Paramount Global Directly Threatens Local TV Services

Hank Price

As cord cutting surges, panic among the major media companies continues to grow. Poor earnings, heavy debt and falling stock prices have created an overwhelming wave of bad news with no good answers.

Having run out of ideas, the networks are turning to the three things they do best: cutting expenses, laying off employees and demanding more money from their affiliates.

A proud leader in network greed is Paramount Global, which is using the latest Fubo TV negotiation to not just pick affiliate pockets but turn them inside out.

During recent discussions with the CBS Affiliate Board, Paramount offered a new Fubo TV deal some call “untenable.” The background story is that Paramount lowered its offer to less than affiliates are receiving now. Adding insult, Paramount is reported to have also said “take it or leave it” with no room for compromise.

The Paramount abuse of affiliates goes beyond Fubo TV. The company is trying to reset the entire retransmission consent landscape. The Fubo deal will set a precedent for every future vMVPD negotiation. This matters, because without a reasonable share of retransmission dollars, few stations would be able to continue producing high quality local news and other critical services.

At last report, many local station owners had not succumbed to Paramount Global’s greedy demands and elected to go dark on Fubo TV, but in another outrage, Paramount is said to now be running a direct network feed with no local content in markets where affiliates have not accepted its ultimatum.

If the CBS affiliates cave to Paramount, it will not only affect their vMVPD contracts, but every other future retransmission negotiation with every other national network.

Paramount can play the bully because outdated FCC rules mean vMPVDs are not subject to the same regulations as cable and satellite. Owners of over-the-air networks can legally negotiate directly with the internet cable providers, cutting local stations out of the process. That’s why CBS affiliates have so little bargaining power in the Fubo TV negotiation.

Facing what many see as oppression, affiliates are dismayed that the FCC is sitting on the sidelines in an area that is clearly its responsibility. More dismay comes from the fact that the solution is so obvious and so simple: Make everyone play by the same rules.

The FCC has been foot dragging this issue for years. That’s hard to understand because this is not a partisan issue. It is about simply leveling the playing field. Giving one side an unfair advantage in a business negotiation is nonsensical.

I can tell you from personal experience that networks spend far more time thinking about stock price than about the local communities their affiliates serve, so there are real long-term consequences if the FCC allows Paramount to continue playing the bully on a tilted field.

Last week, TVNewsCheck Editor at Large Harry Jessell pointed out that FCC Chairwoman Jessica Rosenworcel claims to support localism. If she is serious about that, now is the time for her to take action to protect the very viability of local service by amending regulations written when the idea of vMVPDs did not exist.

If the FCC remains on the sideline, it seems to me every general manager has a responsibility to lobby their local senators and members of Congress to pressure the commission to do the right thing. Hopefully the NAB, which is world class when it comes to lobbying, will lead the charge.

It cannot be pointed out too often that retransmission fees fund local news, emergency weather, local programming and other critical services. I can think of no higher priority than protecting those services in every community.

Bottom line, Paramount Global is trying to control local television services across our nation. If Paramount is successful, you can be sure every other network will follow, so the stakes are very high. That is why Chairwoman Rosenworcel must act now.

Hank Price spent 30 years leading television stations for Hearst, CBS and Gannett while concurrently building a career in executive education. He is the author of Leading Local Television and two other books.