Fox’s spring affiliates meeting adjourned Friday with no deal in place for the affiliates to help shoulder the cost of the web’s new $4.4 billion NFL package.
The network and its affils tried to put the best face on the state of talks, but it’s clear that several key issues are still unresolved.
The main stumbling block is Fox’s unwillingness to link discussions about network programming exclusivity to talks over financing the NFL package. Affils want assurances they’ll get NFL and other programming exclusively for both analog and digital TV broadcasts.
“These discussions are not about a whole list of other issues related to the long-term business,” Chase Carey, chairman and CEO of Fox TV, told affils. “Issues like exclusivity are important, but they don’t relate to the NFL.”
Rejecting the CBS model
Despite the fact that CBS granted its affils assurances on program exclusivity in exchange for sharing NFL costs, Carey said that entangling the two issues would “strangle our ability to move forward.”
“The fact that other networks approach their NFL discussions differently is honestly not relevant,” he added. “We have said from day one they have an outdated structure and plan. We are not going to now start using them as a model for Fox discussions.”
Throwing a bone to affils on the issue, though, Carey said in his speech that the network has no plans to “change the nature of our network program distribution as it relates to exclusivity. You (affils) are our vehicle for distribution of our network programming, and there is no question we will continue to be the exclusive initial distributor of Fox product in your market.”
He added that the real issue is “whether we can find a way to capture incremental value from reruns of our product in new and different ways.”
Another sticking point
Another sticking point in the talks is that Fox wants a one-year deal, so it can have the flexibility to ask for more money later. Affils want a longer, more iron-clad agreement covering the entire length of the NFL contract.
“We cannot offer hard or long-term commitments in certain cases because the market remains in such flux that we simply can’t predict all the ramifications of our potential actions,” Carey said.
One issue that did get resolved, however, was the status of retransmission consent renewal rights, which were given to Fox during the last NFL package. Stations will get back their rights to negotiate directly with cable operators in 1999, Carey assured.
“That’s not an issue anymore,” said Murray Green, chairman of the Fox affiliate board of governors, who added, “I don’t think dollars are a stumbling block (either).”
Despite the rift, Green added that “nobody’s mad at anybody” and “the fact that we’re walking away from here without an agreement has no bearing whatsoever,” because “I don’t know there’s a real rush.”
Fox, however, wants to wrap up the talks soon because football season is fast approaching, and it doesn’t want to shoulder the paycheck alone. Carey, in his address to affils, hammered home the point that Fox is already paying huge programming costs.
“This year alone, we paid well over half a billion dollars for entertainment programming,” he said. “That will jump nearly 20% in 1999, when we will pay for more year-round programming and expensive renewals on series.”
Sports rights fees up
Carey added that total sports rights fees will approach $1 billion in annual expense, an increase of more than 50% over the current year. Despite the cost, he picked on NBC for letting football go because they said the economics didn’t justify it.
“When all is said and done, that will go down as one of the defining moments of recent network history,” he said. “When any broadcast network allows itself to have to decide whether to protect its core series or lose impact event programming, it will already have lost.”
Besides, “NBC’s $540 million per year bid for ‘Monday Night Football’ indicates their recognition of the NFL as event programming, despite their after-the-fact justifications in losing it.”
Regaining No. 1
In other news at the meeting, Haim Saban, chairman and CEO of Fox Family Worldwide, said Fox would regain its former No. 1 position in part by targeting girls more often than it does now and by airing more comedy series. Fox Kids is also redesigning its logo, making its traditional klieg lights into a cartoon character in order to rebrand the kids service.
“Much to the dismay of a mouse, a rabbit or a rugrat, Fox Kids will regain its dominance,” Saban said.
The network also announced that the film “The Lost World: Jurassic Park” will get its TV debut Sunday Nov. 1 and will contain new footage. “Independence Day” will debut in May and will run three hours long, preempting local 10 p.m. newscasts or other programming.
Pushing the envelope
Also speaking at the affiliates meeting were producers David E. Kelley of “Ally McBeal,” Diane English of the upcoming ‘Living in Captivity” and Bonnie and Terry Turner of the upcoming “Feeling All Right.” They all praised Fox for encouraging them to push the envelope and take chances other webs wouldn’t let them take with their programming.