Even if Aereo were to prevail in court, and its broadcast-online model to proliferate with MVPDs, the affiliate-network relationship will stay strong, said David Amy, Sinclair executive VP and chief financial officer, on the broadcaster’s earnings call Feb. 12.
“The amount of support we provide to the networks as affiliates is significant,” said Amy after being questioned about Aereo. “Especially with the amount of local programming—either through news or syndicated product that we purchase and build around network programming.”
Amy said the “historical branding and legacy of a station” are critical factors in its market positioning. He said he’s picked up no intention from the networks that affiliates would be cut out of the model if Aereo were to succeed in its Supreme Court case this spring.
Amy stressed that he did not think an Aereo-type threat is lurking any time soon.
“If that’s upheld it would probably move toward further issues regarding the intellectual property discussion. That would take a bit longer to get through,” he said.
He noted that there’s “a lot of complexity” about the notion of MVPDs adopting an Aereo-type model—repackaging stations’ content and bypassing retransmission consent payments.
“That, in and of itself, would require a significant amount of legal work to try to figure out what that means [regarding the] obligations of a program supplier [and] an MVPD having an Aereo model attached to it,” he said. “Now you’re talking years and years before it gets settled and worked through, if it ever did.”
Sinclair’s long awaited closing of its Allbritton purchase, along with a smaller one for New Age, looks to close in the second quarter, said Amy. Sinclair brass said shared services agreements, currently under the FCC microscope, represent 20% of the broadcaster’s revenue. “We do not anticipate any kind of loss of value in that regard,” said Amy.