NEW YORK — NBC’s affiliate board responded favorably to the conceptual framework of a new network partnership model, but said details remain to be worked out over the next several months.
The ambitious plan, as first reported (Daily Variety, Nov. 17), calls for the network to reduce its affiliate compensation payments, parlaying the money into new joint ventures with stations to invest in digital TV, multimedia and other areas. In addition, the network would extend current 4- to 11-year affiliation agreements to longer terms, ensuring the continued health of stations that depend on the network’s programming for half their revenues.
The partial undoing of a 40-year-old economic model for how networks distribute their programming is unprecedented, though network execs stressed it would be voluntary, in contrast to Laurence Tisch’s failed attempt to unilaterally cut payments to CBS affils some years back.
“We’re trying to make this enough of a win-win situation that people will embrace this idea,” said NBC network prexy Neil Braun in a briefing for reporters. “The premise is really simple: Is NBC committed to the broadcast affiliate distribution system for the long term, and are broadcasters committed to NBC for the long term? … Our futures are inexorably tied; we are not stand-alone businesses.”
Still, there are many issues over which affils and the network are at odds, and an overall agreement, hoped for by the May affiliates meeting, is designed to encompass many of them. NBC is spending hundreds of millions on rights to major sports and primetime hits like “Seinfeld” and “ER,” yet affils balk at eroding exclusivity arrangements that allow NBC, for example, to promote post-game shows on its cable network.
“We’re paying for expensive rights and limiting the exploitation of our product” under the current system, Braun said. “There’s a conundrum there, and we’re trying to look through that” as part of the discussion.
At the board meeting in San Diego, which wrapped Thursday, Ken Elkins was re-elected interim chairman of NBC’s affiliate board, for a term that extends through May.