Network, station group may split; CW considering OTT option
Can this marriage be saved?
In a possible blow to The CW, Tribune Broadcasting has reached an impasse with the network on a renewal deal, which could have ramifications for the TV industry.
According to TV Newscheck, Tribune – owner of thirteen CW affiliates, is balking at an increase of “reverse compensation” fees. The group also wants exclusive digital rights to CW shows in its markets and another long-term deal.
Tribune’s thirteen CW affiliates include stations in the largest markets – including Tribune flagship WGN-TV in Chicago, plus WPIX in New York and KTLA in Los Angeles. Tribune also owns CW affiliates in Dallas, Washington D.C., Houston, Miami, St. Louis, Denver, Hartford, Portland [Ore.], New Orleans, and Norfolk (through a shared services agreement.)
The CW was born as a result of a merger between The WB and UPN, announced on January 24, 2006. All the Tribune outlets mentioned (except Norfolk) were former WB affiliates, who pioneered the “reverse compensation” concept; i.e. paying the network to carry programming. Tribune signed ten year deals for those stations, and those deals expire this August.
Things have certainly changed since in the TV industry since 2006, when Tribune signed the deal. In fact, Tribune management has turned over twice – including a Chapter 11 bankruptcy filing.
Thus it comes no surprise relations are strained between CBS/Warner Bros., the two principles in the relationship and Tribune, as programming philosophies collide. CW has struggled for years, airing teeny-bopper shows such as Gossip Girl and a 90210 revival, while Tribune has expanded its local news output in major markets, which typically draw older – and more lucrative audiences than the CW was attracting. Locally, WGN is more known for its popular morning newscast, Tom Skilling and the Chicago Cubs than any program on The CW, past or present.
CW has recently seen an increase in ratings and respect with more buzzworthy shows such as Flash, Arrow, and the upcoming Legends of Tomorrow. But Tribune is still critical, with CEO Peter Liguori blasting the network in 2014 for targeting viewers “who don’t watch television”, namely the 18-34 millennial crowd who abandoned the boob tube to watch programming via their phones or laptops – which Tribune does not get credit for as Nielsen has yet to measure ratings for such products.
CW has tried to attract older audiences in the past, outsourcing its Sunday night programming to Media Rights Capital in 2008. The results were disastrous, and CW wound up bailing out of the night altogether shortly thereafter.
Another sore point with The CW is WGN’s sports schedule, which preempts prime-time programming at least once a week – notably with Cubs telecasts, recently slimmed down to 45 games a year.
To make matters more interesting, Tribune is developing original programming for WGN America such as Salem and Manhattan, attracting much-needed critical acclaim and buzz for the former superstation.
If CW breaks up with Tribune, it does has options – none are guaranteed, as some stations may close due to the upcoming spectrum auction. The CW could land on CBS-owned independent stations in New York, Los Angeles, and Dallas, since CBS is a partner in the network. Houston also has an available independent station (KUBE.)
In Chicago however, where the CW ends up is murky since CBS does not own a second station here. Weigel-owned independent WCIU could be a possibility, but the station is already committed to airing WLS-TV’s hour-long newscast at 7 p.m. Another is independent WJYS-TV, but they have a weak signal and virtually no syndicated programming.
Another is putting the CW on a digital subchannel of WBBM-TV, but the station’s digital signal is weaker than its competitors and can’t be picked up in some parts of the Chicago area.
And with the spectrum auction upon us, it would be tougher for The CW to find alternative stations in smaller markets.
If Tribune pulls the plug on CW, it could go the My Network TV route and fill the slots with rerun programming. But this option would not be desirable to advertisers, who favor original shows. On the other hand, original scripted programming would be expensive.
Meanwhile, CW is looking to maximize its profits by launching a premium OTT (over-the-top) streaming service, charging a monthly fee. To do so, it may have to compensate affiliates for the loss of exclusivity. Already, corporate cousin CBS has CBS All Access, but CBS affiliates are participants in the venture.
All of this comes as CW is reevaluating its streaming options as its deals with Hulu and Netflix expire soon, and is facing competition from new cable network Freeform, the former ABC Family channel. Already, the launch of the channel Tuesday generated buzz on social media, trending on Twitter practically all day.
To put it all in perspective, Tribune and The CW are better off with one another than without.