TV Station Owners Call for FCC to Review Network Affiliate Deals

In other filings in the docket Monday, the Center for American Rights (CAR) called for additional FCC inquiries into sports programming and rural broadcasters, and public TV stations pushed back on CAR’s arguments for FCC scrutiny of their business plans.

The affiliate station owner groups said there's a power imbalance that favors the networks, and affiliate leverage against Disney, NBCUniversal, Skydance Paramount and Fox is “nearly non-existent.” Affiliation agreements include escalating network fees for content that's increasingly inferior to the programming that networks reserve for their streaming services, the groups said. That dynamic “raises profound questions” about whether such affiliation arrangements are in the public interest. “Further Commission inquiry into these core economic and exclusivity issues is warranted.”

While the networks argued in earlier filings that the repeated renewal of affiliation agreements shows that the relationship is mutually beneficial, the affiliate groups disagreed. “Disaffiliating is not a viable option,” they said. “A station that loses its Big Four Network affiliation stands to lose substantial audience and distribution” without network programming and branding. “The Networks neglect to reveal to the Commission the level of control they exert over their Affiliates,” the filing said. “There is a simple method to determine which narrative is more accurate -- the commission should review these arrangements.”

However, the Media Action Center said in its filing that FCC review of affiliate contracts would be a “government heavy approach,” adding that “there are interpersonal and legal mechanisms for affiliates to address their issues with their networks. This is not an arena the FCC should enter.”

The affiliate groups also called on the FCC to examine whether network “opt-in” contracts with virtual MVPDs undermine broadcaster control of their stations. Under those arrangements, the networks negotiate carriage rights with platforms such as YouTube TV and Disney-owned Hulu on their own and give affiliates the choice to either opt in to the deals, negotiate individually or have their content excluded from the vMVPD’s national feed. “The opt-in framework undoubtedly harms local stations because it centralizes negotiating power with the Networks to the detriment of local broadcast stations and the viewers they serve,” the groups said. “The manner in which each of the Big Four Networks usurps their Affiliates’ ability to negotiate with the vMVPDs raises issues of de facto control meriting further Commission attention.” NAB and station groups have long called for an FCC inquiry on virtual MVPD carriage (see 2211180059).

Numerous lawmakers have said the FCC lacks authority to regulate streaming providers, noted a brief filing from the Preserve Viewer Choice Coalition, whose members include the big four networks, Roku, YouTube TV and Warner Bros. Discovery. “We urge the Federal Communications Commission to resist calls in connection with this public notice to regulate streaming video providers as if they were traditional multichannel video providers.”

Preemption Rights and Public TV

The affiliate station groups again didn’t say much on proposals to strengthen affiliate preemption rights (see 2512110052), but in a footnote in Monday’s filing, they said the FCC should scrutinize those rights. Agency Chairman Brendan Carr initially framed the Media Bureau’s inquiry into network-affiliate relationships as a way to make it easier for broadcast groups to preempt network content, as some did to Jimmy Kimmel Live! (see 2511190065).

“While Affiliate control over preemption of Network programming is important, rebalancing the economics of affiliation agreements is a far more pressing and urgent matter for the survival of local stations,” the footnote argued. “That said, the Commission may wish to examine whether, despite express references to the letter of the right-to-reject rule in affiliation agreements, Affiliates are truly free to preempt Network programming in a manner that is consistent with the rule’s intent.”

CAR said networks “prioritize their liberal agenda over their affiliates’ viewers,” pointing to statistics showing that late-night network shows had vastly more Democratic guests than Republicans. The FCC should remind networks “of their public-interest responsibility” for viewpoint diversity, CAR said. “The Center shares a desire for free markets and a light-touch approach to regulation, while also sharing concerns that the current model is unsustainable for local broadcasters and their essential services.” The group also called on the FCC to open proceedings on the challenges facing rural broadcast stations and the shift of sports programming to streaming. “And even until then, sports should be part of the preemption conversation from this proceeding.”

America’s Public Television Stations pushed back on earlier calls from CAR for the FCC to require public TV stations to submit business plans and possibly take back public TV spectrum. Public TV stations aren’t affiliates, so their relationship with PBS is outside the scope of the proceeding, APTS said. “Local public television stations are not subject to the sort of leverage from national distributors that has concerned the FCC with respect to commercial networks and their affiliates,” the group argued. “The suggestions in the CAR Comments regarding additional regulatory burdens for public broadcasting would needlessly divert time and resources away from local public television stations’ public service to their local communities.”

In its filing, however, CAR doubled down on proposals that the FCC demand business plans from public TV stations, pointing to Arkansas Public Television’s recent dropping of PBS (see 2512120040). “If Arkansas Television was two years from bankruptcy, other PBS and NPR affiliates are likely in a similar position,” CAR said. “This Commission needs financial transparency and serious business models to ensure responsible planning by and for licensees.”