Policy

Iger: Disney Seeking Retrans in 2010

12/09/2009 10:59 AM Eastern

The Walt Disney Co., expects to begin reaping in retransmission-consent cash from cable, satellite TV and telco operators and station groups in 2010, CEO Bob Iger told an audience at an industry conference Wednesday.
Disney, which owns broadcast network ABC as well as 10 owned-and-operated stations in some of the largest markets in the country, had reportedly been asking its affiliate stations for a cut of their retrans cash. But at the UBS Global Media and Communications conference in New York Wednesday, Iger said that come 2010 -- when a substantial number of retrans agreements expire -- Disney will be asking for compensation from both affiliates and distributors.
"We are not in very active negotiations right now, but there will be negotiations coming up -- significant ones -- particularly in 2010 and I'm certain that retransmission consent is going to be on the table," Iger said. "We derive huge value from our stations and they derive huge value from our stations. Ours [stations] are market leaders, particularly in big markets [like] New York, L.A., Chicago and Philadelphia, for instance. We believe that ultimately we should get paid for the value we deliver. We have always looked at that value as part of the overall equation of what we sell various channels to these multichannel providers for, but I think there is probably going to be more of a focus on deriving specific value from retransmission consent for those stations. That seems to be a trend in the market place"
Asked if he was only talking about O&O stations and not affiliates, Iger said both.

"We hope to be able to work with our affiliate base to derive value from our overall network, which includes the stations" Iger said. "Those are discussions that are underway which I won't get too specific about."
That may be tougher to do than he thinks. Already several small station groups have come out against broadcaster attempts to horn in on their retrans compensation -- Fox and NBC also have reportedly asked for their cuts, unsuccessfully, in the past. In August Gray Television CEO Hilton Howell said that he has resisted overtures from networks in the past and that he will continue to.

"We are going to just say no, as Nancy Reagan used to say," Howell said on the company's August second quarter conference call. "I think they are going to try, and we are going to say no, and I hope we can get our industry to really all realize that this retrans is hard fought money for us, and we need to keep all of it."
But just as some station groups are digging in their heels, others are accepting sharing retrans revenue as a part of doing business. In November, Belo Cos., which owns four ABC stations, including their flagship WFAA in Dallas/Fort Worth, said it would likely reach some kind of compensation agreement with the network.

"We expect to complete the agreements in a way that is manageable for the company and continues the good relationship we've had," Belo CEO Duvia Shive said on an earnings conference call in November.

 

September