NBC talks with Ch. 7 could bring shake-up to Boston TV
WHDH’s tie to NBC network for renewal
In the TV business, network affiliate contracts are typically renewed without incident, allowing viewers to continue watching their favorite national programs on the same local channels year after year.
But with 14 months left on a decade-long deal between NBC and WHDH-TV (Channel 7), widespread media upheaval could combine with the companies’ contentious history to make the next round of negotiations uncommonly tense, or possibly lead to the first shakeup on the Boston dial in 20 years.
One potential result — moving NBC programs to NECN — could even upend the traditional, over-the-air broadcast model employed by national networks since their inception.
NBC, which owns its affiliates in other large markets, like New York, Los Angeles, and Chicago, would rather purchase WHDH than sign a contract extension, according to a recent report in Broadcasting & Cable, an industry publication. WHDH is owned by Sunbeam Television Corp. of Miami.
If talks on an acquisition or affiliate extension were to go poorly (and that’s a big if), NBC could yank its programs — “Today,” “Dateline,” “Sunday Night Football” and all the rest — off Channel 7 and shift them to NECN, the regional cable channel owned by Comcast Inc., the parent of NBCUniversal Inc.
“They can do it, but it’s very aggressive,” said Reed Hundt, a former chairman of the Federal Communications Commission who is now chief executive of the Coalition for Green Capital in Washington. “If they did that, it would be big news because it would be regarded as NBC phasing the ‘B’ [for broadcasting] out of its name.”
An NBC spokeswoman said the company does not comment on discussions with affiliate partners.
Chris Wayland, executive vice president of Sunbeam, said, “We fully expect to be the NBC affiliate in Boston beyond 2016.”
Wayland will probably be right in the end, said Mark Fratrik, chief economist at the media research firm BIA/Kelsey. Networks like NBC have maintained the affiliate system, even in markets where they don’t own a local broadcaster, to ensure maximum distribution.
But he said that for many years, they also have kicked around the idea of cutting out stations like WHDH, anticipating a time when virtually everyone watches television on cable, satellite, or the Internet, making the advantage of over-the-air broadcasting negligible. Six percent of US households still rely on antennas, according to a study last year by the Consumer Electronics Association.
“In the strategic planning departments of these networks, it’s a constant topic,” Fratrik said. “It’s just that no one’s done it yet.”
Michael Botein, a former FCC attorney and professor emeritus at New York Law School, said Americans’ viewing habits are changing so rapidly that moving network programs from a local broadcast station to a cable channel could make business sense right now.
“It may look bizarre, but I don’t think it is,” Botein said.
NBC has pulled programming from a Sunbeam station before. In 1988, the network bought a station in Miami and transferred its shows off Sunbeam’s WSVN-TV in that market. WSVN subsequently switched to a Fox affiliate.
The relationship between Sunbeam and NBC appears not to have fully recovered. In a heated public episode six years ago, NBC threatened to strip WHDH of its network affiliation when Sunbeam owner Ed Ansin initially refused to air “The Jay Leno Show,” the comedian’s short-lived hiatus from “The Tonight Show.”
Ansin told the Globe at the time that airing Leno on weeknights at 10 p.m. would be “very adverse to our finances.” He planned instead to launch a 10 p.m. newscast to compete with WFXT-TV (Channel 25). John Eck, NBC’s president of network operations at the time, responded by calling WHDH’s rejection of Leno “a flagrant violation of the terms of their contract with NBC.”
“We have a number of other strong options in the Boston market, including using our existing broadcast license to launch an NBC-owned and operated station,” Eck said.
After a two-week standoff, Ansin ultimately agreed to broadcast Leno’s show, and WHDH kept its affiliation with NBC.
At the bargaining table now, NBC’s ownership of NECN provides leverage it didn’t have during the Leno dispute or when the current deal with WHDH was signed in 2006.
(Comcast acquired a full ownership interest in NECN in 2009, then bought a majority stake in NBCUniversal in 2011. It later placed NECN into the corporate giant’s local TV division, known as NBCUniversal Owned Television Stations.)
But Sunbeam has a new lever to pull, too. In March, the FCC plans to begin a broadcast spectrum buyback program, purchasing local TV signals from stations willing to go off the air. The agency then hopes to auction space on the airwaves to wireless communications companies desperate for more bandwidth.
To motivate owners to sell, the FCC commissioned a study by the New York investment bank Greenhill & Co., which estimated the value of a broadcast station’s air in every media market. In Boston, the nation’s seventh-largest market, Greenhill put the price at as much as $540 million.
“It’s opened the eyes of people who hadn’t considered selling,” said Mitt Younts, a media broker at Chapman & Associates in Richmond, Va. “If you’re somebody like WHDH and you’re open to selling, you might go to NBC and say, ‘Hey, you’ve got to beat the FCC’s price.’ ”