CBS said today it brought in $1 billion in broadcast retransmission fees last year, putting it ahead of schedule in terms of growth rates it set for itself.
“Annual revenue from retransmission consent and reverse compensation has already exceeded $1 billion, a full year ahead of schedule, and continues to grow rapidly,” said CBS CEO Les Moonves in a statement.
That figure puts CBS well on its way toward the goal it set of bringing in $2.5 billion in broadcast retransmission licensing and reverse compensation fees by 2020.
During the fourth quarter, affiliate and subscription fee revenues increased 13%, led by growth in retransmission revenues, fees from CBS Television Network affiliated stations, and digital distribution services. For the full year, affiliate and subscription fees were up 9%.
RELATED: CBS expects $2.5B from retrans, $800M from SVOD distribution by 2020
Looking ahead, CBS CFO Joe Ianniello said a lot more opportunities for retransmission growth were coming up in the next few years. He said that 33% of CBS’ retransmission broadcast footprint and 26% of its reverse comp deals expire over the next 24 months, giving CBS ample chances to renegotiate terms.
As CBS’ retransmission fees grow, so do those of the broadcast industry as a whole. Last year, SNL Kagan revised its projections for broadcast retransmission fees upward, estimating the total licensing cost to U.S. pay-TV operators would hit $10.6 billion by 2020. That’s well ahead of the year before, when the analyst firm projected retrans to hit $9.8 billion by 2020.
With the success CBS has seen in growing retrans and reverse comp rates, Moonves said his company may be on the lookout for more broadcast stations. During Wednesday’s earnings call, Moonves said that if the FCC, under new Chairman Ajit Pai, decides to revise the ownership cap rules for broadcasters, CBS may be prepared to strike.
“If the cap is lifted we’d strategically look to buy more stations,” Moonves said.
While retrans remains a gravy train for CBS, the FCC’s recently concluded broadcast incentive auctions did not pan out for the broadcaster.
As TVNewsCheck points out, CBS said it did not end up selling any of its full-power stations during the auction. Ianniello said it didn’t make sense for CBS to opt in because of the drop in value for the 600 MHz spectrum being auctioned off.