Top 30 Station Groups: Standard General Leaps Into Second Place With Tegna Acquisition

Standard General is the second largest TV station group in the United States — or will be if the FCC approves its takeover of publicly traded Tegna, last year’s third largest group.

The big M&A news of the past year was Standard General’s agreement to take Tegna private in a $5.4 billion buyout of shareholders.

That approval is not guaranteed, but in keeping with BIA Advisory Service’s long-held practice, TVNewsCheck’s Top 30 annual ranking of station groups revenue assumes that all pending mergers and acquisition will get the FCC’s blessing and close. Most deals do.

Nexstar, with nearly $4 billion in total revenue, remains the undisputed leader of the pack. Rounding out the top 10 are Sinclair, Fox, CBS, Comcast/NBC, ABC, Scripps and Hearst.

The ranking is based on 2021 data from BIA Advisory Services, a Chantilly, Va.-based research and investment firm. It provides the coverage percentage (of total TV homes) as well the revenue estimates upon which the ranking is based.

Standard General is controlled by investor Soo Kim and managed by TV broadcasting veteran Deborah McDermott. They had teamed up earlier in rolling up Young, LIN and Media General groups before selling out to Nexstar.

Standard General usurpation of Tegna and the subsequent slipping by Gray Television into the No. 3 spot are the only significant changes on this year’s ranking.

BIA maintains Cunningham Broadcasting and stations owned by Stephen Mumblow as distinct groups. But because they function essentially as subsidiaries — duopoly partners — of Sinclair, TVNewsCheck lumps their revenues in with Sinclair’s. The same holds true for Nexstar; it’s total includes the revenue of Mission Broadcasting.

For the entire Top 30, 2021 revenue topped $26.9 billion, comprising $14.4 billion in ad revenue and $12.5 billion in retrans money.

Those numbers are down from 2020 when the Top 30 take exceeded $28 billion — $16.8 billion from advertising and $11.4 billion from retrans. The decrease on the ad side is due, in part, to the comparison to the very high political advertising revenues generated in 2020.

BIA tracks station group ownership and uses information from individual stations and markets — in addition to historical data — to generate its ad revenue estimates.

Its retransmission consent estimates are not derived from stations, as stations generally promise MVPDs not to disclose the amounts. BIA arrives at its estimates by modeling publicly traded companies and checks all its estimates against whatever public information is available.

So, although the revenue estimates are not exact, they are close enough for ranking purposes.

The chart lists the aggregate coverage of stations in two ways. Actual or total coverage is the percentage of the 122.4 million TV homes the group actually reaches and the relevant one for all practical business purposes.

The FCC coverage is for regulatory purposes. The FCC caps coverage at 39% of those 122.4 million homes, but discounts the coverage of UHF stations by half. That allows groups to extend their reach to as much as 72% of homes.

The discount is a vestige of a time when UHF stations were inferior to VHF stations.

The Democrats now running the FCC are generally opposed to station consolidation and so are unlikely to approve deals that propose to exceed 39% coverage with or without the discount.

Nexstar is tops in actual reach at nearly 68%. That percentage includes WPIX New York, which is owned by its Mission companion group.

Mark Fratrik, BIA Advisory Services’ SVP and chief economist, is retiring at the end of the month. Last Friday, TVNewsCheck featured him on its Talking TV video podcast in which he shared some thoughts on the more tectonic forces shaping the industry in an increasingly fragmented landscape.

Among the issues affecting station M&A that he weighed in on is retrans, the major revenue stream in addition to advertising. That “gravy train,” he said, “is slowing down, obviously with cord cutting and cord nevering. There are many people — many younger people — who won’t be subscribing to an MVPD.

“On the other hand, they may be subscribing to a virtual MVPD or Hulu Live, YouTube Live, where they do get access to the local television stations. And those services do provide retransmission consent payments to local television stations, much like the cable operators [and] the satellite operators.

“But while it is slowing down, thankfully, the local television stations have negotiated contracts with rate increases. So even if they are losing subscribers, they may be still increasing their retrans revenues because the rates keep going up. [But] that’s going to slow down as well. The heyday of very big increases, I think it’s long since gone.”

When asked whether stations will be able to build successful business models based on streaming or whether streaming will have a negative disruptive effect on their core linear TV business, he answered: “I think it’s incredibly disruptive, but I think many local television stations are successfully responding to that disruption by getting involved, playing in the game, much like they did five or six years ago with other digital advertising revenues, their websites and mobile apps, etc.”

And when asked whether he thought stations and groups will ever see digital revenue grow to become a significant percentage of their overall revenue, he said: “The question is how you define that digital revenue. If you include the [streaming] revenue directly, then I think, yes, it will be significant. And even [if it is] 10% or 15%, it’s still a significant number of dollars. And some groups are doing even more than that. So, I think, yes, they will.”

TVNewsCheck’s Top 30 TV Station Groups

Data courtesy of BIA Advisory Services