tv_watchingA new TV retransmission fees forecast calls for U.S. TV station owners to receive $11.6 billion in fees from multi-channel operators by 2022.  That’s a steep increase from the $6.4 billion in retransmission fees that station owners received in 2015, according to the forecast, which comes from S&P Global Intelligence’s SNL Kagan market research group.

Yet despite these gains, TV station profit margins are decreasing as increases in broadcast affiliation payments are increasing at a faster rate than retransmission fees, SNL Kagan highlights in a press release about the TV retransmission fees forecast.

The amount of money that major affiliate station group owners send back to broadcast TV networks – reverse retrans fees – will total $2.1 billion in 2016, researchers forecast. That’s 36 percent higher than the estimated $1.5 billion paid in 2015.

Net affiliate retrans revenues are forecast to grow at low to high single-digit rates over the 10-year forecast period. Reverse retrans fees paid will increase from 44 percent of gross retrans fees in 2016 to 60 percent by year-end 2022, according to SNL Kagan.

Behind the TV Retransmission Fees Forecast
TV station owners have staggered their three-year renewable retrans contracts with multi-channel operators. Their affiliate agreements span an average four to five years, which gives them a window into net retrans revenue data before having to renew their affiliate agreements, SNL Kagan notes.

TV stations’ retrans fees per subscriber per month will increase from $1.40-$2.21 on average from 2016-2022, the market researcher projects. The projected annual total of $10.1 billion by 2019 would make up just 18.7 percent of the $53.9 billion SNL Kagan projects multi-channel operators will pay to basic cable and regional sports networks (RSNs) despite a much higher TV viewing share for the Big Four broadcast networks.

Nonetheless, the average $1.87 per subscriber per month in retrans fees that TV station owners are projected to earn by 2019 will place their earnings above all but three basic cable networks. Only ESPN ($9.17), TNT ($2.59) and Disney Channel ($1.88) will earn more.

Growth in monthly RSN affiliate fees per subscriber will grow at much faster rates than the average retrans fee benchmark for broadcast stations, according to SNL Kagan. Fees for six RSNs should exceed $5.00 in 2019, with Yes Network projected to earn $6.50 per subscriber per month, FOX Sports Detroit $6.41, FOX Sports Arizona $5.20, Comcast Sports Philadelphia $5.15, New England Sports Network $5.15 and Time Warner Cable SportsNet/Deportes $5.03.