Broadcasters Falsely Claim Retrans Fees on the “Decline”

NAB Witness Misleads NYC City Council on Past and Future of Retrans

Washington, D.C. August 8, 2013 — In written testimony to the New York City Council Committee on Consumer Affairs today, Marcellus Alexander, executive VP of television for the National Association of Broadcasters, falsely claimed that the “growth of retransmission consent fees is on a continued and projected decline.” In fact, retransmission consent fees have been rising for years and are projected to continue to rise.

According to SNL Kagan, retrans fees were $215 million in 2006, followed by 7 straight years of consistent and significant growth.  SNL Kagan estimates that fees will reach $3 billion this year and will skyrocket to $6 billion by 2018. In other words, the growth of retransmission consent fees are on a continued and projected incline – not “decline.”

Here are SNL Kagan’s broadcast retransmission fee projections through 2018:

2006 — $215 million

2007 — $314 million

2008 — $500 million

2009 — $758 million

2010 — $1.236 billion

2011 — $1.757 billion

2012 — $2.361 billion

2013 — $3.019 billion

2014 — $3.648 billion

2015 — $4.278 billion

2016 – $4.903 billion

2017 — $5.496 billion

2018 — $6.052 billion

In addition to this objective data, there are also the broadcasters own claims that they are projecting significant retransmission revenue increases in the future.

For example, CBS CEO Les Moonves — who declared “war” in his latest retransmission dispute, and who has said the “sky really should be the limit” when it comes to retransmission consent fees — stated in his Q1 2013 earnings call that “our fast-growing, non-advertising revenue sources were up significantly with double-digit increases in retrans, reverse comp and streaming.” As for the future, Moonves claimed that “we remain on target to hit our goal of $1 billion in retrans and reverse comp by 2017, if not before.”

And here are some reports of the growth in retransmission fees for other broadcasters:

News Corp: “The benefits of growing subscriber revenue were also apparent at the Fox broadcast network and the company’s owned-and-operated television stations, where retransmission fees nearly doubled against the same quarter a year earlier.” –Brian Stelter, New York Times, August 6, 2013

Disney: “Disney has said it expects to boost revenue from so-called “retransmission fees” to $400 million to $500 million annually by 2015 from virtually nothing several years ago.”—Associated Press, August 7, 2013

Nextstar: “Retransmission consent revenue jumped 65.5%, from $15.3 million in 2012 to $24.9 million in this year’s 1Q.”—TV News Check, August 7, 2013

Gray TV: “We are pleased with our operating results for the second quarter of 2013. We experienced period over period increases in national advertising, local advertising and retransmission consent revenue.”—Merrill Knox, Media Bistro, August 8, 2013

LIN TV: “The Television Station acquisitions we made in 2012 and healthy increase in retransmission fees and the continued growth and contributions of our digital businesses were key drivers that help to offset the lack of political advertising revenue and a sluggish economy. “  — Vincent L. Sadusky, President and CEO, Earnings Call, June 30, 2013