CBS Has a 5% Solution for Affils

It wants stations to pay for part of NCAA basketball package

CBS is asking its affiliates to contribute as much as 5%, or $300 million, of the $6 billion the network agreed to pay the National Collegiate Athletic Association this year as part of an 11-year deal to carry the NCAA men's basketball tournament.

At the CBS affiliate meeting in Las Vegas last week, affiliates and network executives were trying to hammer out a compromise, although it wasn't expected to come at this meeting. While stations are amenable to contributing to the NCAA deal in some way, general managers said, it has not been decided how that contribution will be made. The stations already pay for part of the network's expensive NFL package.

"Some stations want an inventory exchange," said Bob Lee, president of the CBS affiliates board, "and others think cash is a more elegant solution."
Affiliates are also interested in other concessions, such as more program exclusivity and thus less repurposing on cable or CBS co-owned TV stations, and more flexibility about how and when affiliates can preempt network programming.

CBS, along with the other three major broadcast networks, also was expected last week to make a bid on the 2010 Winter Olympic Games and the 2012 Summer Olympic Games. The International Olympics Committee is due to open sealed bids this Thursday.

If CBS were to win the Olympic bid, the network has informed affiliates, it will expect a financial contribution from them. But CBS executives say the network is unlikely to bid aggressively for the Olympics because it is happy with the performance of the sports packages it has.

"We will need to determine the best interest of the CBS Television Network and our affiliates before committing to any bid," said Sean McManus, president of CBS Sports.

Peter Schruth, president of CBS affiliate relations, said any bid would have to be "reasonable" and financially prudent. "The Olympics could be an appropriate addition to our portfolio, but we intend to be responsible about it. We'll try our best to get it, but, if we don't, we already have the best sports package of any network."

TV stations are likely to be asked to contribute to the Olympics deal of whatever network wins the bid. NBC and ABC already have delivered their contribution proposals to their affiliate boards, sources said.

Both NBC and ABC are expected to push much harder for the Olympics than CBS is. NBC has established itself as the Olympics network and, without NFL football or the NBA, has more money to spend. ABC is said to be interested because parent Disney can air the games round-the-clock on ABC's ESPN networks.

For many station-group heads, which network wins the Olympic bid is irrelevant because they know any winner will ask them to pony up—and many of the largest station groups are affiliates of all six networks.

Also at the meeting last week, CBS News President Andrew Heyward defended The Early Show, retooled seven months ago. The show delivered CBS's most-watched February sweeps in the time period since 1995, he said, and brought in the most viewers in four years. It showed its best ratings since 1999 and was up 10% over last year in households. The Early Show
also brought in 220,000 more viewers this year over last.