Cable has lost $179.5M from carriage disputes since 2013, says Kagan

The unfortunate title of most expensive affiliate revenue loss goes to Viacom and Suddenlink Communications. (Pixabay)

According to a new report by S&P Kagan, top cable networks have lost about $179.5 million in affiliate fees since 2013 from cable carriage disputes that resulted in blackouts that were eventually resolved. In 2020 alone, these carriage blackouts cost cable networks $18.4 million. These costly blackouts result when a carriage deal expires and the parties involved fail to reach a new agreement. The cable networks go dark on the platform during the dispute, which can cost the networks millions of dollars in lost revenues.

Kagan suggests that the problem stems from a decline in cable viewership in the U.S., which has complicated relationships between cable networking companies and multichannel operators. While traditional multichannel operators are being hit with weakening demand, cable programmers are seeking higher rates to turn a profit.

However, traditional cable is still a profitable business, and network owners risk affiliate revenue by trying to secure a better deal with multichannel operators.

Kagan chart

The unfortunate title of most expensive affiliate revenue loss goes to Viacom and Suddenlink Communications. According to Kagan research in 2014 the companies came to a standstill in their carriage disputes for 3 years costing Viacom Channels $38.6 million in lost affiliate revenues.

Another notable carriage dispute occurred between Fox Corp. and Dish Network. Just 10 days of blackout between September 26 to October 6, 2019 cost Fox $4.8 million in affiliate revenue loss.

Kagan chart 2

With over $31.5 million in lost carriage fees The Weather Channel's 1,567-day blackout on Verizon Communications was the largest loss from a resolved carriage dispute for individual networks since 2013.

RELATED: Dish may be hit with a massive channel blackout in August

The most recent addition to Kagan's database of resolved cable carriage blackouts was the December 2020 battle between Nexstar Media Group and Dish over the carriage of NewsNation. Like the Fox-Dish dispute, the battle between Nexstar and Dish was part of a larger contract disagreement involving Nexstar broadcast TV stations. Approximately $18.3 million of annual cable carriage fees were at risk because of the blackout, but it was resolved after 22 days, costing the network $1.1 million in affiliate revenue loss.