Affiliates Win Round in Pay Fight With CBS

Faced with protests and threatened programming preemptions by its affiliated stations, CBS said Wednesday that it compromised considerably on a controversial plan to cut the payments traditionally made by TV networks to local stations for carrying the network’s shows.

CBS, which had presented the reductions to its 214 affiliates last spring as non-negotiable, said it will cut its compensation payments by about $10 million a year instead of the $20 million originally decided on.

Each CBS station will get, in effect, one-third off the original planned reductions. In addition, stations that carry CBS’ late-night lineup live or on a half-hour delayed basis will get another 17% reduction in the cuts CBS originally planned. And CBS will give stations four additional prime-time advertising spots per week.

The new plan still must be approved by the stations, but affiliate leaders expressed enthusiasm for it Wednesday.

“When all is said and done, many stations will, in fact, make money on the new plan,” said Cathy Creany, chairman-elect of the CBS affiliates board and vice president of WTVH-TV in Syracuse, N.Y. “I think this new plan restores the affiliate-network relationship.”

CBS executives had argued that the affiliate compensation arrangement needed to be changed to reflect the network’s lower profits and increased competition from cable, the Fox network and other sources. ABC and NBC have had similar discussions with their affiliates but apparently have not proposed anything as drastic as CBS’ original plan.

According to network sources, CBS Entertainment President Jeff Sagansky and other executives had been concerned that the threats of angry affiliates to preempt selected network programs in favor of local or syndicated shows could inhibit the network in negotiating for new programming or in selling commercial time to advertisers.

CBS, for example, is interested in wooing David Letterman from NBC when his contract expires in April. But a reduction in the number of stations carrying CBS’ late-night schedule could present problems in negotiating with the comedian, sources said.

“We’re not interested in keeping this sword of Damocles over all our heads,” Anthony Malara, president of affiliate relations for CBS Inc., told reporters. “It’s much more important to have the relationship between the network and our affiliates be as strong as possible so that we can look to the future to compete and take advantage of this network’s first-place schedule.”

Malara said 80% of CBS stations carry the network’s late-night schedule, and he hoped the figure would hit 90% under the new plan.

Under the plan, said Richard Shafbuch, chairman of the CBS affiliate board and general manager of KOIN-TV in Portland, Ore., “It’s appropriate for us to encourage network clearances and support the network’s investment in programming.”