CBS is on pace to quadruple the retransmission fees it gets from its affiliates and cable and satellite providers to $1 billion by 2016, a year earlier than previously expected, a new report says.
Fox and ABC are expected to make similar gains, though NBC is not, according to the report from Todd Juenger, an analyst at Sanford C. Bernstein. The reason NBC isn't expected to make such gains is that its largest distributor is its owner, cable company Comcast, the report said.
The numbers are based on an expectation that by 2016, CBS will receive $1.22 per subscriber per month for the 37 million subscribers to its stations.
The fees are rising quickly: CBS is expected to receive $250 million in retransmission fees this year and had previously anticipated hitting close to the $1 billion mark in 2017.
The report said the faster-than-expected route to $1 billion a year isn't expected to significantly change the current value of stocks for CBS, News Corp., which owns Fox, or Disney, which owns ABC. What will matter more to the stock prices is retransmission-fee growth in the 10 years after 2016.
The report noted that in the early days of pay TV, broadcast networks allowed cable companies to carry their programming for free in exchange for distributing cable networks owned by their corporate parents. But that changed in the late 2000s, because most cable networks had gained full distribution and CBS was split from Viacom and its cable networks, including MTV, Comedy Central, and Nickelodeon.
At that point, CBS began leading the networks in demanding cash payments.
