6 World VIDEOAGE December 2023 (Continued from Page 4) ued at $35 billion. In 2006, the two companies split, then merged again in 2019 with a deal valued at $15.4 billion. Wells Fargo Bank analyst Steven Cahall valued ABC and Disney’s eight owned affiliate networks at about $4.5 billion. Disney would sell ABC’s local TV stations, but keep the network operation. In this case the studio would be losing retrans fees from cable operators, but still getting revenue from affiliates, plus ad time inventory for national TV sports, while affiliates would be getting the network’s programming. Years ago the payees were the networks, but they stopped paying the affiliates in the late ’80s/early ’90s, when local TV stations were at their peak in generating their own significant revenues. Before that, most TV stations got network compensation in major- and medium-sized markets, and that compensation was also dependent on how dominant the smaller market stations performed from a ratings standpoint. Nowadays, to broadcast national TV shows, the affiliates pay the networks compensation for programming (also called network affiliate fees, or reverse compensation), or at the most have a revenue-sharing arrangement. Local TV stations generate revenue by selling airtime and getting retrans fees from cable TV and satellite TV services. The affiliate system was born with the creation of the TV networks in 1946 since the networks needed local TV stations to cover the U.S. In the beginning, the networks provided affiliates with morning, afternoon, and evening programming (about 60 percent of the schedules). In addition, the networks paid the affiliates and gave them airtime during the networks’ shows to sell locally. Back in September, the Irving, Texas-based Nexstar Media Group and Byron Allen’s Los Angeles-based Allen Media Group were said to be interested in buying Disney’s local ABC TV stations... whenever the studio was ready to sell them, that is. Now, a new question arises: Will Paramount sell its CBS TV network... again? ABC has 240 local TV stations as affiliates, of which eight are owned and operated (O&O) by Disney, and are in key markets such as New York City, Los Angeles, Chicago, and San Francisco. In 1995, Disney acquired ABC for $19 billion, which included the network, ABC’s O&O local TV stations, and the affiliate-relation contracts. CBS also owns eight local TV stations in top TV markets that include Miami and Atlanta. Viacom merged with CBS first in 1999 in a deal valThe Changing Business of U.S. TV Affiliates Approx. 50 x 45’ Drama, Fantasy
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