Prather: Nets Want ‘Every Penny’ Of Retrans

As COO of Gray Television, Bob Prather liked to carp about the broadcast networks.

Now the owner/operator of a growing group of small-market stations (his Heartland Media just bought five from Nexstar and Media General for $115 million), he still can’t resist giving the networks what for.

At the S&P Global TV & Radio Finance Summit in New York, he was asked about the networks’ demands for reverse comp.  He said they were insatiable.

“The more we get [in retransmission consent fees], the more the networks want, and we have no way to fight them off right now.

“So that’s the big problem we’ve got… — how do we contain these networks that take every penny we get from the cable guys? At some point, we won’t have any incentive to take money from the cable guys if [the networks] want it all. And I think they want to get as close to all as they can, frankly.”

He said the only leverage a station has is to have the market’s dominant news operation and the willingness to walk away. Graham Media’s WJXT Jacksonville, Fla., cut ties with CBS in 2002,  he said, and still prospers to this day as a news-heavy independent.

Despite the reverse comp demands, Prather said he did not want to follow Graham’s lead and abandon any of his network affiliations. “I don’t want to get rid of them. I think they are good.”

He was also ambivalent about network sports. At one point, he criticized the network for “giving up a lot of the sports to the cable guys.”

Then later he said that costly NFL football — foundational programming on CBS, Fox and NBC — has little value in some small markets where football loyalties are more likely to be to a college team rather than a professional one. In such markets, he said, “we can make more money running old movies” than pro football.

The conference featured four other senior  broadcast TV executives. Randy Bongarten of Bonten Media was on the same panel as Prather and three others were on another.

None of the others took the opportunity to publicly criticize the nets over reverse comp.

Bonten said that every broadcaster who has negotiated with a network has considered going independent, but few actually do. WJXT’s success as an indie is “the exception,” he said.

“The bottom line” on being an affiliate is that networks provide stations with circulation, he said. “They don’t bring the average ratings anymore, but they bring the circulation to the station. If you want to reach 80% to 90% of your market each week, it really helps to have a network affiliation.

“And that circulation provides you with the opportunity to promote and provide audiences on the rest of your programming. That’s really a critical component.”

Plus, he said, a network affiliation is key to negotiating with cable and satellite for retransmission consent payments. “If you are not a Big Four affiliate, you are more than disadvantaged.”

The partnership with the networks is not without “tensions and difficulties,” he said, but it is working.

Prather didn’t save all is blunt talk for the broadcast network.

He also went after niche cable networks that put upward pressure on cable subscriber rates and make it tougher for broadcasters to get what he considers their fair share of cable and satellite programming funds.

“The cable network guys have got to realize… that some of this crap they put on has got to go,” he said.

“A handful of people think it’s greatest thing in the world and nobody else wants to watch it,” he said. “It’s just ridiculous for them to force that kind of junk on the American public…. It’s to keep people in jobs, I guess.”