Belo: ABC Seeking Cut Of Retrans Dollars

Belo CEO Dunia Shive says that ABC, in affiliation renewal negotiations, is asking for a share of the station group's growing retrans revenue to help pay for the network's programming costs. "We expect to complete the [affiliation] agreements in a way that is manageable for the company and continues the good relationship we've had," she says.
TVNewsCheck,

Belo Corp. CEO Dunia Shive says that ABC is asking for a share of the station group's growing pot of retransmission consent dollars in ongoing affiliate renewal negotiations.

Call it reverse compensation or retrans sharing, Shive said during the company's third-quarter conference call with securities analysts. "It's really a mechanism for having the affiliates share in the cost of programming."

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Belo operates four ABC affiliates, including its flagship station in Dallas-Fort Worth (DMA 5), WFAA.

All the networks have been eyeing their affiliates' retransmission consent revenue as it has grown sharply over the past three or four years.

The revenue comes from cable and satellite operators in exchange for broadcasters' permission to carry or retransmit TV station signals.

Belo reported today that its retrans take amounted to $10.6 million in the third quarter, 7.5 percent of its total revenue for the quarter.

Shive declined to discuss details of the talks with ABC, except to say that the network was not asking for "100 percent" of Belo's retrans revenue.

But she indicated that Belo will end up paying something to ABC. "It's a negotiation.... We expect to complete the agreements in a way that is manageable for the company and continues the good relationship we've had."

If Belo does agree to pay ABC, she said, the company will book the payments as a programming expense.

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Comments (5) -

HopeUMakeit Nickname posted over 3 years ago
Let’s see if I got this straight, ABC, who offers it shows online to the detriment its local affiliates and is responsible for half of the broadcast audience erosion to cable between ESPN 1 throu 27 & Disney which, in the case of ESPN, has virtually taken all high profile sports off broadcast weekend schedule is now looking for a cut of the money that the cable companies are paying to the broadcasters which really should be a percentage of those 18,500x $5. cable commercials that they schedule everyday again to the detriment of local broadcasters. Nielsen is now reporting that almost 10% of the broadcast audience was lost in the digital conversion, that only benefited web companies.. How many different fronts will local broadcaster have to battle on?. I would not pay them a dime.
Vivian Nickname posted over 3 years ago
The whole model is broken and the consumer is the one caught in the middle. If ABC is going to give the content away for free on the web why would the affiliate have to pay or for that matter why should cable/telco/DBS pay the affiliates retrans fees for content that is given away free elsewhere? The consumer will be the one that ultimately pays for all of these new fees or they will make the decision to cut the cord and go to the free stuff.
tjxx Nickname posted over 3 years ago
Hey Mr. HopeUMake It. Have you been asleep the last few years? Local broadcasters are in big trouble. They produce very little programming, local news, and have lost control of their destiny by expecting the networks to be their "partners". Are you kidding me! In the next 10 years their will be no network affiliations. All the network prgrams will be on cable and or on the internet. Wake up. Next you will be telling me you are going to buy a weekly newspaper in a small town .
Klaatu47 Nickname posted over 3 years ago
A small point. Weekly papers in small towns are doing alright. Large dailies in big towns are being crushed. for all it's problems, the chicago tribune's triblocal is doing well along with its more than 90 individual town websites www.triblocal.com.
PSIPthing Nickname posted over 3 years ago
and Klaatu47's point can be extended to broadcast; the retrans revenues are greater in larger markets, and -- to not put too fine a point on it -- it's cheaper to pay more to the piper than to create alternative programming, either by yourself or as part of some type of "alternative network."

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