“It’s all about the money.”
That’s the chief reason why the American Cable Association wants the FCC to put the breaks on any loosening of its 39% national TV ownership reach cap until it confers with its newly created Office of Economics and Analytics.
By waiting, the OEA can examine the costs and benefits of such consolidation, “including the extent to which such action would increase cable bills,” the ACA argues.
The ACA has “repeatedly observed” that further consolidation of broadcast TV station owners leads to an increase in a broadcaster’s leverage over the most heated of topics concerning MVPDs and broadcast television: Retransmission consent negotiations.
It is the view of ACA President/CEO Matthew M. Polka that companies gobbling up other companies has led to higher rates paid by pay-TV subscribers, as the added fees seen by broadcast TV owners is passed on to MVPD users via rate increases.
“Both economic theory and the best empirical evidence available to the FCC suggest that increasing the national cap beyond its current level will harm pay-TV subscribers,” Polka said.
In May 2017, The New York Times offered a list of the highest-paid CEOs in the U.S. in 2016. At No. 4 on the list is the head of Spectrum parent Charter Communications, Thomas Rutledge. His salary in 2016 was $98 million, up from $16.4 million in 2015.
Also on the list are CBS’s Les Moonves (No. 56 in rank), and Comcast’s Brian L. Roberts. Roberts’ pay in 2016 was $28.6 million; Comcast, unlike Charter, owns the NBCUniversal operation, accounting for much greater scale.
ACA set forth its views in a filing Monday (3/19) in connection with the FCC’s review of whether to allow a single entity to own enough TV stations sufficient to reach more than 39% of TV households nationally. By relaxing the rule, the FCC would allow transactions such as Sinclair Broadcast Group‘s merger with Tribune Media to pass muster without the need for divestments or shared services agreements.
Polka stresses that opening the marketplace up to greater concentration would allow broadcast TV owners “to impose more harmful signal blackouts on cable operators and demand excessive increases in retransmission consent fees, which inevitably find their way into consumers’ monthly bills.”
For the record, TV signals are not “blacked out” during retransmission fee agreements, as they are available on other providers and via over-the-air broadcast.
“If broadcasters seek to change the FCC’s rules to their benefit, they should provide the data to support their request,” Polka said.