Retrans Consent Leverage Squarely With Broadcasters, Necessitating Regulatory Reform, BTIG's Greenfield Says
Leverage in retransmission consent negotiations is skewed so heavily in broadcasters' favor that regulatory reform "must occur," BTIG analyst Richard Greenfield wrote investors Thursday. Despite growing numbers of U.S. households, multichannel video programming distribution subscription numbers are shrinking because of…
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bundle prices and cost-motivated cord cutting, Greenfield said. Retrans fees cable MVPDs pay to broadcasters are increasingly being used to start cable networks -- such as Tribune's WGNA -- and pay for national broadcast programming through reverse retrans, "neither of which retrans was ever intended for," Greenfield said. Comparing retrans fees and cable network affiliate fees is "apples and oranges" since MVPDs share advertising revenue with cable networks they carry, while broadcast TV ad revenue isn't shared with MVPDs, he said. Greenfield said that the FCC, as it takes comments in docket 10-71 on retrans negotiation rule changes, "cannot simply look at the cost of each broadcast station, but [has] to think how the retrans negotiating process has impacted cable video pricing in totality." Congress' 1992 passage of the Cable Act, enacting retrans consent instead of must-carry rules, had a local focus, involving stations and local programming, noted the analyst. But market dynamics have changed dramatically since 1992, with multiple MVPDs serving a given market, broadcast groups often having control of multiple big four networks in a single market, and retrans fees funding national programming, Greenfield said.