NERW Extra: Deep Inside the Boston TV War

By SCOTT FYBUSH

These are extraordinary times in the world of local TV, and nowhere more so than in Boston. Over the last few weeks (including a NERW Extra last week that broke the news that NBC was officially planning to cut ties with longtime affiliate WHDH), we’ve touched on bits and pieces of the very complicated relationship between NBC and WHDH. In today’s NERW Extra, we offer some background on how we got here – and, for subscribers, we dive deep into some well-informed speculation about what the next chapters in this story will look like and where you’ll see “Superstore” in Stoneham and Swampscott next January.

1948: TV comes to Boston, NBC is settled (for perhaps the last time!) When TV screens began lighting up around the country in the late 1940s, NBC was by far the dominant player. In most markets with just one or two stations, NBC quickly linked up with the first station in town, often drawing on 20-plus years of affiliation with dominant radio stations to get the connection to their new TV sisters. So it was in Boston, where Westinghouse’s WBZ (1030) was the NBC radio outlet and its new WBZ-TV (Channel 4) almost automatically signed on as the NBC-TV affiliate. So far, so good…

1956: Westinghouse feels its independence. Before there was “Group W,” there was “WBC,” the Westinghouse Broadcasting Company’s branding in the late 1950s, when it began to try to pull away from its network ties. After NBC forced Westinghouse to swap its lucrative Philadelphia TV and radio signals for NBC’s smaller TV and radio operation in Cleveland, WBC started to form a quasi-fourth network, establishing its own news bureaus, dropping radio network affiliations at WBZ and other stations, and increasingly pre-empting network TV offerings for its own local programming. (Westinghouse also went to court against NBC and eventually, in 1965, won its Philadelphia stations back.)

1960: NBC makes its first move on channel 7. Long before Ed Ansin and WHDH, NBC wanted to own its own Boston station – and 55 years ago, it almost got one. NBC worked out a deal to swap its Washington stations, WRC radio and TV, to RKO in exchange for RKO’s Boston stations, WNAC radio and TV. WNAC-TV (Channel 7) was then a CBS affiliate, and it’s likely WBZ-TV would have gone to CBS had this deal been consummated. But NBC’s earlier Westinghouse issue was being litigated at the time, which put a big obstacle in the path of FCC approval of the swap. Both sides eventually gave up on the swap, NBC kept Washington (and still owns WRC-TV to this day), and in Boston NBC stayed put on WBZ-TV, pre-emptions and all, for 35 more years.

1987: NBC makes a Miami move. Meanwhile in Miami, NBC spent 30 years struggling with another difficult affiliate, WSVN (Channel 7), owned by Ed Ansin’s Sunbeam Television. When the FCC raised the ownership limits for TV markets in the mid-1980s, NBC jumped at the chance to buy its own Miami signal, and in 1987 it acquired CBS affiliate WTVJ (Channel 4). NBC tried to pull its affiliation away from Ansin right away, but Ansin’s legal challenges forced NBC to run WTVJ as a CBS affiliate until it could finally get its own affiliation at the start of 1989. At that point, Ansin flipped WSVN to Fox, filling former NBC network hours with a huge amount of local news in a new, flashy tabloid style.

1995: Ansin and NBC, unhappy together again. When Westinghouse partnered up with CBS in 1994 to buy more TV stations together, part of the very complex deal involved flipping Westinghouse’s non-CBS affiliates (including WBZ-TV) to CBS. (Later in the year, the partnership turned into an outright purchase of CBS by Westinghouse, which then renamed itself “CBS.”)

In Boston, the deal left NBC looking for a new affiliation to replace WBZ-TV after 47 years together, with just a few months to figure out where to go. The obvious answer was also, in some ways, the least desirable: just a few years earlier, Ansin had purchased Boston’s existing CBS affiliate, WHDH-TV (Channel 7), from supermarket mogul David Mugar. While Ansin’s WHDH-TV was getting a ratings boost from the same sort of tabloid news WSVN was doing in Miami, an NBC affiliation with “7 News” meant once again dealing with Ansin and his adversarial relationship to his networks. (As a CBS affiliate, WHDH carried its own local morning newscast instead of CBS’ morning news, for instance.)

But with WBZ going to CBS and Hearst’s WCVB closely tied to ABC, the remaining options were even less attractive. Fox affiliate WFXT (Channel 25) didn’t have a local news operation at the time (and was soon sold to Fox itself, after Fox turned down the chance to affiliate with WHDH). There was no local news at independents WSBK (Channel 38) or WABU (Channel 68), either. Tribune-owned indie WLVI (Channel 56) was also ruled out – and so NBC ended up back with Ansin on WHDH.

2002: NBC buys in the market. Without much fanfare, NBC used a right-of-first-refusal clause to pick up WPXB (Channel 60) up in New Hampshire from Lowell Paxson, paying $26 million and turning the station into Telemundo affiliate WNEU.

2009: Leno? No thanks. After a relatively placid period between Ansin and NBC, tempers flared when NBC announced its plans to replace the 10 PM entertainment hour on weekdays with a new prime-time Jay Leno show. Ansin quickly declared WHDH wouldn’t run Leno at 10 and would put its own local news there instead. NBC made noises about pulling its affiliation from WHDH, starting the first rumors about an NBC move to WNEU. But Ansin backed down after a few tense days, agreeing to carry the Leno show in order to keep the NBC affiliation until the end of its contract at the end of 2016.

2013: NBC absorbs NECN. With Comcast’s purchase of NBC, local and regional Comcast-owned services became part of the NBC family. That included Comcast-owned New England Cable News, which fell under the NBC Owned Television Stations umbrella, giving NBC another piece of the puzzle – the local news backbone it would need to launch its own station in Boston. Rumors of the new “NBC Boston” began swirling in early 2015, picked up steam as some key faces began departing other stations in town without announcing new gigs, and then burst out last week when NBC made the official announcement that it will part ways with Ansin and WHDH when their contract expires at the end of 2016.

So that’s how we got where we are – but with the plans for the new “NBC Boston” still somewhat vague, what happens next? That’s where we go now, for the subscriber-only part of this NERW Extra…

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First things first: in an infinite-channel universe, does any of this even matter? Yes, and more than you might think. While local TV is no longer the “license to print money” that it once was in markets of any size, it’s still an important mass medium in a media landscape where it’s harder than ever to reach a mass audience that’s splintered into a million pieces. Whether it’s the NFL or the Oscars or even the Today Show or late night, advertisers looking to make a splash still turn to network TV to do it. In turn, the networks need to be able to provide near-universal coverage, especially in the biggest markets, and that includes Boston at number 10, where there are hundreds of millions of dollars of annual revenue at stake in local revenues, not to mention the role the Boston market plays in the network’s national revenues. For all the critical attention that a cable or streaming show might get, there are still many more lucrative eyeballs tuned in to “Superstore” than to “Orange is the New Black” or “Making a Murderer.”

Still don’t think old media matters? Just take one look at the Globe, which has been on the receiving end of a firehose of anger from subscribers who haven’t been getting their print copies reliably since the paper switched to a new distributor two weeks ago.

Can Ansin actually afford to lose NBC? The answer to this question has changed pretty dramatically in the generation since NBC pulled its affiliation away from Ansin’s other station, WSVN (Channel 7) in Miami. Back then, networks paid local stations to carry their shows and it was expensive to fill airtime locally. Today, networks increasingly expect local stations to pay them for network programming – and Ansin has done as much as any station owner to find ways to fill airtime inexpensively with hours upon hours of local news. What Ansin does stand to lose, if NBC really is gone for good, is the leverage to use access to NBC programming to win big per-subscriber carriage fees from satellite and cable companies. (And it’s significant, in that context, that the biggest multichannel provider in the Boston market is NBC owner Comcast…) If Ansin can now go to Dish or Verizon and ask for, say, 50 cents per subscriber per month because otherwise the Golden Globes and Sunday Night Football go away, how much less might WHDH be worth in retrans fees when its biggest offerings are 7 News at 10 and, perhaps, CW programming moved over from sister station WLVI?

And because this is 2016, there’s a huge new factor to take into account, too: whatever any given TV station is worth as a going business, it may have even greater value as a 6 MHz chunk of spectrum to be auctioned off to wireless companies. There’s a lot of risk involved in the decisions Ansin and other local TV owners are making right now. If the huge initial numbers being batted around by FCC analysts turn out to be true, there aren’t many stations in Boston worth as much as broadcasters as the hundreds of millions of dollars they could get by surrendering to the spectrum auction. But those eye-popping figures are very likely to go down, especially as more stations put spectrum in the pot. Assuming many of the smaller operators in town jump at the chance for an auction payout, it’s unlikely the auction will yield enough for a top-four station like WHDH to consider surrendering spectrum. (But its sister station WLVI is another matter entirely; it’s highly likely to be auction fodder.)

Bottom line: it’s still very much in Ansin’s interest to have WHDH remain affiliated with NBC.

So what about NBC – why does it think it can get by without WHDH? In fairness, we don’t yet know all the pieces of Comcast’s plan to reach viewers with its new “NBC Boston” plan – and perhaps Comcast doesn’t, either. What we know so far is that the new NBC Boston will be based on the signal of WNEU (Channel 60), the current Telemundo affiliate owned by NBC/Comcast and broadcasting from Mount Uncanoonuc near its city of license of Merrimack, N.H. That signal can’t be seen over the air in most of eastern Massachusetts, which means NBC would lose potentially 10-15% of its potential audience on day one. (And that Comcast would also lose however many millions of dollars it would have pocketed by putting WNEU’s spectrum in the auction, which was pretty close to inevitable before this all happened.) Comcast says it’s negotiating to make NBC Boston available over the air closer to Boston as well – but that will likely mean having to pay another owner to put NBC on a DTV subchannel or buying another signal, which won’t come cheap when the auction is out there boosting prices.

(There’s a rumor making the rounds this week, for instance, that NBC has an option to buy WBPX Channel 68, with a full-market Boston signal, from Ion Media.)

Even though “NBC Boston” will have universal cable and satellite coverage from day one – it’s going to get a prominent spot on Comcast’s systems, of course – audiences don’t automatically find their way to “new” stations right away, either, even if they can get them on their TVs. NBC ratings in the Boston market will inevitably slump somewhat, which will drag down NBC’s national numbers. And even with Comcast’s existing New England Cable News providing the backbone for a new NBC Boston local news operation, there are new expenses there that Comcast will have to shoulder in hopes of making its new offering competitive with the four established local news players in a town that’s never taken kindly to big changes on its TV dial.

In the long term, of course, NBC is betting that the end of its long battle with Ansin will make its Boston situation more stable – and once it does stabilize, that it’s better off being an owner in a top-10 market than dealing with an unhappy affiliate station.

So wouldn’t it make more sense for everyone if NBC just bought WHDH? Yes, of course – and not just because it would fulfill a quest NBC started way back in 1960, when it attempted to swap its WRC radio and TV in Washington to RKO in exchange for RKO’s WNAC radio and TV in Boston. (WNAC-TV was the distant ancestor of today’s WHDH-TV, in fact.) NBC would get to stay in its familiar home on the Boston dial, it would inherit WHDH’s built-in audience, it could still sell WNEU into the auction…and the octogenarian Ansin would walk away with a huge chunk of cash to make his remaining years as pleasant as they could possibly be.

The only issue, it seems, is price: from all accounts, Ansin and NBC are miles apart on how many millions of dollars it would take to put channel 7 in the Peacock’s hands at long last, and Ansin sees no downside, at least so far, in being stubborn about holding out for more than NBC wants to offer.

Is this it, then – will NBC really be moving to an obscure new home in less than a year? The best answer we can give here is a definitive “maybe.” There’s still a theory among some in the know that this past week’s announcement is one last attempt at calling Ansin’s bluff. If Ansin decides the value of his prized station will really be damaged by the departure of NBC, there’s surely an executive phone line open on an upper floor of 30 Rockefeller Plaza to restart a conversation about selling. The personnel NBC has already hired for NBC Boston could go to NECN or move to WHDH (or end up at a merged NECN/WHDH when the dust settles, for that matter.)

The next critical deadline may well be the start of the Summer Olympics in Rio: if NBC is really serious about launching a new Boston home, there’s no better way to draw viewers’ attention than a high-profile Olympics broadcast. Will Comcast pay off Ansin to get NBC away from him early?

Can NBC do all this legally? Ansin doesn’t think so, or at least that’s what he’s saying publicly. Whether or not Ansin truly believes he has a valid legal challenge to NBC’s decision to take its product elsewhere, he intends to cause Comcast some regulatory pain along the way. Ansin made noise last week about trying a public interest attack on the move, challenging Comcast on the potential loss of NBC service to over-the-air viewers in greater Boston if its programming moves exclusively to WNEU’s New Hampshire signal. NBC, of course, would contend that it has no legal obligation to make its programming universally available. Without much else in the way of weapons in his arsenal, though, why wouldn’t Ansin try to throw some legal hurdles in NBC’s path?

Is there any potential win here for Boston TV viewers? Not much. In a market that already has four strong local commercial TV news institutions (CBS-owned WBZ-TV, Hearst’s WCVB, Cox’s WFXT and Ansin’s WHDH), it’s hard to see much added value in a fifth newsroom that would be doing more of the same. Over-the-air viewers in New Hampshire would be able to see NBC more easily, but many others might have to start paying for cable or satellite if WNEU can’t find a way to be seen on a full-market signal in Massachusetts. And fans of “7 News” might have even more hours of Ansin-style news to fill their days.

Could NBC (or Ansin) partner up with anyone else in the market? It’s not entirely out of the question. CBS already has the maximum two TVs in the market (WBZ-TV and WSBK), but the other major players are solo for now. Would Hearst put NBC on the 5.2 of WCVB in exchange for a channel-sharing deal in New Hampshire that would allow Hearst’s WMUR to go into the spectrum auction? Or might either WCVB or Cox’s WFXT join forces with an independent WHDH to create an even bigger news player in the market? In the brave new world of local TV in the 2010s, anything is possible.

One more thing – did you really mean to imply that “Superstore” will still be on the NBC schedule a year from now? No, not really. But I do hope America Ferrara gets a better gig.

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