Can one ever have enough leverage -- particularly if you're at a station negotiating with a network bent on grabbing a slice of your retransmission consent revenue? Here are some creative ideas on different ways to make Fox listen to reason.
Note To Fox Affils: Create Some Leverage
Listen up all you Fox affiliates.
On Friday, April 8, the eve of the NAB convention, you’re all going to pre-empt Fox’s regular lineup and in its place you’re going to air a two-hour telethon to benefit…well, you name it – Japan, Haiti, United Way, MDA, Habitat for Humanity.
You’ll be doing a lot of good for whatever cause you select.
You’ll also be doing a lot of good for yourself. And I don’t mean in just that touchy-feeling spiritual sense. I mean in that bottom-line, you-can-take-it-to-bank sense.
You see, right now you have a problem. Each of you are in (or soon will be in) a tough renewal negotiations with Fox over the sharing of your retrans revenue. From stations in markets 125 and higher, Fox wants 25 cents per pay TV sub, per month. That’s more than a lot of you are getting from the cable and satellite operators.
The problem is you don’t have enough leverage in those negotiations, which leaves your profit margin vulnerable. So, the thing you got to do is go out and get some – leverage, that is.
That Friday night telethon.
Cutting off Fox from 60% of its potential audience will remind Fox that its affiliates actually do have some value and that it might not be in its own best interest to squeeze the financial life out of them.
If one night doesn’t shake Fox up, knock out another. There are plenty of deserving charities.
And once you’ve saved the world, you could plug in some of your own for-profit programming – say, a popular movie with limited commercial interruption. You’re creative people. You’ll think of something. And, remember, you get to keep all the inventory.
My communications law brain trust tells me that there is not much Fox could do legally about the pre-emptions because of the FCC’s right to reject rule. It entitles affiliates to bounce any network programming if they decide it is “unsatisfactory or unsuitable” or if they decide the replacement programming is of “greater local or national interest.”
I can think of lots of things with “greater local or national interest” than Kitchen Nightmares. You can, too.
And my anti-trust law brain trust tells me that broadcasters banding together to jettison hunks of Fox’s schedule would not expose them to an anti-trust suit from Fox. Of course, you may want to check with your own counsel before risking treble damages.
The funny thing about leverage is that you can never get enough of it. So, here are some other ideas for getting some.
Slap Fox with an “unlawful tying” suit. This is a principle of business law that says a wholesaler can’t make you buy its lousy products in order for you to buy the products you really want, which is precisely what all the networks do, if you think about it. If you want Idol, you have to take Fringe. In broadcast syndication, this is called block-bloking. MCA was nailed for it in the 1990s by a federal appeals court.
Boycott the the Fox upfront. When May rolls around, you should make it known through TVNewsCheck and lesser publications that you are unhappy, that you will not be going to New York and that you will be taking a hard look at each of the new shows in the fall lineup to determine whether it is really worthy of your valuable airtime. It will be sort of a bluff, but, trust me, Fox executives don’t want to be talking to agencies about an affiliate revolt while they are trying to dazzle them with new shows and to stick ‘em with big rate hikes.
Refuse to promote any of the new Fox shows. According to B&C’s Mike Malone, at the end of February, Fox spent a bundle to fly a broadcaster from each affiliate to Los Angeles to get them all jazzed up about promoting the X-Factor, what Fox and producer Simon Cowell expect will be the second coming of Idol. The hell with that. If Fox wants to promote the X-Factor in El Paso, Dayton, Augusta and nearly 200 other markets, they can pay for it just like everybody else. Besides, isn’t Fox’s hard line on retrans premised on the belief that the affiliates are not that important anymore?
Those are some radical ideas, and, as you may know, some of them are actually rattling around among the firebrands in your ranks.
Any one would certainly get Fox’s attention.
None would be easy or without cost.
All would require a level of cooperation I have seldom seen from you or any of the other affiliate group. Sinclair, one of the largest and most potent Fox affiliate groups, has already made a separate peace.
What’s more, pre-empting or sabotaging Fox programming is ultimately self destructive. To the extent you damage X-Factor and whatever else Fox is working on for the fall through lack of promotion and support, you damage yourselves.
You would also risk some serious blowback. There’s a lot of nasty things Fox could do in retaliation, and uber boss Rupert Murdoch has demonstrated repeatedly in his long career that he enjoys nothing more than a confrontation.
Maybe these tactics are too drastic.
But you do need to make some demonstration to earn some respect before your next negotiation.
In the summer of 1998, Nick Evans, then the owner of a several TV stations, tried to get tickets to Dave Letterman’s show from CBS for some advertisers and friends, but kept getting jerked around by CBS.
Finally, Evans had enough. He pulled Late Night from his stations for two or three days, replacing it with the likes of Married…with Children and Judge Judy.
It’s not clear what happened next from the accounts of the time, but CBS finally woke up and found seats for Evans’ friends. I bet they were pretty good ones, too.
There’s a lesson here.
Harry A. Jessell is editor of TVNewsCheck. You can e-mail him at [email protected].