A new SNL Kagan analysis says U.S. TV station owners' retrans fees are expected to reach $9.3 billion by 2020, versus the projected level of $4.9 billion this year. Reverse comp will also rise, but stations should still post net retrans growth.
SNL Kagan: Retrans To Hit $9.3B By 2020
SNL Kagan today updated its industry retransmission fee projections and now expects U.S. TV station owners’ retrans fees to reach $9.3 billion by 2020, versus the projected level of $4.9 billion this year.
At the same time, SNL Kagan projects rising reverse retrans compensation rates based on recent deals, leading to a higher percentage of retrans fees flowing back to the broadcast networks. The good news is the projections still indicate net retrans growth for affiliated stations, albeit at lower rates than last year.
The projections for growth are based on rising per-month sub fees for TV station owners in recent negotiations, as well as a new set of expectations for what broadcast networks are asking in programming compensation from their affiliates.
Despite recent regulatory efforts to chip away at TV stations’ bargaining position in negotiations with multichannel operators and potentially slow the growth of retrans, the market at least near term continues to march higher, the company said. SNL Kagan’s projections call for retrans revenues to rise to $8.78 billion by 2019, versus their 2019 projection of $7.64 billion from last year.
The average $1.32 retrans fee that SNL Kagan anticipate the industry will receive by 2017 across all markets and all affiliates puts TV stations above all but five basic cable networks in terms of affiliate fees per sub per month, with networks such as ESPN ($7.72) and TNT ($1.92) all still above that average mark. Most RSNs are projected to be significantly above this $1.26 benchmark.
SNL Kagan has also updated its reverse retrans projections, which project the funds flow from the affiliate and O&O stations back to their network partners. The projections show that the affiliate reverse retrans funds flow back to the networks could increase from $1.53 billion in 2015 to $3.22 billion in 2020.
BRAND CONNECTIONS
SNL Kagan shows reverse retrans payments back to the networks growing to 59% of affiliates’ retrans payments over time, even as affiliates’ monthly fees increase in the coming years.
Comments (16)
none none says:
October 27, 2014 at 10:46 am
Les can add another wing to the mansion and buy another polo pony!
kendra campbell says:
October 27, 2014 at 10:50 am
Fantasy Land.
Wagner Pereira says:
October 27, 2014 at 7:22 pm
Interesting that you make those comments about Broadcast TV and fail to note that ESPN (Main Channel, not ESPN 2 etc) and TNT are expected to rise ~30% on the heels of their 170% NBA rights deal earlier this month. ESPN (again, main channel not ESPN2 etc) from $6.04 to $7.72 and TNT $1.48 to $1.92.
Amneris Vargas says:
October 27, 2014 at 11:35 am
A little antennae on the back of an STB starts to make more sense.
Jeff Groves says:
October 27, 2014 at 12:55 pm
Seconded! I guess Big Media isn’t satisfied with charging $125.00+ a month, they can’t wait until fees top $200.00. Somebody HAS to pay for those “retransmission” fees, and it will be the subscribers who will get screwed. Scissors anyone?
Evan Ortynsky says:
October 27, 2014 at 4:24 pm
All these fee’s will push people to cut the cord and rely on the Broadcast Antenna again. With equipment on the market like the Tablo and SimpleTV people will not need pay TV anymore. But then the spectrum auction will force broadcasters into a corner to sell their channel, and we will be back to directly feeding Cable and Satellite…. Something has to give here…The house of cards is about to fall….
Keith ONeal says:
October 27, 2014 at 8:51 pm
The FCC is a house of cards, and that house needs cleaning!
Kristjan Magnusson says:
October 27, 2014 at 4:30 pm
Or… the increased retrains fees will allow broadcasters to go back and reclaim some of the sports rights they have lost to the cable nets. Wouldn’t it be great to have all of March Madness, the NBA playoffs and more on the local stations?
Keith ONeal says:
October 27, 2014 at 8:52 pm
And, don’t forget, the College Football BOWL GAMES!
Geoffrey Miller says:
October 27, 2014 at 5:08 pm
Broadcast is finally getting on a level playing field and sports rights to the major events should be available to all. I am rooting for broadcast, cable and satellite have abused their monopolies long enough.
Keith ONeal says:
October 27, 2014 at 8:53 pm
Amen!
Brian Bussey says:
October 27, 2014 at 5:44 pm
Congress needs to pass legislation that bans pro teams, playing in stadiums built by tax payers, from moving any of their games to pay tv. until the stadiums arre paid for.
retrans dollars not spent on programming and staff health benefits should be taxed at 75%. Station employees are required to run to the fire, flood, hurricane, tornado, and terrorist attact. My health costs next year look like I work for Walmart not a large TV Group.. I do not believe tretrans dollars spend the night in the market they originate it. Also, retrans dollars are a slice of consumers monthly cable bills. These are not new dollars. They are just sucked out of other areas of the economy.
Wagner Pereira says:
October 27, 2014 at 7:13 pm
Just because you want to live in a Communist state where everything is dictated by the government (and you would not have the job you do here with your attitude), does not mean it will happen in the USA. As stated previously, NY, NC, GA, FL and even your TX provide tax breaks for filming in those states, yet you do not get to go those movies for free. Amazon and others are receiving tax breaks to open fulfillment centers in those states, yet your Amazon bill is MORE as they then must charge tax in those states. And BTW, thank Obama for “Change You Believed In” in your Insurance Increases. It is happening in every Industry thanks to Obamacare.
Don Thompson says:
October 27, 2014 at 9:39 pm
On Sept. 4, 2014, TVNewsCheck reported that retransmission consent fees will hit $12 billion in 2019, citing Wells Fargo Securities analyst Marci Ryvicker (story: http://tvnewscheck.com/article/78991/nets-share-of-affils-retrans-fees-to-hit-65) Please follow me on Twitter @TedatACA
John Bagwell says:
October 27, 2014 at 10:07 pm
And Matt Polka once said that he is against a la carte and now he is apparently for it (although only for broadcast). How do you explain that one? Plus, the article you posted is a report from Wells Fargo and this is from SNL Kagan. 2 different sources and not one of them being Tvnewscheck.
Wagner Pereira says:
October 28, 2014 at 3:10 am
Everyone, even AHs like Ted Hearn, have an opinion. SNL Kagan has one, Marci Ryvicker has hers. That is how one explains it. Let’s see you explain Researcher’s question? Bottom line, you cannot. Please follow me on Twitter @NotTedatACA