If that turns out to be the case, there is nothing preventing the distributor from bypassing local stations. This is the 'tension' in what's called the 'federal-state' form of U.S. broadcasting. The network's work-around has been (except for ABC/Disney, and to a lesser extent NBC) to buy up any large market affiliate they can. John Willkie ----- Original Message ----- From: "Tom Barry" <trbarry@xxxxxxxxxxx> To: <opendtv@xxxxxxxxxxxxx> Sent: Wednesday, March 07, 2007 10:34 AM Subject: [opendtv] Re: Analysis: GET SET FOR COMING D.C. RETRANS FIGHT > Actually I think the article makes a fairly decent case for retrans > negotiations. But I still worry the affiliates will be caught in the > middle in the future, buying network programming and reselling it to > cable et al. That might or not be a workable business plan in the long run. > > - Tom > > > Craig Birkmaier wrote: > > A PRO Retrans Consent Editorial. > > > > I love this part... > > > > But at this point I would say that it is in neither broadcasting's nor > > cable's interest to encourage over-the-air reception. Instead of handing > > out rabbit ears in the middle of retrans fights, cable operators would > > be far better off paying broadcasters and making them partners in > > driving folks to sign up for cable. > > > > Regards > > Craig > > > > > > http://www.tvnewsday.com/articles/2007/03/07/daily.8/ > > > > Jessell at large > > GET SET FOR COMING D.C. RETRANS FIGHT > > TVNEWSDAY, Mar. 7, 8:46 AM ET > > > > Now that broadcasters are getting the upper hand in retrans > > negotiations, cable wants to gut broadcasters' rights in Washington. > > Fortunately, broadcasters hold the high ground. > > By Harry A. Jessell > > > > You can almost feel it. > > > > Retrans has reached the tipping point. > > > > All of a sudden, it seems, the leverage in retrans negotiations has > > shifted to broadcasters. A growing number are now able to extract fees > > from cable operators who want to carry their signals. > > > > With hard-nosed broadcasters like Nexstar's Perry Sook and Sinclair's > > David Smith leading the way, TV station groups are tearing up old > > revenue projections and factoring in millions in new retrans dollars. > > > > Two weeks ago, CBS CEO Les Moonves finally made good on his big retrans > > talk by cutting deals involving nine operators and more than one million > > subs. He later said the deals will yield $6 million a year-50 cents per > > sub per month. > > > > Moonves senses the shift. "[Did] you noticed that these nine MSO deals > > were done without a whole lot of noise?" he asked security analysts last > > week. "The MSOs are realizing that it's better to get along than to fight." > > > > LIN TV is excited because it thinks it has the upper hand and most of > > its retrans deals with cable are now ripe for renewal. Last week, it > > announced a deal with Cox involving nine stations in five markets. > > Nobody is talking terms, but everyone is assuming that cash was involved. > > > > Even Gray Television, which has long had a go-along, get-along attitude > > on retrans, is starting to talk about getting its "fair share" from > > cable operators. > > > > "We certainly see the momentum shifting," Gray CFO Jim Ryan said at the > > Bear Stearns Media Conference yesterday. > > > > The tipping point was a long time coming. > > > > When Congress granted broadcasters retrans rights in 1992, the > > presumption was that they would immediately begin receiving monthly > > payments from operators for their signals. > > > > For a lot of reasons, it never happened-until now. > > > > And let me be clear: retrans is not easy. To squeeze money out of cable > > operators takes the right set of circumstances and a willingness to risk > > the short term for the long term. It's not for everyone. > > > > Of course, now that broadcasters are having some success, the cable > > operators want to change the rules. They want Congress or the FCC to > > shift the leverage back to cable operators by restricting broadcasters' > > retrans rights. > > > > For the most part so far, the effort to gut retrans has been led by the > > American Cable Association, which represents smaller, independent cable > > operators who were the first to feel broadcasters' muscle. > > > > But as TVNEWSDAY's Kim McAvoy reported last week, cable's big lobby-the > > National Cable & Telecommunications Association-has now taken up the fight. > > > > That sets up what should be a titanic contest between NCTA and the NAB > > this year over retrans that will be real test of their relatively new > > leaders, Kyle McSlarrow and David Rehr, respectively. > > > > Nothing less than the financial health of TV broadcasting is at stake. > > Stations need retrans revenue to offset the loss of network comp and the > > inexorable decline in national spot. > > > > Fortunately, the retrans case for broadcasters is clear and simple. > > > > Cable operators pay monthly affiliate fees to cable networks that have a > > fraction of the audience. If ESPN is worth $2.50 per sub per month, > > surely the local CBS affiliate (NFL, The Masters, March Madness) is > > worth 50 cents. > > > > Cable operators say that paying retrans fees will cause them to raise > > rates. Nonsense. They can find money for broadcasters simply by cutting > > fees that they inexplicably pay to cable networks that hardly anybody > > watches. Better yet, they can drop those networks and send broadcasters > > an even bigger check. > > > > Broadcasters provide local public service. They have reporters on the > > street and anchors that show up at community events. They have satellite > > trucks, helicopters and weather radar that can track tornadoes. Spike TV > > has World's Wildest Police Videos and Late Night Strip. > > > > Satellite TV operators and telephone company offering the exact same > > service as cable are willingly paying retrans fees. No fuss. They enter > > a market, and the first thing they do is lock up the best programming in > > town-the programming they need to compete with cable. If the new > > entrants can pay, entrenched cable can pay. > > > > Cable operators have always recognized the value of retrans rights, but > > have insisted on non-cash compensation-carriage of cable networks in > > which the broadcasters had an interest or committing to advertising buys > > on stations. > > > > But now that broadcasters are demanding cash, the operators pretend that > > the rights have little or no value. > > > > Part of cable's anti-retrans rhetoric is that operators shouldn't have > > to pay for "free TV." Well, guess what? Local broadcasting isn't free. > > In fact, it costs a lot of money to build, maintain and operate a > > state-of-the-art TV station, to license syndicated programs and to > > produce several hours of local news each day. > > > > Right now, broadcasters are still paying the bills for digital > > transmission facilities and they are preparing to spend millions more so > > that they can produce local news in high definition and stay competitive > > with other broadcasters. > > > > The only thing that's free about broadcasting is over-the-air reception. > > As part of their pact with the government, broadcasters are committed to > > making their service available to anyone who can afford a TV set. > > > > But at this point I would say that it is in neither broadcasting's nor > > cable's interest to encourage over-the-air reception. Instead of handing > > out rabbit ears in the middle of retrans fights, cable operators would > > be far better off paying broadcasters and making them partners in > > driving folks to sign up for cable. > > > > That's what the satellite operators and telcos have done. When a retrans > > fight breaks out, DirecTV and Echostar swoop in to pick off unhappy > > cable subscribers. Mediacom says it lost 7,000 in its recent retrans > > fight with Sinclair. > > > > Cable's call for retrans reform is really a call for more government > > involvement in what should be-and has been for a decade and a half-a > > private negotiation. Does anybody really want more regulation, more FCC > > meddling in their business? > > > > The broadcasters are playing defense right now. All NAB has to do is > > maintain the status quo. > > > > But perhaps it should consider offense. Here are a couple of ideas that > > NAB may want to push when cable comes to shove: > > > > An antitrust exemption that allows all the stations in a market to > > negotiate together for retrans fees. This would balance things out in > > market dominated by one or two cable operators. Cable could hardly > > protest. Last year, ACA proposed that small cable systems be allowed to > > do the very same thing. > > > > A minimum retrans fee for every TV signal. In this way, Congress could > > insure the future of local broadcasting-a cornerstone of its > > communications policy since the 1920s. To be fair, the fees could be > > tied to ratings. The more viewers a station has, the more money it would > > get. Stations could accept the minimum or negotiate for higher fees. > > > > In the coming debate, both sides will claim that only they have the true > > interests of the consumer at heart and that the other side doesn't > > really care about either mom or pop at all. > > > > But, face it, this isn't a consumer issue. This is business. > > > > If cable operators want broadcasters' signals, they just have to pay for > > them. > > > > > > ---------------------------------------------------------------------- > > You can UNSUBSCRIBE from the OpenDTV list in two ways: > > > > - Using the UNSUBSCRIBE command in your user configuration settings at > > FreeLists.org > > - By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word > > unsubscribe in the subject line. > > > > > > -- > Tom Barry trbarry@xxxxxxxxxxx > > > > ---------------------------------------------------------------------- > You can UNSUBSCRIBE from the OpenDTV list in two ways: > > - Using the UNSUBSCRIBE command in your user configuration settings at FreeLists.org > > - By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word unsubscribe in the subject line. > ---------------------------------------------------------------------- You can UNSUBSCRIBE from the OpenDTV list in two ways: - Using the UNSUBSCRIBE command in your user configuration settings at FreeLists.org - By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word unsubscribe in the subject line.