Following in the footsteps of other networks groups like Fox, CBS has struck a digital media deal with the CBS affiliate board which frees up the network in making other digital media deals. Affiliates will get anywhere from 12.5 percent to 25 percent of advertising revenue or consumer transaction fees for digital programming within the new deal.
The previous agreement was deemed to generous, as affiliates received as much as 50 percent of this revenue, and prevented CBS from making wide-ranging media deals. Under the new agreement, which still needs approval of the entire affiliates station group, affiliates could actually get more revenue since they will receive a “bounty” for Internet user traffic they deliver to CBS-owned Internet sites. This is intended to encourage stations to use on-air time to support CBS-related Internet activities.
Bill Carroll, VP and Director of Programming for Katz Television Group noted that the digital media deal is not disadvantageous to the affiliates. “For CBS to succeed in these new areas, it needs to have the affiliates promote them. What’s your motivation to promote? A share in the revenue,” he stated to Media Daily News. “But no one knows exactly what it is going to be.”
CBS already had an NFL cost-sharing agreement with its affiliates, which stations say gave it leverage. Under the new deal, the NFL agreement is extended for three years.