Looking at the trouble regional sports networks are having getting distributors to pay for local sports and at CBS affiliates pulling their local feeds from vMVPD FuboTV, analyst Rich Greenfield is questioning whether the retransmission gravy train for TV broadcasters has left the station.
Entertainment programming has shifted to streaming from broadcast, noted Greenfield, principal and media and technology analyst at LightShed Partners. “Time spent watching broadcast TV is falling rapidly, yet the annual cost of retrans continues to rise,” he said.
During broadcasters’ earnings calls, analysts asked as many questions about the future flow of retrans revenues as any other subject.
Greenfield quoted Dish Network chairman Charlie Ergen, who said on the satellite-TV provider’s latest earnings call: “The next step in retrans is down, not up. … I said it about regional sports, I’m saying it now. That’s where that’s going. And it’s a shame because the local broadcasters are caught in a vice between the network and the distributors. So we have some empathy for their plight, but we cannot be their bank unless we get a return. And right now, we don’t get a return.”
The FuboTV situation may be a harbinger of battles coming up with other virtual multichannel programming distributors (vMVPDs). With affiliates balking, CBS gave FuboTV a national feed of CBS programming, with CBS News replacing local affiliate news.
“When Nexstar management was asked about their leverage in negotiations with vMVPDs vis-a-vis the national vs. local feed, they stated: “that [news] is what people want us for as is the local content,” Greenfield noted. “We hope Nexstar management does not actually believe that as retrans would be a tiny fraction of what it is today without the power/leverage of NFL games on Sunday.”
Also: FuboTV Says Loss of CBS Affiliates Has Had Little Effect On Sub Growth
If local viewers do want local news and can’t get it from a CBS affiliate, they can get it from local ABC, NBC or Fox affiliates, Greenfield added.
“The irony of all ironies is hearing TV station group owners now begging for regulatory relief to have vMVPDs included in antiquated retransmission consent rules to remove access to the national feed,” Greenfield said. “While the Cable Act of 1992 is embarrassingly outdated, as we talked about a decade ago, we are not holding our breath for it to be updated anytime in the next several years. If station groups are hoping for regulatory relief, #goodluckstations.”
While cord-cutting is putting pressure on distribution revenue, it is also hurting ad sales, cutting into reach, he adds.
“Have TV station groups overplayed their hand as the price/value drops with too many direct-to-consumer streaming alternatives?” Greenfield asked. “Feels like management and investor expectations for revenue growth are inflated, with serious headwinds growing.” ■
