After two weeks of hard bargaining, CBS affiliates have agreed to a plan that calls for affils to pony up an estimated $30 million to $40 million per year over the next eight years to help the Eye web pay for its $4 billion NFL rights package.
CBS’ annual spring affiliates gathering ended on a high note Friday as web execs and affils heaped praise on each other for negotiating a peaceful solution to the pigskin crisis.
Prior to last week’s two-day affiliate confab, a number of affils had balked at the idea of laying out cash to help cover the cost of pro football, which hasn’t been seen on CBS since 1994.
“We gave and they gave,” said Dino Corbin, general manager of KHSL Chico. “It’s an equitable deal.”
Mel Karmazin, prexy and CEO of CBS, boldly predicted Friday that the strength of the NFL this fall would propel the 14 CBS-owned stations from fourth to second place (behind Fox) in total revenue this year. Twelve of the 14 CBS O&O markets have NFL teams.
One concession made by the network that helped speed the NFL negotiations with affils involved program exclusivity, a hot-button issue these days for all network-affiliated broadcasters.
CBS execs agreed to formalize a set of exclusivity guidelines drawn up last year that bars CBS from using the broadcast web to offer day-and-date cross-promotion of CBS’ cable properties, such as CBS’ Eye on People and the Nashville Network.
Under the guidelines, CBS entertainment programming is exclusive to the broadcast web for one year after its premiere; parameters for talkshows and other reality fare range from five days to three months.
The Eye web’s complex NFL agreement with affils involves a combination of cash payments and advertising inventory swaps. Affils will exchange at least one minute of their local ad time in CBS’ morning and latenight program blocks for a rotating series of primetime spots.
Station and web execs characterized the deal as a “win-win” for all, because affils can sell their local primetime spots for top dollar, while the web can make more efficient use of the morning and latenight spots with national advertisers.
The amount of the cash contribution will vary according to a station’s market size. Affils in markets that have NFL teams will pay significantly more than those without a hometown cheering section. Because CBS bought the American Football Conference rights package, affils with AFC teams in their markets will kick in the most cash.
“We settled on what we feel is fair value for the network and for us,” said Paul Karpowicz, exec VP of Lin Television, who was elected the new chairman of the CBS affiliate advisory board last week. “It’s difficult to put a round number (on the value of affil contributions) because ad inventory will be going both ways.”
In other news from the meeting, CBS prexy Karmazin told affils he would increase the network’s national ad sales staff by 20%. Karmazin noted that the recent uptick in sales at the CBS O&Os was spurred by his decision last year to double the station group’s local sales force from 160 to 300 staffers.
Karmazin, the radio mogul who became CBS’ largest shareholder when the Eye bought his Infinity Broadcasting in 1996, drew a round of applause in his address to affils by dashing media speculation that he is plotting a corporate coup against CBS chairman Michael Jordan.
“I want you to know that the management team at CBS is 100% on the same page. We all want CBS to be No. 1,” Karmazin said. “And no, I don’t spend my time lobbying for Michael Jordan’s job. I spend my time doing what’s in the best interest of our employees, our shareholders and our advertisers.”