SNL Kagan: U.S. Retrans Fees to Reach $10.3 Billion by 2021

MONTEREY: SNL Kagan has revised its industry retransmission fee projections upward, now expecting U.S. TV station owners' retrans fees to reach $10.3 billion by 2021.

This is up from the previously projected $6.3 billion. The reason for this upward revision is that station owners in the U.S. have continued to secure higher retrans fees in recent negotiations, with strong advances made at end-2014 from renewals and annual step-ups in existing contracts.

While U.S. TV station owners have been successful at securing rising rates, broadcast networks have also been able to extract their share of rising fees—though SNL Kagan does expect continued growth for net retrans over time.

While the level of reverse retransmission paid back to the networks is rising, so-called "areas of cooperation" are also increasing between networks and affiliates—in particular, in the OTT arena. OTT initiatives provide ways to further monetize TV stations’ content and act as a barrier against potential retrans disputes and loss of multichannel subscribers from cord-cutting.

SNL Kagan expects that the average $1.53 retransmission fee the industry will receive across all broadcast networks by 2018 puts broadcast TV stations above all but five basic-cable networks in terms of affiliate fees per subscriber per month—with ESPN ($8.80), TNT ($2.16), FOX News ($1.67), FOX Sports 1 ($1.57) and Disney Channel ($1.56) all above that average mark.