WTTV Move Shows CBS Testing The Market

In moving its Indianapolis affiliation from LIN to Tribune, CBS is sending the message that “if the incumbent doesn’t meet the value that we perceive it to be, we will certainly test the marketplace,” says CBS’s Ray Hopkins.

CBS isn’t taking its affiliation switch from LIN Media’s WISH to Tribune Broadcasting’s WTTV lightly, but Ray Hopkins, president of television networks distribution at CBS says the network will continue to entertain outside offers as it continues renewal talks with LIN and other affiliates.

“We always hope to work with the incumbent,” says Hopkins. “But if the incumbent doesn’t meet the value that we perceive it to be, we will certainly test the marketplace.”

That value is expressed these days in the programming payments or reverse comp that most affiliates pay the Big Four networks.

“It came down to the value that Tribune offered in its entirety versus what LIN was offering,” Hopkins says. “Tribune saw an opportunity in Indianapolis to have the No. 1 network. The valuation that Tribune put forth was more in line with what we are seeking.”

The affiliation switch, announced this morning, is effective Jan. 1, 2015. WTTV is currently a CW affiliate. Come Jan. 1, the CW programming will move to a WTTV subchannel. Tribune also owns the market’s Fox affiliate, WXIN. Tribune will begin producing local news on WTTV.

According to BIA/Kelsey, Indianapolis generated $156.1 million in TV revenue in 2013 with 22.1% ($34.5 million) going to WISH and 7.5% ($11.7 million) going to WTTV.


The deal also included Tribune renewing its affiliate deals with CBS in four markets: Memphis, Huntsville, Ala., Ft. Smith, Ark., and Richmond, Va.

In addition, CBS has renewed its affiliation agreement with Dreamcatcher Broadcasting’s WTKR Norfolk, Va., to which Tribune provides operational support under a shared services agreement.

The switch is a blow to LIN Media, which is in the process of  merging with Media General.

LIN has 10 other CBS affiliates: KRQE Albuquerque (DMA 47), WIAT Birmingham, Ala. (44), WIVB Buffalo, N.Y. (52), WANE Ft. Wayne, Ind. (109), WLFI Lafayette, Ind. (189), KIMT Mason City, Iowa (153), KOIN Portland, Ore. (22), WPRI Providence, R.I. (53), WTHI Terre Haute, Ind. (155), WKBN Youngstown, Ohio (113).

CBS is still working on renewals with other LIN Media stations, although Hopkins would not say how many.

“As far as going forward with LIN, they are a large affiliate of ours,” he says. “We expect to further engage with them in renewing in markets where we have markets up for renewal.”

It declined multiple requests for comment today.

David Bank, a securities analyst at RBC Capital Market, said in a note to clients that he was encouraged by the “hard line” that CBS has been taking on reverse comp.

“If CBS is willing to flex its muscles in reverse comp discussions, it’s possible we could see upside to long-term retrans/reverse comp total targets of [approximately $2 billion] by 2020.  

“At the end of the day, in many markets, we think if a local affiliate balks at CBS’s demands, the affiliate must recognize that other stations might step up to take over the affiliation at less attractive terms.”

The Marci Ryvicker analyst team at Wells Fargo said other switches are possible, but not likely. With its Fox affiliate, Tribune already has a strong presence in Indianapolis. “To us, the PR around this deal suggests that this is a signal from CBS to its affiliate body that it wants what it considers to be ‘fair value.'”

That doesn’t mean that CBS wants the lion’s share of affiliates’ retransmission consent revenue, it said. “We think CBS is asking for fair value based upon what it gets in retrans for its own O&Os. CBS is sort of putting a fire under its affiliates to go out and get as much as it can from the MVPDs.

“As our contacts put it, CBS is asking for a specific rate and it’s up to the affiliates to get a higher top line–that is what will decide what ‘portion’ of retrans is ultimately given back to the network.”

SNL Kagan senior research analyst Justin Nielson notes that CBS’s new deal with the NFL for Thursday Night Football may have prompted more aggressive affiliate renewal talks.

“Fox and CBS were the first ones to start extracting [reverse retrans] money, primarily because they are spending a lot of money on sports rights,” says Nielson. “Thursday Night Football is quite costly for CBS. They want to make sure they’re getting compensated for that.

“With all this TV station consolidation, you have larger groups, which are getting more retransmission consent fees that they’re collecting,” he says. “So, they’re getting higher and higher rates from multichannel operators. The networks want a piece of that.”

Comments (19)

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none none says:

August 11, 2014 at 10:36 am

Let’s see, something like – “For Sale” Top 25ish market. Use to have an audience, not so much any more, but the carpet in the newsroom is new and we just painted.

Manuel Morales says:

August 11, 2014 at 10:36 am

So what does this mean for WISH?

    Terry Dreher says:

    August 11, 2014 at 10:43 am

    Must be a secret otherwise “Staff” would have put it in the blurb. 🙂

pat archambault says:

August 11, 2014 at 10:43 am

WISH will take a big hit ~ no matter HOW they try to spin it…

Teri Green says:

August 11, 2014 at 10:47 am

Same thing as XETV.

Teri Green says:

August 11, 2014 at 10:51 am

I wonder if it had anything to do with the fact WISH’s digital signal is on VHF and WTTV is on UHF.

Kristine Melser says:

August 11, 2014 at 11:08 am

So, the #1 network affiliate in a market switches call letters to go to a CW station (whose owner has major interest in that network by the way). I think we can all read between the lines here.

    miss Aisha al mana says:

    August 18, 2014 at 7:36 pm

    Tribune does not have an ownership interest in the CW, although it is the top affiliate group. What are you suggesting we read between the lines?

Manuel Morales says:

August 11, 2014 at 11:10 am

So they will likely lose 100M+ in value. Tough deal. This is a clear message to affiliates- “We did it to LIN/Media General. We can do it to you.”

    Teri Green says:

    August 11, 2014 at 4:58 pm

    NBC already sent that message years ago to KRON

none none says:

August 11, 2014 at 11:34 am

I must say if you go to http://www.wishtv.com you would never know they are a CBS affiliate. Not that you have to co-brand with your network, but given the strength of CBS you would think its something to be proud of…but now that CBS is gone, maybe they made the right choice all along, but I bet CBS was not too keen on it.

Celeste Champagne says:

August 11, 2014 at 1:48 pm

“Sammy”… hit-the-nail-on-the head.

    Kristine Melser says:

    August 11, 2014 at 2:08 pm

    Yep, sounds like what Fox did. And coincidentally Tribune will now sell 90% of the NFL avails in the market with a Fox and a CBS. Ought to be interesting how they handle local news too.

    Manuel Morales says:

    August 11, 2014 at 2:28 pm

    So tribune has the FOX currently? They shouldn’t last with our admins crackdown. Maybe this isn’t that bad for LIN. Perhaps they get the FOX.

    Kristine Melser says:

    August 11, 2014 at 3:23 pm

    Tribune had a Fox/CW duop before this and the Fox just made a big local news announcement which is why I mentioned local news too. Tribune could have forecasted higher retrans from Fox and decided to go for CBS with the home NFL team and it could be very good news for Lin to get Fox but I think 3 of Lin’s Fox stations are in potential sell off due to the MG/Lin merger so not sure how that plays out.

Keith ONeal says:

August 11, 2014 at 2:16 pm

Will WISH pick up The CW network, a net that no one watches?

    Diane Tryneski says:

    August 11, 2014 at 2:32 pm

    Don’t think so. Sounds like CW is moving to .2.

Robert Vincent says:

August 11, 2014 at 3:32 pm

CBS is putting on some better programming lately. Was hoping them to loose the Aereo case though. I already do Netflix and ATSC, that’s all. Aereo would have let me get rid of my slingbox which I now use for free to do the same thing the courts said were illegal.

Paul DiGiacomo says:

August 11, 2014 at 5:24 pm

If the nets had their way..all major markets would be O and O’s…I guess WISH will have to stock up on Andy Griffith reruns and old movies…I can hear the Resume’s flying out of their newsrooms now….

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