Sinclair CEO tells investors in Palm Beach that his TV group hopes to quadruple retrans revenue to $100 million over the next three years as cable falls in line and begins paying for broadcast signals.
Sinclair Broadcast Group expects annual revenue from retransmission consent to increase rapidly over the next three years—from $25 million in 2006 to as much as $100 million in 2009, President and CEO David Smith said this morning at the Bear Stearns Media Conference in Palm Springs, Fla.
“It’s very clear to us everybody is going to pay,” said Smith. “The only issue is what day and how much. The pure market forces are going to mandate that that happen. Otherwise, there will likely be some substantial losers on the cable end of the equation.”
He cited Columbus, Ohio, where Sinclair owns the Fox affiliate (WTTE) and the ABC affiliate (WSYX). Two satellite companies compete with Time Warner Cable and two other cable companies and SBC is planning on entering the market with yet another multichannel video service.
“If Time Warner elects not to do a retrans dealÃƒÆ’Ã‚Â¢ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬Ãƒâ€šÃ‚Â¦they have no place to go but down because SBC is going to pay and everybody else already is,” Smith said.
In Columbus, Sinclair broadcasts Desperate Housewives and American Idol. They may not be “available to MSOs that choose not to pay,” he warned. “That’s not a revelation to anybody,” he said. “It’s just a reality of the ever-coming marketplace that competition is bringing.”
Citing an unnamed source, Smith said cable operators are beginning to recognize that they will eventually have to pay around $4.50 per sub per month for all the broadcast signals in each market.
“I don’t think there is any doubt in anybody’s mind that they are going to pay, ” he said. “And well they should because, in the final analysis, the vast majority of the people watch broadcast TV the vast majority of the time.”