Retransmission Distance - Simon Applebaum - MediaBizBloggers

By TV / Video Download Archives
Cover image for  article: Retransmission Distance - Simon Applebaum - MediaBizBloggers

There's the signpost up ahead. Your next stop: the comeuppance zone.

Submitted for your disdain, all you broadcast stations living large off those retransmission consent deals that cable operators screamed were unfair, but ultimately capitulated to.

Now we know, in a number of ways surfacing last week that the unending saga of retransmission consent may soon take another ugly turn. After a few years of seeing broadcast stations tap cable operator pocketbooks to develop a retransmission revenue stream, the broadcast networks want in on the action. First, Belo CEO Dunia Shive blurts out that ABC wants a share of the station group owner's retrans oilwell, which gushed $10.6 million in revenue from operator payments this recent July through September. "I don't think there is any secret that the networks look for some sort of revenue payment from the affiliate," Shive told listeners on Belo's latest quarterly results call. Call it a hint that Belo's affiliate connection with ABC can be in jeopardy without a retrans pay clause.

Then came fighting words from Gray Television CEO Robert Prather, on his company's quarterly call. "We need to really work hard so that the networks don't use the old divide-and-conquer... (Retrans) is based on our work and nobody else's work." He invited other station group leaders to put up a "united front" on ABC or any broadcast net demanding retrans payment.

Rounding out the first round of station react: Nexstar Broadcasting CEO Perry Sook, after reporting $7.9 million in retrans earnings in his company's latest fiscal quarter. "We'll fight just as hard to keep that retrans revenue as we did to create it in the first place," he opines on the matter. "I don't understand why the networks would feel they're entitled to a piece of revenue stream that we developed, that they had no hand in negotiating, documenting or collecting."

Broadcast network leaders didn't let what their affiliates are saying in public go unanswered. At Dow Jones' annual Media & Money conference last Thursday in New York, News Corp. COO Chase Carey declared that his Fox Broadcasting unit will not back down from retransmission demands. "An array of other channels have a healthier business model than we do," he argued.

ABC is "intent on getting paid fair market prices for fair market value," acknowledged Walt Disney CEO Bob Iger during his company's latest conference call late that afternoon. His broadcast net "fully expects to participate in the trend, however it goes."

Sure, cable operators put up a battle for years against paying retransmission fees to broadcasters, questioning why they should fork up dollars for content non-cable viewers see for free with advertising support. Whether they had the proper argument or not, they ultimately laid down their arms and paid, in part thanks to well-publicized incidents of stations turning off their signals on cable, such as WABC-TV in New York and other key ABC affiliates, and Sinclair's extended blackout at Mediacom systems in Iowa. Cable subscribers saw their systems, not their favorite stations, as the villain, so out came the money and back on came the stations.

But all that may end up a tremor compared to the seismic upheaval in store if this situation escalates. Retransmission consent is becoming the savior for local stations hammered by a collapsed, recession-jolted local advertising scene. Sinclair's retrans treasury increased to $28 million over the last three months, from $17.9 million in the same 2008 time frame. That upturn may have saved a local newscast or public affairs program somewhere in Sinclair's station universe from termination. Think Sinclair or any other station group will want to part with that money, uncertain when the local ad environment will turn better, much less turn back to pre-recession levels?

Be ready to witness these stations battle the networks who supply them with the largest chunk of content they program day after day. Each side looks like they are checking out the other for a tussle. It's not going to be pretty if cooler executive actions don't come together in the next year or so. And in the middle of all this, more than a few cable operators in private couldn't be happier that what bit them in the backside first, is biting advocates of retrans now.

With reverence to Rod Serling, today's depiction of irony off the tube...in the comeuppance zone.

*****
Two observations from the passing parade:

***Will Tyler Perry launch a new TV network in association with Lionsgate, which distributes his movies and TBS sitcoms? "Tyler is our anchor space," replies Lionsgate vice chairman Michael Burns near the end of his Media & Money keynote interview. "You can figure that out." Unscrambled hunch on my part: looks very possible. In case you haven't noticed, Lionsgate is now a major TV channel domo with TV Guide Channel, Epix and video-on-demand service FearNet. Do we see dynasty ahead?

***Best recent quote, whether or not pointed at a possible Comcast/NBC Universal arrangement: "I've never seen a merger or a financing create a better set of movies." That's Jeff Berg, International Creative Management CEO talking, at Media & Money.

Simon Applebaum is producer/host of Tomorrow Will Be Televised, the Internet radio program covering the TV scene. The program runs every Monday/two Fridays a month at 3 p.m. ET/noon, PT overwww.blogtalkradio.com. Replays can be found atwww.blogtalkradio.com/simonapple04, or via podcast atwww.sonibyte.com. Have a question or comment? Reach out tosimonapple04@yahoo.com.

Read all Simon’s MediaBizBloggers commentaries at Tomorrow Will Be Televised - MediaBizBloggers.

Follow our Twitter updates @MediaBizBlogger

Copyright ©2024 MediaVillage, Inc. All rights reserved. By using this site you agree to the Terms of Use and Privacy Policy.