ABC and affiliates near NFL pact

Oct 7, 2002  •  Post A Comment

ABC affiliates seem poised to OK a two-year plan by which the stations will contribute some $34 million a year toward the network’s NFL costs.
In return, the affiliates will get additional prime-time advertising inventory, continued limits on the repurposing of ABC programming, a compromise on cross-promotion of other ABC TV platforms and a concession on the prickly issue of affiliation assignment in the event of a station sale, among other guarantees.
An all-affiliates conference call Friday to discuss the agreement worked out by ABC and the ABC Affiliates Association board of governors “went well,” said Bruce Baker, the Cox television executive who is chairman of the affiliate board of governors. “There were no big issues.”
One participant in the call noted that many stations had mere hours to begin digesting a lot of information.
Now it is up to each affiliate or group owner to decide by Friday whether to sign on to the deal, which will help the network defray the costs of its $550 million-a-year contract and calls for smaller-market stations to kick in less cash than affiliates in top 50 and NFL markets. Stations that agree to the deal will get seven additional 30-second spots a week in prime time (compared with eight spots under the original Network Affiliate Program, which had been extended several times after its expiration date of July 31).
Participating stations also will get from the network a five-year guarantee that the network will not prevent transfer of affiliation with the sale of a station unless the network has “reasonable business concerns.” ABC has maintained that it should be able to have something to say about ownership of an affiliate if it changes hands, one of the issues raised by the Network Affiliated Stations Alliance in its 2001 request to the Federal Communications Commission that it investigate some of the business practices of the big broadcast networks.
The assignment question thus is disengaged from the NFL agreement, officially known as the Network Affiliate Program II, as are questions related to retransmission consent, which would remain in effect for the duration of each station’s affiliation agreement.
The plan maintains the network’s repurposing limit of 25 percent of its prime-time entertainment lineup and makes a variety of allowances for repurposing of other types of programming.
ABC finally would be able to do some time-and-date-specific cross-promotion of such Disney-owned networks as ABC Family Channel and ESPN. However, stations whose corporate policies prohibit specific promotion of competing networks and channels will be allowed to cover the cross-promotional spots with generic cross-promotions. The affiliates’ participation in Disney’s SoapNet was guaranteed by the original NAP.
ABC affiliates representing a total of 67.6 percent of the country must agree to NAPII for it to take effect. Early feedback indicates that such a quorum is possible, especially since station groups represented on the affiliate board account for some 60 percent.
Those stations that choose not to participate can expect to lose inventory in and around big events on the network, such as the Oscarcast.
At first glance the amount the affiliates are being asked to pony up each year appears to have dropped dramatically compared with the original NAP, which expired at the end of July.
“We are essentially holding on to the dollars,” Mr. Baker said.
The new agreement does not address significant questions raised by a possible spinoff and merger of ABC News and CNN, but the subject did come up because news of the negotiations between Disney and AOL Time Warner broke during the final stages of bargaining between ABC and affiliates.
“There were questions, and we addressed the questions,” said Alex Wallau, president of the ABC Television Network.
Mr. Baker said much the same but noted that “it is a little troubling” to hear what some affiliates read as signals from Disney that “ABC is not one of their core businesses.” Still, both sides seemed relieved to have crafted a document that addresses so many issues that have been bones of contention.
“It is a very significant step toward clearing the air on a number of things,” Mr. Wallau said. “We want them to be strong and powerful presences in their markets, and they want us to be strong. We are both trying to understand and deal with each other’s business.”
“The affiliates and ABC worked hard to find a common ground so we can move forward with this plan and the overall relationship,” Mr. Baker said. “The end result is intended to strengthen both ABC and the affiliates.”
When the new agreement expires at the end of July 2004 there still will be two years remaining on the NFL’s agreement for “Monday Night Football” (and other TV packages), but it will be in the middle of a year in which a large number of ABC’s 10-year affiliation agreements are scheduled to run out.
Through the fourth game of the 2002-03 season, “MNF” is up 5 percent in total viewers compared with a year ago and up 30 percent in men 18 to 34, up 20 percent in adults 18 to 34 and up 8 percent in adults 18 to 49.
A large number of the network’s long-term affiliation agreements also are set to expire in 2004.
One of the points in NAPII says that ABC would “prospectively” reduce the NFL contribution by the same percentage as the network reduces compensation as part of the renewal of an affiliation agreement during the next two years.
Other contractual issues addressed include network-related music license fees (ABC would continue to pay for the duration of the existing affiliation agreement); the possible consequences of ABC’s buying a station in the affiliate’s market (the network would not terminate affiliation), and local news (the network could not demand “network/affiliate” quality).
Stations who participate in NAPII also would get guarantees that for the length of their current affiliate contract there will be no change in the network’s retransmission consent policy and that they would be allowed to carry on their digital channels the digital version of analog network programming.