When Fox set all this affiliate switching in motion by stealing a dozen affiliates away from CBS, ABC and NBC, an unforeseen outcome was that it also greatly inflated the value of local television stations.
Suddenly, a lot of stations became a sought-after commodity instead of white elephants."It's greatly enhanced the value of local stations, no doubt about that," Rupert Murdoch, Fox's chairman and CEO, recently told television critics. "You know the price of stations in the last 12 months has gone up unbelievably. Stations were changing hands, even in big markets, for seven or eight times (their) earnings a year ago.
"Not only have their earnings gone up greatly, but they're now changing hands at 11 or 12 times (their earnings) so that their values have actually doubled."
That's not just a national phenomenon, but a local one. Reportedly, KUTV-Ch. 2 - which is on the block - will be sold for somewhere in the neighborhood of $70 million. That's considerably more than the station would have brought a year ago - perhaps double, according to some local analysts.
There has been no official word on who will end up owning KUTV, but the reported front-runner is Paul Hughes, who heads the investment group that currently controls the station.
It had also been reported that the station's former owners, the Hatch family - who now have only a minority interest in the company that owns both KUTV and a station in Rochester, N.Y. - had attempted to put together some sort of deal in which they could regain control of Ch. 2. But a $70 million price tag would put it out of their reach.
Even Larry H. Miller's purchase of KJZZ-Ch. 14 - a station that has never shown a profit - is looking like a great investment in the current climate. If he wanted to, Miller could undoubtedly turn around and sell the station and pocket several million dollars in profits.
(The real loser there is Ch. 14's previous owner, American Stores, which sold to Miller when television station prices had hit rock bottom.)
Stay tuned . . .
CHANNEL CHURN: The affiliate swapping has yet to hit Utah - and there are no immediate indications it will - but it's at least possible that it could hit a Utah company right where it lives.
While this is all still in the rumor stage, it's at least within the realm of possibility that Utah's Bonneville Corp. - the owners of KSL-Ch. 5 - could lose their CBS affiliation with the company's other television station, KIRO in Seattle.
To understand the possibilities requires a little background. In the wake of losing eight affiliates to Fox, CBS signed a deal with Westinghouse's Group W, which owns five stations in major markets. Two of those (Philadelphia and Boston) are switching from NBC to CBS; one (Baltimore) from ABC to CBS.
In addition, an operation that is 51 percent owned by Group W and 49 percent owned by CBS is looking for other stations to buy and switch to CBS affiliations.
There have been numerous reports that this Group W-controlled group is interested in Gaylord Broadcasting's stations - and one of those stations is in Seattle. If Group W were to buy Gaylord, the Seattle station (currently a Fox affiliate) would switch to CBS - and Bonneville's KIRO would be left without an affiliation.
(Try to imagine for a moment a Bonneville-owned station affiliating with Fox. Ummm . . . not going to happen.)
And the value of a station that has no network affiliation drops dramatically.
Once again, none of this has gone beyond the discussion stage. CBS itself had expressed some interest in Gaylord before the Group W deal, but dropped the matter. However, Group W has reportedly revived that interest.
(To make matters even more complicated, what Group W/CBS is really interested in is Gaylord's station in Dallas, where CBS is losing its affiliate to Fox.)
A local analogy to the situation in Seattle would be if Group W were to buy KUTV-Ch. 2 and switch that station's affiliation from NBC to CBS.
Hey, that's sort of an interesting idea . . .
WHAT IS QUALITY? Barney Rosenzwieg, who produced "Christy," "The Trials of Rosie O'Neill" and "Cagney & Lacey," is no longer a big fan of the Viewers for Quality Television, the independent group of TV fans who fight to support quality programming.
Which is rather ironic, because VQT grew out of a letter-writing campaign that saved "Cagney & Lacey" when CBS canceled it early in its run.
"We had a bit of a falling out with the Viewers for Quality Television during `Rosie O'Neill' when (VQT founder and president) Dorothy Swanson was quoted quite frequently in some of the major press as criticizing Sharon Gless' hairdo on the show," Rosenzwieg said. "And I thought that was really irresponsible. I mean, it's either a quality show or it's not a quality show. And that isn't based on somebody's hairstyle."
(Rosenzweig, by the way, married Gless just as "Rosie O'Neill" was going into production.)
The end result of this falling out is that Rosenzweig - whom VQT once called its founding father - has not been invited to the group's 10th anniversary convention later this summer.
MIXED EMOTIONS: Viacom, which owns Showtime, just completed its takeover of Paramount. But old contracts leave the Showtime and Paramount in the rather interesting position of competing with each other.
Paramount is in the midst of a longterm contract to provide its movies to Showtime's biggest rival, Home Box Office.
"Which is fine, because frankly, we couldn't absorb that quantity of movies today," said Matthew C. Blank, Showtime's president and chief operating officer. "So we find ourselves in the sort of funny position of rooting for Paramount movies when they open because of the potential impact on our stock price . . . but rooting against them because if they're very successful they'll be great for HBO."