CBS Wants Affils To Pony Up For Programs

Having watched their affiliates pile up new revenue from retransmission consent over the past few years, CBS has joined other networks in asking their affiliates for what's been called "programming fees," "license fees" or "reverse compensation."

By whatever name, it's money going from the pocket of the affiliate to that of the network.

Here, in an interview with TVNewsCheck Editor Harry A. Jessell, CBS Affiliates Relations President Diana Wilkin says that most, if not all, the CBS affils have accepted the fact that they will have to pay to air NCIS, The Big Bang Theory and Survivor. Some have already cut deals, she says, declining to discuss terms.

She also acknowledges that affiliates are being asked to pay a bit more to tap into the CBS Newspath news services, but promises that any if CBS renegotiates its March Madness deal with the NCAA it will not result in added expense for the affiliates.

If any network executive should sympathize with the affiliate, it should be Wilkin. Prior to joining CBS as chief affiliate wrangler two years ago this month, she ran the CBS affiliate in West Palm Beach, Fla. (WPEC) and the CBS/Fox duopoly in Jacksonville, Fla. (WTEV/WAWS). She also sat on the CBS affiliate board.

An edited transcript:

I understand that CBS is now asking for license fees from the affiliates. How do you justify that?

I wouldn't call them license fees. Are we looking for compensation, yes. CBS brings enormous value to the affiliates, No. 1 programming, exclusivity, national promotion. We have seen how all have changed and we are looking for support from our affiliates financially.

If it's not a license fee, what is it?

It's an individual negotiation. We aren't approaching it as a one size fits all. It's loosely based on what we perceive the value to be of an affiliation in a given market, and that can vary.

Is it a function of the retransmission consent dollars that the stations receive?

Are we specifically tying our agreements to a retrans share? No we're not. But we believe that CBS represents a substantial portion of the retransmission consent fees that stations and groups receive.

So it's not some kind of retrans formula.

No.

What kind of push back are you getting from the affiliates on this?

Interestingly enough, we have had, I would say, support. Honestly, the vast majority if not all of our affiliates understand that the business model has changed. We have actually already completed some deals. So, this is not a point of major contention in our discussions.

I haven't heard of any CBS deals yet.

Yeah. We keep things pretty confidential and quiet here.

I will try to work on that.

Good luck with that. We're in conversations with a lot of groups and I fully expect us to have deals done. We both want to have a strong network and strong affiliates. We're No. 1 and we plan to stay No. 1.

Can you give me a range of what kind of compensation you're seeking?

I really can't. That's an individual conversation with an owner and again, as I have mentioned, the conversation varies depending on a number of factors.

So the concept of reverse compensation is acceptable to the affiliates. It's just the number that's being negotiatied.

Again, it's hard for me to sort of give you a one-size-fits-all kind of answer to this. It isn't. There're many factors in every negotiation that make it an individual conversation. Are we looking for a greater contribution from our affiliates on numerous levels? Yes we are.

Nexstar CEO Perry Sook and, I believe, others say that they are willing to pay networks reverse compensation, but only if the network can help them get more retrans dollars from the cable and satellite operators.

That's Perry's position. I understand that. He and I have had numerous conversations about that. You know, we are confident from literally penny one that the affiliates compensation via retransmission consent is derived from the fact that it's a CBS affiliate.

Some affiliates are wondering about renegotiation of the rights for the NCAA basketball tournament. The affiliates are already paying a fee to help pay for the rights. How will a new deal affect the affiliates?

First of all, there's been no announcement on what the deal will be with the NCAA moving forward so it's hard for me to speculate on something we don't have finished. However, you know, our NCAA agreement with the affiliates is a value exchange agreement. It's much broader than NCAA alone. I don't anticipate we will be renegotiating that agreement.

So they're not going to end up having to pay more under that plan.

I'm not even sure how to answer that. There is no plan to renegotiate the agreement. 

In my interview with CBS affiliate board chairman Tim Busch [of Nexstar] last September, he was excited about a prospect of working with the network in developing new online projects. But nothing has happened. Is it because your online exec Quincy Smith has left the company?