Networks

[brandy00]

Can anyone tell me if radio and tv networks pay the stations for carrying their programing or do the stations pay the networks?

 

[PTBoardOp94]

It depends. A lot of radio programming is barter (station plays national spots). A lot of TV programming is cash-based. And there are a number of situation where the station plays spots and pays.

For some programs, the distributor might pay the station to clear ... this is fairly rare, though.

 

[jal41]

Can anyone tell me if radio and tv networks pay the stations for carrying their programing or do the stations pay the networks?

ABC, CBS, NBC - affiliates recieve compensation from the networks to carry network programming because affilates give up a lot of ad time. There are a few exceptions (In 2001 KNTV San Francisco paid NBC to become an affilate...only to get their money back when NBC bought the station).

Fox (may have changed recently), CW - affilates pay to carry network programming (reverse compensation). There are a few exceptions (O&O's and some affilates may have a barter agreement). Even then, they have to give up 90% of adtime to the network during prime time (why Tribune wants out of their deal with the CW - they have to pay to carry ads).

My Network TV - 100% barter. No cash changes hands. Healthy ad split.

Syndicated programming can vary from 100% barter to a mix of cash and barter to 100% cash. In cases where barter is used, the item bartered is ad time. 100% cash means the station can sell all available ad time. Newer programs will be more barter and older programs more cash.

PBS (and NPR) - 100% cash for all programming. The money raised during local begathons (pledge breaks) goes mostly to this programming (corporate donations pay for operating costs).

Commercial radio works like TV in that things can vary from barter to cash to being compensated. With a few execeptions, there are no traditional radio "networks" anymore.

Sports programming can also vary. Generally, the networks and cable stations will pay cash upfront for sports rights, or split ad revenues. In a rare case, the Atlanta Falcons (as of this year) paid their radio station (WZGC 92.9 "Dave FM") for the time and sold the ads themselves. Same with the Atlanta Hawks and Thrashers and Ion O&O WPXA a few years ago. I don't know how Raycom Sports works.

Infomercials, home shopping, and religious programming - we all know how they work. TBN and the other religious stations sell space for that programming like commercial stations do. HSN and ShopNBC (and formerly Shop At Home) pay for their blocks of time as well. This is how LPTV's make their money (and, for most of them, the only reason they exist - a cash generator for someone).

News programming is so popular with stations because they can sell all of their ad time. Of course, many stations do not have the resources to produce all sorts of local programming that could make money outside of news (WSB-TV/Atlanta is a rare exception - they produce a local high-school quiz show and all sorts of prime-time specials - and make money and ratings with them - they send their reporters to Africa for segments).

WFLA Tampa, WXIA/Atlanta, and other stations have created local shows (seperate from the news) that have an additional source of revenue built in - the interview segments.

Of course...all of the networks and most of the commercial stations are owned by public companies trading on the stock market...and profit is their #1 concern.

 

[ShawnHill1]

Sports programming can also vary. Generally, the networks and cable stations will pay cash upfront for sports rights, or split ad revenues. In a rare case, the Atlanta Falcons (as of this year) paid their radio station (WZGC 92.9 "Dave FM") for the time and sold the ads themselves. Same with the Atlanta Hawks and Thrashers and Ion O&O WPXA a few years ago. I don't know how Raycom Sports works.

That's a great breakdown, but I specificially noted this paragraph because I wanted to bring up a good example. KCAL here in L.A. have broadcast deals with the Lakers (since 1977) and the Dodgers (since 2006). Both deals are similar to NBC's deal with the National Hockey League...KCAL and the teams have split all their respective revenue, and share costs with paying the announcers and crew.

 

[LKellerIII]

The KNTV situation jal41 refers to above was an attempt by NBC to turn the regular affiliation agreement on its head and create a precedent whereby the affiliates would start paying the networks for programming - rather than the traditional arrangement in which the networks paid the affiliates.

In 2001, KRON - The long time San Francisco Bay Area NBC affiliate was sold to Young Broadcasting, which outbid NBC, which wanted KRON as an O&O. Aside from the opportunity to exact some revenge for losing out, NBC decided to use Young as its test case. When Young balked and refused to pay NBC, little independent KNTV (San Jose) jumped in and agreed to pay. NBC pulled the network affiliation from KRON and gave it to KNTV.

Depending on who you talk to - Young was either brave for falling on its sword and standing up to the big network bullies, or stupid for losing the NBC affiliation. To this day, KRON (an independent station for about 6 years now) is a money-pit albatross that has caused the virtual financial ruin of Young Broadcasting.

Early this year, Young announced that it was putting KRON up for sale. More than 9 months later - no takers.

 

[BRNout]

When Young balked and refused to pay NBC, little independent KNTV (San Jose) jumped in and agreed to pay. NBC pulled the network affiliation from KRON and gave it to KNTV.

Your description was spotless, except for the "little independent KNTV" part. KNTV was actually an ABC affiliate that served the South Bay and Santa Cruz areas. Yes, it was a much smaller station than KGO - but not like some little UHF indie, either. It had a good VHF signal - but not in much of the SF area, as it didn't serve the city and north bay regions.

NBC was eyeballing stations to buy in place of KRON and KNTV's contract with ABC was up (IIRC). I think that there was also an interim period between the end of KNTV's affiliation with ABC and the new one with NBC where they were independent. But that was temporary and they spent a lot of that time working on improving their signal and cable coverage into areas north of San Mateo and Fremont.

Whatever pay for play deal NBC made with KNTV was merely a stopgap until the sale to NBC was approved and finalized. That was the idea from the moment that the affiliation was changed. At least, that's my understanding.

I'm sure someone here can correct me where I have it wrong and fill in the blanks....

 

[LKellerIII]

When Young balked and refused to pay NBC, little independent KNTV (San Jose) jumped in and agreed to pay. NBC pulled the network affiliation from KRON and gave it to KNTV.

Your description was spotless, except for the "little independent KNTV" part. KNTV was actually an ABC affiliate that served the South Bay and Santa Cruz areas. Yes, it was a much smaller station than KGO - but not like some little UHF indie, either. It had a good VHF signal - but not in much of the SF area, as it didn't serve the city and north bay regions.

NBC was eyeballing stations to buy in place of KRON and KNTV's contract with ABC was up (IIRC). I think that there was also an interim period between the end of KNTV's affiliation with ABC and the new one with NBC where they were independent. But that was temporary and they spent a lot of that time working on improving their signal and cable coverage into areas north of San Mateo and Fremont.

Whatever pay for play deal NBC made with KNTV was merely a stopgap until the sale to NBC was approved and finalized. That was the idea from the moment that the affiliation was changed. At least, that's my understanding.

I'm sure someone here can correct me where I have it wrong and fill in the blanks....

I wasn't implying that KNTV was some "little UHF indy"...but by location, they were serving a much less populous metro area than the San Francisco affiliates. Though KNTV was carried on San Francisco and East Bay cable systems up until the 70s, that changed due to changing cable rules regarding repetition of network programming. By the 80s, they served only the South Bay and the Monterey Peninsula. KNTV lost their affiliation with ABC in July 2000. Since they subsequently ran WB programming, I guess it isn't accurate to call them independent. But there was an 18 month gap between ABC and the start of their NBC affiliation

I'd speculate that Young Broadcasting called NBC's bluff because they didn't believe NBC would actually pull the affiliation from their mighty KRON (the NBC affiliate for 40 + years) to give it to comparatively puny KNTV, which had a spotty signal in much of the Bay Area.

Once the affiliation switch was agreed upon, Bay Area cable companies did pick up KNTV again before the actual switch in Jan 2002, but it was not until after the affiliation switch that the signal was improved. Many over-the-air viewers in San Francisco, Marin County and Contra Costa County could not get NBC programming for a period of time.

Young made mis-step after mis-step. Before the deal with KNTV (Granite) was finalized, NBC offered to buy KRON from Young at a discounted price, but Young would not settle for less than the full $750 million (or so) that they had paid. Big mistake on Young's part. If they had taken the financial hit then, the company probably would have recovered, and would not have been bled slowly to death over the past 6 years trying to service the huge debt they encumbered by buying KRON.

And a high-class operation (KRON under Chronicle ownership) would have remained with NBC, not turned into a low-grade shell of its former self.

 

[Markxxx]

What about WJXT Channel 4 Jacksonville, they dropped CBS and became independent. Did that have anything to do with compensation issues?