SNL Kagan: Retrans fees up 40% per sub, as NCTA looks to kick broadcasters out of basic tier

The amount of money each U.S. pay-TV subscriber pays to include individual broadcast stations in their channel package increased an average of 40 percent year-over-year to 89 cents per customer in the second quarter, according to SNL Kagan.

The research firm's latest tabulation of fast-rising broadcast retransmission fees comes as the NCTA -- in comments to the FCC relating to the agency's upcoming Video Competition Report to Congress -- asked for removal of a mandate requiring cable companies to include broadcast channels in their basic programming tiers.

As for the quarterly SNL Kagan retrans report, it tracks the top 15 station owners and comes just two and a half months after the research firm predicted U.S. pay-TV operators will pay a combined total of $9.8 billion by 2020 for broadcast retransmission TV rights. 

SNL Kagan said Gray Television took in the largest retrans fees in the second quarter, with per-sub fees growing to $1.26 per subscriber on a network basis. (Gray Television just agreed to buy Schurz Communications' TV and radio stations for $442.5 million.)

Another station group in consolidation mode, Media General, saw year-over-year per-sub increases of 45.2 percent to 99 cents per pay-TV customer, according to the report. Media General just made a $2.45 billion proposal to acquire Meredith Corp.

The SNL report comes not only as the broadcast TV station and pay-TV landscapes are both consolidating, but also as the FCC is mulling significant changes to laws governing retransmission negotiations.

The FCC has already indicated that it will likely remove "exclusivity" laws that restrict pay-TV operators from porting in signals from distant broadcasters. But other key changes could be coming, as well.

Responding to a call for comments for the FCC's upcoming annual Video Competition Report to Congress, the NCTA took aim at what it called "outdated" laws that require cable companies to include broadcast TV stations in their basic programming tiers. "None of cable's competitors have such an obligation, and the requirement hampers cable's ability to compete for customers who would prefer not to have to pay for such stations," the NCTA said in its filing.

For more:
- read this SNL Kagan report (sub. req.)
- read this Broadcasting & Cable story

Related articles:
FCC Media Bureau chief Bill Lake: Time to end 'outdated' exclusivity rules
Media General and Meredith to form third biggest TV station group in U.S. with $2.4B merger
Average pay-TV bill up more than 9% in one year to $99.10, Leichtman says
SNL Kagan raises retrans fee forecast to $9.8B by 2020; Mediacom's CEO complains to FCC

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