A day after CBS and its affiliate board agreed on a new network compensation plan, the network’s top negotiator in the matter admitted that the network was too aggressive with its original plan and too eager in imposing such a drastic cut (Daily Variety, Oct. 7).
Speaking to members of the media yesterday, CBS affiliate relations prez Tony Malara called the network’s first stab at cutting $ 20 million from its affiliate compensation pool “much more aggressive than the environment, the market conditions” could support. He went on to say that the network was “a little too eager and tried to (cut compensation) too quickly.”
More important, the exec said the network had no intention to make another across-the-board compensation cut, provided the network enjoys some level of stability and support from its affil.
In May CBS announced that it intended to cut compensation– the money paid to stations to carry network programming — by $ 20 million and take back another $ 5 million in advertising time from affils in morning and weekend programs.
In addition, that plan called for changing compensation values on network programming, making some programs worth more in compensation and eliminating compensation completely on other shows.
Affils immediately reacted angrily to the cuts and rebelled by threatening preemptions–a potentially costly maneuver for the network.
Now, after four months of haggling and meetings, CBS affils have gotten the network to cry uncle.
Under the new program, CBS will cut its compensation pool by only $ 10 million. That figure puts CBS right in the middle in terms of total compensation paid by the Big Three networks. Currently, NBC pays $ 117 million annually, ABC $ 100 million and come January CBS will pay $ 110 million each year.
“One of our goals was to get into that arena,” Malara said. He added that the network and the affiliates wanted to get this matter behind them. “We’d rather be talking about the business of television.”
CBS’s first plan was going to cut compensation to stations in the top 100 markets by 25% and by a lower level to stations markets No. 101 and below. The new program cuts those numbers by a third and reduces the cut another 50% should the station clear CBS’s late night programming.
The web’s clearance levels in late night are at about 80%, though Malara said he thinks they could get up to 90%, at least in part because of the added compensation.
Looking at Letterman
While the network is pleased with the performance of its “Crime Time After Prime Time” programming block, Malara did say CBS would be interested in the talents of David Letterman, who has long been rumored to be leaving NBC.
In addition to the improved proposal for compensation, stations will get four 30-second spots during prime time each week during mid-break pods in the “Sunday Night Movie,””48 Hours,””Street Stories” and “The Hat Squad.”
According to Malara, stations airing late night and selling the additional spots during prime time are likely to make up the entire amount that is being cut from their compensation package.
The new plan also eliminates the earlier clauses that would have made some prime time shows worth more in compensation and eliminates the section that would have stopped paying compensation for the “CBS Evening News.”
Mick Schafbuch, general manager of KOIN-TV, Portland, Ore., and head of the affiliate board, praised the network for responding to every one of the board’s concerns with the original package. “There wasn’t an element they didn’t address ,” he said.
One of the things that did develop as a result of CBS’ affiliate stance was a stronger affiliate organization. At one point during the standoff the affiliate board suggested having a stand-alone meeting, separate from the network’s annual gathering.
Schafbuch said yesterday he was not sure if that meeting would happen, though he did say there was need for affiliate dues to increase and for the creation of a executive director position to fight for the affiliates in Washington.