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Rumor Has It: Network-Affiliate Model Is Splitsville - Broadcasting & Cable

Rumor Has It: Network-Affiliate Model Is Splitsville

Did Carey’s declaration in Vegas change the station world forever?
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Two years ago, I sat at the boisterous Margaritaville bar on the Las Vegas Strip, admiring the lady pirates walking by on stilts, and contemplating the noxious battle between Fox and its affiliates over retrans sharing that was best summed up by the U2 lyrics cranking through Margaritaville’s relentlessly loud speakers: I can’t live/With or without you.

A different couplet, bouncing around my head while resting some tired feet with a beer at a little Strip-side cantina near Caesars, captured the latest Sin City battle between Fox and its station partners. Adele, her voice smoky as the casino floor at the Flamingo, warbled: Just ’cause I said it/Don’t mean that I meant it.

Did News Corp. president/COO Chase Carey really, truly mean what he said onstage at the NAB Show’s opening session on April 8, when he told the thousands of broadcasters in the room that he might take Fox off the broadcast platform where it has resided since the days of Married… With Children and 21 Jump Street? And if so, where does that leave Fox’s station partners, with their local news and their half-century-old connection to the community—not to mention their substantial programming fees to the network?

“One option could be converting the Fox broadcast network to a pay channel, which we would do in collaboration with both our content partners and affiliates,” went the last line of News Corp.’s statement, issued moments after Carey stepped offstage in Vegas. It was the biggest NAB opening session bomb since Tim Robbins profanely and eloquently urged broadcasters to tone down on-air sleaze in 2008.

In collaboration with our affiliates…

Station leaders with skin in the game parsed the statement at the bars of the Encore and the Wynn. Did Chase mean what he said? If Fox went the subscription route—an option if Aereo prevailed in the courtroom—how exactly would the affiliates factor into the equation? Was the network-affiliate broadcast model, a winner for as long as anyone at the show could remember, breathing its final breaths? Were the two parties, to paraphrase another pop starlet, breaking up in Vegas?

Affiliates of non-Fox networks smiled and shook their heads, as they do when the sparks fly between Fox and its stations. Yet all knew, deep down, that if the cable model somehow proved to be a revenue upgrade, Fox would not be the only network to punt on broadcasting.

A day later, Fox’s affiliates and network chiefs assembled in a ballroom, outside of which a man in a suit kept one hand firmly pressed against the door, while the other held a smartphone—which presumably sent him reminders to keep that hand pressed against the door so no secrets could spill out. They discussed what Carey said, and brainstormed new models designed to make network, and local, television relevant for years to come.

Fox brass seemingly said the right things, because when the affiliates emerged, they were, for the most part, smiling. They felt like partners, in a live streaming initiative, and primetime and sports, and everything else related to Fox. They almost unanimously agreed that broadcasters—networks and affiliates, and not only the ones showing American Idol and The Following— have to stand together if they are to prevail against common enemies.

“I’m very impressed that they’re out in front of this,” said one respected voice among the affiliates, who requested anonymity.

Mike Hopkins, Fox’s affiliate sales and marketing president and a central figure in the bloody retrans battles in recent years, emerged sporting the smile of a man who had won big at blackjack. “I think everybody supports our position, and is generally understanding about where we’re going,” Hopkins said.

It’s worth noting that, during and after their 2011 meeting at NAB, many affiliates said Fox’s retrans demands would put them out of business. Years later, many saluted the network for being aggressive with MVPDs, and with them. Regardless, as the station reps went their separate ways, many were left contemplating if the relationship between networks and affiliates had changed forever.

Paul Karpowicz has a unique perspective. As NAB joint board chairman, he was backstage when Carey uttered his incendiary words. As Meredith Local Media president, Karpowicz oversees some Fox stations, including the one down the road in Vegas. “I think Fox, and I hope all the networks, understand and appreciate the local value of the affiliate and his presence in the marketplace,” he said. “That’s what makes us different from USA Network and AMC and Discovery—the 50-year-old [local] brand that exists in these markets.

“I don’t think for a second,” concluded Karpowicz, “that can be replicated in a cable model with no affiliates.”

E-mail comments to mmalone@nbmedia.com and follow him on Twitter: @BCMikeMalone

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