Retrans Fees Rising 20% to $7.7B in 2016

SNL Kagan estimates payments hitting $11.6B by 2022
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Retransmission consent fees from multichannel operators to U.S. TV stations are estimated to rise 20% to $7.7 billion in 2016, according to SNL Kagan.

Kagan forecasts that retrans fees will hit $11.6 billion by 2022.

Reverse comp—the retrans money the stations pay to their networks for programming—is also rising. Kagan sees reverse comp jumping 36% to $2.1 billion in 2016.

Net affiliate retrans revenue should still post annual growth in the high- to low-single digits over the next 10 years, according to Kagan. TV station owners typically stagger their retrans contracts for renewal every three years, whereas affiliation agreements span an average four to five years, providing station owners some visibility on net retrans until the next renewal.

The $10.1 billion in retrans fees expected by 2019 would represent 18.7% of the $53.9 billion operators will pay for basic cable networks and regional sports networks. Kagan notes that the big broadcast networks draw a higher share of viewing.

Kagan sees the average TV station's retrans fee rising to $2.21 per sub per month by 2022 from $1.40 in 2016.

Looking again at 2019, stations will average $1.87 in monthly retrans fees, a number that will exceed all but three basic cable networks, ESPN at $9.17, TNT at $2.59 and Disney Channel at $1.99.

Some regional sports networks will also top the fees paid to broadcasters. Kagan projects YES Network receiving $6.50 per sub, Fox Sports Detroit getting $6.41, Fox Sports Arizona taking $5.20, Comcast SportsNets in Philadelphia and New England garnering $5.15 and Time Warner Cable SportsNet/Deportes at $5.03.

(Photo via Money-401(K) 2012's Flickr. Image taken on June, 27, 2015 and used per Creative Commons 2.0 license. The photo was cropped to fit 3x4 aspect ratio.)

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