One day after The Walt Disney Co. chief Michael Eisner told investors and
analysts that ABC was not one of the company's main brands going forward (those
would be Disney itself and ESPN), ABC and its affiliate board of governors have
approved (subject to ratification by the affiliate body) a new, two-year
National Football League exclusivity pact.
The two sides had discussed the possibility of a new four-year pact but
concluded that they were so far apart on deal points that they couldn't get it
done. "Still, we feel that the affiliates will be better off with the proposed new
network-affiliate plan than without it," said Bruce Baker, chairman of the ABC
board of governors. Nevertheless, there's a great deal of concern on the
affiliates' part over Eisner's comments and what that says about Disney's
commitment to ABC going forward, Baker said. "It's not good," he added. "Affiliates have not
responded well to this."
Of equal concern are the ongoing talks that ABC News and Cable News Network are engaged in
about possibly merging operations. Baker said the affiliate board expects to
have further conversations with network and Disney executives about the
implications of both the CNN talks and Eisner's remarks, which also laid out a
"horizontal" strategy for jointly integrating the operations of ABC and the
Disney cable networks.
Affiliates covering 67 percent of the country have until Oct. 11 to ratify
the new plan.
For the first time, the agreement includes so-called assignment language
on the sale of stations by ABC affiliates. In the past, affiliates have been
irked that the network has blocked sales by threatening to change the terms of
the affiliate contract with the new owner, or even withholding an affiliate
contract altogether. Now, the network commits (for the next five years) not to
change financial terms on the new owner. "I think on the whole, the affiliates
will be much happier with this," Baker said.
The new agreement also spells out specifically the type and amount of
cross-platform program promotion the network is allowed to do. A summary of the
plan is being sent to affiliates Wednesday, with a more detailed outline from
Wade Hargrove, attorney for the ABC Television Affiliates Association, set to
Affiliates agree to pay $34 million per year to help pay for NFL rights,
roughly in line with the annual cash payment under the old agreement.
There is also a similar rejiggering of inventory -- the stations will
continue to give back 10 units of Saturday-morning time to the network in
exchange for seven units of prime time inventory (carved mostly out of promo time)
from a mix of highly rated and not-so-highly rated programs. That's one less
spot than the stations were given under the old deal.
Also, the network's right to repurpose up to 25 percent of its prime
time schedule remains in place.