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'In Tension'

NAB TV Board Vows It Will Put Broadcast Advocacy Over Network Members' Streaming Businesses

The NAB Television Board of Directors promised in a policy statement Wednesday to prioritize local broadcasters' interests in NAB’s advocacy, “including on those issues that may be in tension with other NAB member business interests." This was a veiled reference to the networks and their streaming businesses, numerous attorneys and broadcasters told us. The policy statement is widely seen as a reaction to growing conflict between broadcast affiliates and their network partners over content and issues such as virtual MVPD regulation.

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While certain NAB members may have additional media interests, this trade association’s mission is to protect consumer access to the trusted news and content broadcast stations provide to local communities, Nexstar CEO Perry Sook, the NAB Joint Board's chair, said in the release. “This association must be focused on fighting for policies to enable the indispensable and trusted programming that broadcasters deliver to their viewers and listeners every day,” NAB CEO Curtis LeGeyt said.

The NAB TV Board includes representatives from Fox, Disney, Paramount and NBCUniversal, and the on the policy statement wasn’t unanimous, a network official told us. In discussion for weeks, the statement was released Wednesday after NAB’s board meeting earlier this week, attorneys told us. Industry officials on the broadcast and network side said there are rumblings that the networks could eventually leave NAB over the growing conflicts between the streaming and broadcast interests. With streaming services becoming increasingly important, it's not difficult to see more conflicts arising, attorneys on both sides told us.

An NAB board member told us the policy statement isn't intended to pit the trade group against its network members but to provide a clear directive to NAB's policy staff when there's a conflict between the interests of local broadcasters and those of a nonbroadcast business. There are other advocacy groups for streaming businesses. NAB was created to advocate for broadcasting, the board member said.

NAB's focus has always been on protecting viewers’ access to local broadcasting, yet due to the rapidly changing environment, we have increasingly been called upon to advocate for the business interests of members beyond this core medium,” the policy statement said. “Conflicts among these competing aims have led us to reaffirm NAB’s central purpose and primary mission: to protect consumers’ access to live and local broadcast stations.” A network official disputed that NAB was asked to advocate for business interests outside broadcasting. The trade group has never been asked to advocate for networks' nonbroadcast businesses, such as Peacock or ESPN, the network official said.

Industry officials pointed to NAB’s policy position on virtual MVPDs as a central point of conflict between the trade groups’ networks and affiliates. However, they also cited network direct-to-consumer offerings and streaming-exclusive sporting events as other areas of disagreement. NAB has pushed for the FCC to seek further comment on reclassifying linear streaming services as MVPDs but stopped short of calling for the outright reclassification. Broadcasters such as Sook and Sinclair CEO Chris Ripley have gone much further. “There is no difference between YouTube TV and Comcast,” Ripley said Tuesday. Ripley and other broadcasters are dissatisfied with the compensation they receive from streamers retransmitting their content and say that under the current framework, the networks negotiate that compensation without affiliate input. Meanwhile, the NBC-owned Peacock, Paramount Plus, Disney and other streamers formed the advocacy group Streaming Innovation Alliance last year to oppose the reopening of the docket. FCC Chairwoman Jessica Rosenworcel has said repeatedly the FCC lacks authority to reclassify virtual MVPDs, and the agency isn’t expected to act on the matter any time soon.

Negotiations between broadcast affiliates and networks over affiliation agreements and streaming rights are also points of conflict, broadcasters have said. Peacock announced in March an exclusive NFL game. On Tuesday, Ripley called for government scrutiny of streaming exclusive sporting events. In earnings calls, Gray and Nexstar executives have said that the amount of money they are willing to pay for content is based on its exclusivity. That exclusivity is undercut when programs that a broadcast affiliate airs are also available on-demand from a network-owned streaming service. In May, Disney CEO Bob Iger said Disney would reduce content spending, but a broadcast attorney told us that isn’t expected to lead to lower payments to ABC from its affiliates.

The networks have left NAB before, over disagreements around the national ownership cap in the late 1990s and early 2000s. By 2010, when Gordon Smith headed NAB, they returned. The networks pay dues to the trade group based on their owned broadcast stations, like other members, and an additional fee based on their network status, making them out-sized contributors to the association’s war chest. Along with reducing NAB’s funding, the networks' departure would be a blow to the association’s influence, industry officials told us.

This is about NAB doubling down on what is important for consumers by being a fierce advocate for local broadcasters in Washington, D.C.,” said Gray Television Chief Legal and Development Officer Kevin Latek. “The policy statement is a reaffirmation of the association’s unwavering commitment to local journalism and ensuring that local broadcasters’ voices are heard by policymakers in Washington,” he added.