Policy

Sinclair Eyes $48M in Retrans Fees

2/14/2007 3:15 AM Eastern

Sinclair Broadcast Group, on the heels of its bitter battle with Mediacom Communications, this year expects to generate nearly $48 million from retransmission-consent agreements, nearly double last year’s figure, officials said Wednesday.

The expected $48 million will represent almost a 90% increase from the $25.4 million in retransmission-consent revenue that the broadcaster secured in 2006, Sinclair officials said during a conference call on fourth-quarter results.

Sinclair CEO David Smith urged his fellow broadcasters to continue the quest for cash from cable companies.

“Now is certainly a significant time in history, and point in time in history, when we as a company have been able to get what we think is the beginning of the fair value of our content,” Smith said. “Having said that, it is now incumbent upon the rest of the industry to kind of recognize what we’ve been able to accomplish and kind of step up and start asking for what their due is.”

In a bitter dispute,

Sinclair pulled 23 TV stations off of Mediacom systems in 16 markets Jan. 6

, affecting 700,000 subscribers. But a new agreement was struck earlier this month in which Mediacom reportedly paid cash fees for carriage of Sinclair’s stations, which were restored to the cable company’s lineup.

In January, Sinclair also completed a new retransmission-consent pact with Time Warner Cable for the carriage of analog and digital signals of 35 stations in 22 markets, representing nearly 6 million cable subscribers.

During a question-and-answer period, Smith also said he hopes that CBS, which has been vocal about getting cash for its TV-station signals, will move forward with that strategy.

“I think the next big driver in this category is going to be CBS, which has publicly said it would like to get 50 cents per subscriber,” Smith said. “We think that’s a very doable number and would certainly encourage them to hold the line and, for the CBS affiliate body, to the extent that it can, to hold the line to start to get paid.”

Added Smith, “There is no confusion on the part of the consumer about what they watch and what they think has value. I think it’s time for the consumer to kind of let the cable company know that it’s OK to pay for content that we choose to watch.”

Sinclair officials were circumspect about details of their deals with Mediacom and Sinclair and other operators.

“There are rate increases in all of our retrans deals,” Smith said. “They vary deal-to-deal.”

When asked what kind of losses or negative impact the Mediacom dispute had, Smith said, “Anything that we lost there was immaterial relative to what we get. So it’s not worth chatting about.”

After being complimented on their conduct during the Mediacom battle by an analyst, Sinclair officials commented on some of the remarks made about them -- not only Smith, but general counsel Barry Faber -- by the cable company.

“It’s one of the most difficult things Barry and I’ve ever been through, and Barry was bearing the brunt of the entire transaction,” Smith said. “It was necessary to stay above the foolishness, as you suggested, because I think if we hadn’t, then it would have just degenerated into just a name-calling kind of thing ... It’s not easier, but it’s sometimes difficult to stay on the outside of that and say, ‘We’re just going to be really good guys here and do the right thing and let the chips fall where they’re going to.’ It was hard, but it was necessary, given the personalities of the two companies.”

Sinclair, which reached a retransmission-consent deal with Mediacom Feb. 2, told analysts that it still needs to secure such agreements for roughly 25% of its viewers who are customers of multichannel-video-programming distributors, having done deals for the other 75%.

The broadcaster also expressed some expectations for retransmission-consent revenue going forward.

“By 2010, there is no reason why our numbers, I’m being cautious here, probably couldn’t double if the industry moves in the right direction,” Smith said.

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