CW, My Network TV Win Affils3/03/2006 07:00:00 PM Eastern
As they race toward their Sept. 5 debuts, The CW and My Network TV have fired their latest shots in the battle to sign up affiliates. The CW, already ahead in distribution, recruited five new stations. But My Network TV snagged a bigger catch, landing a deal with a major TV-station group. And as the networks press for more deals, potential affiliates say they have major concerns regarding both.
My Network TV, announced Feb. 22, unveiled its first affiliation pact last week with Sinclair Broadcast Group to carry the mini-network on 17 of its stations. Sinclair was a prime target for both suitors, since the company owns and operates 18 WBs and six UPNs.
Two days before revealing his choice, Sinclair Chairman David Smith praised the My Network TV plans. Fox, Smith said at a Bear Stearns investor conference, has “demonstrated historically the ability to do things outside the box, be trend-makers and create huge wealth and value.”
With the deal, My Network TV boosted its distribution to 36% of U.S. TV households. The company's nine UPN outlets and one independent will also carry the network.
The CW closed five deals last week that brought its clearance to 52% of the country. It signed up four strong WB stations, WBNX Cleveland, WKCF Orlando, Fla., WBKI Louisville, Ky. and WMWB South Bend, Ind., and one UPN, WJZY Charlotte, N.C.
The affiliates join 16 Tribune stations and 11 CBS-owned UPNs previously announced as CW outlets. “We know the value of an affiliation, and we went hard and heavy for The CW,” says Carol LaFever, CEO of WBKI parent Cascade Broadcasting. While Cascade is still considering both pitches for its WB outlet in Tucson, Ariz, LaFever says The CW is a better-known quantity: “There isn't any getting to know you with CW.”
Both networks say they will reach more than 90% of the country by launch. To get there, they have a lot of ground to cover. The competitors must cut deals with station groups like Clear Channel, LIN TV and Pappas, and go door-to-door to many small station operators. As station owners consider their proposals, some have major gripes about each network.
For one, they're wary about My Network TV's long-term programming plans. If the telenovelas tank, they say, then what? The network's plan to strip series, rather than the traditional checkerboard schedule, also makes affiliates nervous about ratings.
Fox Television Stations CEO Jack Abernethy says that, as an owner of My Network TV outlets, he has a vested interest in funneling strong shows. “We're committed, and we're going to put the resources behind this,” he says. “We're going to give stations programming that will win the time periods.”
A main contention with The CW is its plan to seek reverse compensation, typically a percentage of station revenues. (My Network TV is not asking for programming fees.) While many WB affiliates already pay such fees, UPN stations have never had to do so. In the five deals from last week, The CW is getting some form of compensation, according to executives familiar with the deals. “It is hard to believe the big station groups will pay The CW,” says an owner of several UPN stations, “but there will be other people that think they have to have it and will pay up.”
The CW's allotment of advertising inventory is also drawing protests. During network programming in the afternoon, it is proposing that stations get four minutes of ad time per hour, but some operators would like an even split. In prime, stations will get only three minutes an hour, compared with My Network TV's offer of nine minutes.
Saturday mornings are also an issue. The CW plans to run five hours of kids programming, but those are prime slots for infomercials—a cash cow for many non-traditional affiliates.
Affiliates have some common demands. Station owners want the right to form affiliate boards to represent their interests. They also want to set terms for revenue-sharing if either network sells shows on-demand or on the Internet. And, with the fall season looming, potential affiliates want assurance that the networks will provide solid marketing and promotional support.
As stations plot their next moves, managers say they are considering all options. “These networks are helping station owners think about how to survive in small markets and how to develop new business models,” says Paul Koplin, CEO of Venture Technologies Group, which owns four UPN affiliates. “Both networks are options—and so is going independent.”