Tribune Extends Fox Affiliation Deal in Seattle Market — For a Price

After months of hardball negotiations, Tribune Media has reached a deal with Fox to extend the affiliation of its Seattle station KCPQ-TV, which Fox had been eyeing as part of its campaign to secure O&Os in key NFL markets.

Tribune said Friday that it has extended the affiliation deal through July 2018. Last month, Fox formally notified Tribune that it intended to end the affiliation deal in January as it pressured Tribune to agree to a  station swap deal that would have allowed Fox to claim KCPQ as its own.

Fox even went so far as to start the process of acquiring another station on the edges of the Seattle market to ramp up the pressure on Tribune to hand over KCPQ. The Fox O&O group orchestrated a similar station swap with Cox Media in the San Francisco market earlier this year.

Tribune also had some clout to bring to the table with its sizable 42-station group and heft as a major owner of Fox affils. Broadcast industry observers have kept a close eye on the Seattle situation at a time of rising tensions between networks and affils over reverse compensation fees.

Last year, Fox bought a station in Charlotte, N.C. and switched the network affiliation from its longtime home on WCCB-TV. The transition to the smaller outlet in Charlotte has not been particularly smooth for Fox, which may have influenced the decision to stay the course with Tribune in Seattle rather than go through the disruption of switching stations.

In announcing the deal, Tribune said it had agreed to pay “additional programming fees to Fox for the prime time and sports content provided by the network.” That is in keeping with the steeper reverse compensation terms that each of the Big Four networks are seeking from affiliate stations. It’s unclear if Tribune will pay considerably more in the Seattle market that it does in reverse comp for its seven other Fox affiliate stations.

“We are pleased to have secured a multi-year agreement with Fox to extend our affiliation with KCPQ-TV in Seattle through July 2018,” said Peter Liguori, president-CEO of Tribune Media.  “Tribune is not only Fox’s largest local affiliate group, but also has a far-reaching business partnership with Fox on nearly 20 syndicated programs as well as ‘Salem,’ a WGN America original series. Today’s agreement illustrates the value both parties place on resolving issues on mutually satisfactory and beneficial terms.”

Fox wanted the Seattle station because it is the hometown of the Seattle Seahawks NFL franchise, part of the NFC conference rights that Fox controls.

Tribune said that even with the higher programming fees, KCPQ would “deliver profitability in excess of its previously disclosed 2013 annual EBITDA of $13 million.”

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