With pay TV subcribers falling, there’s a shift to a variable model from fixed fees for reverse compensation.
Big TV station groups continue to see the greatest downside with affiliate revenue as a result of more pay TV cord-cutting, a Wells Fargo report says. According to the report, fewer pay TV subscribers — including in the most recent quarterly period — will eventually mean less affiliate revenue, especially for big, independently owned TV station companies. “We think the third quarter reiterates the weakness in some of our companies due to their high exposure to pay TV decline,” writes Steven Cahall, Wells Fargomedia analyst.
For TV Station Groups, National Collaborations Increase And Improve
Station groups including Gray, E.W. Scripps and Nexstar are increasingly drawing on their stations to contribute stories for their national reporting projects. The ensuing collaborations are having a transformative effect on news production. Pictured: Susan Campbell reporting a story for one of Gray Television’s “consumer franchises” — Did You Know? — from KOLD Tucson.
After years of buying and selling, the nation’s largest TV station groups have become local leviathans that own dozens of outlets across the country. At an unsettled time for broadcast TV, the biggest independent groups — including Nexstar Media, Sinclair Broadcast Group and E.W. Scripps — are increasingly trying to generate new profit sources by using local news and programming assets in innovative ways.
A month and a half into the second quarter, major TV station groups are witnessing sharp advertising declines of around 35% to 40% so far due to COVID-19, according to recent earnings calls with analysts.
His company, Apollo Global Management, has scooped up 29 television stations across the country. When Apollo lost a key deal, “they were pretty ripshit.” But the march continues.
Exclusives
Investors Put Their Chips On Television
Seven publicly traded station groups have registered double-digit gains year to date, and on a year-over-year basis, three stock prices have gained more than 50% — those of Scripps, Gray and Nexstar. The groups also blew the doors off of two major indices, generally outperforming both the Dow and S&P by wide margins. Kyle Evans, managing director of the technology/media practice at the Stephens Inc. financial services firm, breaks things down.
Based on the revenue estimate, BIA/Kelsey places a value of $84 billion on the entire industry. Of the $31 billion, it also says, 83% comes from just 18 major station groups with more than half the stations.
When something as tragic as the shootings at the gay nightclub Pulse in Orlando occur, local stations often stretch an already thin staff even thinner in an attempt to provide viewers with updates about what’s happening and why. TVSpy asked the station groups about plans to help their locals cover the shooting while keeping up with the news of the day.
