Hearst Recuts Dish Retrans Deal, Clouds Details

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In agreeing to restore Lifetime to its DBS service, EchoStar’s Dish Network cut a new retransmission consent agreement with Lifetime corporate cousin Hearst-Argyle Television.

Before dropping Lifetime New Year’s Eve, Dish Network signed an extraordinary retransmission consent deal with the stations owned by Hearst-Argyle, whose controlling shareholder – Hearst Corp. – also owns 50% of Lifetime.

Dish agreed to pay around $11 million a year or about 50 cents per month for each subscriber in Hearst-Argyle’s markets. That would be a big step up from what Hearst-Argyle has generated by letting Lifetime negotiate on its behalf with every major cable and DBS operator in the country and far more than the 15-20 cents DBS services are believed to have been paying some other stations.

The deal’s been changed. In a new securities filing, Hearst-Argyle says it is returning to the old structure, allowing EchoStar to pay Lifetime for its networks and Hearst-Argyle’s stations. Lifetime in turn will compensate Hearst-Argyle for the value of the retransmission consent rights in the negotiations.

After the previous agreement, Hearst-Argyle disclosed that the EchoStar deal alone would pay “less than 1.5%” of the company’s annual revenues, or around $11 million. B&C estimates that comes to 50 cents per Dish subscriber in Hearst-Argyle markets.

The new disclosure is broader, saying that Lifetime will now pay Hearst-Argyle “less than 2.5%” of estimated annual revenues. That’s around $18 million or 9 cents for not just customers of Dish, but of DirecTV and every cable system in Hearst-Argyle markets.

Hearst would not comment beyond the disclosure. Despite funneling the payments through Lifetime, Hearst-Argyle says that the new agreement is “substantially similar” to the old one, meaning that the broadcast group's compensation is about the same.

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