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Plan Plays Well With Affiliates

NBC affiliates have complained of NBC's using their air to cross-promote its cable interests, and they remain concerned about the broadcast net's programming priority within a massive new conglomerate full of distribution channels. But several affiliate executives approve of NBC's plan to extend its media reach with its Vivendi deal.

Roger Ogden, who runs KUSA(TV) Denver and is a senior vice president at Gannett, the largest NBC affiliate group, said it is too soon to expect NBC to lay out the structure and specifics but it is reasonable for affiliates to wonder "whether or not we lose position in the scheme. If NBC develops other sources of distribution, what priority does the network have for these cable networks? NBC still has a vested interest in stations, as it owns stations in several top markets. But as you begin to develop revenue streams that are subscription-driven, those economics can change pretty quickly."

For programming, though, Ogden acknowledges that "NBC needs to have this kind of arrangement. And we want to be with a network that has the possibility of acquiring programming in a variety of ways."

Hearst-Argyle chief David Barrett would not comment on the deal. His company is not only the No. 2 NBC affiliate group but also shares programming interests with NBC as a 20% partner in a production and syndication unit, NBC/Hearst-Argyle Syndication LLC, within NBC Enterprises. And both Hearst and Gannett are partners with NBC's station group in a syndicated development and distribution alliance formed in 2000.

"They did this for strategic reasons," said Jim Keelor, president of Liberty Corp., which has nine NBC affiliates, "and we don't know all their strategic reasons. But I think that NBC, despite the disagreements, has always been the best network at sitting down with and putting all their cards on the table with affiliates, and I think they will do that with this deal."

Sources also suggested that the deal could also encourage NBC in pursuing a second on-air network using Paxson stations, which have clearly been fading with their own network programming, and late-prime time newscasts supplied by the market's NBC owned or affiliated station. NBC currently owns a third of Paxson, and numerous Paxson stations are already involved in some sort of operating or sales agreement with local NBC affiliates, which are invariably the No. 1 or 2 station in their markets. NBC had no comment.