BIA/Kelsey: Station Group Stocks Up 185% Through Q3

Wall Street continues to applaud station group consolidation, evident in the 185% increase in local broadcasters' stock price in the first three quarters of 2013, according to a new report from BIA/Kelsey. The S&P index is up 15.6% over that same period, reports Kelsey's "Television Stations Profiles and Trends for 2014 and Beyond," while BIA/Kelsey's own local media index is up nearly 65%. Broadcast TV's 185.3%--also fueled by retransmission consent and increased digital business--vastly eclipses both.

"The advertising revenue pendulum of the local television industry swings predictably between odd and even years," said Mark Fratrik, BIA/Kelsey's chief economist and report author. "However, an interesting way to look at the future of the local television industry is to examine two-year revenue changes, which remove the dramatic ups and downs associated with election and Olympics years. With strong negotiations around retransmission consent agreements and expansion of digital offerings beyond the over-the-air base, we anticipate the industry to average between 5% and 8% increases every two years, or 2.5% to 4% increases per year."

Stations bag nearly 15% of all the $132.7 billion spent in local markets, says BIA/Kelsey, trailing direct mail (27.2%) and newspapers (16.1%).

BIA/Kelsey expects retransmission consent revenue to triple by 2018, from more than $2 billion in 2012. "By 2018, this additional revenue will constitute an estimated 14% of the total revenue (advertising plus retransmission) generated by the local television station industry," says the report.

The report details the increased array of competitors local TV is up against, but says the segment is situated for growth. "Many of these local television stations are in a position of strength, benefiting from the additional political advertising in recent years and significant revenue from their retransmission consent agreements with local cable, telco and national satellite distribution services," reads the report's introduction. "This revenue allows them to reinvest in their programming and develop new services."

Michael Malone

Michael Malone, senior content producer at B+C/Multichannel News, covers network programming, including entertainment, news and sports on broadcast, cable and streaming; and local broadcast television. He hosts the podcasts Busted Pilot, about what’s new in television, and Series Business, a chat with the creator of a new program, and writes the column “The Watchman.” He joined B+C in 2005. His journalism has also appeared in The New York Times, The Philadelphia Inquirer, Playboy and New York magazine.