Like many long-term relationships, the one between networks and their affiliates has had its ups and downs. Unfortunately, it is currently at a low point. In March, the Network Affiliated Stations Alliance, which claims to represent more than 600 local television stations, filed a petition with the Federal Communications Commission that charges broadcast networks with a host of devious practices.
Frankly, filing a formal complaint with the government that your business partner is operating in an unlawful manner-especially one with whom you’ve had a long and profitable relationship-exceeds the boundaries of acceptable behavior even among the most dysfunctional of families. In reality, NASA’s petition has little to do with network behavior and a great deal to do with the efforts of a small group of major media conglomerates to further their own regulatory agenda.
I would much prefer to be writing today about the long-term affiliation deals we’ve forged with the majority of our affiliate body-deals in which we have negotiated fairly and reached agreement on many of the issues cited in the NASA filing. Instead, we find ourselves facing divisiveness at a time when it is more important than ever for networks and affiliates to work constructively together.
As we negotiated our recent affiliation agreements, the most difficult conversations centered on the proposed lowering of stations’ cash compensation. This is in dramatic contrast to 1994, when compensation levels increased almost threefold. Curiously, no stations complained then about being unable to meet their local license obligations.
This is why the filing strikes me as so cynical and disingenuous. After all, against the mounting competitive threats to their business, networks give local stations their primary weapon: high-quality programming that attracts large audiences. Network programming, combined with a strong connection to the local audience through an affiliated station, has been a winning formula for half a century. But for it to continue, the network-affiliate relationship must be flexible enough to adapt to a radically shifting media landscape.
The NASA petition is full of rhetoric about the networks’ supposed threats to the affiliate model and to its ideals of localism and diversity. But the assertion that the networks create an environment that hinders local stations from being able to serve their local communities’ interests is an insult to the men and women at the 13 NBC owned-and-operated stations, who exemplify the principle that communities are best served by stations that have strong ties to their local audiences. No stations have deeper commitments to the people they serve.
From the Wednesday’s Child programs at WNBC-TV in New York and WRC-TV in Washington, which are helping hundreds of foster children find loving homes, to the Dare to Care initiative at KXAS-TV in Dallas, through which more than 1,000 vital nonprofit organizations are matched with volunteers, our stations devote enormous resources to improving their communities.
Such programs are not just good-they are good business. A broadcast station that fails to serve its community fails, period. Whether a station in Boise, Idaho, is owned by Belo (which is based 1,600 miles away in Dallas) or NBC (headquartered 2,500 miles away in New York) is irrelevant; if you want to succeed, you have to serve your local audience, and that means being good corporate citizens in your individual communities.
The NBC O&Os do this and still manage to execute the business side of their enterprises beautifully-even under the “onerous weight” of a network program schedule. Of course, affiliated stations that don’t think they can fulfill their local community service obligations with a network affiliation always have the option of going independent, in which case they would be able to devote 24 hours of their broadcast day to such endeavors.
Let’s look at some of the other charges in the petition.
The petition claims that networks stifle programming diversity by forcing stations to air network programs. But the evidence shows that NBC makes more than ample allowances for stations to pre-empt network programming, either to accommodate concerns about community standards or to serve local community interests.
By contract, our affiliates are given a basketful of allowable pre-emptions, many of which go unused. In fact, during the last season, affiliates had the contractual right to pre-empt 3,690 hours of prime time in addition to breaking local news. They pre-empted 2,255 hours, only 61 percent of what was available. By the way, our flexible and liberal agreements with affiliates contrast starkly with the terms of the typical national syndication agreement.
The petition charges that networks abuse the assignment clauses in affiliation agreements and thus subvert local license independence. But, according to our records, NBC has received more than 80 requests for affiliation assignment since 1996, and we have granted every single one.
The petition says the networks’ “repurposing” of programming for cable networks threatens affiliates’ economic viability. But if there was any evidence that repurposing hurts network programming, NBC-as a station owner-wouldn’t do it. After all, why would we do something that damages our own long-term interests?
Moreover, repurposing is not just a network practice: Cox station WPXI-TV in Pittsburgh airs its local news on cable, as does Belo station KING-TV in Seattle; meanwhile, two Gannett stations in Jacksonville, Fla. (WTLV-TV and WJXX-TV) air the same local newscast, and there are numerous other examples.
Clearly, the NASA petition has little to do with actual network practices. So what is really going on? The petition was spearheaded by a few large media conglomerates with interests ranging from newspapers to radio to television stations. Anticipating that the FCC might relax the outdated national broadcast station ownership cap, and thus allow broadcasters like NBC to expand their roster of owned stations, they launched this petition as a diversionary tactic.
What we find particularly hypocritical is that at the same time they are lobbying against lifting the station ownership limit, they are fighting for the removal of another anachronistic restriction: the cross-ownership rules that limit ownership of newspapers and broadcast stations in the same market.
As a matter of principle, NBC is in favor of lifting all outdated FCC restrictions, not just those that serve our interests. We feel strongly that the public is best served by competition that is unhampered by anachronistic regulations. This is why we are so opposed to the current national station ownership limit. It is based on a purely hypothetical standard of potential viewers and effectively limits station ownership to an audience share of less than 10 percent of the nation.
In any other industry, being regulated in terms of potential customers would be inconceivable, and for the limit to be set at such a low market share is simply ludicrous. No other medium-not radio, not cable, not telephone service-is regulated on the basis of potential customers, and the time is long gone when this made sense for television broadcasting.
We feel strongly about this because we want to operate in a vibrant industry that does not have its flow of capital pinched by government regulations. In short, it comes down to our basic principles. We would hope that other media companies that own television stations would put their principles above their self-interests. But even if they don’t, we’ll persevere. We’ll continue to urge the FCC to modernize its regulatory framework, and we’ll continue to work with our growth-oriented, forward-thinking affiliates as our key partners in bringing high-quality national and local programming to the public.
In closing, it strikes me that if we spent as much time working together to find ways to grow our respective businesses for our shareholders as some of us spend filing expensive, divisive and time-consuming documents on how best to selectively build regulator
y power in Washington, we would all be better served.