Despite cord-cutting eroding the number of pay TV subscribers, station revenue from retransmission and carriage fees from distributors rose 3% to $14.46 billion in 2022, according to S&P Global Market Intelligence.

S&P sees rate hikes in deals renewed in 2023 slightly outpacing the cord-cutting trend, resulting in a 3% gain in gross retransmission and subscriber fee revenues to $14.83 billion.

The totals include payments from cable operators, satellite distributors, telcos and virtual multichannel video programming distributors (MVPDs). 

“Although traditional multichannel churn outpaced virtual subscriber gains in 2022, increases in average per-subscriber rates in renewals and annual step-ups kept gross retransmission revenues growing, albeit at a much slower pace than years prior,” said Justin Nielson, principal analyst at S&P Global Market Intelligence.

S&P sees station distribution revenues growing in the low-single-digit range longer term, reaching $15.93 billion by 2027.

Some of those payments go to the networks with which the stations are affiliated, and S&P sees the stations keeping a shrinking share of that revenue. S&P said stations got about 50% from 2018 to 2020 and 49% from 2011 to 2024. From 2026 to 2027, stations will retain 48% of their distribution revenue, S&P forecasts.

Cincinnati Bell, doing business as Altafiber, has filed a retransmission consent complaint against Cox Media/Apollo's WHIO-TV, the CBS affiliate in Dayton, Ohio, and the top station in the market, for allegedly failing to negotiate in good faith, as FCC rules require, by trying to charge a fee for over-the-top video streamers as well as traditional cable subs.

Cincinnati Bell says that would constitute a "crippling" fee.

The telco, which is trying to launch a fiber to the premises (FTTP) video service combining cable and broadband, says its issue is that the station won't grant retrans rights unless it gets a per-sub fee from most non-cable as well as cable subs, even though the former are not getting retransmitted TV station signals. "Imposing retransmission consent fees on broadband subscribers, to whom no retransmission is made, would not only increase the cost of broadband service but it has the immediate impact of foreclosing competition," it says.

The telco says it has been trying to secure retrans rights since 2019.

According to Cincinnati Bell, "Cox confirmed that even if such a subscriber merely streamed YouTube videos or purchased a Netflix subscription, it demands payment of retransmission consent fees despite the absence of any retransmission by Altafiber."

The telco points out that WHIO has not asked for similar fees from other cable/broadband operators in the market, and while it concedes Cox could be testing the waters for doing so in the future, why it is doing so is not the point, but the effect of doing so, which is to hinder competition, is an exercise of market power that runs afoul of the good faith standard.

Cincinnati Bell says that without rights to the top station in the market, it will have to scale back or scrap construction of its planned FTTP system to 135,000 homes in the Dayton DMA. That means not offering choice in cable and high-speed broadband to a community with a median income of only $32,540, where 30% live in poverty and almost half the population are people of color, just the sort of community that needs choice. Charter is the cable/broadband provider the telco would be going up against in the market.

"Both Congress and the Commission have repeatedly asserted the need for ubiquitous availability of affordable ultra-high-speed broadband service," Cincinnati Bell says in its complaint. "This is exactly what Altafiber seeks to accomplish with its plan to invest hundreds of millions of dollars in Dayton, only to be derailed by an extortion demand."

Cincinnati Bell has asked the FCC order that Cox:

1. "Cannot require, directly or indirectly, payment of retransmission consent fees related to subscribers who do not purchase cable television service from Altafiber;

2. "Cannot mandate or restrict Altafiber’s fee or billing structure or disclosures for cable service so long as Altafiber does not disclose to subscribers the amount paid toCox for retransmission consent;

c. "Engage in good faith negotiations with Altafiber to attempt to resolve remaining open issues; and

d. "Cox is prohibited from engaging in any effort to circumvent the effect of the order, including, but not limited to, engaging in retaliatory pricing of its retransmission consent fees."

A Cox Media spokesperson had not returned a request for comment at press time.

Retrans complaints have generally been dismissed for failing to show the negotiations were not in good faith, or dropped after the parties involved reach an agreement and publicly bury the hatchet.

But last July, the FCC upheld a record $10 million fine against Sinclair-managed stations. ■

Tribune Media said it has reached a "comprehensive" retransmission consent agreement with Charter Communications, ending an impasse that began on Jan. 2.

About 33 stations in 24 Charter markets encompassing 6 million homes went dark on Jan. 2 at 5 p.m., a day after Tribune had granted a brief extension to try to work out a deal.

Charter had claimed Tribune was demanding rates that were more than double what had  paid in the past. Tribune stressed it was seeking fair compensation for its content. Along the way, they reached a compromise apparently both can live with. 

Terms of the deal were not disclosed.

“We are pleased to have reached this agreement that will return Tribune Broadcasting’s local television stations and WGN America to Spectrum customers and Tribune’s viewers,” Charter and Tribune said in a joint statement.

Nexstar Media Group estimates it will reap at least $75 million in additional retransmission consent fees after its $6.4 billion purchase of Tribune Media closes next year, meaning cable, satellite and telco TV operators will have to dig deeper into the well.

Nexstar agreed to purchase Tribune Media for $46.50 per share in cash in a deal valued at $6.4 billion including assumed debt. Nexstar said it hopes to obtain the necessary regulatory approvals and close the deal sometime in the third quarter of 2019.

Tribune’s 42 local TV stations in 39 markets will vault Nexstar into the No 1 spot among broadcast station groups with 216 stations in 118 markets. The combined Nexstar-Tribune would still fall below the federal TV station ownership cap of 39% of the total TV market, although the company does expect to divest some stations.

On a conference call with analysts to discuss the deal, Nexstar said it expects retrans revenue to rise by about $75 million in the combined company just by applying Nexstar’s rates to the Tribune stations. That figure doesn’t include increased renewal revenue as deals expire.

On the call Nexstar chairman and CEO Perry Sook said that Nexstar’s enthusiasm for retrans growth hasn’t waned with this deal. “At this point, we would slightly bet the over.”

The deal would come about one year after Nexstar purchased Media General, increasing its ownership to 174 TV stations across the country. On the call, Nexstar chief financial officer Thomas Carter said that about 10% of its former Media General stations were up for retrans renewals this year, with 5% of those deals already completed and the remainder due this month. About 70% of Nexstar’s retrans deals come up in 2019, with 15% of those up in the middle of the year and the remainder in the back half.

Sook said that in the past, acquired stations moved to the Nexstar rate card within 30 days of those deals closing. He anticipated the same time frame for the Tribune stations.

“It will be fairly quickly following the acquisition,” Sook said.

What will happen to Tribune Media’s cable channel WGN America is still up in the air. Sook said that he was impressed with the turnaround at the channel: cash flow has gone from a negative showing in 2017 to a “nine-digit” positive this year. But he said some outside parties have expressed interest in buying the channel, and if the right deal came along, Nexstar would sell the network.

“I would say we’re happy with the progress they have made,” Sook said on the call. “If someone is willing to pay a significant premium, we’re also happy to have that discussion as well. Currently we have no plans to immediately divest of it.”

Nexstar had looked at the Tribune assets in 2017, but backed off when the price became too rich for its tastes. Sinclair Broadcast Group had initially agreed to buy Tribune in May 2017 for $3.9 billion, but Tribune terminated that deal in August after what it said was Sinclair’s sluggishness through the regulatory approval process. 

TV station consolidation is expected to continue in earnest over the net few years, in the wake of 21st Century Fox’s asset sale to Disney, as “New Fox” has said it would eye purchasing more stations, and Cox Enterprises said in July it was considering placing about 14 properties on the block.

Sook said Nexstar would focus on completing its current deal and integrating the Tribune stations, but added that if the federal ownership cap either rises or is eliminated, it would consider bulking up even more.

“We want to de-lever a bit and digest this before we would taking another step, but if the rules were to change and there was an opportunity as accretive as this, we’d obviously be very interested,” Sook said, adding that the deal also opens up the opportunity of swapping stations with other broadcasters to beef up its presence in some markets. “There are a lot of levers to pull post-completion, but completing the acquisition is going to be Job 1 for us in the immediate future."

Altice USA and 21 Century Fox managed to hammer out a deal for carriage of their broadcast and some cable networks Friday, avoiding a blackout.

Fox said in a statement that it had reached an agreement with Altice USA, but terms were not disclosed.

Some analysts had expected Fox to push for a large increase in its retrans fees – as much as $1 per subscriber per month. That, however, apparently wasn’t an issue. 

“We are pleased to have reached an agreement to continue to provide Optimum / Suddenlink customers with the Fox shows and sports they enjoy, and we thank them for their support,” Fox said on its website Friday.

Fox had run as spots on its channels warning Altice customers that they were in danger of losing access to sports programming like NFL Football and possibly the Major League Baseball playoffs if a deal were not reached by midnight Oct. 1. While that deadline passed without a deal, both sides continued to talk and the networks – FX, National Geographic and Fox’s broadcast station in New York WNYW – remained on the air for Altice customers while a deal was hammered out.

“Altice USA is focused on providing the highest quality entertainment experience at a great value, and we are pleased to reach a deal with Fox that ensures our Optimum and Suddenlink customers will continue to receive their programming. We thank our customers for their support while we worked on their behalf to reach a fair agreement.”

The midnight deadline for 21st Century Fox and Altice USA to hammer out a retransmission consent renewal came and went without an incident on Oct. 1, as the two continue to negotiate, according to sources familiar with the companies.

Analysts had expected Fox and Altice USA retrans talks to be contentious, especially after the broadcaster began running spots on its channels in September warning the cable operator’s customers that they may be without key programming if a deal was not reached. 

Sources familiar with the talks said the negotiations are ongoing and so far there has not been a blackout of any Fox programming. 

BTIG media analyst Richard Greenfield said in a blog post last week that he believed the Altice USA negotiations could set the tone for future talks with the broadcaster, especially as it embarks on its live sports and news-focused strategy. Fox has agreed to sell most of its content assets to the Walt Disney Co., keeping its broadcast, Fox News Channel, Fox Business, FS 1, FS 2 and Big Ten Network properties. Greenfield had estimated that Fox could be pushing for big retrans increases to fund its new direction.

MoffettNathanson media analyst Michael Nathanson told an audience at the TVB Forward conference Sept. 27 that he would not be surprised if Fox was asking as much as $4 per month per subscriber for its stations in upcoming retrans rounds.

Univision Communications began warning Dish Network customers Saturday (June 23) of a potential blackout of the Spanish-language network, claiming that it has hit a snag in retransmission-consent negotiations with the satellite TV giant that won’t likely be resolved soon.

Neither side would reveal when the retrans deal actually expires. But in a statement Univision said that Dish has already rejected three “good faith” carriage offers by the network, including one to extend its current agreement to avoid a service disruption.

Dish claims that Univision is demanding a 75% increase to its current carriage fees, a boost that the satellite company says is exorbitant, given that its ratings have declined by nearly one-third over the past five years. Univision also lost the Spanish language broadcast rights to the World Cup soccer – currently airing on rival Spanish-language broadcaster Telemundo – not only for this year but for 2022 and 2026, according to Dish. 

Univision claims it is the third most-watched network on Dish in any language, and its Univision Deportes channel is Dish’s second most watched sports channel in any language. UniMás is a top-15 network regardless of language on Dish, and, collectively, the network claims its channels represent 60% of the total Spanish-language viewership on Dish’s ethnic package, DishLatino.

“Dish has left us no choice but to alert our viewers that they could face yet another Dish service interruption,” Univision said in a statement. “We remain hopeful that we can reach a fair deal with Dish that doesn’t deprive its customers and our viewers access to the indispensable news, information and content that they rely upon from UCI, now more than ever.”

Dish also remains hopeful that a deal could be reached and expressed some puzzlement at why the company decided to negotiate its retrans deal in public while there is still time to hammer out an agreement.

"We are actively working to reach a fair deal before the contract between Dish and Univision expires knowing that only Univision can choose to take its content away from Dish and Sling customers,” Dish said in a statement, reminding customers that they can still access Univision broadcast content for free over the air. “There is still time for the two parties to reach a mutually beneficial deal.”

Dish Network and CBS reached an agreement Thursday night to end the three-day blackout of 27 of the broadcaster’s owned and operated stations as well as cable networks CBS Sports Network, POP and Smithsonian Channel. Terms of the deal were not disclosed.

“We are grateful to our customers for their patience this holiday week as months of work has resulted in a deal that delivers CBS for years to come,” Warren Schlichting, Dish executive vice president of marketing, programming and media sales, said in a statement.

The CBS properties went dark to Dish’s 13 million subscribers on Nov. 20 after the two reached an impasse in negotiations. As late as Wednesday, CBS said the companies were “far apart” in negotiations. But apparently they found a common ground as Thanksgiving night drew to a close, announcing their pact at 11:48 p.m. on Nov. 23. 

“We are pleased we have reached a deal with Dish, who recognizes the value that the number one Network brings to viewers in these markets,” said CBS Television Networks Distribution president Ray Hopkins in a statement.  “Dish customers will continue to get CBS’ must-have content, while we are also able to achieve our short and long-term economic and strategic goals.”

The agreement includes retransmission consent of CBS, and several other local television stations owned by CBS, on Dish in New York (WCBS and WLNY), Los Angeles (KCBS and KCAL), Chicago (WBBM), Philadelphia (KYW and WPSG), Dallas (KTVT and KTXA), San Francisco (KPIX and KBCW), Atlanta (WUPA), Boston (WBZ and WSBK), Seattle (KSTW), Tampa (WTOG), Detroit (WWJ and WKBD), Minneapolis (WCCO), Miami (WFOR and WBFS), Denver (KCNC), Sacramento (KOVR and KMAX), Pittsburgh (KDKA and WPCW) and Baltimore (WJZ).  

The San Diego CBS affiliate KFMB-CBS 8 went dark to DirecTV customers Thursday at 5 p.m., Pacific Standard Time, two-hours prior to the NFL Preseason opener of the hometown San Diego Chargers vs. the Dallas Cowboys, after the parties could not come to terms on a retransmission consent agreement.

According to KFMB’s web site, the station had been negotiating with DirecTV for several months – and offered six weeks of extensions -- while it tried to work out a deal. The station, owned by Midwest Television Inc., says it continues to negotiate with DirecTV and hopes a deal can be reached soon.

The station blamed the standoff on DirecTV’s recent acquisition by AT&T and the telco’s promise that it would cut costs after the deal was completed. AT&T completed its $48.5 billion acquisition of DirecTV on July 24.

“This black out is brought to you by Wall Street,” KFMB said on its web site. “When AT&T bought DirecTV, it told Wall Street that it would reduce its programming costs by 20%.  Now, AT&T/DirecTV has decided to make San Diego subscribers responsible for the promises AT&T made to its Wall Street investment bankers. CBS8 is only asking DirecTV to agree to the same low rates that other companies (including AT&T U-Verse) have agreed to pay.  AT&T/DirecTV has refused to do that.  We can’t give in to AT&T/DirecTV (and its Wall Street backers) and keep delivering to you the high quality local sports and entertainment programming you’ve come to expect from us.”

In a statement, DirecTV said the dispute is over money – it claims KFMB is demanding an exorbitant price increase.

"We intend to get KFMB back for our customers very soon and apologize for this temporary disruption,” DirecTV said in a statement. “KFMB is blacking out DirecTV homes unless customers pay more than double just to get back the same KFMB shows that remain available for free over-the-air on channel 8 and often at CBS.com. Local broadcasters including KFMB have now blacked out their communities more than 65 times already this year, forcing families to pay billions of dollars extra to keep conventional 'free' broadcast TV. We have asked for our customers’ patience since it will help to keep their bills lower.”