Broadcasters Blackout Local College Basketball Fans While Sending Billions of Dollars to Network Executives in Los Angeles and New York

 Raycom Media Pulls Another 27 Local TV Stations in 23 Cities
Seven Local CBS Stations Down

Washington, D.C. – Raycom Media has pulled its 27 local TV stations from AT&T U-Verse customers in 23 cities, including seven local CBS stations scheduled to broadcast the NCAA Basketball Tournament. Broadcasters are once again using their local news and station websites to try to convince American consumers and middle class families that their massive fee increases for otherwise free programming and the rapidly expanding TV blackout crisis are a necessary evil to support the local community.

Raycom’s blackout covers seven CBS markets that are scheduled to broadcast the first and second round games of the NCAA Tournament this weekend.  In another dispute, Hearst Television’s ongoing blackout of DISH Network has left fans without access to their local CBS channel in Louisville, KY and Des Moines, IA.

“This is the old shift and shaft, with with fans getting the shaft,” said Trent Duffy, ATVA spokesman.  “Broadcasters are proudly exploiting a system that incentivizes them to jack up fees as much as 200% or more to replace lost revenue from ads.  As CBS Chief Les Moonves said, blacking out viewers during retransmission negotiations provides the ‘ultimate leverage’ and ‘the sky’s the limit’ in retrans fees if we fail to change the current system.”

The fastest-rising component of all pay TV customers’ cable bills — broadcast station retransmission fees – are up nearly 40 percent year-over-year in each one of the past four years, surpassing $7.7 billion in 2016 and expected to soar past $10.6 billion by 2020. Many middle class families have seen their own incomes stagnate or even decline during that same span, making it that much harder to pay to retain “free” TV.  Rather than collect any benefit in their own hometown, blacked out viewers must instead watch the local station owners licensed to serve them kick back the majority of these soaring station fees to national broadcast network executives in New York and Los Angeles who threaten to revoke ABC, CBS, FOX or NBC affiliations if they don’t pay up.

Station-induced blackouts are already on a record pace in 2017, totaling more than 125 blackouts more in the first three months of the year than all of 2016.  As this surging blackout crisis rolls on, big network executives are not only raking in cash at new record highs, but local stations have shown little courage to stop gouging a much smaller number of American families who still continue to remain loyal.

  • CBS Chief Les Moonves said his company’s $1 billion haul in retransmission consent fees was “a full year ahead of schedule, and continues to grow rapidly,” despite ongoing reports the company’s revenue performance is actually down.  CBS advertising revenue—the largest contributor to CBS’s top line—fell 2.8% to $1.8 billion, according to the Wall Street JournalIn another recent report, CBS COO Joe Ianniello expects to be taking in about $2.5 billion in broadcast retransmission licensing and reverse compensation fees by 2020.
  • NBC Universal’s retransmission consent revenue was up 14 percent, with the company’s overall revenue for its broadcast unit hit $2.8 billion. NBC Universal Broadcast Television business earns the majority of its revenues from advertising and retransmission revenues.
  • 21st Century Fox reported higher earnings for its fiscal second quarter as revenues rose at its cable and broadcast TV operations.
  • ABC/Disney broadcasting operating income grew 28% from 2016 to 2017, largely due to higher affiliation revenue.

As advertisers shift more of their own support elsewhere, innovation-adverse local stations that still retain exclusive control over which families can receive them in their local lineups, regardless of their choice of provider, have resorted to pulling their stations from lineups, typically just before major events like the start of the fall football season, the NFL playoffs or – in Raycom’s case — the NCAA Men’s Basketball tournament – that still remain popular with local viewers. Yet even those events aren’t the draw they once were, as viewership for Fox recent Super Bowl LI own for the second year in a row and ratings for regular season NFL games are also declining.

Many broadcast stations put their editorial independence and journalistic integrity at stake by using their newscasts and station websites to convince cash-strapped consumers that they will be uninformed, unsafe and, in some cases, jobless if they fail to support these station pleas for more funds for local programming. Oftentimes, what local stations claim is local often isn’t local at all. Rather than airing local news, broadcasters are increasingly relying on syndication services to broadcast the same exact thing in hundreds of local TV markets, producing often hilarious results.

“All of this demonstrates what the American Television Alliance has maintained since its founding – existing rules do not protect the viewing public from broadcaster blackouts and that Congress and government regulators should act,” added Duffy.

###

The American Television Alliance (ATVA) brings together an unprecedented coalition of consumer groups, cable, satellite, telephone companies, and independent programmers to raise awareness about the risk TV viewers face as broadcasters increasingly threaten service disruptions that would deny viewers access to the programs they and their families enjoy.

For more information about ATVA, visit our website. Follow us on Twitter @ATVAlliance.