Editorial: NBC, Young and Granite roll dice

Nov 19, 2001  •  Post A Comment

The wrangling between NBC and Young Broadcasting over San Francisco station KRON-TV-a tussle that will decide the future of the NBC franchise in the nation’s fifth-largest television market-will have repercussions that could help shape the TV industry as a whole.
On the surface, the issues are simple: NBC would like to own its longtime affiliate and remain on Channel 4. Young, struggling to cope with the ad downturn, would like to sell the station. But Young wants more than NBC is willing to pay. Unable to come to an agreement, the two players have effectively thrown down their cards and stormed out of the room.
Now Young is preparing to take KRON independent on Jan. 1, while NBC is raising the profile of a would-be KRON rival, Granite-owned KNTV in San Jose, Calif., by granting it the highly prized Peacock affiliation.
The KRON situation became a test case for network-affiliate negotiations when NBC and Young reached an impasse last year on the issue of reverse compensation. Young refused to pay the network for the privilege of carrying NBC programming. Granite, on the other hand, agreed to pony up $362 million over 10 years to bring the NBC affiliation to KNTV.
It’s a good move for Granite, which has nothing to lose. Like Young, the company is doing poorly in the current economic climate. If Granite doesn’t make money with NBC, it probably won’t have to pay the reverse comp.
On the other hand, if the arrangement turns out to be profitable, it could chart the direction for future network-affiliate relations, shifting the precarious balance between the two entities and establishing reverse compensation as the new model.
But the deal has at least one serious drawback: KNTV, which currently carries WB programming, is hardly the equal of KRON, the market’s dominant station. KNTV’s Channel 11 signal is unavailable in significant portions of the market, and even though the station has been working out cable and satellite carriage deals, questions remain as to whether some viewers will be able to receive NBC programs over the air.
The most likely losers in the deal are NBC, which appears poised to give up part of its audience, and those viewers who will no longer be reached by the Peacock. On the other hand, a newly independent KRON would bring a fresh television voice-along with a plethora of new programming-to the San Francisco region. And Young’s commitment to local news and community service bodes well for the entire market.
With Young and NBC apparently unwilling to attempt a last-minute reconciliation, the Federal Communications Commission should take steps to ensure that their corporate gamesmanship doesn’t leave viewers out in the cold. It should encourage KNTV to beef up its signal-possibly through a power increase, better antennas and new translator stations-to reach more of the market, putting any plans the Granite station may make on a fast track.