MyNetworkTV Orchestrates New Affiliate Deals

Some years ago, the venerable baseball broadcaster Vin Scully came across a star player with a bruised knee whose status was listed as "day-to-day."

"Aren't we all?" he quipped.

Not a bad mantra for the media business these days. In that vein, News Corp.'s MyNetworkTV looks to be taking a year-to-year approach.

When it launched three years ago, the network went market-by-market and inked stations to standard five-year affiliate deals, which were scheduled to run through 2011. Now, as the network adopts a new "hybrid" programming strategy, it's ripping up those agreements and asking stations to sign on for only a year starting in September.

Amid the uncertain economy--and frankly, the future of TV itself-- station executives say the proposed deals provide them with welcome flexibility. From the network's standpoint, it leaves it with room to maneuver.

MyNetworkTV has failed to develop a hit itself, so it's turning to recognized off-network programming such as "Law & Order: Criminal Intent" to lower risk and increase ratings. If it succeeds, it would be in a position to possibly renegotiate deals on more favorable terms come 2010.

The network's leverage could also improve if it brings in another high-profile beachhead to join "WWE Friday Night SmackDown," its highest-rated show. Wrestling by one measure has helped push ratings up 36% this year among 18- to-49-year-olds, although an average of 747,000 viewers in the demo still trails five cable networks.

(MyNetworkTV's deal with NBC Universal for "Criminal Intent" is also for one year; the wrestling licensing deal goes beyond the 2010-11 season.)

"We want to leave open our opportunities ... that we have from a programming acquisition standpoint," said MyNetworkTV Executive Vice President Paul Franklin. The structure of the new affiliate deals is similar to the current ones. Stations will receive seven minutes an hour of ad time to sell on four weeknights--and five on Fridays during "SmackDown." The network, however, will no longer program Saturdays, where it has offered a movie--meaning that it will be in service Monday through Friday from 8 p.m. to 10 p.m.

Multiple station executives say they have already signed new contracts or expect to, while expressing support for the new programming strategy. Maintaining affiliation also avoids the potentially expensive process of re-branding, after pushing a "MyNetwork" moniker for three years.

Franklin, who oversees affiliate relations, said "we're getting great feedback" and indicated that he's not anticipating losing any affiliates. Guaranteed to return are the 10 large-market News Corp.-owned stations in its Fox group.

"We're still going down the road with them," said Scott Blumenthal, executive vice president of television at LIN TV, which operates five affiliates. "So, we're just talking details at this point and I don't see any major stumbling blocks anytime soon." The top executive at the affiliate in Boston, the seventh-largest DMA, said the station would re-up. And Bob Prather--president-COO at Gray Television, which operates 16 affiliates in small- to mid-size markets--said "we're renewing with them." General managers at stations in Salt Lake City and Louisville, both top-50 markets, said they had already inked new deals.

Mike Yanuzzi, president of New Age Media--which operates the Wilkes Barre Scranton affiliate and three others--said he would do a market-by-market evaluation, "but as of right now, we're still committed to the network."

The general manager at the Portland, Ore. affiliate, KPDX, declined comment because negotiations are ongoing between parent Meredith Corp. and the network.

Representatives for Tribune and Young Broadcasting, which own the affiliates in Philadelphia and San Francisco, respectively--the two largest non-News Corp. markets--declined comment.

The Sinclair group, which operates a slew of top-50 affiliates, said in a recent government filing that it is "considering the options we have for programming" the stations. Calls to the company were not returned. Franklin said conversations have been "very positive" and "we feel confident" about a renewal.

When the new contracts kick in this September, MyNetworkTV's lineup looks to be 60% set. The network's deal with NBCU gives it access to the pool of "Law & Order: Criminal Intent" episodes in syndication, and it plans to run back-to-back episodes on Mondays. A movie will continue to air on Thursdays, while "SmackDown" will stay on Fridays. That leaves Tuesday and Wednesday still open for what are expected to be off-net dramas.

With viewers watching programs not networks, station executives say viewers have a certain familiarity with established dramas--a benefit when marketing budgets are strained. Building sampling for MyNetworkTV's comedic gambits such as "Under One Roof" and "The Tony Rock Project" has been challenging, said Ray Hardy, general manager of KCSG in Salt Lake City.

"By going to a 'Law & Order: Criminal Intent,' I don't have to say anything," Hardy said. "It's immediately recognized in the market." Dropping out of the original programming business and going with network-built dramas also provides stability. Moreover, it removes risk that comes with developing shows that can fail in a matter of weeks, leaving the schedule in flux. (MyNetworkTV says it is still taking pitches from producers, so it hasn't totally sworn off originals.)

"When you have a smaller voice like MyNetwork does as compared to ABC or Fox, it makes it that much more difficult to launch a program-- even a really good one," said Bill Lamb, general manager at WMYO in Louisville. "They're going to air proven programs--much as we do in syndication off-network. I think it's going to be more successful for them; I think it's going to be more successful for us."

Station executives say having established brands and a firm schedule also can help attract advertisers that may be more risk-averse during the recession.

"When you have so many new shows and you have so much competition, a known, established brand is always going to be an advantage, and something that the advertisers can be very comfortable with," said Diane Sutter, who heads WZMY in Boston.

As for the network dropping the Saturday movie, Sutter and other executives said stations are happy to go it alone that night.

In Boston, Sutter said she will pursue some sort of local programming or syndicated product. New Age Media's Yanuzzi said regional sportscasts will fill many weeks at his stations. Patrick McCreery, general manager at Meredith's KPDX, said the Portland station owns several movie packages it will use.

For News Corp., it is difficult to evaluate the MyNetworkTV makeover strategy without viewing it through a broader lens. In 2008, the network had $91.6 million in net ad sales, up 5% from 2007, according to SNL Kagan. On one level, the company is banking on higher ratings from the established dramas to offset ad time that MyNetworkTV is forfeiting.

When it airs the likes of "Law & Order: Criminal Intent," the network will receive no time to sell. Syndicator NBCU gets half, with the stations the other 50%.

That could leave MyNetworkTV with no national time to sell three nights a week. But if ratings for the new shows surpass the current lineup, News Corp. could make more by selling the local time at its 10 stations for higher rates. (Also, the network's programming costs are likely to go down substantially with the syndicated shows.)

News Corp. will continue to sell national time on Thursdays and Fridays. As they did with Fox when it launched 22 years ago, buyers have tapped syndication budgets for MyNetworkTV buys.

Although it seems unlikely for now, if MyNetworkTV were to air shows distributed or produced by a division such as 20th Century Fox, News Corp. would have another revenue stream.

After CBS and Warner Bros. announced the formation of the CW in 2006, MyNetworkTV was hastily assembled to provide programming to the 10 News Corp. stations that were set to lose a network affiliation. While the CW may be losing money, CBS and Warner Bros. have used it to air shows they produce, which can lead to profits when the series are sold into syndication.

When it launched, News Corp. filled the MyNetworkTV schedule with telenovelas it produced, but those failed. The company has since decided not to pursue the CBS/Warner Bros. approach.

Bill Carroll, vice president and director of programming at Katz Media Group, said he isn't surprised with that direction, considering that the CW's owners had "a long-term strategy" and MyNetworkTV was "originally a stop-gap answer."

Before it added wrestling this season, MyNetworkTV's highest-rated show was "Jail," a reality series from the producers of "Cops," a show that helped put Fox on the map two decades ago. Along with "Street Patrol," the network has had a block on Tuesdays it calls "Crimetime."

"Crimetime" will end its run just as the new "hybrid" model launches this fall. John Langley, executive producer of both series, said there's a "very strong likelihood" that another outlet will pick up "Jail."

As the network fills out its fall schedule, Franklin said he's expecting MyNetworkTV to be able to attract top-tier programming by offering studios an avenue to air syndicated fare nationally in prime time. The lower-rated Ion network has employed a similar strategy and attracted dramas such as "NCIS" and "Criminal Minds."

"We offer (distributors) beachfront property and a prime-time opportunity--a window they've never had before," Franklin said.

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