ABC, Affils Try 'Third Leg' of Inventory Exchange

After two successful rounds of inventory exchanges, which saw ABC affiliates buy extra spots from the network, and then vice versa, ABC and its affiliates are firming up the details on what affiliates board chairman Bill Hoffman calls "the third leg" of the inventory exchange stool. Whereas the first two chapters of the so-called Inventory Exchange System (IES) involved the buying and selling of spots, the next "seasonal inventory exchange" will be a straight spot swap. 

The swap is expected to occur at the start of the fall season, and continue for 16 weeks. The affiliates board calls it a test. Affiliates will have the opportunity to trade spots in shows they have in abundance for units in the dayparts where they're not as strong. Stations typically have a lot of avails in Nightline, for example, and are weak in World News units.
"Everybody has been satisfied with how the economics work thus far," says Hoffman, "so now we're looking at something called the seasonal exchange."

Hoffman would not provide details about which shows the affiliates and network will push for avails in.
ABC was not available at presstime on short notice. 

In September, ABC announced its Inventory Exchange System, which allowed affiliates to buy extra spots from the network. In November, the network and the affiliates announced a two-way street approach to the exchange, with the network having the opportunity to buy spots from the affiliates during the slow January season. 

Hoffman says buy-in on the affiliate side has grown with each new chapter, with informal votes showing that around 95% of the stations body like the exchange concept, which allows either the stations or the network to buy extra spots when their demand is particularly high, such as stations during election season. 

Networks and their affiliates have tried swaps before. During the fall's election peak, for example, CBS offered affiliates the chance to buy extra spots in 60 Minutes and primetime.
The affiliates credit Anne Sweeney for pushing the positive relations between ABC and its affiliate body. The teamwork comes at a time when networks and their affiliates are sparring over money matters such as reverse compensation and retrans; last week, a battle between the Fox affiliates board and the network over affiliate payments went very public, and got rather unpleasant. 

ABC and its affiliates body still have issues, such as the network's underperforming last hour of primetime and the network's demands for reverse comp. But the three-legged inventory exchange shows that they're not only hearing the other party's concerns, but acting on them too.

"The network is in, the board of governors is in, the O&Os are in and the affiliate body is in," says Hoffman. "We've really got nice consensus. We really believe we're working on something that can be good for one another."

Michael Malone

Michael Malone, senior content producer at B+C/Multichannel News, covers network programming, including entertainment, news and sports on broadcast, cable and streaming; and local broadcast television. He hosts the podcasts Busted Pilot, about what’s new in television, and Series Business, a chat with the creator of a new program, and writes the column “The Watchman.” He joined B+C in 2005. His journalism has also appeared in The New York Times, The Philadelphia Inquirer, Playboy and New York magazine.