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The Mating Game

Oorphaned stations consider a new option 2/24/2006 07:00:00 PM Eastern

News Corp. threw the world of local television into another spin cycle Feb. 22, when the company's Fox Television Stations unit unveiled My Network TV, a broadcast network intended to rival CBS Corp. and Warner Bros.' The CW.

The new Fox service will funnel programming to its nine UPN stations orphaned by the shutdown of The WB and UPN next fall, and Fox is pitching it to other slighted stations. Many say aligning with The CW is their first choice, but they have also considered going it alone as independents. Now, courtesy of Fox, they have a third option.

WB affiliate WBNX Cleveland is one of those lobbying to be a CW affiliate, but it faces stiff competition from the UPN affiliate in town, WUAB. WBNX Station Manager Annie Keith says she's also exploring becoming an independent and, this week, will hear Fox's pitch. Asked about her station's future, Keith says it's still open: “We're not married to anything.”

Sharp elbow at cbs and Warner bros.

As expected, Fox last week revealed a six-night-a-week prime time service anchored by English-language telenovela franchises Desire and Secrets. With its UPN stations and one independent, KDFI Dallas-Ft. Worth, Fox's new network immediately clears 24% of the country, and Fox executives expect 90% coverage by the Sept. 5 debut. Selling the mini-network to other stations is a way to further grow the business and throws a sharp elbow at CBS Corp. and Warner Bros., whose surprise announcement of CW in mid January caught Fox executives off-guard.

With The CW and My Network TV on the market, the race to sign stations is on. Within a day of the announcement, Fox and Twentieth Television executives were out pitching affiliates, starting with major station groups. By midweek, reps will fan out to midsize markets. The CW, meanwhile, expects to unveil several deals this week. It has also sent new proposals to stations in markets No. 103 and higher to align with The CW Plus, a single-network feed for small operators.

But station owners consider both networks a wild card. “There is no guarantee either will be successful,” says Howard Shrier, senior executive VP/COO of Pappas Telecasting, owner of five WBs and one UPN. Fox planned to pitch Pappas on Monday, and the group had already submitted proposals to The CW. “We are still in fact-gathering mode,” he says.

According to early plans, Fox's My Network TV is trying to appeal to stations by offering control over costs and airtime. The network is not asking for reverse compensation and, according to executives at potential affiliates, will give stations 65% of advertising inventory in its two-hour prime time block.

In contrast, CW affiliates would receive three minutes of commercial time per hour in prime. “Fox's split is much more favorable for station owners,” says Equity Broadcasting chief Larry Morton, who is negotiating with both networks.

Fox says My Network TV affiliates can be branded, for example, as My Chicago TV or My 9, after the station's channel position.

“The economics are much better, especially for strong stations who have syndicated product and don't want to give up 30 hours,” says Fox Television Stations CEO Jack Abernethy.

Between affiliate and independent

With its plan, Fox is wedging itself between the traditional affiliate model and independent stations, a stance well-received by some managers. “I would like their programming, but it is important to be able to brand ourselves and have inventory,” says Mike Roberts, co-owner of Roberts Broadcasting, which operates three UPN stations.

Many of the UPN and WB affiliates that will consider My Network TV had already bought the Twentieth telenovelas to run in syndication. But My Network TV has some executives uneasy, in large part because the lineup is still unclear, aside from the two soaps on tap.

“Stations need to ask what phase two, three and beyond look like,” says consultant Bruce Northcott, managing partner of Crawford, Johnson & Northcott. “These stations are getting out of a bad marriage and don't want to get into another one.”

Some of The CW's programming will be a known quantity—the network will cherry-pick existing hits like America's Next Top Model and Smallville—but potential affiliates have other gripes. The CW is asking stations to pay for its programming and commit to heavy launch support and marketing. Stations must clear two hours of prime, two afternoon hours and Saturday mornings.

The CW is also reserving the right to expand into other dayparts, including mornings and late fringe, that are profit centers for stations.

“This is the great battle of reverse compensation versus no compensation,” says Kirk Black, general manager for Meredith Broadcasting's CBS/WB duopoly in Kansas City, Mo. WB station KSMO is competing for CW affiliation against a UPN station and an independent.

Stations could still shun any network programming and go independent. Many owners are exploring adding local news and sports or extra syndicated fare. The independent model is attractive, managers say, because they keep all of the advertising time. However, independents must brand and promote completely on their own.

In Kansas City, Meredith's KSMO is considering all options with and without a network. Fox's service, Black says, at least gives affiliates leverage: “I can put together my business plan for CW and walk away if it doesn't work.”

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