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Kagan: Retrans Fights Could Be Fewer in 2021

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(Image credit: CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=1292131)

It may seem that 2021 is starting out to be a big year for retransmission consent battles, with fights between Cox Media Group, DirecTV and Suddenlink dominating the news around Super Bowl LV, but according to a top researcher, this year may offer a bit of a respite to those weary of the rhetoric that usually surrounds such negotiations. 

According to Kagan, a unit of S&P Global Market Intelligence, about 22 retrans deals are expected to come up for renewal in 2021, affecting about 30.2 million subscribers. All together, Kagan estimates that about 334 stations in 244 markets will come up for renewal this year. 

While comparisons are tough, Kagan says that is lower than 2020, when they estimate retrans deals affected about 56 million subscribers. 

Although there may be fewer pacts up for renewal in 2021, distributors are still expected to pay more for retransmission consent this year. In June Kagan estimated that retransmission consent revenue would rise about 2% in 2021 to $12.4 billion.

Kagan is basing its pending deal numbers on a typical 3-year timeline from the last public retrans transaction announcement or from earnings calls and investor presentations. Typically, broadcasters and distributors don’t reveal when a deal is up until it is, citing non-disclosure agreements embedded in retrans contracts. 

There are some slight exceptions -- Comcast lists on its customer support website pending deals looking ahead a few months, but doesn’t reveal specific dates. For example, the site shows that 11 stations owned by Weigel Broadcasting in eight markets (Cedar City, Iowa; Seattle; Chicago; Glenwood Springs, Colorado; Palo Alto, California; Bellingham, Washington; South Bend, Indiana; and Rockford, Illinois) are up for renewal in February, as are three stations owned by Draper Holdings Business Trust in Salisbury, Maryland, and Georgetown, Delaware. 

Another nine stations owned by Quincy Media -- which agreed to be purchased by Gray TV on Feb. 1 -- in Arizona, Illinois, Indiana and West Virginia are coming up for renewal in March. Also that month, two stations in Shreveport, Louisiana -- KPXJ and KTBS -- owned by the Wray Properties Trust, are set for renewals.

The country’s largest cable operator also said on its customer support site that it will be moving Cartoon Network to its Digital Preferred, Preferred and Preferred + tiers on April 13. On the site, Comcast said the change is part of a regular review of its programming.

“We regularly review our programming and sometimes make changes to ensure we're offering a wide variety of programming at the best value,” Comcast said. “We look at a variety of factors, including customer viewership and programming costs when making these decisions. Given this, we are moving the Cartoon Network to the Digital Preferred, Preferred or Preferred + package, to help manage programming costs that are passed on to our customers while continuing to make the channel available to those who want to watch it.” 

Comcast also has several of its NBC owned-and-operated stations coming up for renewal in March, but that isn’t expected to cause much controversy, as well as a handful of its cable networks -- Bravo, CNBC, MSNBC, E!, Golf Channel, Syfy, Oxygen, Olympic Channel, USA, Universo and Universal Kids. 

Several regional sports networks are up for negotiation, including six NBC-owned RSNs: NBC Sports Bay Area, NBC Sports Boston, NBC Sports California, NBC Sports Washington and NBC Sports Washington Plus. NBC Sports Network, which the company said earlier this month will be shuttered at the end of the year, also is up for renewal. Three AT&T-owned RSNs are set to expire in March: AT&T SportsNet Pittsburgh, AT&T SportsNet Rocky Mountain and Root Sports Northwest. According to Kagan, Comcast also has to negotiate with Meredith for 13 stations this year. It last did a retrans deal with the broadcaster in the first half of fiscal 2019, which spanned June 30 to Dec. 31, 2018. 

For the most part, distributors stay away from revealing when deals are up. But for the average layperson, it isn’t that hard to figure out a ballpark time frame for disputes. They usually occur around major live TV events -- opening days of the regular season for major professional sports, playoffs for major sports leagues, the World SeriesThe Super Bowl, The Academy Awardsthe summer, and major holidays with a big sports connection like Thanksgiving Day and New Year’s Day. 

Also Read: Retrans’ Hobson’s Choice 

Also this year, large broadcast station groups that some have complained are particularly aggressive with smaller distributors, may find themselves in a different negotiating dynamic.

In May, a Federal Communications Commission order giving buying groups like the National Cable Television Cooperative the same good-faith negotiation protections as  individual MVPDs in retrans talks where they represent operators, has given smaller cable companies sharper teeth in talks with larger broadcasters.  That protection took hold in July. 

So far, NCTC is keeping any retrans deals it reached in 2020 close to the vest, but said more are likely to come. 

“In 2020, NCTC was very successful and closed multiple deals and we hope to continue that trend,” said NCTC EVP of programming Judy Meyka in an email message. 

And though it is possible that this year will be lighter on the retrans rhetoric, it doesn’t mean that some big fights couldn’t be brewing.

Dish Network, always ready to get in the ring with a programmer, has two big retrans renewals this year according to Kagan -- with Tegna for about 61 stations in 51 markets and Sinclair Broadcast Group for 113 stations 93  markets. Dish last reached a retrans renewal with Tegna in December 2018, so it is likely that deal will come due toward the end of the year.  According to a research note by Wells Fargo Securities media and broadcast analyst Steven Cahall, the Dish/Sinclair deal is expected to come up for renewal in the summer. That renewal also is expected to include Sinclair’s regional sports networks, which went dark to Dish customers in July 2019. 

After Dish, the next biggest retrans negotiator is Cox, with about 50 stations in 35 markets to hammer out deals with (33 owned by Nexstar Media Group, 13 owned by Sinclair). Cox last reached a retrans deal with Nexstar in Feb. 2016. About 28 Fox stations in 18 markets are up for renewal with AT&T/DirecTV/ U-verse, building on the deals it reached so far this year with Cox Media  Group.

So those that crave a good old-fashioned retrans shoutfest shouldn’t be that disappointed.