Pew: Local TV Retrans Fees Negate Ad Revenue Losses Caused by Pandemic

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WASHINGTON—Local TV stations had a saving grace during the height of the coronavirus earlier this year as ad revenue was dropping, retransmission fees. According to a Pew Research Center report on the second quarter of 2020, local TV stations’ gain from retrans fees outperformed what they lost in ad revenue.

Studying the revenue reports from Sinclair, Tegna, Nexstar, Gray and E.W. Scripps—which together own or operate more than 600 stations in the U.S.—Pew found that their ad revenue fell by a median of 24% (Nexstar’s year-over-year numbers do not include former Tribune stations as the companies merged post Q2 2019). Even in a presidential election year, for all station groups but Gray, ad revenue was down from the mid-term elections in 2018.

But retransmission fees paid by cable providers negated these losses, as the median year-over-year increase for the five companies was 37%, helped by an increase in viewership during the early days of the pandemic. Pew says that this equates to a median increase of $87.3 million in revenue; Pew estimates that ad revenue dropped $67.9 million during Q2.

Sinclair was reported to have the biggest jump, earning more than $1 billion in retransmission fees in Q2 2020, compared to $367 million in Q2 2019.

(Image credit: Pew Research Center)

TV news media overall actually saw general increases in its ad revenue for Q2 2020. Pew found that network TV (ABC, CBS and NBC) saw an 11% increase in ad revenue during the quarter. Cable networks, meanwhile, combined netted a 2% year-over-year increase, but it was a different story for each network, with Fox News Channel seeing an increase of 41%, CNN decreasing 14% and MSNBC dipping 27% in ad revenue.

For the complete study, visit Pew’s website (opens in new tab).