Gordon Smith, President/CEO of the National Association of Broadcasters, wrote an opinion piece in Capitol Hill news publication Politico noting that 99% of all retransmission negotiations conclude peacefully. But some MVPDs, he argued, are creating failed negotiations on purpose in order to attract government intervention.
Smith said that both sides rely on one another. Broadcast brings viewers, high value sports and entertainment programming and local news to the MVPD, and broadcasters need the MVPD platform to keep their viewership up and support their advertising rate card.
This mutually-beneficial relationship, argued Smith, provides a firm basis for a fair negotiation which generally produces a fair price in the end.
“This mutual incentive is jeopardized only when one of the negotiating parties has the expectation that it might receive government assistance should talks break down,” wrote Smith. “Recognizing the overwhelming historical success of retransmission consent, some pay-TV operators have undertaken a cynical campaign to manufacture market failure in the hope that Congress will rewrite established law — and tip the scales in pay TV’s favor. The government must resist this course of action.”
Smith said he understood the motives of some of his former congressional colleagues to protect consumers, but warned that that an intervention that favored one side over the other would not produce that result. He said such a move would only provide MVPDs with further motivation to divorce themselves from good-faith negotiations.
Smith concluded, “Pay-TV companies that built their businesses on the backs of local and network broadcast signals should pay a fair price for access to that high-value programming. Legislators and policymakers should reject pay TV’s call for government intervention and reinforce the power of market-based negotiations.”
