Fox Network, O&Os and Affiliates

by Thomas Staudt

Fox Television, owned by News Corp, is one of the “Big Four” television broadcasters in the United States, and also owns a wide portfolio of cable properties domestically. Fall 2012 was a busy time for many areas of the business.

Owned and Operated Stations

Fox Sells WUTB in Baltimore

Fox O&O WUTB in Baltimore

FOX Agrees to Sell O&O WUTB in Baltimore [17]

In May 2012, Fox Television reached an agreement with Sinclair Broadcasting to renew the Fox affiliations on 19 Sinclair owned stations for five years. As part of the agreement, Sinclair paid $25 million for the Fox affiliation on WBFF in Baltimore, as well as an option to purchase the Fox owned and operated station in Baltimore, WUTB, by March 31, 2013. The station had served as leverage for Fox when negotiating with Sinclair, since Fox would threaten pulling the Baltimore Fox affiliation from Sinclair’s flagship, WBFF, and switching to their own WUTB. WUTB is the MyNetwork affiliate in Baltimore, and was unique as the only MyNetwork station owned in the Fox television portfolio. [1]

On November 29, 2012, Sinclair exercised the option to purchase WUTB, paying an additional $2.7 million. Because Sinclair owns WBFF in Baltimore, the sale is between Fox Television corporate, and a third party Deerfield Communications, controlled by sole shareholder Stephen Mumblow. Sinclair will control the station through operations contracts with Deerfield. Sinclair will also owe an additional $25 million to Fox, unless Fox exercises an option to acquire certain stations from Sinclair’s current portfolio. WUTB is the third Sinclair controlled station in Baltimore, as they also control the CW station, WNUV, owned by Cunningham Broadcasting- which is owned by the children of Sinclair’s shareholders. [2]

Fox Owned and Operated Stations Receive Uniform Graphics and Music Update

The Fox owned and operated stations (17 stations) rolled out a uniform graphics update for locally produced programming during the first week of November, 2012. The changes are for show and segment openings, as well as lower third graphics. The Fox rectangular logo has largely been replaced with the Fox name, and appears with 3D and circular elements. The standard music package has also been slightly adjusted. Finally, Fox owned stations have standardized the practice of showing reporter’s Twitter handles, rather than email addresses under their name on air. [3] 
[18]

Affiliates

WFFF Fox Burlington Sold to Nexstar

Nexstar Broadcasting

Nexstar Broadcasting Purchases WFFF [19]

Nexstar Broadcasting announced the completion of a deal November 5, 2012 to purchase Fox affiliate WFFF in Burlington, VT from Smith Media. Nexstar agreed to pay $17.1 million for WFFF and sister station WVNY, an ABC affiliate. Mission Broadcasting is also involved in the transaction due to media ownership laws. The FCC is expected to approve the transaction in the first quarter of 2013. Upon completion of the deal,Utica,NYNBC affiliate WKTV will be the only television station still owned by Smith Media. [4]

While Burlington, VT is DMA 97, it is an important market because it reaches a substantial Canadian market not counted in its DMA size. This includes Montreal, a city with ten times more population than the entire Burlington DMA. Canadian cable operators carry WFFF in the southern Quebec province as their Fox station. [5]

4 Northwest Broadcasting Fox Stations Pulled From Dish Network

Northwest Broadcasting pulled four Fox affiliate stations off of Dish Network after retransmission renewal negotiations broke down on November 26, 2012 over a dispute about rate increases. The stations affected are WICZ in Binghamton, NY; KMVU in Medford, OR; KFFX in Yakima, WA; and KAYU in Spokane, WA. After months of negotiations, a deal could not be reached, and the signals went dark to Dish Network customers.

The impasse comes only two months after a long blackout of the same stations ended with Dish competitor DirectTV. The Northwest- DirectTV battle lasted for over 22 months, and at times was hostile. [6]

LIN FOX Stations Almost Pulled From Charter

LIN TV threatened to pull two other Fox affiliates, WNAC in Providence, RI and WLUK in Green Bay, WI off of Charter Communications cable platforms if increased retransmission rates were not agreed to by November 29, 2012. Charter claimed that LIN was demanding 150% increases in fees. [7] At the last moment before the stations were scheduled to go dark, the two sides reached a deal for undisclosed terms. [8]

Syndication

Fox O&O Stations Purchase Syndication Rights to Anger Management

Anger Management Promotional Poster

Charlie Sheen stars in Anger Management on FX [20]

Fox owned and operated stations signed a syndication contract in October, 2012 to begin airing the FX sitcom Anger Management starring Charlie Sheen beginning in the fall of 2014. FX will retain the cable syndication rights sold by Lionsgate Television. Lionsgate’s television division plans to produce 90 episodes over the next two years in order to fulfill syndication requirements. This follows a model the company has used in the past to get syndication fees sooner. Anger Management averaged 4.5 million viewers per episode during its initial summer run; new episodes begin in January. [9]

Fox O&Os Purchase Rights to Veteran’s Day Parade

NYC Veterans Day Parade Logo

The 2012 NYC Veteran’s Day Parade aired on Fox Stations [21]

Fox owned stations came to an agreement with the Wounded Warriors Project for the television rights to the New York City Veteran’s Day Parade for the first time in 2012. Fox owned stations aired the parade live or tape delayed (depending on local NFL games) with cut-ins from Fox News cable network. The live showings of the parade aired Sunday November 11, from Noon until 3:30 Eastern time. [10]

Bethenny Frankel Daytime Show Picked up by Fox Owned Stations

Fox owned and operated stations have signed a syndication deal to air the daytime talk show Bethenny, hosted by former reality television star Bethenny Frankel, and executive produced by Ellen DeGeneres. The show was left for dead in 2012, after it failed to achieve Fall 2012 clearances, but Fox kept the show alive by airing it on six owned stations for a trial period of six weeks during the summer. The positive results gave enough of a sample and momentum for Warner Brothers Distribution to syndicate nationally in other markets. The show is expected to premiere in early 2013. [11]

Ownership

Fox Purchases Stake in YES to Assist Clearance

YES Network Logo

FOX Purchased 49% of YES [22]

On November 20, 2012, News Corp, agreed to purchase a 49% ownership stake in the YES Network. A specific price was not released, but analysts estimate the network to be valued at $3 billion. News Corp completed the deal with Goldman Sachs and Providence Equity Partners. The contract includes a path for Fox to increase its ownership stake to 80%. YES has rights to air New York Yankees baseball through 2042, and is expected to be used as leverage to increase retransmission rates and clearance for other Fox properties in the nation’s largest market and surrounding areas. [12]

Sports

Fox launches Saturday Night Football and Baseball

Erin Andrews

Erin Andrews Joined Fox to Anchor Sports Coverage [23]

For the first time in 2012, Fox aired weekly college football games on Saturday nights anchored by the popular Erin Andrews. Fox drew ratings as high as a 3.5 overnight, on a night previously ignored by networks and viewers. Fox also moved its Saturday afternoon baseball to Saturday nights, seeing ratings increases of over 25% for the season. [13]

Legal

Fox Denied in Suit Against Dish Network’s DVR

United States District Court ruled on November 29, 2012 against Fox Broadcasting in its attempt for an injunction against Dish Network’s advanced DVR and ad-skipping technology. The court found that Fox was not likely to succeed on the merits of copyright infringement against the DVR service, and that Fox had failed to show irreparable harm caused by the “quality assurance” ad-free copies made to show customers. [14]

Technology

 Fox Joins with Dyle to bring Television to the iPad

Dyle Ap

Dyle Can Bring Television to the iPad [24]

Fox has joined a consortium of broadcasters to allow people to legally watch the Fox television network for free on their iPad. Called Dyle, the program requires an antenna adapter since the device does not use the internet, instead using television broadcast signals. The technology is improving, and is a large step towards bringing television to the iPad. [15]

Performance

1st Quarter Financial Data for News Corp.

News Corp’s 1st Quarter (July-Sept) financial data showed a slow start to the television year. Overall company revenues were up 2.2%, but operating income down .5% to $1.38 billion. The company reported higher than expected political advertising spending, and a more than doubling on average of retransmission rates, but also had a poor start to the network season ratings. The Fox broadcast network and owned and operated stations posted a 17.3% increase in operating income to $156 million, while Fox cable properties showed 23% increase in operating income to $953 million.

The scatter market was not robust as the company had hoped, and the Olympics siphoned off some potential revenue, but Fox is working towards its stated goal of a dual revenue stream of retransmission revenue and reverse affiliate compensation. A low- rated four game World Series and poor fall launches hurt the quarterly performance, but projections for the 2nd Quarter are more optimistic. [16]

 References

  1. Malone, M. (2012, November 29). “Fox Selling WUTB to Deerfield Media for $2.7 Million”. Broadcasting and Cable.  http://www.broadcastingcable.com/article/490598Fox_Selling_WUTB_to_Deerfield_Media_for_2_7_Million.php
  2. Jessell, H. A. (2012, November 29). “Sinclair Makes it a Triopoly in Baltimore”. TV News Check. Retrieved from http://www.tvnewscheck.com/article/63866/fox-sellingwutb-baltimore-to-deerfield-llc
  3. Newscast Studio. (2012, November 16). “Fox Owned Stations Roll Out Graphics Overhaul”. Newscast Studio. Retrieved from http://www.newscaststudio.com/blog/2012/11/16/fox-owned-stations-roll-out-graphics-overhaul/
  4. Knox, M. (2012, November 5). “Nexstar Acquires Stations in California, Vermont.” Media Bistro. Retrieved from http://www.mediabistro.com/tvspy/nexstar-acquires-stations-in-california-vermont_b68213
  5. TV NewsCheck. (2012, November 5). “Nexstar Adding Stations in Calif. and Vt.” TV News Check. Retrieved from http://www.tvnewscheck.com/article/63324/nexstar-adding-stations-in-ca-vt
  6. Stiles, G. (2012, November 28). “New Battle for Northwest Broadcasting Inc”. Oregon Public Broadcasting. Retrieved from http://www.opb.org/news/article/new-battle-for-northwestbroadcasting-inc/
  7. Donohue, S. (2012, November 20). “LIN TV Threatens to Pull CBS, NBC, Fox Stations from Charter Communications”. Fierce Cable. Retrieved from http://www.fiercecable.com/story/lin-tv-threatens-pull-cbs-nbc-fox-stations-charter-communications/2012-11-20
  8.  Donohue, S. (2012, November 30). “Charter Signs Last-Minute Deal with LIN TV”. Fierce Cable. Retrieved from http://www.fiercecable.com/story/charter-signs-last-minute-retransdeal-lin-tv-still-no-directv-gannett-agre/2012-11-30
  9. Porter, R. (2012, October 31). “Charlie Sheen’s Anger Management Sold into Syndication, Which was Point All Along”.  Zap 2 It. Retrieved from http://blog.zap2it.com/frominsidethebox/2012/10/charlie-sheens-anger-management-sold-into-syndication-which-was-the-point-all-along.html
  10. Wounded Warriors. (2012, November, 8). “New York City Veterans Day Parade to be Broadcast in 10 Major Markets”. Market Watch. Retrieved from http://www.marketwatch.com/story/new-york-city-veterans-day-parade-to-be-broadcast-in-10-major-markets-2012-11-08
  11.  Andreeva, N. (2012, September 24). “Bethenny Frankel’s Talk Show to Launch on Fox Stations in 2013”. Deadline. Retrieved from http://www.deadline.com/2012/09/bethenny-frankels-talk-show-to-launch-on-fox-stations-in-2013/
  12. Jannarone, J. (2012, November 20). “News Corp. to Buy 49% of YES Network”. Wall Street Journal. Retrieved from http://online.wsj.com/article/SB10001424127887324851704578131030193577240.html
  13. Hiestand, M. (2012, November 4). “Saturday Nights: The Future of Big-Time TV Sports?” USA Today. Retrieved from http://www.usatoday.com/story/sports/2012/11/04/michael-hiestand-television-college-football-ratings-dan-patrick-notre-dame-alabama-lsu/1681031/
  14. Davidson, S. (2012, November 29). “Federal district court refuses to enjoin DISH Network’s advanced DVR and ad-skipping services”. Lexology. Retrieved from http://www.lexology.com/library/detail.aspx?g=f124e36b-91d0-441b-a617-1adb5aa26470
  15. Kafka, P. (2012, November 19). “Dyle Brings Legal, Live TV to Your iPad, With Many Strings Attached”. All Things SD. Retrieved from http://allthingsd.com/20121119/dyle-brings-legal-live-tv-on-your-ipad-with-many-strings-attached/
  16.  Messmer, J. (2012, November 6). “News Corp. Admits Soft Fall Start for Fox”. TV News Check. Retrieved from http://www.tvnewscheck.com/article/63366/news-corp-admits-soft-fall-start-for-fox
  17. Image. “WUTB Logo”. WUTB. Retrieved from http://www.my24wutb.com/
  18. Video. “November 12, 2012- Fox 13 WHBQ”. Newscast Studio. Retrieved from: http://www.newscaststudio.com/blog/2012/11/16/fox-owned-stations-roll-out-graphics-overhaul/
  19. Image. “Nexstar Logo”. Logos Wikia. Retrieved from www.logos.wikia.com
  20. Image. “Anger Management”. TMZ. Retrieved from http://www.tmz.com/category/anger-management/
  21. Image. “NYC Veterans Day Parade 2012 Logo”. Wounded Warrior Project. Retrieved from http://www.vetsday.org
  22. Image. “YES Network Logo”. SNY Networks. Retrieved from http://snynets.com/nets/nets-already-helping-yes-network-grow/
  23. Image. “Erin Andrews.” Daily Glow. Retrieved from http://www.dailyglow.com/beauty-news/erin-andrews-shares-her-best-beauty-tips-for-game-day.html
  24. Image. “Dyle”. Dyle TV. Retrieved from http://www.dyle.tv/devices/elgato-eyetv-mobile-tv-tuner/

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