Recent Earnings Reports Reveal Bloated Retrans Fees Continue To Escalate
PITTSBURGH, November 15, 2017 – The evidence is clear that TV station owners continue to rely on their market power and hardball negotiating tactics to extract scandalous increases in the fees that pay-TV operators are required to hand over in order to provide “free TV” signals to their customers. The American Cable Association’s recently launched TV Ransom campaign is an effort by smaller pay-TV providers to alert the public of corporate broadcasters’ unrestrained greed and galling conduct, such as the epidemic of signal blackouts before marquee events.
Based on the latest round of quarterly earnings analyzed by ACA, broadcast media conglomerates are extracting outrageous “retransmission consent” fees from cable operators and their customers to deliver big returns that more than offset declining revenue from other sources, especially advertising. In fact, “retrans” fees are the fastest growing part of consumers’ monthly cable bills. These fees are 30 times more expensive today than they were 10 years ago, and it’s only getting worse.
According to S&P Global, retransmission consent has shifted nearly $40 billion from the cable industry to broadcasters over the past 11 years. In recently released earnings reports, the following broadcasters reported excessive year-over-year increases in retrans revenue:
• Nexstar Broadcasting: 162 percent increase
• Comcast/NBCU: 70 percent increase
• Gray Television: 37 percent increase
• CBS: 27 percent increase
• E.W. Scripps: 20 percent increase
“It’s undeniable that many corporate broadcasters are abusing retransmission consent matters. They are leveraging their market power to extract unconscionable fee hikes from cable customers to drive revenue that is being lost in other areas of their business,” said Matthew M. Polka, President and CEO of the American Cable Association.
As broadcast TV viewership continues to drop, broadcasters are leveraging skyrocketing retransmission consent fees to compensate for the sharp decline in their advertising-centric business models, emboldening them to use abusive behaviors during retransmission consent negotiation periods to line their pockets.
Worst of all, they extract the highest fees from the smallest cable operators and their customers, and their demands are continuing to escalate. ACA’s TV Ransom campaign is designed to shed light on these actions and hold broadcasters accountable for their bad behaviors.
This comes at a time when hundreds of small and mid-sized cable operators are negotiating thousands of carriage contracts with corporate broadcasters by the end of the year, with some expected to come down to the wire. These earnings reports are a sneak peek of what’s to come in terms of escalating retrans fees. Actual per-subscriber prices charged by TV stations are included in contracts that contain strict non-disclosure provisions.
About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 750 smaller and medium-sized, independent cable companies who provide broadband services for nearly 7 million cable subscribers primarily located in rural and smaller suburban markets across America. Through active participation in the regulatory and legislative process in Washington, D.C., ACA’s members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business. For more information, visit https://acaconnects.org/