Fox Talks NFL With Stations

Aug 4, 2003  •  Post A Comment

Fox Broadcasting, which after months of discussions has been unable to reach agreement with the Fox affiliates board of governors on three issues, has begun negotiating new National Football League game cost-sharing agreements directly with stations.
“We have had extraordinarily positive discussions with all of the major station groups,” said a spokesman for Fox, which is thought to have reached either verbal or written agreements with upward of 75 percent of its affiliates.
The previous NFL agreement expired at the end of June. Some affiliates had suggested that as long as no agreement was in force, stations would be under no obligation to make their payments, which are thought to add up to $1 million to $1.2 million per month. That was regarded as a signal of “bad faith” in some corners at Fox, which aims for a retroactive start date of July 1 on its new agreements.
“We are not going to be making a recommendation [regarding the NFL agreements],” said John Tupper, president of Prime Cities Broadcasting and chairman of the Fox Affiliate Advisory Board. The advisory board is a liaison between the network and affiliates but is not authorized to commit affiliates to anything.
Mr. Tupper noted that “time was of the essence to [the network]” in the case of the NFL talks and said he planned to suggest to affiliates that as they begin discussions with the network, they take up the three areas that were still at issue when talks broke off last week. Those issues:
* The board’s request for Fox to pledge that no network programming would be repurposed on another broadcast network or station group. “We don’t want to let them shoot themselves in the foot and take us with them,” Mr. Tupper said.
* The board’s desire for a commitment that the network would not pipe Fox Net’s fill-in feed or another Fox station’s signal into a market in which the local affiliate has been unable to reach a retransmission agreement with cable or satellite signal providers.
* The board’s request for an “accommodation” for smaller-market stations in the formula for arriving at how much reverse compensation stations owe the network, which last year took a write-down of nearly $400 million on its eight-year $4.4 billion NFL deal.
“It’s a sales tax, in essence,” said Mr. Tupper, who maintains that the assessment can become a “regressive income tax on cash flow” in smaller markets. “It’s a little inequitable,” he said.
Before the talks broke off, Mr. Tupper said, “The board had made substantial improvements to the original offer Fox made for the renewal of the NFL fee.” Fox had agreed to:
* Give affiliates three new 30-second NASCAR spots, which will be placed between the checkered flag and the start of post-race coverage, in return for the right to repurpose network programming.
* Repurpose no more than four of the network’s prime-time shows per season and no more than three in any given week.
Repurposing has been a contentious issue. Stations regard it as a dilution of the brand with which they are affiliated.
* Guarantee local avails in NASCAR and Major League Baseball coverage. There was not an increase of local time.