Disney Upbeat About Retrans Fee, Pay-TV Alternatives

TV networks are destined to make big revenue gains on retrans fees. How much is still anyone’s big guess. Some TV networks believe they might see $400 million to $500 million per network per year by 2015, and as much as $1 billion a year by 2017. (SNL Kagan estimates overall 2013 revenues from retransmission revenues will be $3.019 billion.)

But Jay Rasulo, senior executive vice president/CFO at Walt Disney Co., in speaking at a Bank of America/Merrill Lynch media conference, said network groups are different -- depending on the size of their stations, what negotiation cycle they are in regarding these deals, and their TV station performance.

“It’s very hard to compare companies' networks forecast when it comes to retransmission,” he said. “I wouldn’t read too much into it.” That said, Rasulo is confident that Disney’s ABC stations will get their fair share -- just looking at viewership: “We are No. 1 in seven of eight markets where our stations are.”

With regard to the TV advertising market, Rasulo said not much has changed since Disney last spoke about the business in August. “The market is pretty good,” he said. In terms of the TV upfront market in June, he said, “we are happy with the pricing and volume.”

Estimates are that the ABC network, which closed upfront deal-making in late July, pulled in cost per thousand viewer price increases (CPMs) in the 7% to 8% range.

Disney continues to seek new pay TV system alternatives: “With strong content, however the pay TV business evolves -- from traditional MVPDs (multichannel video program distributors) ecosystem or an over-the-top provider of various sources or maybe a full over the top MVPD supplier -- when you step to the table with great content, you are in the driver's seat.”

Disney took a major hit from the poor showing this past summer of “The Lone Ranger” theatrical movie. In response, Rasulo says “there needs to be cap on non-tentpole movies.”

Walt Disney’ stock shot up by 3% during mid-day trading on Thursday to $65.64, from news the company would be buying back some of its stock.



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