Affiliate vs. O&O

In the Executive Summary of Networks, an affiliate is a local TV station that carries network programming from their partnered network. Simply it’s like a burger joint franchise; the chain would take some of the revenues; and the local owner would take a stake. Prior to the year 2000, networks would pay back to affiliates if they carried most of their programming. The number would be under a million to several million. According to WGBH’s Emily Rooney, from Beat the Press WHDH-TV in Boston was receiving over $4 million prior to NBC severing the generation long affiliation agreement to move to an owned-and-operated signal in 2017. This was reversed with most stations more than 20 years ago; and this method was called reversed-compensation where affiliates would pay the network. And instead of a network paying millions, the local stations would pay the network. As a result local stations had been consolidating. The ol FCC rule of a maximum of either 21 stations or 21% of the country’s reach had since become outdated.

The Stations The Network Owns

The Walt Disney Company only owns 8 stations through the ownership of ABC.  NBC owns more than a dozen with NBC affiliations, and slightly more with Telemundo. CBS owns nearly 20, and Fox owns 20 major stations with secondary stations in some of their markets. Back in the day, prior to the mid 1980s, networks had to be careful where to own… there was an incentive

Owned-and-operated (or O&Os) are stations that are owned explicitly by the networks are exclusive stations. These stations have direct access to the network’s resources. The networks also do not have to split advertising revenues, and as a result this is direct revenue to the holding company. Sometimes the evening news anchor will promote personally to the anchors on camera on a 5:00 newscasts.

Markets

O&Os were in the common 3 big TV cities such as New York, Chicago and Los Angeles. For ABC, they owned Detroit (yes, WXYZ was owned by ABC), San Francisco, etc. After GE’s acquisition of NBC, GE owned a couple stations, one was KCNC (once known as KOA-TV) in Denver; and CBS owned mostly radio stations, as CBS was first radio network, and owned mostly all-news stations on the AM band, and rock stations on the FM band. In 1985, when all networks had been consolidated by other companies, the networks added stations, or dropped some to meet FCC requirements. In short all 3 networks added more local stations.

Fox

In 1985, an Australian newspaper man, named Rupert Murdoch, owner of News Corporation made media splash that he was going to by the Fox movie Studios and Metromedia, the company with remains of the ol DuPont Network’s ol O&Os. As a result buying Metromedia and Fox would help build a Fox network. A network that would only be on a couple nights a week, for a couple hours without no network news. The deals went through by 1986, and by the fall of 1986, Fox O&Os started to brand themselves such as “Fox Channel 5 in New York” or “Fox News” in Los Angeles. The Fox Network itself didn’t sign on till April 5th, of the following year. Fox was one of the first networks that recommended using Fox-channel number as a primary brand. Some of the biggest affiliates such as Miami’s WSVN and San Francisco’s KTVU did not comply with the branding, and dragged their feet. Both stations had strong news departments with high ratings that clobbered even the Big 3 stations; and drew lucrative revenue, and it wasn’t until 2015 that KTVU would get Fox branding, as Fox got the station by trading the Boston and Memphis O&Os from Cox Media Group the year before.

Branding Controversies

And since the mid 1990s, the networks are branded with their initials and channel numbers. Though not every station followed this, because in some markets like Channel 7 Eyewitness News in New York had such institutional and local reception; that the ABC 7 branding seemed too promotional of anything outside of local news. While KNBC in Los Angeles had promoted the removal of “K” in “KNBC” in 1995; it took many, many years of any explicit branding of “NBC4”; since the Channel 4 News had been a local news branding for them for a decade and was in a safe 2nd place. It wasn’t till the late 00s, where The NBC 4 News was nudged in the Southland.

O&Os Today, Tomorrow and the Future

O&Os are like many chains today, often running the same program across the markets to save on costs. Most often on the “flagship” markets, The Drew Barrymore Show will be seen mostly on CBS O&Os, unless you live in a market where Nexstar owns a Fox affiliate where those stations would carry the show for most of their affiliates. For many years Rachel Ray was well known in the big cities on CBS O&Os but since the NBC O&O in Boston was struggling to get content; they snatched her program away from the competing CBS O&O, WBZ-TV. ABC and NBC have outsourced master control (the control room where they push the button switching from commercials, to network, to local) to third party companies in a city many miles away. In short, they are really just having a remote-access back to the station, like a fancier Remote Desktop access since content is stored in servers. NBC for a while before HD would pipe in all content from 30 Rock to their 13 stations, which used exclusive resources from 30 Rock in Manhattan to the local O&O’s transmitter. When things went to files from tapes and SD to HD, this was scrapped.

CBS carved out extra space at KCNC and since 2018 has controlled their stations remotely from a handful of people in Denver. Fox controls their O&Os from a facility in Las Vegas, but the local affiliate is not an O&O, but owned by Meredith.

In 2011, a completely unverified report by the New York Post claimed that Disney was exploring to sell their 8 O&Os, something that Disney denied nor ever showed any public interest in purging. Rumors spread after the ViacomCBS deal in 2018, the whole idea of buying CBS was their primetime show collection Viacom could hoard just like all the great stuff they don’t air anymore on their MTV Networks portfolio.

This meant by 2019, reports of ViacomCBS selling CBS’s Black Rock headquarters, the CBS Broadcast Center, the TV production facility; and CBS Television City, in the Southland, not to mention the Hollywood studios of CBS Studio City would be owned by some REIT institution; in a similar vein Viacom did to the MTV division, own content, not studios or get involved in production. This could mean CBS 2 in New York, Chicago and Los Angeles could over the next few years be owned by completely different companies and do whatever they want