A change is gonna come — that was the message NBC affiliates took home from the Peacock web’s three-day affiliate confab this week in Los Angeles.
NBC execs have proposed a major overhaul to the traditional network-affiliate business model with a plan to phase out affiliate compensation payments by 10% per year over a 10-year period. NBC is proposing that the network and its affils instead participate in a joint venture fund that would invest in a wide range of media-related businesses.
Affils aren’t thrilled with the 25-page proposal sent out last month by NBC Television prexy Neil Braun, but few are dismissing the concept of such a change out of hand. Braun repeatedly stressed in his talks with affils that the plan as written is just a “starting point” for negotiations.
“There’s an open mind on the part of affiliates to work cooperatively with the network,” said Ken Elkins, president and CEO of Pulitzer Broadcasting and the outgoing chairman of NBC’s affiliate board. “The assumption that this is going to be a war is invalid.”
The only consensus that emerged from this week’s powwow was that more meetings and much more debate is needed before the web and its affils can come to terms. Braun and other NBC execs plan to pound out the details of the proposal in regional meetings with affils starting in July.
“People have made it clear that they’re not enamored with what they’ve seen. No one is thrilled with it, but it’s a starting point,” said Alan Frank, president and general manager of WDIV Detroit. Frank was elected chairman of the affiliate board.
Smaller affils unhappy
Braun joked that he managed to include “something in it for everyone to hate.” Braun acknowledged that for station owners in smaller markets, the prospect of phasing out network comp is unsettling, as the payments can amount to as much as 50% of a station’s cash flow. NBC currently shells out about $200 million a year in payments to its 215 station affils in exchange for carrying blocks of the network’s programming in primetime and other dayparts.
Some of the larger station groups with NBC affils are, at first blush, “uncomfortable” with the idea of participating in a venture fund that they would have little control over, Braun added.
In other network-affiliate business, the affils gave the greenlight to helping the web cover the cost of televising the 2008 Olympics by giving back a portion of their local advertising inventory, just as they did for the Summer Games in 1996.
NBC’s joint venture plan aside, program exclusivity was the hot topic for NBC affils this week. Both the web and its affils are upset by Columbia TriStar TV’s recent decision to offer same-day pay-per-view telecasts of the NBC soap opera “Days of Our Lives” through satcaster DirecTV.
Don Ohlmeyer, NBC West Coast prexy, would not comment on whether the issue of exclusivity could be a deal-breaking point when the popular soap comes up for renewal early next year.
“We’ll cross that bridge when we come to it,” Ohlmeyer said, although he did add: “It doesn’t do us any good to have a show on our air that a lot of (NBC) stations will preempt or not carry because they’re not happy about the exclusivity issue.”
Sources who attended this week’s closed-door meetings said affils responded with a resounding yes when NBC execs asked if they should draw the line at same-day exclusivity or be prepared to give up “Days,” generally the brightest spot on NBC’s struggling daytime lineup.
Underscoring the sentiment of solidarity between the web and its affils, WDIV’s Frank reiterated their support for NBC’s decision to give up its Sunday pro football NFL franchise when the league’s asking price skyrocketed. Ohlmeyer said NBC is still engaged in “conversations about the viability and practicality” of starting a new football league with Time Warner and other potential partners.