NEW YORK, July 14 -- CBS Inc. announced Thursday it reached a 10-year pact with Westinghouse Broadcasting Co. to give it new affiliates in Boston, Philadelphia and Baltimore and keep affiliates intact in San Francisco and Pittsburgh. The deal with Group W also provides for forming a joint venture to own current NBC affiliate KYW-TV in Philadelphia and buy other stations. For CBS, the deal is a major positive development following the stunning departure of eight affiliates to the Fox network in late May. It also saw its deal to buy QVC collapse earlier this week, prompting widespread speculation of a takeover bid. The Group W deal had been rumored for several weeks, with reports emerging that CBS had been in intensive negotiations with Westinghouse over the stations. CBS said Thursday the talks had lasted for two months. The CBS-Group W deal represents a serious blow to General Electric Co.'s NBC, which will lose KYW-TV in Philadelphia and Boston affiliate WBZ-TV. NBC has been widely reported as making a serious competing offer for an affiliate deal with the five Group W stations. In Baltimore, Group W's ABC affiliate WJZ-TV will switch to CBS. The deal also keeps CBS affiliates KPIX-TV in San Francisco and KDKA-TV in Pittsburgh in the CBS fold. Group W will own a majority interest in the joint venture and exercise full operational control of the stations in it. CBS will sell its Philadelphia station, WCAU-TV, and the proceeds will be used to buy new stations for the joint venture.
CBS did not indicate if it has a buyer for WCAU, but NBC would be a likely candidate since it will be without an affiliate in the market. The move helps quell a potential troubling situation for CBS in Boston, where current CBS affiliate WHDH of Boston was widely reported as actively considering leaving for Fox. WHDH is owned by Sunbeam Television Corp., which also owns Fox affiliate WSVN in Miami. The two companies also announced plans for a partnership to produce programming for both Group W's and CBS's television stations and for distribution to other stations, once the rules limiting the Big Three networks from such production deals are lifted, probably late next year. Group W and CBS also said they plan to combine their advertising sales representation operations, with Group W owning the majority interest. Group W President and Chief Executive Officer Bill Korn said the programming partnership would became a major industry supplier at a time when the number of cable channels is due to expand significantly as fiber-optic networks come on line. The May announcement by Fox that it had captured affiliations with a dozen major TV stations through a $500 million investment in New World Entertainment has set off a major scramble among the major networks for new affiliate deals. Washington Post Co. and NBC announced last week they had reached a long-term agreement renewing affiliations of WDIV in Detroit and KPRC in Houston, meaning that CBS lost another possible option for a Detroit television affiliate. CBS has been looking for a new TV affiliate in the Motor City because its current affiliate -- WJBK-TV, Channel 2 -- will switch to the Fox Network next fall. CBS was blocked last month from setting up a new deal in Detroit when Capital Cities/ABC and Scripps Howard Broadcasting signed a deal that renewed their committment to WXYZ-TV, Channel 7. Before CBS deal with QVC collapsed, Wall Street analysts had said CBS might have managed to end the defections with its announcement that QVC Chief Barry Diller would run CBS.
