CBS has reached a tentative agreement with its affiliates to share the cost of the NFL as well as revenues from the digital use of primetime shows.
The agreement, negotiated with CBS’ affiliate board, extends for three years the net’s cost-sharing arrangement for the NFL, known as the NFL Value Exchange, under which the affiliates shoulder some of the license fees in exchange for broadcast exclusivity.
Deal also resolves what has been a significant bone of contention between the network and its affiliates by providing a framework for sharing revenue from digital ventures like the Eye’s video deals with Google and iTunes.
Several large affiliate groups, including Freedom Broadcasting, Gannett, LIN TV, Nextar, Meredith and New York Times Co. all have agreed in principle to the terms. The proposed deal will be presented to the rest of CBS’ affiliated stations in the coming days.
“By sharing these costs with our broadcast partners, we will be able to ensure signature, big-ticket programming like the NFL remains on CBS,” said Peter Schruth, CBS president of affiliate relations.
The deal gives CBS greater flexibility to exploit new media like the Internet and mobile devices while giving the affiliates a new revenue stream in exchange for reduced exclusivity over firstrun shows like “CSI” and “Survivor.”
By cutting in the affiliates on the proceeds, it gives them the incentive to promote those offerings on their local air and Web sites.
“The network appreciates that the affiliates are its strongest promotional platform,” said Doreen Wade, president of Freedom Broadcasting and chair of the affiliate board. “If we help promote viewership on different platforms, then we will share in the proceeds.”
Fox reached a similar deal with its affiliates earlier this year. NBC formed a separate company, a joint venture with its affiliates known as National Broadband Co., to pursue digital opportunities.
An Eye spokesman said the deal opens the door for more firstrun CBS programming to appear online and on demand, and to expect to see more shows appear in more places as a result.