Cowen & Company has signaled that it thinks Ion could still get an affiliation deal with Fox, even though Ion has elected must-carry for its stations.
After the FCC reportedly said Ion had elected must-carry, forgoing payments from MVPDs for its TV station signals in favor of mandatory carriage, the general wisdom appeared to be that that meant Fox would not switch some of its affiliations from Sinclair and Tribune to Ion.
In a commentary Wednesday (Oct. 18) from analyst Paul Gallant, Cowen had a different take, suggesting Ion could put a Fox signal on its TV station digital subchannels and seek retrans for that multicast channel.
"Despite Ion's must-carry election, we still believe it could strike a deal to carry Fox's signals and collect retrans for them," Gallant advised. "Ion could do this by carrying Fox as a second digital stream within its 6 MHz broadcast signal and collect retrans for it."
Gallant, managing director of the Washington research group on technology, media and telecom, and himself a former top FCC official, said the key is a 2005 order FCC conclusion that must carry elections only apply to primary signals, so any other digital signal is subject to retrans negotiations.
He says Sinclair/Tribune could try to get that 2005 rule changed, but the FCC is unlikely to open that floodgate and Gallant points out that it would not apply to Ion's three-year election made earlier this month.
Bottom line, he says, that digital subchannel option strengthens Fox's hand.