LIN TV Expects Affil To Pay For Top Shows

by David Goetzl, Feb 28, 2008, 8:00 AM

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The top executive at LIN TV, a station group which operates 10 stations that carry the NFL, said Wednesday he expects networks to increasingly seek compensation for premium content, such as the league's games. In lieu of cash, they may ask for more ad inventory in the broadcasts.

CEO Vincent Sadusky said networks increasingly will look to affiliates for help in paying to carry top-notch programming, saying: "If you want the NFL or incremental NFL games, this is a pretty pricey thing for the network. We'd like you guys to help us out with that."

It may not be cash--a more typical type of reverse compensation--but requests for more spots in the game for the networks to sell themselves, he said.

LIN operates stations in three NFL "home markets." The Fox station in Green Bay carries Packers games regularly, while the CBS affiliates in Buffalo and Indianapolis carry Bills and Colts games, respectively. LIN has seven other markets with NBC, CBS or Fox affiliates that offer NFL games.

Sadusky offered his take on network-affiliate relations on a conference call to discuss LIN's performance in the recently completed fourth quarter. He cited digital revenues--which include advertising on Web sites affiliated with the company's 29 stations--growing 131% year-over-year as a highlight.

Still, the $4.8 million comp was only about 4% of the $108.6 million in total fourth-quarter revenues--and it's a bundled figure that also includes retransmission consent dollars. LIN hopes Web sales will lead to 5% of revenues in the short-term--and eventually exceed that. (The $108.6 million was down 15% versus the year before, largely attributed to a drop in political advertising.)

The company restructured its ad sales operations early last year to bolster sales on off-air properties. Its focus there has been on attracting local businesses, and has been successful at peeling dollars away from competing newspaper Web sites, executives said.

LIN said it conducted a seminar for 100 local businesses in the Grand Rapids, Mich. market--where it has an ABC/NBC/MyNetworkTV triopoly--about the Internet. It held another seminar for small-business owners in New Haven, Conn., where it has an ABC/MNT duopoly.

Scott Blumenthal, who heads LIN's TV operations, said: "We believe our continued focus on developing new non-traditional TV advertising relationships is a valuable service we can provide to local businesses and can further differentiate us from competing media outlets."

As with other station groups, LIN said the auto category has been sluggish, and was down 1% for all of 2007, although it had a slight 5% rise in the fourth quarter.

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