Fox and Viacom traded stations last week, as expected, to create three new large-market duopolies.
The station swaps—pending FCC approval—would give Viacom a duopoly in No. 5 market San Francisco and Fox duopolies in No. 8 market Washington and No. 11 Houston. Viacom will exchange WDCA(TV) Washington and KTXH(TV) Houston, where Fox owns WTTG(TV) and KRIV(TV), respectively, for KBHK-TV San Francisco, where CBS already owns KPIX-TV. All three stations in play are UPN affiliates.
Group officials said the station values evened out and there was no cash in the deal. More exchanges between the companies are likely in pursuit of duopolies.
If the deal is approved, Viacom's station group would have seven duopolies, all in major markets: San Francisco, Philadelphia, Boston, Dallas, Miami, Detroit and Pittsburgh.
"Pairing KBHK-TV with KPIX-TV [would make] San Francisco our largest duopoly market and opens up many possibilities for our viewers and our advertisers in the Bay Area," said Les Moonves, president and chief executive officer of CBS.
Moonves added that the Bay Area acquisition could lead to another news venue. CBS has added news in several of the duopolies created by its UPN station additions, and its Detroit UPN station, WKBD(TV), shares news resources with CBS' Detroit property, WWJ-TV, which had been the only CBS station without news. Both groups said no decisions had been made regarding personnel or programming changes.
Fox's two duopolies join its other duopolies in top markets New York and Los Angeles and in Dallas and Phoenix, as well as a proposed duopoly in Minneapolis. Last month, Fox reached agreement with Clear Channel to swap KTVX-TV Salt Lake City and KMOL-TV San Antonio for Clear Channel's WFTC (TV) Minneapolis.
Fox's Los Angeles, Phoenix and New York duopolies were created only a week before the Viacom swap, when the FCC approved Fox's purchase of 10 Chris-Craft stations, and the station swaps with Viacom were expected to follow.
Viacom will join Cox, Granite and Pappas Telecasting as Bay Area duopoly owners. CBS' KPIX-TV has not garnered strong local-news ratings in recent years, but Bay Area dominance could be up for grabs next year, when longtime powerhouse KRON-TV surrenders its NBC affiliation to Granite's KNTV (TV) and becomes an independent. KPIX-TV's news director, Dan Rosenheim, is the former news director at KRON-TV.
Fox's strength in the Bay Area would have been limited by the unavailability of its own affiliation there. Although Fox typically can reclaim its affiliation by contract when it acquires a station in a market, the Fox affiliation in the Bay Area is locked up for the next several years by the very strong Cox-owned affiliate, KTVU(TV).
Even with the new duopolies, both Fox and Viacom exceed the FCC's 35% cap on TV household reach—although Fox noted in its announcement of the deal that the swaps reduce its reach to 39%. The cap has been stayed pending disposition of a federal appeals court case brought by Viacom. The case is scheduled to be heard in the U.S. Court of Appeals for the D.C. Circuit in September. Fox has also challenged the cap.