CBS Affil Deal Ends Cash Payday

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Under a new 10-year affiliation agreement, CBS will pay two Hearst-Argyle stations about $1 million each over two years in network compensation, but then the network will not pay out any more money for the remainder of the deal.

Under the pact, Hearst-Argyle’s KCCI Des Moines will receive $726,000 in the first year and $363,000 in year two. The company’s other CBS affiliate, WLKY Louisville, gets $660,000 in the first year and $330,000 for the second year. After 2007, neither station will take in any money from CBS.

The deals highlight what has becoming a source of major frustration for local TV station owners. Historically, the broadcast networks have paid affiliates to carry their programming and the fees were a major source of cash for TV stations. In recent years, however, the networks have scaled back those payments and, in some cases, eliminated them altogether. In fact, the cash flow is actually changing directions. It is now common for affiliates to pay fees to the networks to support billion-dollar sports rights deals. For example, ABC affiliates contribute to the network’s Monday Night Football deal. 

The details of Hearst-Argyle’s new CBS deals were contained in the company’s latest 8-K filing. A Hearst-Argyle spokesman would not comment further.

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