Advertisement

CBS to collect $1 billion a year in distribution fees by 2016

Share

The amount of money broadcast networks are collecting from both pay-TV distributors and their own affiliate stations for their content is growing faster than Wall Street had anticipated.

In a new report, Sanford C. Bernstein analyst Todd Juenger said CBS is anticipating revenue of $1 billion in 2016 from retransmission consent fees from cable and satellite operators and their own affiliates. CBS had previously said it wouldn’t hit that number until 2017.

According to Juenger, that figure is based on a subscription fee of $1.22 per-month, per-subscriber from multichannel video program distributors (MVPDs) for the stations the network owns, including KCBS-TV Los Angeles. It also includes a 50% cut of whatever their affiliates get from MVPDs, which Juenger thinks will be the same price CBS gets for its stations.

Advertisement

Of course, whether every CBS affiliate, particularly those in small markets, will be able to squeeze MVPDs for $1.22 remains to be seen. If it can’t and CBS has set 50% of what it is taking in as the price tag, some stations may have to reach into their own pockets to cover that cost. However, CBS may also agree to adjustable rates on so-called reverse compensation.

Both Fox and ABC are on a similar retransmission consent track, Juenger said, while NBC is not. The reason, Juenger said, is because NBC’s parent is Comcast, a cable operator with more than 20 million subscribers. NBC, he wrote, “seems mired down in the inter-company complications of Comcast being NBC’s biggest distributor, and the contradictory motivations and unintended consequences that causes.”

The increase in retransmission consent revenues, which the MVPDs will do their best to fight, will be cheered not only by the networks and Wall Street, but also by the people who sell programming and sports. If the networks can argue that their content is worth so much to MVPDs, then the NFL and big content producers can counter that they need a big cut of that pie.

MORE:

INTERACTIVE: TVs highest paid starts


QUIZ: Celebrity voice overs


PHOTOS: Hollywood back lot moments


ALSO:

Broadcasters getting 50% more in retrans fees

Advertisement

Broadcast networks will rake in retransmission consent fees

Broadcasters and distributors debate retransmission consent rules at FCC

Follow Joe Flint on Twitter @JBFlint.

Advertisement