NBC’s Affiliate Retrans Plan Is 50-50 Split

NBC would receive “around 50%” of its affiliates’ retransmission consent revenue as part of the still-tentative arrangement announced on Monday, under which NBC would hold the proxies of affiliates and negotiate retrans deals with cable and satellite operators on their behalf, according to Brian Lawlor, chairman of the NBC affiliate board and head of the E.W. Scripps TV group.

While confirming NBC’s share of the revenue in an interview with TVNewsCheck, Lawlor shot down reports that NBC wants a higher percentage from weaker stations as an incentive for them to improve. “Every affiliate will be treated exactly the same,” he said.

A spokesman for NBC declined to comment on the split.

On Monday, Lawlor and NBC officials lauded the agreement, the fruit of two years of off-and-on conversations, as a win-win that would create the revenue stream needed to “offset the high cost” of national and local programming.

Lawlor declined to discuss in detail how the proxy system would work, saying: “The depth of this is vast.” But over time, he said, an effort would be made to sync up the retrans agreements of all the affiliates so that they all expire at the same time. However, he added that the agreements that are now out of sync would not slow implementation of the plan.

The job now is to convince enough affiliates to participate in the plan by agreeing to turn their proxies over to NBC. So far, the feedback from affiliates has been good, Lawlor said. “Conceptually, people were intrigued by what they heard.”

The goal is to recruit affiliates covering 80% of TV homes, Lawlor said. Lawlor did not cite a minimum percentage needed to go ahead with the plan. But, he said, “I don’t think this happens at 40%.”

So, what kind of retrans feeds can NBC manage to squeeze out of Comcast, the nation’s largest cable operator, which also happens to be NBC’s parent company?

Lawlor said he doesn’t know. “Comcast has not been any part of the equation.”

That NBC and its affiliates are cooperating is in sharp contrast with what’s happening with the other three major broadcast networks and their affiliates.

ABC, CBS and Fox are leaving their affiliates to negotiate fees on their own, and then simply demanding a share of the revenue. In the case of Fox, the demand is in the form of a non-negotiable fixed fee. Affiliates either pay the fee or lose their affiliations as two recalcitrant affiliates did last week.