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12 TV Stations to Abandon Big Three Networks for Fox : Entertainment: CBS loses eight affiliates in the history-making deal. Moves follow Fox’s football pact.

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TIMES STAFF WRITER

In a history-making deal that may demonstrate the appeal of sports over more traditional programming, the Fox Network on Monday announced plans to abscond with a dozen stations currently affiliated with its rivals at the Big Three networks.

CBS bore the brunt of the loss, surrendering eight affiliates in what was called the largest defection ever from one network to another. Other affiliates from CBS, and to a lesser degree NBC and ABC, have also flocked to Fox since it gained broadcast rights to the National Football Conference.

Fox’s surprise raid on the CBS affiliates leaves the No. 1 network without representation in key markets such as Detroit, Cleveland, Atlanta, Tampa and Milwaukee. CBS, which just finished in first place for its third consecutive prime time season but which lost the NFC broadcast rights to Fox earlier this year, said Monday that it is “confident in the continued strength of our network. . . . we will maintain strong affiliations in all of the markets affected.”

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With the network not saying how it plans to replace the affiliates, however, Wall Street hammered its stock. CBS fell $15.50 a share, to $288, on the New York Stock Exchange.

Some analysts see a trend in smaller stations abandoning their network programming providers in favor of the more lucrative opportunities offered by upstarts such as Fox. The station switch gives the Fox Network a much larger potential audience, and is expected to boost its ratings. It is part of a broad-based working alliance between Fox Inc., the network’s parent company, and New World Communications Group, which owns the affiliates.

William C. Bevins, chief executive of New World, said the affiliates are moving to Fox because its schedule leaves more time to air money-making syndicated programs. Fox broadcasts 15 hours per week of prime-time programs, compared to 22 hours for each of the other three networks.

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Bevins conceded that the ratings of New World’s TV stations will probably decline, but he said it was more important that New World use the newly available time slots to develop its own shows for syndication--which could far outweigh the gains of higher ratings.

The news hit like a bombshell at the National Cable TV Assn. convention in New Orleans, where more than 20,000 executives from the cable TV industry have gathered to hear predictions about the 500-channel future of interactive television.

By entering into a broad alliance with New World, observers said that Rupert Murdoch, chief executive of Fox parent News Corp., is putting his faith in over-the-air broadcasting at a time when many people are banking on the expanded TV universe. News Corp.’s American Depository Receipts closed at $52.875, up 75 cents, on the New York Stock Exchange.

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“Upgrading his network by switching over UHF for VHF (stations) and acquiring franchise programming like the NFL is a brilliant long-term move,” said Gordon Crawford, senior vice president of Capital Research Co., which is a big institutional shareholder in News Corp.

But another Wall Street analyst, who did not want to be identified, said “Murdoch is on the loose again,” a reference to News Corp.’s past propensity for challenging the fates financially. Murdoch approached the brink of bankruptcy four years ago as a worldwide recession set in after he had gone through a decade of aggressive acquisitions and accumulated debt.

Separately, NBC President Bob Wright told 650 of his affiliate representatives that the news changes the “landscape” of television, but will not harm NBC.

Most analysts look for Fox to benefit greatly from the added stations. Ever since its inception, the upstart network of Bart Simpson and Al Bundy has been hampered in reaching an audience on parity with the major broadcast networks because most of its affiliates are UHF stations. Once the affiliation switches are in place, 40% of Fox’s affiliates will be more preferable VHF stations.

“This strengthens the distribution of our network significantly and will dramatically increase our weekly circulation,” said Lucie Salhaney, president of Fox Broadcasting Co. She projected that the new football contract, coupled with the upgraded affiliates, will boost Fox’s ratings by more than 20%.

The affiliation switches will be achieved over the next 12 to 18 months, Salhaney added. Under the deal announced Monday, Fox and New World have also agreed to mutually develop programming that the companies will syndicate to other TV stations throughout the country.

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New World’s stock closed at $10.625, up $1.687, in Nasdaq trading Monday. The company, controlled by Revlon cosmetics mogul Ronald O. Perelman, has aggressively expanded its TV holdings at a time when many investors and analysts have been eschewing the broadcasting industry in favor of cable TV and the “information superhighway.”

In connection with the deal with Fox, New World will expand its station ownership from the current seven stations to as many as 12, the maximum allowable under Federal Communications Commission regulations. New World recently agreed to buy four TV stations from Great American Communications Corp., which will all become Fox affiliates.

In addition, New World has acquired an option to buy the debt and securities owned by DLJ Merchant Banking Partners of Argyle Television Holding, which owns four TV stations. The deal will cost New World $716 million.

Fox will help New World complete that deal by investing $500 million in New World. When the transaction is completed, Fox will own 20% of New World’s equity and have 2.9% of the voting stock.

The stations moving to Fox from CBS are: WAGA of Atlanta; KTBC of Austin, Tex.; KDFW of Dallas; WJBK of Detroit; WJW of Cleveland; WITI of Milwaukee, KSAZ of Phoenix and WTVT of Tampa, Fla. From ABC, Fox gains WBRC of Birmingham, Ala.; WGHP of High Point, N.C., and KTVI of St. Louis. From NBC, Fox gets WDAF of Kansas City.

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