Net retrans revenue to reach $13.5B by 2021, Wells Fargo says

quarterly earnings

Net retransmission revenue (which is retrans minus reverse compensation) for broadcasters is on track to reach $13.5 billion by 2021, according to Wells Fargo analysts.

At that rate retrans will be growing 8% annually and, according to the report, will represent 54% of broadcast EBITDA by 2021, up from 46% in 2017.

Wells Fargo’s forecast appears to somewhat outpace where SNL Kagan in June predicted retrans would be by 2020 although SNL Kagan’s numbers examine the retrans cost predictions for pay-TV providers. According to that firm, the total licensing cost to U.S. pay-TV operators will reach $10.6 billion by 2020.

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RELATED: SNL Kagan revises projected 2020 retrans figure again, moves it up to $10.6B

SNL Kagan's projections call for the average TV station's monthly per-subscriber fee to grow from $1.40 this year to $2.21 by 2022.

Looking ahead to 2017, Wells Fargo offered up some predictions for individual broadcasting groups.

The firm predicts Nexstar will have the highest average retrans rate at $1.99 per subscriber, which will be due in part to new rates for Media General following Nexstar’s acquisition of the group. Sinclair Broadcast Group, meanwhile, will have the highest net retrans margin at 59% next year.

Because of timing on renewals, Wells Fargo anticipates that Scripps will have the highest net retrans growth rate next year at 27%.

As for the major broadcasters, Wells Fargo anticipates CBS will have the best 2017.

“Of the diversifieds, CBS has the best trends of the group — with a monthly retrans rate of $3.24/sub and a monthly reverse comp rate of $1.94 by 2021 (total revenue of $2.7 billion). We believe this is because CBS only focuses on broadcast, while the others sort of lead with cable. For reference, retrans/reverse and total trends for NBC, Fox and ABC are $3.24/$1.91 ($2.5 billion), $2.83/$1.85 ($2.5 billion) and $2.77/$1.59 ($2.1 billion), respectively,” the firm said, according to TVNewsCheck.


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