Sinclair Broadcast Group said it has entered into an agreement with the ABC Network for the renewal of its nine affiliation agreements covering approximately 5 percent of the country. The new agreements will expire Aug. 31, 2015.
"As one of ABC’s largest affiliate groups, we are pleased to renew our partnership with the network," David Smith, president-CEO of Sinclair, said in a statement. "We believe the length of this new term continues to demonstrate the robust viability of the network/affiliate model."
Barry Faber, Sinclair’s executive VP/general counsel, noted, "Although the agreement includes a license fee, based in part on retransmission consent revenue, we believe that the pass-through to the networks of a reasonable portion of the fees that broadcasters receive is a necessary and appropriate way to make sure that the networks continue to be able to provide the most popular programming on television.
"Over time," he continued, "we expect that the fees paid by multichannel video program distributors to acquire content will be reallocated so that the payments they make more closely correlate with the popularity of programming. As a result, the fees paid to broadcasters are likely to increase to more appropriate levels, which will allow affiliates to share these fees with the networks in a measured manner, while the local stations continue to benefit from this dual revenue stream."
Sinclair said it does not expect the terms of the new agreement or the license fee to negatively impact the 2010 TV station expense guidance provided in Sinclair’s Feb. 17 earnings release, which included an estimate for the amount.