ABC, Affiliates OK $50-Million Program Deal

ABC’s board of affiliates has agreed to a wide-ranging deal that for the first time would allow the network to reuse certain prime-time, sports, soap opera and news programming on other distribution outlets such as cable channels or the Internet.

Under the settlement announced Monday, the board also agreed to help offset the cost of “Monday Night Football” in exchange for additional advertising inventory and a stake in a new soap opera cable channel.

The deal, which follows similar pacts struck by Fox and CBS, is worth about $50 million annually for ABC for the next three years, according to Patricia Fili-Krushel, president of the ABC Television Network. About $45 million of the total will help underwrite the eight-year, $4.4-billion contract that ABC signed in January 1998 with the National Football League.

“This is the most comprehensive peace agreement to date,” said David Barrett, chief operating officer of Hearst-Argyle Television, which owns ABC, CBS, NBC, UPN and WB stations.

Barrett is a member of the ABC affiliate board of governors’ negotiating committee that endorsed the plan, which will be presented to all 225 affiliates this week.

The negotiations are part of an industrywide effort by the networks to restructure the long-standing relationships with the stations at a time when rising programming costs and falling viewership are eroding profits.

ABC, which ranks third in key demographic ratings after NBC and Fox, has been a drain on parent company Walt Disney Co.

While affiliates of both Fox and CBS agreed last year to chip in about $50 million for football, ABC and its affiliates struggled to reach an agreement. After talks broke down in April, ABC unveiled plans for a soap opera channel without affiliate participation and early this month threatened to reclaim lucrative advertising time.

In May, Fox affiliates agreed to pay the network $60 million a year for advertising time, some of which they had been receiving free.

Under Monday’s treaty, ABC will give affiliates eight additional 30-second prime-time spots per week and continue paying stations fees they receive for carrying the network’s programming. Both NBC and ABC have threatened to take their programming to cable if their affiliates do not reduce the approximately $200 million each of them pay in compensation fees.

In exchange, the affiliates will chip in for football and give back 10 Saturday morning ad spots that are worth more in the national than in the local advertising market.

The affiliates also will have a stake in the new soap opera channel, which plans to air on cable during prime-time the same show that was televised during the daytime on broadcast television.

Most networks are seeking to squeeze more value from their investments in programming by repackaging it for use on cable or the Internet.