Retrans revenue to grow to $13B by 2028, analyst says

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According to an S&P analyst, the money stations are netting on retrans after network fees will go flat by 2021. (Getty/jackaldu)

Broadcasters will be collectively taking in around $13 billion from the pay TV industry in the form of retransmission licensing payments by 2028, an analyst predicts. 

According to Robin Flynn of S&P Global Market Intelligence, the growth of total net retrans fees will slow to low single digits by 2021, then hold flat at around $5.3 billion through 2028. (Credit TV News Check for reporting on a presentation delivered by Flynn at last S&P Global Market Intelligence’s annual TV & Radio Finance Summit in New York.)

However, that’s because broadcast networks will demand a greater share of retrans fees from affiliates, Flynn said. The fees pay TV operators pay will keep on growing, she predicted. 

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According to Dish Network programming chief, a passionate opponent of retrans fee increases, retrans totaled $215 million in 2006 and rose to $7.7 billion by 2016. By 2017, he said it totaled $10.93 billion, indicative of what he called “incredibly aggressive retrans fee hikes.”

Also in the room alongside Flynn, Nexstar Media CEO Perry Sook described retrans fees as being pretty good business for station owners, despite network demands. 

In 2005, he said, Nexstar collected $5.7 million in retrans fees, surrendering none of it to network partners. “This year we’ll do $1.1 billion in retrans revenue with a margin in the 50s. I’ll take the margin in the 50s on a billion dollars rather than 100% of $5.7 million, and I think every other broadcaster would do the same.

“You have to look at the totality of the [network] relationship,” Sook added. “If that ever ceases to be profitable, then I think you have fundamental decisions to make.”