Wells Fargo media analyst Marci Ryvicker at the TVB Forward conference

Analyst Expects Ion to Choose Must-Carry

Decision would kill Fox deal, help Sinclair

Analyst Marci Ryvicker expects Ion Media to elect must-carry at its Oct. 1 deadline, rather than try to secure retransmission payments from cable operators, a decline that would effectively kill a potential station deal with 21st Century Fox.

Fox was reportedly considering a joint venture with Ion that could absorb Fox affiliations around the country, which could hurt stations owned by Sinclair Broadcast Group.

“Ion appears to be on track to remain must-carry this Sunday, making a partnership with Fox financially impossible in our view,” Ryvicker said in a research note.

“With this overhang likely to be gone—and very soon—we reiterate our Outperform on Sinclair," she added.

Ryvicker said that without local news, sports or “must-see” primetime programming, Ion lacks negotiating leverage for retrans and has chosen must-carry under the communications law in the past. She added that Ion has already traded picking must carry—and forgoing retrans payments—for nationwide carriage of its networks by distributors.

The main point of Fox doing a deal with Ion would be to enable Fox to collect a bigger share of the retransmission payments its affiliates get. Fox would have to wait three more years before trying to get retrans payments via Ion stations in a joint venture.

Ryvicker noted that if Ion does choose retrans, “we would have to re-evaluate.”