Fox is playing hardball with at least three affiliates that haven’t cooperated with the network’s inventory buyback plan.
The network sent letters last week to a number of stations warning that their affiliation will be yanked in 90 days unless they sign the controversial agreement, announced last spring and put into effect last November.
With a number of stations still not on board, the network hopes to prove a point by singling out a few smaller-market outlets whose group or individual owners have so far balked at making the buyback payments.
“We’re dealing here with a very small percentage of stations,” said Bob Quicksilver, president of network distribution at Fox. “And these are very small market stations.”
Quicksilver said Fox has begun to explore alternate means of distribution in the markets where it has placed the ultimatum.
“We’re confident if these affiliates choose not to come on board that we’ll be able to replace them,” he said. “We don’t think it will have any impact.”
Meanwhile, UPN execs have stepped up talks with a number of disgruntled Fox stations in the coming weeks.
“We’re booking a lot of airline reservations,” said UPN COO Adam Ware. “The message we’re telling people is: If you thought there were no alternatives to Fox, think again.
“News Corp. has clearly focused its efforts away from Fox, and that doesn’t seem to be lost on its affiliates,” he said.
How it works
Under the affiliate inventory swap, announced last May, Fox took 20 30-second spots that had previously been local ad time and has sold them back to stations for a flat fee. Additionally, the network converted 15 national spots into local spots, which stations also bought for a flat fee. At the time, insiders said Fox stood to gross $50 million to $75 million from its non-owned stations.
The deal went into effect affiliate-wide after 70% of the web’s station body approved it. Sources note that Fox, in order to reach the 70% necessary, allowed some stations to push back payments, delay getting into the news business or pre-empt more primetime hours.