tried to negotiate for fees since the retrans law was passed in the early 1990s. The FCC also betrays some bias toward cable, raising questions about how current rules might work against small cable operators, but ignoring how small TV stations are affected.
While the just-announced FCC review of its retransmission consent rules doesn’t include commission intervention when talks fail, there are some things broadcasters need to be wary of. Most important is the proposal to eliminate the non-dupe rule. Without it, cable systems would be able to import an affiliate from a another market to replace one that it loses in a retrans dispute with impunity.
After a series of FCC meetings where the only mention of broadcasters was in connection with taking TV spectrum for wireless broadband, the tentative agenda for the next FCC meeting, to be held on March 3, is full of broadcast issues — issues that could have broadcasters wishing that they were ignored once more.
Many TV stations are no longer vigilant in sending out network non-duplication or syndicated exclusivity notices. Recent developments arising in retransmission consent negotiations, however, make clear that stations need to be more diligent than ever in making sure that they send out timely notices, and that the notices conform to all FCC requirements.
The network sent a letter to the individual affiliates saying it has made no progress negotiating a retrans sharing deal with the affiliate board. So now it wants to negotiate with the stations individually, adding that if a station doesn’t agree with its demands for a cut of their retrans dollars “Fox will have to pursue different distribution channels to receive fair value for our programming and continue to serve our viewers.” Affiliate board Chairman Brian Brady counters that Fox has failed to negotiate in good faith and is engaged in a “divide-and-conquer” strategy.
The publicly traded station group is paying the networks for programming on its four ABC and five CBS affiliates.
Hearst’s David Barrett, Barrington’s Chris Cornelius and Schurz’s Marci Burdick give FCC Commissioner Robert McDowell a list of questions they say the commission needs to consider as it proceeds with its review of the retransmission consent process. They also urge the FCC to not approach the whole exercise with the assumption that there is a problem that needs to be fixed.
TVNewsCheck picked the brains of some top broadcasters and analysts to see what the year’s important issues will be. For the first time in a long while, the general outlook was optimistic. Getting specific, here are nine things they will be keeping their eyes on: retransmission consent/reverse compensation, the FCC’s spectrum incentive auction, mobile DTV, industry consolidation, Comcast-NBCU deal ripple effects, signs of life in M&A, record off-year for political advertising, evolution of digital subchannels, publicly held station groups to pay dividends and local online and mobile media.
TV station owners and the NAB need to develop a sense of urgency about the vital importance of marquee sports to broadcasting’s future. By allowing ESPN and other cable nets to siphon away top contests like this week’s BCS Championship, the smaller the medium becomes in the eyes of the public, investors and policymakers..
Rather than seeking leverage and advantage in retrans negotiations, cable operators and broadcasters should look for ways to collaborate and avoid the service disruptions that harm both parties. That collaboration could come in the form of joint local sales efforts and carriage of multicast channels.
Dish Network failed to come to terms with Frontier Radio Management for carriage of Fox affiliate WGXA Macon, Ga., and its ABC multicast channel.
Following a breakdown in retrans renewal negotiations with Northwest Broadcasting, DirecTV will be dropping at midnight the Northwest Fox affiliates in Yakima and Spokane, both Washington; KMVU Medford, Ore.; and Binghamton, N.Y. DirecTV CEO Mike White claims Northwest is asking for a 600% increase in fees.
The broadcaster joins Nexstar in asking the commission to forbid Time Warner Cable from using United’s Fox affiliate WNYF-CA Watertown, N.Y. as substitute network programming in the cable operator’s retransmission consent battle with Smith Media in Burlington, Vt.-Plattaburgh, N.Y.
2011 will be a busy year for broadcasters with retrans, renewals and indecency, as well as for cable and satellite operators as well.
The broadcaster wants the commission to forbid Time Warner Cable from using its stations as substitute network programming in the cable operator’s retransmission consent battle with Smith Media.
FCC Media Bureau Chief Bill Lake announced today that the FCC plans to issue a proposed rulemaking on retransmission consent to provide “some limited guidance” on what good faith bargaining entails
When News Corp.’s Fox Broadcasting struck a big deal with Time Warner Cable last January for distribution rights to its Fox TV stations, it also included an interesting clause that may give some Fox affiliates headaches.
DirecTV executives said Thursday that they will look to fight continued program fee increases, in part by dropping smaller, less popular channels as the company recently did with Comcast’s G4 network. They also discuss other key issues such as possible a la carte pricing, an emerging premium VOD release window for movies and the future of retransmission consent payments to broadcasters.
The Senate Communications, Technology and Internet Subcommittee, chaired by Sen. John Kerry (D-Mass.) released the witness list for Wednesday’s hearing on retransmission consent. As expected both representatives from Cablevision and News Corp. will go before the subcommittee.
Retransmission talks between Sinclair Broadcast Group and Time Warner Cable have reached the point where it’s possible that Sinclair will shut down service for 33 stations it delivers in TWC and partner Bright House Networks franchise areas starting at the stroke of midnight New Year’s Eve.
As the pioneer in seeking retransmission consent cash from cable systems, Nexstar CEO Perry Sook talked about the future of retrans at Wells Fargo Securities’ Technology, Media & Telecom Conference.
As promised, the Senate Committee on Commerce, Science and Transportation officially confirmed today that it will hold hearings on retransmission consent next week, on Nov. 17.