Meredith set to renegotiate 80% of its retrans contracts through 2017

TV station operator Meredith Corp. looks poised to cash in on the rising cost of retransmission fees.

Speaking to investors on the company's quarterly earnings call yesterday, Meredith CFO Joseph Ceryanec said 80 percent of the broadcaster's retrans deals with MVPDs come up for renewal within the next two years. 

"For fiscal 2016, about 40 percent of our MVPD contracts are up," he said, according to a Seeking Alpha transcript of his remarks. "So we're just kind of starting into renegotiating in a new rate structure. And, yes, we feel good about growing both the top line, as well as the margin this year … About another 40 percent of those contracts are up in our fiscal 2017, as well."

According to SNL Kagan, retrans fees have risen 40 percent per pay-TV subscriber since last year. 

Meredith Corp., which also publishes magazines like Shape and Better Homes and Gardens, saw overall revenue increase by 3.63 percent in the fiscal quarter to $384.7 million, growth the company attributed partly to rising broadcast retransmission fees, which offset softness in the advertising market. 

Meanwhile, Meredith Chairman, President and CEO Stephen Lacy also addressed the issue of the proposed takeover of Meredith by Media General. That $2.5 billion deal has been opposed by some Media General shareholders, as well as rival broadcaster Nexstar, which is threatening a hostile takeover of Media General.

In updating investors on the progress of the Media General deal, Lacy still described it as imminent.

"The new Meredith/Media General will feature a strong financial position, unmatched content creation capabilities, deep consumer insights and data, expansive consumer reach and multiple avenues for future growth. It will truly be a powerful and diversified media company operating across multiple platforms," he said.

"The new Meredith/Media General will operate a leading portfolio of more than 80 television stations reaching 34 million U.S. TV households; importantly, in high-quality markets," he added. "This includes an industry-leading 25 Big Four network-affiliated television stations in the nation's top 50 markets. Additionally, Meredith Media General's 30 percent television household reach will be well below the government mandated 39 percent ownership cap. This allows for further participation in the ongoing local broadcast industry consolidation."

For more:
- read this Seeking Alpha transcript

Related articles:
Nexstar makes $4.1B hostile bid for Media General as broadcast consolidation binge kicks into overdrive
Media General and Meredith to form third biggest TV station group in U.S. with $2.4B merger
SNL Kagan: Retrans fees up 40% per sub, as NCTA looks to kick broadcasters out of basic tier

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