Retrans Wars: "But the retransmission fees are really for the LOCAL content"

Categories: TV Business

Written By

November 11th, 2009

"With all due respect to my friends at the networks, I contend that the network programming is not the main reason that we're receiving compensation--it's the local programming."

-Nexstar Broadcasting Group Chairman/President/CEO Perry Sook via Broadcasting & Cable

Perhaps, but not for me.  I'm completely fine without any of the local content and have been for going on 20 years.  In fact, as a west coaster, I'd pay at least $5 a month extra just to get the east coast feeds of just the nationally broadcasted content.

The affiliates relationship with the retransmission fees is a lot like Gollum's relationship with the ring.

For those not already playing along at home, local broadcast networks negotiate a fee from cable and satellite providers to carry their signal.  As a revenue growth opportunity, the networks (rather than the local affiliates) have been attempting to get a share of retransmission fees.  Not something the affiliates are happy about.  For me, Sook's and other similar comments strike me as "No! Mine! Keep your grubby hands off!

I do understand the affiliates plight.  They've negotiated these deals and its an important revenue stream.  But I also understand the networks plight which amounts to "hey, why shouldn't some of that be coming back to US?"  If I'm CBS I'm laughing at Sook's comments and thinking, "Yeah right.  How many people watch your local news broadcasts and how many people watch NCIS and NFL Football?"

Over the long haul I just don't see the affiliate model surviving.   Sook is fine with the networks getting some of the money -- if they want to renegotiate the retransmission deals and then split any increases 50-50 with the affiliates, that's fine with him.

But the networks are going to want more than half of any additional amount they could negotiate, they're going to want some of the original amount too.

Because of how these deals are negotiated (with most deals not currently being up for renegotiation), this is a war that will play out over years, rather than weeks or months.

 
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