In a report that is sure to be fully embraced by the broadcast community, SNL Kagan said Thursday that retransmission consent fees, also known as the bane of multichannel video service providers, add up to the equivalent of 8.9% of total fees distributors pay for basic-cable and regional-sports networks and are expected to rise to just under 13% by 2017.
The Kagan report comes just weeks after the Federal Communications Commission moved to prohibit Joint Sales Agreements where two of the top four stations in a market join forces to negotiate retrans deals. Part of the reason for the ruling was to prevent what some MVPDs have said was onerous pricing for retrans and to stop blackouts of channels.
In its analysis, SNL Kagan said they saw little evidence for either. The research house said that rising retrans fees are just one factor in escalating programming costs – others were the additional expense of TV Everywhere and multiplatform agreements, increasing costs for cable network programming (especially sports), and additional channel launches.
According to Kagan’s research broadcast retrans fees will be just 12.6% of the fees paid to basic cable networks and RSNs in 2017, although the growth rates for retrans feeds are higher than those paid for the larger pool of cable network and RSN fees.
Kagan also saw little correlation between JSAs and blackouts – for example, Nexstar Broadcasting Group Inc. hasn't had a blackout since 2005, and Sinclair Broadcast Group’s (currently involved in a blackout of one station – WNWO – in Toledo, Ohio with Buckeye Cable) last blackout was in 2007. According to Kagan, statistics provided by the station at a recent town hall meeting, WNWO is being paid 24 cents per subscriber per month, compared to $5.33 for ESPN, $1.10 for Nickelodeon and $3.45 for FOX Sports Detroit.