Spotlight Feature: NBC stations getting ready to pay to be an affiliate

by Frank Macek

In another sign that times are changing in the television industry, NBC executives have decided that NBC affiliate stations will begin paying reverse compensation for network programming, beginning with the renewal of their affiliation agreements after this Labor Day.

In the past, networks would pay stations to be one of their affiliates. This often had the advantage of being an additional revenue stream for local stations and helped the network keep their affiliations with stations they considered critical to their success.

With the increasing cost of production for shows and the high price of big sporting events, NBC has been forced to go the way of FOX which began the reverse compenstation process about 10 years ago. According to TV News Day, CW affiliates also pay reverse compensation to their network.

What could this mean for a station like WKYC - one of NBC's top performing stations? It really depends. In bigger markets like Cleveland, NBC would be likely to charge less than underperforming stations it sees as weak and draining their bottom line.

High performing stations not only help the network with make bigger sales, but NBC wouldn't wish to jeoparidize losing stations, like WKYC, as an affiliate.

Smaller and underperforming stations are likely to take a bigger hit. Some may even be forced to change affiliates, or reduce their local news budgets to pay for the higher affiliation agreements.

And this leads us to another point, I first talked about on the Director's Cut many months ago.. Could NBC be finally ready to decrease the amount of hours it programs in prime time?

NBCU's President and CEO Jeff Zucker left open that possibility when he made the reverse compensation about a month ago at the NBC affiliates convention in California.

This leads us to wonder, again, if NBC affiliates, like WKYC would benefit from having the 10 pm hour to locally program news - and a new possible show to start late night by 10:35 pm hosted by someone, like Jay Leno, who apparently isn't quite ready to give up the "Tonight Show" to Conan O'Brien next year.

We continue to follow this one carefully. But it is another piece of a puzzle that could prove interesting as the February 17, 2009 all digital deadline turns into an attractive opportunity for TV to re-write the rules both at the local and the network level.

We welcome your comments and thoughts. You can post them here or email to: fmacek@wkyc.com

Disclaimer: The opinions of the Director's Cut blog are those of Frank Macek and do not necessarily reflect those of WKYC or Gannett Broadcasting.

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