Twentieth TV yesterday became the first major syndicator to waive its claim to retransmission consent payments, which are rights fees that stations receive from cable systems to retransmit their broadcast signals.
Retransmission consent, which is scheduled to take effect in October 1993, will permit broadcasters to negotiate with cable companies for money, promotion or other types of “value.”
Since Congress passed the legislation in October, syndicators have been seeking to rewrite their program contracts in order to get a 10%-20% cut of retransmission revenue attributable to their shows.
By taking a leadership role, Twentieth hopes to indirectly benefit by reaping higher prices for its shows since stations would have more money to pay.
If other syndicators jump on the bandwagon, the Twentieth move will have helped strengthen the Fox-owned TV stations.
Twentieth also stands to gain while other distribs weigh their options. The syndicator is vying to introduce its “Bertice Berry” morning talker in a crowded market, and its position could give it a built-in negotiating advantage.
Greg Meidel, prexy of Twentieth TV, said in a statement, “Broadcasters will be strengthened if they are allowed to negotiate with cable companies over retransmission consent without any added interference from distributors …
“Stations will have a stronger incentive to bargain for terms beneficial to the broadcast industry if they are not obliged to give distributors fees they obtain from their retransmission customers.”
Twentieth, however, left itself with an out in case other syndicators continue to press their claims.
By limiting the new policy to the company’s current round of syndication contracts, the company won’t lock itself into an unfavorable long-term position.
The Fox syndie subsid emphasized that its stance is “subject only to a most-favored-nations position”–which means that if others continue to take a piece of the action, Twentieth will, too.
There was speculation in some quarters yesterday that other syndicators may not be anxious to join in the Twentieth-led effort.
Twentieth appears to be operating on the theory that when sales reps for competing syndicators go into a market and hear the stations’ response to its plan, they will likely follow suit. The entire retransmission issue remains in a state of flux.
Tele-Communications Inc., the nation’s largest multisystem operator, has vowed not to provide broadcasters with one penny from retransmission consent.
Both Twentieth sister Fox Broadcasting Co. and CBS have taken a hardline stance in urging stations to go after retransmission fees. ABC and NBC, each with cable interests, have been lukewarm on the issue.
Stations have the option of seeking “must carry” protection (which requires a cable system to carry their broadcast signal) in lieu of a rights fee.
If, as some suspect, the courts make “must carry” provisions mandatory before retransmission consent kicks in next year, then cable operators will have less bargaining power.