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Moody's: Broadcasting's Near-Term Future Looks Stable

Despite softening ad demand, the U.S. broadcast industry is expected to remain stable over the next 18 months or so thanks primarily to increases in retransmission consent revenue, according to Moody’s.

In a report issued Monday, the investors firm said it expects core ad sales to rise up to 1.6% over the next year. The cautious estimate reflects the expected displacement of core ads with political spends during the upcoming midterm elections; the ongoing loss of market share to digital media; a soft automotive market; and weak pacing during Q1 2017, Moody’s said.

Moody’s, however, expects those factors to be mitigated by retransmission consent fees, which are expected to grow in the low teens over the next 12-18 months—and account for roughly 30% of broadcasters’ revenue. Political spending is expected to be high in 2018 as well, it said.

New opportunities in consolidation, as well as income from the recent FCC spectrum auction, will also factor into the industry’s continued health, Moody’s said.