Disney may have averted a war over free speech by putting Jimmy Kimmel back on the air, but it still faces a battle against ABC affiliate owners Nexstar and Sinclair, which continue to preempt “Jimmy Kimmel Live!” indefinitely over his remarks about Charlie Kirk’s alleged assassin.
The standoff means Kimmel will remain dark in a significant number of markets. Sinclair owns nearly 40 ABC affiliates and Nexstar owns 23 ABC affiliate stations and partners with nine other stations. In total, there are around 250 ABC affiliate stations dispersed across the United States, with Disney owning eight of its own.
The conflict underscores the paradoxical nature of the affiliate owners, which are facing shrinking audiences and ad revenue thanks to cord cutting but also, thanks to consolidation, still reaching millions of households. In this case, Nexstar is throwing its weight around in a bid to get even larger through its planned acquisition of fellow affiliate owner Tegna, while Sinclair is taking a moral stand in line with its audiences’ generally conservative leanings.
This also marks the latest in a long history of standoffs between affiliate groups and programmers. But it isn’t Disney CEO Bob Iger’s first rodeo, as the executive sparred with conservative-leaning affiliate groups over shows like “NYPD Blue” and an episode of “Ellen” in which host Ellen DeGeneres came out as a lesbian in the 1990s.
In the era of Trump 2.0 and a fragmented media landscape, however, the stakes are much higher.
For Nexstar and Sinclair, whose revenue primarily comes from retransmission fees and advertising, they argue that the need for consolidation is key to their very survival. In comparison, Disney’s sources of revenue are much more diverse, spanning broadcast and cable, streaming, theatrical, theme parks, cruises and more — but it notably needs government approval for its pending acquisition of the NFL Network and Fubo-Hulu + Live TV merger.
Though some experts tell TheWrap that the economic consequences for the three companies is “negligible” in the short-term, others said Nexstar and Sinclair are risking potentially breaching their affiliate agreements and a removal of Disney’s programming longer-term in a worst-case scenario.
“With an older base of viewers who tend to be more conservative, Sinclair and Nexstar are trying to protect their advertising base while Disney has a younger, more diverse audience across its offerings,” Parks Associates Vice President of Research Jennifer Kent told TheWrap. “Time will tell if this particular content fight will impact viewership, but Sinclair and Nexstar have more to lose due to their precarious position in the market as the entertainment world shifts to streaming-first models.”
Representatives for Disney and Sinclair did not immediately return TheWrap’s request for comment on how long the standoff could last or how much the ABC affiliates generate for their bottom lines. A spokesperson for Nexstar declined to comment.
Near and long-term risks
Nexstar and Sinclair have both slammed Kimmel’s remarks as “inappropriate,” “offensive” and “insensitive at a critical time in our national political discourse” and are seemingly refusing to budge from their decision to pull Kimmel from their airwaves without concessions — Sinclair previously demanded an apology from the late night host before it would even consider putting his show back on its airwaves.
In a statement on Tuesday, Nexstar similarly said it was standing by its decision to keep Kimmel off the air indefinitely, “pending assurance that all parties are committed to fostering an environment of respectful, constructive dialogue in the markets we serve.”
Aaron Meyerson, a former president of programming and development for CBS TV Distribution, told TheWrap that network affiliate agreements typically include clauses that obligate affiliates to broadcast programming from the networks in assigned time slots unless there’s an agreed upon preemption or the network gives consent.
While he noted that preempting or refusing to air network programming without permission for extended periods of time could represent a breach of contract, it depends on the terms of the contract and how enforceable the obligations are.
Meyerson warned Disney faces immediate risks from the standoff, such as lost national advertising reach and ratings erosion in dozens of markets. But he said the danger for Nexstar and Sinclair is longer-term, with risks including withheld compensation from ABC, angering national advertisers due to inconsistent distribution and, in the worst-case scenario, jeopardizing their ABC affiliations altogether, which would be a “lose-lose” for both sides.
“If they preempt programming over a sustained period of time, or an uncertain period of time, that can become problematic for both of them,” said Larry West, the former head of the Tribune Broadcasting Company — before Nexstar purchased it for $4.1 billion in 2019 to become the largest local TV broadcaster in the U.S.
Losing complete affiliation with ABC, a former television executive said, could have a “tremendous” impact on Nexstar and Sinclair’s bottom line.
“Am I more likely to buy the station that has network programming, live NFL games, live college football games, or the station that’s running 20 hours of local news every day and infomercials on the weekend?” the former executive told TheWrap. “That’s a really different, difficult business to get excited about when you’re losing your network affiliation so you lose all of the network programming.”
The executive continued: “If Disney really decided they wanted to play hardball in that way and accelerate that conversation, meaning, have it quicker than not, I can’t see Nexstar and Sinclair walking away from the affiliation. This has put everybody in a really lousy situation.”
Under pressure to consolidate
The standoff is about more than just comments made during a late-night monologue. The underlying motivation for the affiliates is the desire to get bigger.
During Trump’s first term, the Federal Communications Commission made several moves to relax restrictions on broadcast ownership, including reinstating the UHF discount, relaxing the local TV duopoly rule and rolling back limits on the number of radio and TV stations a single company could own in a local market. Now, Nexstar and Sinclair are seeking the help of the FCC yet again.
The former, which has denied that FCC Chairman Brendan Carr pressured its decision to pull Kimmel’s show, is in a pending $6.2 billion merger with rival Tegna to create a combined entity that would own a station portfolio representing 80% of U.S. households.
Meanwhile, the latter has launched a strategic review of its broadcast business, which will look at opportunities including acquisitions, strategic partnerships and business combinations with potential partners in the broadcast and the broader media and technology ecosystem.
Both companies are also pushing the FCC to lift the 39% cap on broadcast TV station ownership, which the agency has opened up for public comment and will discuss at its open meeting next week. Carr has previously called the current rules “arcane” and “artificial” and believes modifying them would be one way to empower local broadcasters.
All of this to say, Sinclair and Nexstar have every reason to want to make the FCC happy.
While acknowledging that the political scrutiny around the Kimmel situation makes it “a lot harder” for Sinclair and Nexstar to simply reverse course, Syracuse University television, radio and film professor Robert Thompson told TheWrap their situation is much more precarious and that both the affiliated station and cable models are “in descent.”
Ultimately, experts expressed hope that a resolution between the parties will be reached without the need for the worst-case scenario.
“My guess is that in order for both sides to save face, Nexstar and Sinclair preempt for a couple of nights while Kimmel addresses the issue and puts it behind him and ABC,” Meyerson said. “And then everyone goes back to the way it was.”
