Hearst-Argyle’s Retrans Revenue Soars

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Hearst-Argyle Television reported Friday that it collected $17.9 million in retransmission-consent revenue last year, up from $6.8 million in 2005.

This year, the broadcaster expects to get $18 million-$20 million in retransmission-consent revenue, according to its fourth-quarter earnings release.

Hearst-Argyle, which is 74% owned by Hearst Corp., is one of the few broadcasters to break out its cash compensation from retransmission-consent deals. Its total of nearly $18 million in such revenue last year represents payments from direct-broadcast satellite companies, telcos and money it receives for securing distribution of Lifetime Television and its spinoffs.

Hearst-Argyle and Lifetime are sister companies, via Hearst, which owns one-half of the cable network. Disney is Lifetime’s other owner.

Hearst-Argyle uses carriage of its TV stations as a bargaining chit to get cable carriage for Lifetime and its sister channels. The cable programmer, in turn, gives Hearst-Argyle a share in its license fees from cable operators and other distributors.

Like Hearst-Argyle, Mediacom Communications also held a fourth-quarter earnings call Friday.

Mediacom is fresh off its retransmission-consent battle with Sinclair Broadcast Group, during which the cable operator lost carriage of 23 Sinclair stations for one month.

Mediacom finally reached a deal with Sinclair Feb. 2, in which it is reportedly paying cash to carry the broadcaster’s stations, and Comcast’s current retransmission-consent extension with Sinclair expires March 1.

“I think we’re going to see more of this [retransmission-consent disputes],” Mediacom chairman and CEO Rocco Commisso told analysts. “We have the Comcast situation coming up in the next week or so. My bet on that is that they are going to go out and sign a deal. And then we’ll see what happens.”

Mediacom said it lost about 14,000 basic customers during the fourth quarter, of which about 7,000 were attributed to the Sinclair dispute.

“I think this Comcast situation that is currently going on with Sinclair will be an indication of the balance of power here,” Mediacom executive vice president of operations John Pascarelli said on the conference call. “We were sitting there with [Sinclair] having 50% of our customers and we only represented a small piece of their revenues. They were in a situation where they could be more aggressive. Whether and how this applies across the rest of the industry will be based on balance, and I think this will be a key indicator of how it goes.”

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