Rising retransmission-consent fees and growing advertising revenue have helped boost investor confidence in the local TV sector, according to a report by broadcast industry researcher BIA Kelsey, adding that stocks for local broadcasters have risen 185% in the first three quarters of the year.
According to its report – "Local Television Stations Profiles and Trends for 2014 and Beyond" – BIA Kelsey’s Local Media market capitalization index, which includes more than 55 local media companies, rose by 64.9% in the first three quarters of 2013, compared to a 15.6% increase for the S&P 500 Index.
Local television stocks, according to BIA Kelsey, rose a combined 185% in the same period. BIA Kelsey predicts that retrans revenue – at more than $2 billion in 2012 – will rise to more than $6 billion by 2018.
The researcher estimates that total local media spending will rise to $132.7 billion in 2013, of which local; TV is expected to capture about 15%. BIA Kelsey’s chief economist and author of the report Mark Fratrik noted in a statement that local TV ad revenue swings predictably between odd and even years.
“With strong negotiations around retransmission consent agreements and expansion of digital offerings beyond the over-the-air base, we anticipate the industry to average between 5 and 8 percent increases every two years, or 2.5 to 4 percent increases per year,” Fratrik said in a statement. More information about the report and how to purchase it is available at http://www.biakelsey.com/Research-and-Analysis/Reports/State-of-the-Industry-TV