Tegna And NBC Sign New Affiliation Deal

Tegna Media announced today that it and NBC have agreed to a renewal of the affiliation agreements of all 17 Tegna Media NBC stations. Tegna’s entire portfolio of NBC stations will now be under one common, long-term agreement.

Tegna Media is the largest independent NBC affiliate group.

“We are pleased to be extending our deep and longstanding partnership with NBC,” said Dave Lougee, president, Tegna Media. “NBC’s content, from sports to news to primetime, combined with Tegna Media’s trusted, innovative and impactful local programming is highly valued by our viewers.”

“We are happy to extend our affiliation with Tegna, NBC’s largest affiliate station group,” said Jean Dietze, president, affiliate relations, NBC Broadcasting. “We’ve had a strong, successful partnership with Dave and his team for many years. We look forward to continued collaboration to provide high-quality network broadcast content to complement Tegna’s award-winning local news and programming in key markets across the country.”

“The new deal removes an overhang from [Tegna],” says the team of Wells Fargo analysts that cover broadcasting in a note to clients.

“While we had always expected a deal to be signed, we think this was a nice sigh of relief for anyone who may have had some concerns.”

The agreement covers all of Tegna’s NBC affiliates, but only the affiliates that Tegna acquired in its merger with Belo will have to pay reverse comp to the network this year, Wells Fargo says. The “legacy” Tegna stations will not have to pay until the start of 2017, it says.

The reason for the disparity is the Belo affiliates’ network deal expired at the end of 2015, while the legacy Tegna affiliates’ deal isn’t up until the end of this year, it says.

Wells Fargo also notes that Tegna signed new retransmission consent agreements covering 57% of its homes in 2015 and will cut deals for another 30% this year.

In light of the new retrans and reverse comp deals, it says, net retrans for the company should increase 8% this year, but decline 8% in 2017 when the legacy Tegna affiliates start paying comp.

“This deal illustrates the true partnership between the networks and their affiliates,” it says. “We’ve heard concerns from some investors that the relationship between the networks and broadcasters may be fraying post the announcement that NBC intends to launch its own station in Boston beginning 2017, removing the affiliation from Sunbeam’s WHDH.

“We had characterized the Sunbeam situation as unique, and the deal between [Tegna] and NBC should reinforce this view.”