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CHANTILLY, VA.—While increased election advertising and double-digit growth through digital media offerings were significant contributors to the total industry revenue for local television stations in 2016, BIA/Kelsey’s report estimated that nearly one-fourth of the total revenue came from retransmission consent agreements between local TV stations and cable/satellite companies. BIA/Kelsey found that stations received $6.8 billion from retransmission agreements.
“The dependence on retransmission fees has become incredibly important to local stations and many publicly traded ownership groups because it amounts to nearly one-third of their revenue,” said Mark Fratrik, senior vice president and chief economist at BIA/Kelsey. “The fees provide a sound financial basis for the stations and have also become the foundation for many of the larger stations. Our analysis also uncovered that even mid-size and smaller market stations are increasingly relying on the income provided by these fees.”
As a result of the boost in retransmission fees has caused BIA/Kelsey to include retransmission consent estimates on local television in its “Media Access Pro” and “Investing in Television Market” reports. Because retransmission agreements are not made public, BIA/Kelsey developed a modeling formula that uses public information and industry knowledge to provide an examination into revenue streams for stations. In the reports, BIA/Kelsey predicts that retransmission fees will continue to rise over the next five years.
Other findings in BIA/Kelsey’s report show that television is experiencing growth in over-the-air revenues, in large part based on the 2016 elections for president, as well as statewide and local races. Digital revenues also saw an uptick, generating $1.006 billion, a 10.4 percent increase over 2015. BIA/Kelsey forecasts a 8.8 percent increase for digital revenues in 2017.
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