Local TV

Rumor Has It: Network-Affiliate Model Is Splitsville

Did Carey’s declaration in Vegas change the station world forever? 4/15/2013 12:01:00 AM Eastern

Two years ago, I sat at the
boisterous Margaritaville bar on the
Las Vegas Strip, admiring the lady
pirates walking by on stilts, and contemplating
the noxious battle between Fox and
its affiliates over retrans sharing that was
best summed up by the U2 lyrics cranking
through Margaritaville’s relentlessly loud
speakers: I can’t live/With or without you.

A different couplet, bouncing around my
head while resting some tired feet with a
beer at a little Strip-side cantina near Caesars,
captured the latest Sin City battle between
Fox and its station partners. Adele,
her voice smoky as the casino floor at the
Flamingo, warbled: Just ’cause I said it/Don’t
mean that I meant it

Did News Corp. president/COO Chase
Carey really, truly mean what he said onstage
at the NAB Show’s opening session
on April 8, when he told the thousands
of broadcasters in the room that he might
take Fox off the broadcast platform where
it has resided since the days of Married…
With Children
and 21 Jump Street? And if so,
where does that leave Fox’s station partners, with their local news and
their half-century-old connection to the community—not to mention
their substantial programming fees to the network?

“One option could be converting the Fox broadcast network to a pay
channel, which we would do in collaboration with both our content
partners and affiliates,” went the last line of News Corp.’s statement,
issued moments after Carey stepped offstage in Vegas. It was the biggest
NAB opening session bomb since Tim Robbins profanely and eloquently
urged broadcasters to tone down on-air sleaze in 2008.

In collaboration with our affiliates…

Station leaders with skin in the game parsed the statement at the
bars of the Encore and the Wynn. Did Chase mean what he said? If
Fox went the subscription route—an option if Aereo prevailed in the
courtroom—how exactly would the affiliates factor into the equation?
Was the network-affiliate broadcast model, a winner for as long as anyone
at the show could remember, breathing its final breaths? Were the
two parties, to paraphrase another pop starlet, breaking up in Vegas?

Affiliates of non-Fox networks smiled and shook their heads, as they
do when the sparks fly between Fox and its stations. Yet all knew,
deep down, that if the cable model somehow proved to be a revenue
upgrade, Fox would not be the only network to punt on broadcasting.

A day later, Fox’s affiliates and network
chiefs assembled in a ballroom, outside of
which a man in a suit kept one hand firmly
pressed against the door, while the other
held a smartphone—which presumably sent
him reminders to keep that hand pressed
against the door so no secrets could spill
out. They discussed what Carey said, and
brainstormed new models designed to make
network, and local, television relevant for
years to come.

Fox brass seemingly said the right things,
because when the affiliates emerged, they
were, for the most part, smiling. They felt
like partners, in a live streaming initiative,
and primetime and sports, and everything
else related to Fox. They almost unanimously
agreed that broadcasters—networks
and affiliates, and not only the ones
showing American Idol and The Following
have to stand together if they are to prevail
against common enemies.

“I’m very impressed that they’re out in front
of this,” said one respected voice among the
affiliates, who requested anonymity.

Mike Hopkins, Fox’s affiliate sales and marketing president and a
central figure in the bloody retrans battles in recent years, emerged
sporting the smile of a man who had won big at blackjack. “I think
everybody supports our position, and is generally understanding about
where we’re going,” Hopkins said.

It’s worth noting that, during and after their 2011 meeting at NAB,
many affiliates said Fox’s retrans demands would put them out of business.
Years later, many saluted the network for being aggressive with
MVPDs, and with them. Regardless, as the station reps went their separate
ways, many were left contemplating if the relationship between
networks and affiliates had changed forever.

Paul Karpowicz has a unique perspective. As NAB joint board chairman,
he was backstage when Carey uttered his incendiary words. As
Meredith Local Media president, Karpowicz oversees some Fox stations,
including the one down the road in Vegas. “I think Fox, and I
hope all the networks, understand and appreciate the local value of
the affiliate and his presence in the marketplace,” he said. “That’s what
makes us different from USA Network and AMC and Discovery—the
50-year-old [local] brand that exists in these markets.

“I don’t think for a second,” concluded Karpowicz, “that can be replicated
in a cable model with no affiliates.”

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