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Retransmission consent fees are expected to climb to $10.3 billion in 2021, up from $6.3 billion in 2015, according to SNL Kagan.
According to Kagan, U.S. TV station owners have continued to secure higher retrans fees in recent negotiations, with strong advances made at year-end 2014 from renewals and annual step-ups in existing contracts. The gains in retrans fees extracted from distributors also comes as broadcast networks are also expected to grow their reverse retrans fees from stations.
For 2015, Kagan projects reverse retrans could increase from $1.65 billion to $3.69 billion. SNL Kagan shows reverse retrans payments back to the networks growing from 42% to 60% of affiliates' retrans payments over that time.
Although the level of reverse retrans paid back to the networks is rising, both stations and broadcasters are finding room to cooperate, particularly with over-the-top offerings like CBS All Access. These OTT initiatives enable stations to further monetize TV content and act as a hedge against potential retrans disputes and loss of multichannel subs via cord-cutting.
On average, stations will receive retrans fees of about $1.53 per subscriber per month by 2018, according to Kagan, putting them in the neighborhood of the priciest cable channels. According to Kagan, stations will be ahead of all but five cable networks in terms of affiliate fees by 2018 -- ESPN ($8.80), TNT ($2.16), FOX News ($1.67), FOX Sports 1 ($1.57), and Disney Channel ($1.56). Most RSNs are projected to be significantly above this average retrans fee benchmark for broadcast stations.