Letterman’s CBS Hope : Will the Affiliates Buy His New Show or Just Rerun ‘Golden Girls’?

Last month the publicity-shy David Letterman paid a visit to the CBS affiliate in Dallas, KDFW-TV. During a two-hour stopover, he met the station’s executives and staff, tossed a football with some passersby outside, did shtick on the air with the KDFW weatherman and videotaped some local promotional spots for the station to air when Letterman’s new late-night talk show debuts in August on CBS.

It is a measure of the stakes--personal, financial and corporate--in the push to get CBS affiliates signed on with the new Letterman show that network executives asked him, and that he agreed, to show the flag at KDFW and two other stations, in Houston and Raleigh, N.C.

Luring Letterman away from NBC with a reported $14-million-a-year contract was only the first hurdle CBS had to clear in its effort to establish a late-night franchise that will challenge NBC’s long-running “Tonight Show” and ABC’s “Nightline.” Now the network has to persuade its stations to carry the show--and at the preferred hour of 11:35 p.m. (an hour earlier in the Midwest).

Currently, fewer than 70% of CBS’ approximately 200 affiliates choose to broadcast the “Crimetime After Primetime” series that Letterman will replace, and only about half of those at 11:35 p.m. The majority instead fill that lucrative time slot with Arsenio Hall’s talk show or some other syndicated series. KDFW, for example, carries reruns of “The Golden Girls.”

Persuading them to take Letterman at 11:35 is of crucial importance to the network because the audience decreases as the night grows later, and the biggest ratings--and thus the largest advertising rates--are generated in the 11:35-12:35 period. Only by getting high clearances there will CBS be able to quickly recoup its investment in Letterman and compete with “The Tonight Show,” which is carried on 99% of the NBC affiliates, nearly all of them at 11:35.

Since signing Letterman in January, therefore, CBS’ affiliate-relations representatives have been crisscrossing the country, making their case for the Letterman show. They are citing his strong ratings with young viewers and projecting advertising revenue versus other programming; they are promoting loyalty to the No. 1 prime-time network and stressing the long-term payoff to stations if Letterman is a success.

“We think we have the best late-night talent in Letterman,” said Anthony Malara, president of affiliate relations for CBS. “And we’re offering CBS stations the chance to get out from under the influence of syndicators to go with a show that they won’t lose to a competitor or have to pay more for when it becomes a hit.”

So far, the visit from Letterman notwithstanding, Dallas’ KDFW is sticking with “The Golden Girls,” with Letterman delayed half an hour.

“It’s a tough call,” said general manager Jeff Rosser. “I think David Letterman will be a hit, and we’ll make money on his show. But we already make a lot of money from ‘The Golden Girls’ because we get to sell all of the commercial time in the show as opposed to sharing the advertising time-slots on a network show like Letterman. Letterman would have to get a large rating to make up for that difference in commercial time.” According to one industry executive, KDFW is likely generating more than $1 million a year in ad revenue with “Golden Girls.”

Malara, citing competitive factors and a number of ongoing negotiations, declined to say how far along CBS is in its station clearances. But he predicted that Letterman’s overall clearances will be 95% at launch, with “a goal” being 65% airing the show at 11:35 p.m. The network hopes that figure will increase over the next few years as stations’ syndication contracts with their existing 11:35 shows expire.

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CBS executives acknowledge that such contracts are a major financial obstacle in the case of the 21 affiliates that currently air Arsenio Hall at either 11:35 p.m. or midnight. Many of the pacts negotiated by Paramount, Hall’s syndicator, call for “liquidated damages” to be paid if the show is moved, meaning that the station pays the difference between the rating the show was getting in a more favorable slot and the rating it gets in a less favorable slot.

“CBS affiliates are firmly supportive of the Letterman show but, in the case of a large market with ‘liquidated damages’ for Arsenio, you could be talking about $10,000 a week in ‘liquidated damages’ if the station moved the show from 11:30 to 12:30 p.m.,” said Dick Kurlander, vice president of Petry Television, which represents 115 TV stations around the country.

Malara said that CBS has no intention of picking up those costs. Even if it wanted to, it might invite legal action for interfering in an existing contract.

What CBS is offering is a standard “compensation” payment to stations that carry its late-night program, plus a bonus if it is broadcast at 11:35. (The fees are not disclosed and vary with the size of the station’s potential audience.) Stations split the commercial time with the network and wind up with one more minute per show than with Arsenio Hall.

But each affiliate contract is different, and there is room to build in other incentives, such as higher compensation payments or additional ad time.

“Their primary ‘selling point’ is Letterman himself and the value of having a late-night hit on the network that is No. 1 in prime time,” said Alan Bell, president of the broadcast division of Irvine-based Freedom Newspapers. “But an affiliation agreement has a lot of little clauses and charges that can be interpreted in different ways to give the customer a break.”

It isn’t exactly the glamour part of show business. But such horse-trading will help determine who is at the late-night starting gate come fall.

“Sometimes it comes down to, figuratively, throwing in a pair of snow tires for the car,” said Richard Shafbuch, the former head of the CBS affiliates board and current general manager of KOIN-TV in Portland, Ore. “A station has additional muscle if it’s a strong station in a large market or one of a group of stations.”

Although executives contacted at some CBS stations said they have not yet made up their minds about carrying Letterman, others have signed up enthusiastically.

“We haven’t carried CBS’ late-night lineup since before Pat Sajak, but we’ve decided to carry Letterman live,” said J. B. Chase, general manager at WCPO-TV in Cincinnati. “I think Letterman has a good chance of being a very successful late-night show for CBS and WCPO.”

To carry Letterman, Chase has decided to move the Arsenio Hall show to 12:35 a.m. WCPO’s contract with Hall ends in December, and Chase said that Paramount and the station had mutually agreed to the change (although he wouldn’t say whether WCPO would have to pay “liquidated damages”).

“WCPO is the highest-rated station in Cincinnati, and I think they decided it was better to be on at a later time with us than go to another station in town,” Chase said.