CBS, Westinghouse Agree on Broad TV Station Partnership
NEW YORK (AP) _ CBS Inc. has reached a wide-ranging agreement with Westinghouse Broadcasting Co. that gives its CBS Television Network long-term station affiliation deals in five big-city markets.
The deal announced Thursday also calls for CBS and Westinghouse to set up separate joint ventures that will buy more stations, produce syndicated programs and sell advertising that will run on their local stations.
The deal comes only a day after CBS gave up on its planned merger with QVC Inc. in response to a rival bid for the cable shopping channel operator.
The pact between CBS and Westinghouse is different than the merger CBS had planned with QVC because CBS and Westinghouse are only forming limited ventures while remaining independent. CBS and Westinghouse officials said their deal would have proceeded no matter what happened to the CBS-QVC discussions.
They said they reached the agreement to help both companies expand programming and distribution capabilities.
Financial terms were not disclosed. Westinghouse has talked for about two months with both NBC and CBS about this type of deal.
CBS chairman Laurence A. Tisch said it ″demonstrates our commitment to the network-affiliate system and our firm belief on the future of broadcasting.″
Jonathan Klein, president of Group W Television, said Westinghouse picked CBS over NBC because CBS appeared more enthusiastic about all aspects of the deal. ″It wasn’t a question of money,″ he said.
Westinghouse agreed to sign 10-year affiliation deals for all five of its Group W stations with CBS. Its stations in San Francisco and Pittsburgh are already CBS affilaites. But it will switch the affiliations of its stations in Boston, Philadelphia and Baltimore to CBS as part of the new agreement.
Group W’s Boston and Philadelphia stations - WBZ and KYW - are currently NBC affiliates; its Baltimore station WJZ was aligned with ABC.
CBS said it agreed as part of the deal to sell or trade its station in Philadelphia, WCAU, because Westinghouse already owns KYW there.
WCAU has historic significance for CBS, however, as it was the first CBS affiliate when the network was formed in 1948.
Westinghouse will contribute KYW to the station-buying venture with CBS, and will have controlling interest in it.
CBS will contribute what it gets for the sale or trade of WCAU to the venture as well and gets a minority stake.
Westinghouse gets control of the station-buying venture, according to CBS TV Network president Peter Lund, because the government says no one company can own stations reaching more than 25 percent of the United States.
CBS is already near that limit at about 20 percent coverage for its six stations other than WCAU, while Westinghouse’s stations reach only 9.8 percent of the country, leaving plenty of room for adding more stations.
The alliance is important to CBS because it assures the network that its programs will be cleared in at least 30 percent of the country at a time when affiliation deals are coming under attack.
CBS was stunned when it recently lost eight key affiliates to the growing Fox network.
The program venture, whose ownership will be evenly divided, won’t go into operation until rules barring the networks from selling reruns of programs they create are lifted. That is expected to happen late next year.
Westinghouse’s production business has created syndication hits such as ″The Mike Douglas Show″ and ″Vickie.″
Lund said the production venture will make shows for sale to individual stations, not for the CBS TV network.
The ad sales venture will also work for the stations, not the network, he said.