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FOX: Pay Us Or Lose Your Affiliation

In Affiliate Issues, FOX, Retransmission on February 9, 2011 at 2:50 pm

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Some who’ve been in television news for decades can remember when affiliate stations were actually paid monthly by the networks. Today’s story turns that old practice right on its head.

Management with the FOX network said this week it may drop some affiliates if the local television stations there won’t pay FOX a percentage of what’s called “retrans,” or retransmission fees, according to Bloomberg.

Retransmission fees are charged by local affiliates to cable and satellite providers in exchange for carrying their signal there. Now, FOX wants a cut of that as well.

FOX has not said officially if this plans to happen, with a spokesperson saying Monday that “negotiations with our affiliates are a private business matter and as such those discussions are private.”

However, the Bloomberg article says a February conference call with News Corp. (FOX’s parent company) Chief Operating Officer Chase Carey said he indicated a desire for the broadcast division to generate as much as a BILLION dollars in annual earnings over the next couple of years.

From Bloomberg:

The affiliates’ negotiating committee said in a Jan. 28 letter to members that Fox “summarily rejected” several proposals to share revenue over the next 10 years. Fox’s offer is “substantially worse” than what NBC, CBS and ABC, are proposing, they said.

“We are now deeply concerned Fox may have no intention of negotiating such an equitable deal,” Brian Brady, president and chief executive officer of Northwest Broadcasting in Okemos, Michigan and chairman of the Fox affiliate board, said in the letter.

Fox is attempting a “strategy to divide and conquer,” Brady said. He said the network has already identified affiliates “to use as an example” and by taking away one station’s affiliation it can force the others to “fall into line.”

Something tells me I wouldn’t want to be a FOX affiliate over the next decade. We’ll have more on this as it develops.
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