SNL Kagan now expects U.S. TV station owners’ retransmission fee totals to reach $10.3 billion by 2021, versus the projected $6.3 billion this year. The company also updated its retrans revenue number for 2020, up $500 million more than its prior projection of $9.3 billion last year, to $9.8 billion.
The revised numbers are partially due to strong advances made at the end of 2014, thanks to renewals and annual step-ups in existing contracts.
While the station owners have been successful at securing rising rates, broadcast networks have also been able to extract some rising fees of their own — growing up to 60 percent from the prior 42 percent range. SNL Kagan now projects the funds flowing from the affiliate and Owned & Operation stations back to their network partners could increase from $1.65 billion in 2015 to $3.69 billion in 2021.
Now common over-the-top offerings have brought the two sides closer together, SNL Kagan found, providing an avenue to further monetize TV stations’ content, a hedge against potential retrans disputes, and loss of multichannel subscriptions via growing cord-cutting.
The average 2018 retrans fee for broadcast networks is expected to be $1.53, above all but five basic cable networks’ affiliate subscription fees: ESPN ($8.80), TNT ($2.16), Fox News ($1.67), Fox Sports 1 ($1.57), and Disney Channel ($1.56).
Most Regional Sports Networks are projected to be significantly above the $1.53 benchmark, the SNL Financial LC division concluded.