Exhibit 10.2
June 30, 1999
Patrick Scott
President & CEO
Fisher Broadcasting Inc.
100 Fourth Avenue N.
Seattle, WA 98109
Re: KOMO/Seattle, WA
Dear Pat:
If approved by your station, this document will constitute a side letter
amendment to the existing affiliation agreement between American Broadcasting
Companies, Inc. (hereinafter, "ABC" or "Network") and your station (hereinafter,
the "Amendment"). ABC reserves the right to terminate this Amendment if
comparable side letter amendments have not been accepted by non-owned ABC-
affiliated stations representing 66% coverage of the country by July 16, 1999.
I. INVENTORY SWAP/NFL CONTRIBUTION
A. 8 Additional Primetime Spots per Week to Your Station from Network:
1. 2 "A" program spots per week
2. 4 "B" program spots per week
3. 2 "C" program spots per week
4. Dividing the Network's weekly primetime program schedule into
one-thirds, the "A" spots shall come from spots appearing in the
top rated one-third, the "B" spots shall come from spots
appearing in the middle rated one-third, and the "C" spots shall
come from spots in the lowest rated one-third of the Network's
primetime program schedule. The allocation and placement of the
spots will be made within 60 days prior to the start of each new
Network television season.
March 28, 2000
Page 2
B. To Network from Your Station
1. A total annual payment by your station of $936,204. This payment
will be made through an equal monthly reduction from your
station's Network compensation. The payment has been calculated
on the basis of the following methodology: A $45 million
aggregate annual payment by non-ABC-Owned Stations through
monthly deduction from Network compensation, and to the extent
there is inadequate Network compensation to cover the payment,
through equal monthly payments. The amount of payment required of
each Station will be based upon the pro-rata percentage of the
station's market coverage of total U.S. television households
(excluding coverage by ABC-owned stations) which amounts to
74.888% The amount of the annual $45 million payment by non-owned
ABC stations will be reduced in proportion to any increase in the
present percentage of coverage of U.S. television households by
television stations owned or operated by ABC or its affiliated
companies. (E.g. if ABC's coverage were to increase to 30%, the
aggregate annual affiliate payment would be reduced to
$41,528,877.) If that were to happen, the amount of payment
required of your station would be reduced correspondingly.
2. 10 Children's spots per week.
C. Children's Clearances:
Your station shall maintain its current level and time period
scheduling of Children's clearances. ABC warrants that during the
three year term of the agreement, the Network will continue to provide
the quantity of educational and informational programming that
satisfies the FCC's Children's television rules (currently three hours
per week) and that Network-supplied commercial matter in all
Children's programming will not exceed FCC restrictions. ABC will
indemnify and hold your station harmless against any breach by the
Network of the Children's program and commercial content warranty.
D. Term:
The provisions of this Section I (Inventory Swap/NFL Contribution)
shall have a term of 3 years beginning August 1, 1999.
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E. Guarantees Against Dilution During the Term of the Inventory Swap/NFL
Contribution Plan:
1. The Network agrees that it will afford your station commercial
units of the same number and length and with substantially the
same placement as during the 1998-1999 Network television season.
The Network will also add the two (2) units per hour of inventory
for your station to auto racing, golf and horse racing as set out
in the body of Pat Fili's June 4, 1999 letter. (A copy of that
letter is attached).
2. Network agrees that apart from the program categories listed in
the body of Pat Fili's June 4, 1999 letter, and except as might
arise in the enforcement or negotiation of individual contracts,
Network will continue to offer your station the same cash
compensation currently offered.
3. Your station guarantees that it will maintain at least its
current level of clearance and time period scheduling of "The
View" and "Politically Incorrect" through July 31, 2000.
II. SOAP CHANNEL PARTICIPATION
A. Soap Channel Cable Service Revenue Sharing:
1. Your station, along with other affiliates accepting the terms set
forth herein (including ABC Owned Stations) will have an economic
participation in The Soap Channel Cable Service by receiving one
of the following annual distributions, whichever is greater:
a. $0.01/month per revenue-generating Soap Channel subscriber
in the affiliate's market.
b. 15% of total annual subscriber revenue generated in the
affiliate's market capped at $0.03 per revenue-generating
sub/month.
c. 10% of total subscriber revenue generated in the affiliate's
market, without a cap.
d. 15% of annual net profits generated in the affiliate's
market.
March 28, 2000
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2. The term "market" means your station's DMA. Revenues generated
in a DMA adjacent to that of an ABC affiliate but in which no ABC
affiliated station exists shall be credited to an ABC station or
stations outside that DMA based upon their respective viewing
shares in that DMA.
3. The term "cable service" includes the distribution of programming
by any video delivery system now known or hereafter devised,
including, but not limited to, television stations, satellite,
wireless, telephone and cable systems.
4. The terms "revenue-generating Soap Channel subscriber" and
"subscriber revenue" mean the subscriber fee paid by the cable
service, without regard to launch fees.
5. The term "net profits" (as used in this section) means gross
revenue less any costs incurred by The Soap Channel cable
service, subject to independent audit.
6. The term "Soap Channel Cable Service" means that programming
service that was announced by ABC on April 8, 1999. If that
service is partially owned by ABC or is merged with the Soap
Channel announced by Sony, the affiliate participation in annual
net profits as set out in paragraph II. A.(l)(d) will be diluted
in the same proportion as ABC's interest in the service.
Affiliate participation under the formula set out in paragraph
II. A. (1) (a)-(c) will not be subject to dilution or reduction.
B. Daytime Clearances:
Your station shall maintain current level and time period
scheduling of clearances for the following ABC Soaps: General
Hospital, All My Children, One Life To Live and Port Charles, or
for any replacement soap opera programming.
C. Exclusivity:
ABC has immediate repurposing rights for its soaps for the
purposes and as provided in this section II for the term stated
in paragraph D below.
March 28, 2000
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D. Term
1. The term of the provisions of Section II of this Amendment shall
be for the duration of your station's ABC affiliation agreement.
2. The same terms of Soap Channel Participation will apply during
the term of the renewal of current affiliation agreements.
III. EXCLUSIVITY
A. Entertainment:
1. Series: ABC will not repurpose any Primetime Entertainment
series episode within 180 days of the end of its original airing
on the Network or the expiration of that television season
(Sept.-Sept.), whichever is earlier. (In no event will ABC
repurpose any such series episode within 90 days of the end of
its original airing on the Network.)
2. Made for TV Movies, Mini-Series and Specials: ABC will not
repurpose within 60 days of the end of original airing on the
Network.
3. Awards Shows and other timely Specials: ABC will not repurpose
within 48 hours of the end of original airing on the Network.
4. ABC will not promote the repurposed Entertainment programming
prior to its original airing on the Network. ABC will obtain
contractual commitments from licensees imposing the same
promotion limitations, but ABC will have no liability to
affiliates in the event of a breach by such licensee.
5. The above notwithstanding, ABC will be free to repurpose up to
25% of the Primetime Entertainment schedule without any
restrictions.
B. Sports:
1. Programs: ABC will not repurpose any Sports program in its
entirety within 48 hours of the end of its original airing on the
Network.
March 28, 2000
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2. Excerpts: ABC will not repurpose excerpts (defined as 40% or
less) of any Sports program within 4 hours of the end of its
original airing on the Network.
3. Highlights: ABC will continue to be free to use highlights drawn
from any Sports program anytime after its original airing on the
Network. The term "highlight" is defined by reference to custom
and practice within the broadcast industry.
C. News:
1. ABC has immediate and unrestricted repurposing rights for
breaking news coverage unless it has preempted Network
programming for such coverage in which case it will have
unrestricted repurposing rights immediately following the
preemption of Network programming for such coverage.
2. ABC will not repurpose any "hard" News program (e.g., WNT &
Nightline) within 4 hours of the end of its original airing on
the Network, and any timely News program (e.g., GMA) within 2
hours of the end of its original airing on the Network. Upon
request by ABC, affiliates will not repurpose in the same time
period in which ABC is airing "hard" News any News program
content that has been provided by ABC.
3. ABC will not repurpose any "soft" News program (e.g.,
Newsmagazines) in its entirety within 60 days of the end of its
original airing on the Network. ABC may repurpose excerpts of
any Newsmagazine program within 60 days after the end of its
original airing on the Network if the new program does not
contain more than 50% of any one original Newsmagazine program
and the original Newsmagazine program titles are not used unless
modified (e.g., "Best of 20/20").
4. Politically Incorrect: ABC will not repurpose within 4 hours of
the end of its original airing on the Network.
D. Daytime:
1. ABC has immediate and unrestricted repurposing right for its
soaps as provided for herein. ABC will limit its repurposing of
its soaps to the Soap Channel Cable Service unless and until the
launch of such channel fails. In the event that ABC repurposes
its soaps apart from
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the Soap Channel Cable Service, your station will be entitled to
an economic participation from such repurposing by receiving an
annual distribution based on 15% of annual net profits generated
by such repurposing in your station's market. For the purposes of
this paragraph only "net profits" means gross revenue less any
direct out of pocket costs incurred by ABC in repurposing its
soaps. The term "direct out of pocket costs'' means amounts paid
by ABC to third parties specifically and solely for the
repurposing of the soap operas (e.g., third party participations,
residuals, rights clearance costs and the like). The term
excludes amounts paid to Disney/ABC, any of their respective
subsidiaries or any of their employees, save residuals or third
party participations that may be owed to such employees. The
calculation of net profits as set out in this paragraph will be
subject to independent audit. The provision of this paragraph
related to ABC's repurposing soaps apart from a Soap Channel
Cable Service and the right of your station to an economic
participation in such repurposing shall be subject to the term
limitations set out in paragraph E below.
2. ABC will not repurpose The View or any replacement programming
referenced in paragraph II.B above that is not a soap opera
within 4 hours of the end of its original airing on the Network.
E. Term:
The term of the provisions of this Section III shall be
coterminous with the term of Section I (the Inventory Swap/NFL
Contribution Plan) of this Amendment.
IV. FURTHER FLEXIBILITY
The parties recognize that ABC may wish to repurpose certain programming in
a manner that is at variance with the limitations set forth above. Your
station authorizes the Network's Affiliate Board to act fully on your
behalf to accept or reject ABC's requests for such a variance and agrees
that neither the Affiliate Board nor those acting on its behalf will be
liable to you for the decisions it makes to accept or reject a variance.
The Affiliate Board will be required to meet with ABC promptly upon
receiving a request for such a variance, and will not act unreasonably in
withholding its approval.
March 28, 2000
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V. MISCELLANEOUS
1. The geographical scope of exclusivity shall be your station's DMA or
any lesser area as may be required by the FCC under existing rules.
2. The exclusivity provisions prohibit repurposing by any video delivery
system now known or hereafter devised, including, but not limited to,
television stations, satellite, wireless, telephone and cable systems.
3. The prohibition against and the contractual provisions restricting the
pre-promotion of Entertainment programming (as set out in paragraph
III.A (4)) apply as well to all other program classifications, e.g.,
news and sports.
4. If comparable side letter amendments are accepted by the requisite
number of affiliates, then as to those accepting affiliates ABC agrees
not to implement before August 1, 2002 any of the measures outlined in
the attachment to Pat Fili's June 4, 1999 letter entitled "1999-2000
Season Format Adjustments", except the compensation reduction outlined
in the body of that letter which will be implemented as to all
affiliates. With respect to any affiliates who do not accept such a
comparable side letter agreement, ABC reserves all of its rights
including the measures outlined in the attachment to the letter.
5. If ABC should desire to program or create a channel that is designed
to repurpose a significant portion of any class of ABC Network
programming that involves the creation of an asset, ABC agrees to
enter into good faith negotiations about affiliate financial
participation in such asset but ABC shall be under no legally
enforceable obligation to come to agreement with affiliates about any
such participation.
6. In the event that your station's existing affiliation agreement
imposes greater clearance obligations than set forth herein, those
clearance obligations will continue to apply.
7. The provisions of your station's existing affiliation agreement
relating to the application of FCC rules to clearance commitments will
continue to apply.
8. This Amendment shall be governed by New York Law.
If your station wishes to agree to the Amendment, please execute the
enclosed copy of this letter in the space provided below and return it to me
before July 16, 1999.
Very truly yours,
John L. Rouse
Senior Vice President
Affiliate Relations
Accepted and Agreed To:
KOMO/Seattle, WA
By: ____________________________
Title: _________________________
Dated: _________________________