Gannett's broadcasting chief said the company doesn't mind paying networks for rights to carry their programming. The money creates a partnership where a high tide lifts all boats -- and, he said, the public benefits.
Speaking at a UBS investor event Wednesday, Dave Lougee, who heads the Gannett unit with 23 stations, said sharing some of its retransmission consent fees with networks will allow continued funding of top-tier programming.
"It's in our joint interest for the broadcast networks to grow and develop that revenue stream," he said. "It's also in the public's interest. A financially healthy network-affiliate model is how local and national sports can be kept from going to all pay services, and it's how local broadcasters in cities across this country continue to make the necessary investments in local independent journalism."
Gannett will not have to make those reverse compensation payments for several years, since its affiliate deals don't expire for a while, Lougee said.
Meanwhile, it will continue to collect retrans dollars, pegged at $75 million-plus in 2011 -- up 20% from this year and from $18 million three years ago.
"This is broadcasting's paid-content model, if you will, and the marketplace is finally beginning to work," he said.
Still, he said satellite/cable/telco operators have "artificially held down" retrans fees. While network affiliates draw top ratings, they were being paid a fraction of what lesser-viewed cable networks get for carriage rights.
Yet, casting ahead, Lougee said: "That's the good news. The marketplace is finally beginning to align audience and sub fees, but together we and the networks have a ways to go before those two columns come into alignment."
Gannett's stations include the NBC affiliates in Atlanta, Denver and St. Louis and Lougee said the company is very optimistic that Comcast's takeover of NBC will be a boon to the broadcasting business.