Broadcast Nets: Higher Ratings Should Merit Higher Retrans Fees
Although retransmission fees continue to climb, broadcasters say they are still nowhere near the carriage fee levels paid to cable networks.
Retrans fees paid to stations are just 7.1% of the total carriage fees paid to cable networks -- according to media researcher SNL Kagan, which released the data during a recent conference. By the end of 2012, total retrans fees will hit $2 billion. Subscriber fees paid to cable networks amounted to nearly $29 billion.
Dennis Wharton, executive vice president of communications for the National Association of Broadcasters, says: "As is clearly obvious from this chart, the notion that broadcasters are responsible for excessive pay TV rate increases has no relation to reality."
Broadcasters have said that since they generally get higher ratings than many cable networks and local cable stations, they should get higher fees from retrans deals.
More than one senior media executive heading up a TV network and owning TV stations has said there is still a major gap between big cable networks like ESPN, which get nearly $5 per month per subscriber, and the money that goes to TV stations. Generally, big market TV network affiliates have been getting anywhere from 50 cents to 75 cents per month per subscriber in retrans deals.
SNL Kagan does project that retrans monies will grow -- as well as its share against cable network carriage fees. In 2015, SNL Kagan says retrans money will go to $3.83 billion, or a 10.7% share of cable networks' total carriage fee take of $36.51 billion.