Tag Archives: News Corp.

Regional Sports Networks

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By Tim Doehler

Background

The idea of regional cable networks is not a new one. In fact, the first regional cable network, the Madison Square Garden Network, was founded in the New York metropolitan area in 1969 — over 40 years ago. Eventually the idea caught on in other cities in the 1980s, mainly as a way to distribute sports programming within limited geographic areas [1]. Over the years RSN’s (Regional Sports Networks) have provided fans with live broadcasts and consistent coverage of their local teams.

The Players

Click to enlarge

Click to enlarge

The major players in the regional sports network industry consist mostly of FOX Sports Network and Comcast SportsNet, which acquired NBC Universal (including NBC Sports Network) in January of 2011 [2]. Most regional sports networks in the United States are affiliated with one of these two networks, which both feature affiliates that span across the country.

However, a new player might be emerging in the industry. While the company still has a long way to go to reach the heights that FOX and Comcast have, Time Warner Cable made a significant splash in the industry earlier this year when they outbid News Corp. to eventually sign a lucrative, 25-year deal worth $7 billion with the Los Angeles Dodgers and announced that they were starting a new regional sports network, SportsNet LA [3]. It is important to note that the Dodgers — not Time Warner Cable — will program the new channel. Therefore, this network, which will not air until 2014, will only feature the Dodgers, even though Time Warner Cable also has a current deal in place with the Los Angeles Lakers. This deal, which gives Time Warner Cable exclusive regional TV rights to the Lakers, was agreed upon between the two sides in 2011 and is estimated to be wroth $3 billion over 20 years [4]. This network is called Time Warner Cable SportsNet, a name that the company believes is distinctive enough from the new SportsNet LA network being launched for the Dodgers next year [11] . Ultimately it will be difficult to compete with FOX and Comcast, but cornering one of the largest markets in the nation is a move that should not go unnoticed in the industry.

Watch analysts discuss the TWC-Dodgers deal.

Current Events

While the TWC-Dodgers deal is one of the most noteworthy as of late, there have been other important moves made throughout the industry, one also involving Time Warner Cable. In late February the company agreed with FC Dallas to the most extensive television broadcast deal in the club’s 18-year history. This season, Time Warner Cable SportsChannel will air 22 FC Dallas regular-season games with all games being broadcast in HD. Also, it will allow FC Dallas to travel its broadcast team to all 17 road games and provide fans with additional in-depth programming about FC Dallas [5]. This further demonstrates a willingness to expand for Time Warner Cable and get involved in the industry in various ways, such as soccer.

Also in late February, FOX, specifically FOX Sports South, acquired the 45 Atlanta Braves games that previously aired on Turner’s Peachtree TV network. This will be the first time Turner will be out of the Braves TV business since the mid-1970s. In addition, the move means that Braves telecasts are moving from a free over-the-air station to cable [6].

Another major move by FOX Sports came about a month later, when the Big East Conference and FOX Sports agreed upon a 12-year multi-platform media rights agreement beginning with the 2013-14 academic year. The newly reconstructed Big East Conference now features Butler University, Creighton University, DePaul University, Georgetown University, Marquette University, Providence College, St. John’s University, Seton Hall University, Villanova University and Xavier University. The agreement grants FOX Sports rights to all conference-controlled men’s basketball games, select rights to women’s basketball, all Olympic sports and extensive rights for highlights and to produce ancillary programming [7].

The Result

More money are coming out of the pockets of consumers. While these regional sports networks across the country are convenient for fans, they do not come without a price.

“Pretty much everybody in the business agrees that overall costs are outrageous. Nobody has an easy solution,” said News Corp. COO, Chase Carey in light of the TWC-Dodgers deal as he “conceded” that the TV sports landscape is “becoming increasingly tricky — and expensive.” Carey also went on to refer to the business as “invaluable yet complicated [8].”

As a result of lucrative deals such as the TWC-Dodgers agreement, as mentioned by Carey, consumers are being asked to pay more. For example, this particular deal will include an estimated $4-5 per month carriage fee for subscribers throughout the area. In addition, DirecTV, the country’s most popular satellite service and VerizonFiOS have started adding a $2 to $3 monthly surcharge in markets like New York and Los Angeles to pay for regional sports networks [9]. This is a cause of concern for many, especially those who are not avid sports fans, such as David Sirota, as shown in the video below. Sirota, a nationally syndicated newspaper columnist, daily drive-time radio host on AM760 in Colorado, and New York Times bestselling author shares his opinion and some relevant facts regarding these issues…  [10]

What’s Next?

In today’s day and age of rapid technological advancements, distributors and programmers, like ESPN, need to do everything in their power to keep this live programming in the age of digital video recorder and the Internet, sports leagues and organizations know they have leverage in this particular situation [9]. As Brian Stelter, New York Times writer states, “Sports are the television industry’s bulwark against rapid technological change: while the companies fear cord-cutting by customers who can cobble together a diet of TV on the Internet, they rest a little easier knowing that former customers would be hard-pressed to find their favorite teams live online [9].”

Unfortunately, a reasonable solution has not yet been discovered. A potential solution that analysts and industry critics have discussed is an “a la carte” model of pricing [9]. This would mean that customers would be allowed to pick and choose which channels they want to subscribe to instead of being forced to purchase packages. As Gene Kimmelman, a former Justice Department antitrust lawyer says, “The cable industry has done everything it can to bundle programming and force consumers to buy things they don’t want. Finally, one piece of their bundle has become so expensive that it may finally force the cable industry to shift gears and split the bundle out of fear of pricing its own customers out of the market [9].”

There are many options being brainstormed and discussed in trying to fix this evolving issue, and although many feel that a solution is necessary, there is not a strong indicator of exactly what it will be. For now, consumers are going to continue paying premium dollars for these sports networks, especially as lucrative deals such as the TWC-Dodgers deal continue to happen.

 

Bibliography

[1] Blumenthal, Howard J., and Oliver R. Goodenough. “Chapter 2.” This Business of Television. New York: BillBoard, 2006. 16. Print.

[2] Adegoke, Yinka, and Dan Levine. “Comcast Completes NBC Universal Merger.” Reuters. N.p., 29 Jan. 2011. Web. 8 Apr. 2013. <http://www.reuters.com/article/2011/01/29/us-comcast-nbc-idUSTRE70S2WZ20110129>.

[3] Rovell, Darren. “Dodgers Launching Sports TV network.” ESPN. ESPN Internet Ventures, 29 Jan. 2013. Web. 08 Apr. 2013. <http://espn.go.com/los-angeles/mlb/story/_/id/8889859/los-angeles-dodgers-launching-regional-sports-tv-network-sportsnet-la>.

[4] “Time Warner Cable Cuts First Major Lakers Deal.” Yahoo! Finance. N.p., 26 Nov. 2012. Web. 08 Apr. 2013. <http://finance.yahoo.com/news/time-warner-cable-cuts-first-major-lakers-deal-003325369.html>.

[5] “FC Dallas Inks Landmark Television Deal with Time Warner Cable.” FC Dallas. N.p., 25 Feb. 2012. Web. 08 Apr. 2013. <http://www.fcdallas.com/news/2013/02/fc-dallas-inks-landmark-television-deal-time-warner-cable>.

[6] “Braves Move Remaining Local Telecasts To Fox RSNs, Ending Long Run With Turner.” SportsBusiness Daily. N.p., 28 Feb. 2013. Web. 08 Apr. 2013. <http://www.sportsbusinessdaily.com/Daily/Issues/2013/02/28/Media/Braves.aspx>.

[7] “Big East, FOX Reach Rights Agreement.” FOX Sports. N.p., 20 Mar. 2013. Web. 08 Apr. 2013. <http://msn.foxsports.com/collegebasketball/story/Big-East-FOX-Sports-reach-extensive-multi-platform-media-rights-agreement-032013>.

[8] “News Corp. COO Chase Carey Discusses Sports Rights; Calls Dodgers Deal “Too Rich”” SportsBusiness Daily. N.p., 7 Feb. 2013. Web. 8 Apr. 2013. <http://www.sportsbusinessdaily.com/Daily/Issues/2013/02/07/Media/News-Corp.aspx?hl=Serie%20A&sc=0>.

[9] Stelter, Brian. “Rising TV Fees Mean All Viewers Pay to Keep Sports Fans Happy.” The New York Times. The New York Times, 26 Jan. 2013. Web. 08 Apr. 2013. <http://www.nytimes.com/2013/01/26/business/media/all-viewers-pay-to-keep-tv-sports-fans-happy.html?_r=1>.

[10] “David Sirota.” The Huffington Post. N.p., n.d. Web. 8 Apr. 2013. <http://www.huffingtonpost.com/david-sirota>.

[11] Shaikin, Bill. “Dodgers, Time Warner Cable Announce New Channel: SportsNet LA.” Los Angeles Times. Los Angeles Times, 28 Jan. 2013. Web. 08 Apr. 2013. <http://articles.latimes.com/2013/jan/28/sports/la-sp-dn-dodgers-time-warner-cable-sportsnet-la-20130128>.

 

 

Fox Network, O&Os and Affiliates

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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/

Big Media

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by Thomas Staudt

Ownership Rules

FCC Proposes Relaxing Media Ownership Rules

Federal Communications Commision

The Federal Communications Commission Has Proposed Changing Media-Ownership Rules [19]

The biggest news in Fall 2012 regarding the topic of Big Media is a proposal by the FCC to implement changes in the media ownership rules. The biggest change aims to relax the ban that prevents cross-ownership of a television station and newspaper in the same market. The rule does not apply to top 20 markets, although a waiver could be obtained to allow it to be applied. Regulations against the ownership of duopoly television stations will remain in effect. The proposal comes at a time when the media landscape is shifting, and local news operations are struggling for resources. [1]

Advocates for the proposal suggest that allowing mergers between local television and newspaper outlets will allow the outlets to stay in business in a tougher media economic climate. Without the rule change, the argument is that total media outlets will severely decline do to sustainability issues in the coming decade. [2]

Opponents of the plan claim that relaxing the ownership rules will promote further concentration of ownership, and erode diversity, competition, and localism that are in the public interest. The FCC has agreed to accept further opinions and research on the manner, and will hold off on voting until early 2013. [3]

Tribune Requires Ownership Waiver for Sale

Tribune Company Logo

The Tribune Company is an FCC Waiver Away from Emerging from Bankruptcy [20]

 While the FCC considers officially changing cross-media ownership rules, the FCC announced in November, 2012 that it was close to granting a cross-ownership waiver to the Tribune Company to allow the transfer of ownership to a group composed of Oaktree Capital Management, Angelo Gordon, and JP Morgan Chase. The waiver is needed because the group currently owns television assets in Los Angeles and four other markets involved. A permanent waiver is expected Chicago, and temporary 1 year waivers for Los Angels, New York, Miami and Hartford. The waivers will allow the closing of the sale, and the completion of four years of bankruptcy. [4]

Ownership Report

FCC Releases Minority Ownership Report

At the beginning of November, 2012, the FCC released its bi-annual report on the ownership of commercial broadcast stations in theUnited Statesas of the end of 2011. The timing of the report is noteworthy as the FCC is in the midst of examining further deregulation of ownership rules, something critics believe will lower ownership diversity even further.

Of the nation’s 1,348 television stations, whites own 69.4%. That is an increase from 63.4% in 2009 when there were 1,187 stations. Accompanying this, African American ownership fell from 1% to 0.7% and Asian ownership fell from 0.8% to 0.5%. Following national trends, Hispanic ownership rose, but only slightly, from 2.5% to 2.9%. There is also a large gender gap in commercial television ownership. While on the rise, women own only 6.8% of stations in the US as of 2011, up from 5.6% in 2009.

The television ownership statistics are not dramatically different than radio, where whites own 80% of stations, and men own 70%. [5]

Cable Networks

Liberty Media Spins off the Starz Network

 

Starz Logo

Starz Will be Spun Off into Its Own Company by Liberty Media [21]

Liberty Media announced in August, 2012 that they intend to spin off their premium network Starz into a separate, publicly traded company. The deal is expected to be completed by the end of 2012. Liberty shareholders will receive Starz stock as a one-time dividend. The new company will acquire all of the Starz portfolio and assets, as well as $1.5 billion debt, and undisclosed cash. [6] Analysts are skeptical about the financial prospects of the new company, with Starz reporting an 11% decline in income against last year. [7]

Fox Purchases Stake in YES to Assist Clearance

On November 20, 2012, News Corp, the parent company of Fox, agreed to purchase a 49% ownership stake in the YES Network. A specific price was not released, but analysts estimate the deal values the network near $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 a contract to air New York Yankees baseball games through 2042, and is expected to be used as strong leverage to increase retransmission rates and guarantee clearance for other Fox properties in the nation’s largest market and surrounding areas. [8]

Current TV for sale

Current TV Logo

Al Gore’s Current TV is Up for Sale [22]

In October, 2012, Current TV, the networked owned by former Vice President Al Gore, announced that it was up for sale. The struggling network does not have a full time program line-up, and is focused on the far left side of the political spectrum. Austin, Texas startup SocialGood.tv confirmed December 1, 2012 that it was working to raise funds to purchase the network. Although they do not yet have the funding, a released business plan shows that they would move the network to the political central in order to increase both viewer and advertising bases. SocialGood.tv claims to be close to having financing in place, but it will remain to be seen if the company can complete the transaction. [9]

 O&O Stations

Fox Sells WUTB in Baltimore to Deerfield Communications

In May 2012, Sinclair paid $25 million to Fox for the affiliation for 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, as Fox used the threat of pulling the Baltimore Fox affiliation from Sinclair’s flagship, WBFF, and switching to their own WUTB. [10]

On November 29, 2012, Sinclair exercised the option to purchase WUTB, paying an additional $2.7 million for the station. Because Sinclair owns WBFF in Baltimore, the sale is between Fox Television corporate, and a third party Deerfield Communications. Sinclair will control the station through an operations contract with Deerfield, and will owe an additional $25 million to Fox, or Fox can exercise an option to acquire certain stations from Sinclair’s current portfolio. [11]

Television Station Groups

Nexstar Buys 5 TV Stations

Nexstar Broadcasting announced that intends to reinvest its windfall from this year’s political season to purchase 5 television stations in California and Vermont. On November 5, 2012, Nexstar announced that it paid Newport Television $35.4 million for the CBS affiliate, KGPE, in Fresno, CA; the NBC and CW affiliate, KGET, in Bakersfield, and a low-powered Telemundo affiliate, KKEY, in Bakersfield, CA.  [12]

In a separate sale, 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. The Burlington DMA is important due to its sizeable Canadian audience, including Montreal.  [13] 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 which, Utica, NY NBC affiliate WKTV will be the only television station still owned by Smith Media. [14]

Cox buys 4 Newport Stations

Cox Media Logo

COX Media Purchases 4 Newport Television Stations [23]

Newport Television also closed a deal to sell 4 stations to Cox Media on December 4, 2012. Cox purchased the FOX and CBS duopoly, WAWS and WTEV, in Jacksonville, Florida as well as the FOX and MyNetwork affiliates, KOKI and KMYT, in Tulsa, Oklahoma. [15]

Sinclair buys 7 Newport Stations

On December 3, 2012 Sinclair Broadcasting closed a deal for $459.7 million for seven stations owned by Newport Media. WKRC in Cincinnati, OH; WOAI in San Antonio, TX; WHP in Harrisburg-Lancaster, PA; WPMI and WJTC in Mobile, AL; WHAM in Rochester, NY, and KSAS in Wichita, KS are the stations included in the deal. Sinclair has already announced sweeping personnel changes at many of the stations involved. [16]

Sinclair and Nexstar in running for 24 Barrington stations

Sinclair Television Logo

Sinclair Television is a Finalist for Barrington Television Stations [24]

On November 29, 2012, Barrington Broadcasting, the group run by former AOL Time Warner COO Bob Pittman, announced that it was looking to sell its entire portfolio of 24 television stations. Located in 15 markets ranging from market size 67 to 200, the portfolio consists of ABC, CBS, NBC, FOX, and CW stations. Although several companies made bids, Sinclair Broadcasting and Nexstar are the finalists. These two companies have advantages over others due to their nationwide retransmission agreements with a variety of distribution platforms. Upon the completion of a sale, the retransmission rate of the sold station would become that of the new owner, often much higher than that negotiated by the station. [17]

Denali Media Purchases Three Alaska Stations

On November 9, 2012, Denali Media Holdings, Alaska’s largest telecommunications company, announced that it was looking to purchase three additional television stations across the state. As part of a strategy to create a state-wide news and entertainment network, Denali is purchasing the Anchorage CBS affiliate, KTVA, from Media News Group of Denver. It is also purchasing the NBC affiliates in Juneau and Sitka, KATH and KSCT respectively, from North Star Broadcasting. The FCC is expected to approve the sales in early 2013. [18]

References

  1. Lowry, B. (2012, December 1). “Media-Ownership Rules Need New Look”. Variety. Retrieved from http://www.variety.com/article/VR1118062935
  2. Johnson, T. (2012, December 5) “FCC: Rule Changes Would Actually Promote Diversity”. Chicago Tribune. Retrieved from http://articles.chicagotribune.com/2012-12-05/news/chi-tms-variety-fcc-rule-changes_1_cross-ownership-fcc-s-media-bureau-media-ownership
  3. Kang, C. (2012, December 5). “FCC Relax of Media Ownership Ban Draws Fire.” The Washington Post. Retrieved from http://www.washingtonpost.com/blogs/post-tech/post/fcc-relax-of-media-ownership-ban-draws-fire/2012/12/05/729dfafe-3e56-11e2-a2d9-822f58ac9fd5_blog.html
  4. Puzzanghera, J. (2012, November 15). “Tribune Close to Clearing Last Bankruptcy Hurdle”. LA Times. Retrieved from http://www.latimes.com/business/la-fi-tribune-bankruptcy-20121115,0,6621573.story
  5. Flint, J. (2012, November 14). “FCC Media Ownership Survey Reveals a Lack of Diversity”. LA Times. Retrieved from http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-fcc-diversity-20121114,0,5618853.story
  6. Lieberman, D. (2012, August 8). “Liberty Media Says it will Spin Off Starz”. Deadline. Retrieved from http://www.deadline.com/2012/08/liberty-media-starz-spin-off/
  7. (2012, December 2) “Liberty Media Closes in on 50% Ownership of Sirius XM”. Seeking Alpha. Retrieved from http://seekingalpha.com/article/1039341-liberty-media-closes-in-on-50-ownership-of-sirius-xm
  8. Jannarone, J. (2012, November 20). News Corp. to Buy 49% of YES Network. Retrieved from http://online.wsj.com/article/SB10001424127887324851704578131030193 577240.html
  9. Sheppard, N. (2012, December 1). “Al Gore’s Current TV May Be Bought By Texas Startup Looking to Make It More Centrist”. Newsbusters. Retrieved from http://newsbusters.org/blogs/noel-sheppard/2012/12/01/al-gores-current-tv-may-be-bought-texas-startup-looking-make-it-more
  10. Malone, M. (2012, November 29). “Fox Selling WUTB to Deerfield Media for $2.7 Million”. Broadcast & Cable.  Retrieved from http://www.broadcastingcable.com/article/490598-Fox_Selling_WUTB_to_Deerfield_Media_for_2_7_Million.php
  11. 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-selling-wutb-baltimore-to-deerfield-llc
  12. Lieberman, D. (2012, November 5) “Nexstar Buys 5 TV Stations in California and Vermont.” Deadline. Retrieved from http://www.deadline.com/2012/11/nexstar-tv-station-acquisition/
  13. 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
  14. 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
  15. Eck, K. (2012, December 4). “Cox Media Group Closes on Purchase of Newport Stations”. TV Spy. Retrieved from http://www.mediabistro.com/tvspy/cox-media-group-closes-on-purchase-of-newport-stations_b71843
  16. Knox, M. (2012, December 3). “Sinclair, NewportTelevision Close Seven-Station Deal”. TV Spy. Retrieved from http://www.mediabistro.com/tvspy/management-changes-at-sinclair-stations-as-newport-deal-closes_b71663
  17. Messmer, J. (2012, November 29). “Sinclair, Nexstar In Running for Barrington”. TV News Check. Retrieved from http://www.tvnewscheck.com/article/63834/sinclair-nexstar-in-running-for-barrington
  18. Associated Press (2012, November 9). “GCI to Buy 3 AlaskaTV Stations”. Fairbanks Daily News Miner. Retrieved from http://newsminer.com/view/full_story/20786800/article-GCI-to-buy-3-Alaska-TV-stations-?instance=home_news_window_left_bullets
  19. Image. “FCC Logo”. LBA Group. Retrieved from http://www.lbagroup.com/blog/ebs-substantial-service-deadline-extended/
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  21. Image. “Starz Logo”. GP Com. Retrieved from http://blog.gpcom.com/?tag=starz
  22. Image. “Current TV Logo”. TV By the Numbers. Retrieved from http://tvbythenumbers.zap2it.com/2011/11/10/the-young-turks-with-cenk-uygur-to-launch-on-current-tv-monday-december-5-at-7pm-et/110277/current-tv-logo/
  23. Image. “Cox Communications Logo”. Dioji. Retrieved from http://www.dioji.com/newspress.asp
  24. Image. “Sinclair Broadcasting Logo”. Awesome Cake. Retrieved from http://awesomecake.com/portfolio/logo-designs/