Gray's Prather: Operators Paying More For Stations

Gray Television COO Bob Prather said station groups are starting to collect 50 cents a subscriber (or more) each month from operators in carriage payments, but Gray is taking in more in some arrangements kicking off this year.

Prather said he expects a certain bifurcation to emerge in the ways that cable/satellite/telco operators pay for carriage, where they will look to moderate fees to “niche” cable networks in order to afford the broadcast stations, ESPN, CNN and other top-tier outlets. 

At Gray, NBC has asked to postpone renewal of its affiliation deal to at least March. Under the current arrangement, Gray isn’t paying the network any reverse compensation.

Gray’s CBS and ABC deals extend at least two years out. It’s not paying either one any rights fees. It does pay Fox a little for its small group of Fox stations.

Networks have been inking deals to collect a portion of the dollars that stations garner in payments from operators, and no doubt renewals with the Big Three networks will involve that.

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At an investor event, on questions whether Gray would look to participate in the government’s intentions to auction off spectrum, Prather indicated that it’s unlikely, but he did not rule it out.

“You never say never, but who knows what the price is going to be?” he said. “You hear it all across the board.”

“It’s up to us to make sure that we convince the public and Congress and the FCC that we’re good stewards of this spectrum and that we use it the right way and if there is a way to sell some of the spectrum and still keep our TV broadcasting business strong, I think it’s something we’ve got to look at,” he added.

Gray, which operates 36 stations, likes to focus on stations in markets where there is a state capital or large university. Its largest market is Knoxville, Tenn., and the smallest is in Grand Junction, Colo.

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