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Will spurned TV station launch ABC courtship?

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Greg Andrews

Could WISH-TV Channel 8 rebound from the stunning loss of its CBS affiliation by stealing away WRTV-TV Channel 6’s ABC affiliation, which is due to expire in January?

It’s an intriguing scenario, albeit an unlikely one, as WISH, a CBS affiliate for more than a half century, contemplates how to program itself and rebuild viewership after the year-end shift of the nation’s top-rated network to WTTV-TV Channel 4, a former market also-ran.

Media experts say CBS played hardball with WISH to prove to affiliates nationwide that it’s serious about scooping up a bigger chunk of “retransmission consent” fees—the money TV stations get from cable and satellite providers for the right to carry their signals. For WISH, those fees total some $10 million a year, Wedbush Securities estimates.

While networks and affiliates lately have been splitting retransmission fees 50/50, CBS CEO Leslie Moonves has been outspoken in asserting that’s not good enough, given the eyeballs top shows like “NCIS” draw for affiliates and the massive sums the network spends for NFL football rights.

In a conference call with analysts this month, Moonves said, “We decide what we think is fair. It generally is higher than the 50-percent number. And we negotiate on that basis.”

Affiliation switches are highly unusual nationwide, analysts said, which might have led LIN executives to misread the risks of holding firm in negotiations.

“The indication here is, they did not have a Plan B,” said a WISH newsroom staffer who requested anonymity because employees were told not to talk publicly.

It’s hard to understate the severity of the setback the loss of the CBS affiliation is for WISH’s owner, Austin, Texas-based LIN Media Corp., which is in the process of being acquired by Richmond, Virginia-based Media General Corp. for $1.6 billion.

LIN has made no public statements since Chicago-based Tribune Broadcasting, owner of WXIN-TV Channel 59 as well as WTTV, announced the CBS affiliation switch on Aug. 11.

In a Securities and Exchange Commission filing that day, however, LIN said it was evaluating whether the affiliation loss would cause it to restate the station’s value on its financial statements.

The consequences could be even broader. In a report, Evercore Partners analyst Douglas Arthur wondered whether the affiliation switch could muck up the sale to Media General, which has the right to reopen talks or part ways if a “material adverse change” has occurred.

LIN has TV stations in 23 markets, but Indianapolis, the No. 26 TV market, is among its most important. The only larger market where the company has stations is Portland, Oregon, which ranks 22nd.

Could striking an affiliation deal with ABC save the day?

“I suspect they will try,” said Rick Gevers, an Indianapolis-based agent who represents on-air news talent. But he doubts LIN would get far, given that WRTV’s owner, Cincinnati-based E.W. Scripps Co., is one of the leading owners of ABC affiliates. It has 11 ABC stations, five of them in top 20 markets.

The affiliation agreements for all 11 are up in January, said Scripps spokeswoman Carolyn Micheli. She noted that Scripps’ ABC stations collectively reach 12 percent of U.S. households.

Micheli would not characterize negotiations, but said, “We have been a really good partner with ABC over the years. … We think they have been happy with our relationship.”

Scripps is about to gain even more clout. Last month, the company and Milwaukee-based Journal Communications Inc. announced they were combining their broadcast operations while spinning off their newspapers into a separate company. Journal Communications’ holdings include four ABC stations.

If WISH can’t land a major network affiliation, LIN management will face tough choices, industry observers said.

It could help fill the programming void by expanding its news programming. However, Tribune says that when the CBS affiliation switches to WTTV, it will launch its own newscasts—bringing to five the number of local TV stations with their own news brands.

Gevers said it’s unclear whether Indianapolis has the advertising revenue to support so many news outposts. Not many cities have five, and those that do are generally in larger markets.

Another alternative would be to ratchet down the station’s aspirations, reducing expenses and perhaps even the station’s news department.

On-air talent is somewhat protected by multi-year contracts, but those agreements typically give stations the opportunity to opt out at least annually.

“A lot of people are in jeopardy,” the WISH newsroom staffer told IBJ.•

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  • Think big picture
    There is a simple reason why WISH is not reporting on this story. LIN has others stations in different markets that are affiliated with CBS. Reporting about CBS blindsiding WISH/LIN due to CBS's greed and bullying tatics would risk any future negoations LIN will have with CBS in other markets.
  • No Plan B?
    I think you underestimate LIN management. Of course they had a Plan B. Their Plan B was that Plan A would work and CBS would blink.
  • It's a PR issue, not "news"
    While it's true that WISH-TV's "loss" of a national network affiliation IS news, the silence that surrounds their studios (in terms of reporting the story...) can be traced to the station owner's PR department and their executive suite. Without question, this is a crisis PR situation that has unfolded for LIN and it doesn't appear as though they know HOW to respond. And, having their I-team uncover the "story" or report on it...would leave the news crew knocking on their boss's door. That type of coverage is not exactly going to boost ratings, much less help solve the problem LIN is facing with regard to the station's seemingly bleak future. Working as a PR counselor, I have had the pleasure of working with some respected TV journalists at Channel 8 and knowing them as I do, I am hoping for the best for them and their families. But, as Dennis Ryerson once reminded me, "news is as it is, not as it should be". And, right now, LIN is acting as though they've already gone "off the air" in Indianapolis.
  • That's the point!
    So they are told not to cover a big story about their operations and they don't. OK. But isn't the bigger question then if we can't turn to them to properly/objectively report an important story close to them why/how should anybody trust them to cover any other story...? Isn't a news department supposed to cover news.....and because their management says nothing we, as viewers who have been told that journalists always get to the bottom of the story, should think WISH TV behavior is acceptable?
  • Up the creek...with out CBS
    SJ, it is in the article. They employees have been told not to speak about the issue publicly thus the News Department is unable to cover it. They had no plan B and suspect management is trying frantically to cover their behinds.
    • Iron Dome of Secrecy?
      Why does the vaunted WISH TV News Department have nothing to write about regarding this significant news story? I can't find anything on their site about this big story. They brag about their Investigators, but we have nothing but silence. If this is news...why do they not cover it? Which leads to credibility questions about what they would consider doing moving forward. The "no comment" response is not accepted by their reporters when doing stories not impacting WISH. But now, with a story that hits home for WISH they go silent? Let them die on the vine. Selective news gathering is not needed in this market or any other.

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