In cases where two broadcast television licensees are in an SSA or JSA in a local market, it is common practice to negotiate in tandem for local MVPD carriage fees. The American Cable Association, “at the risk of broadcaster retaliation,” is asking for the FCC to shut down the practice.
ACA and member organizations sent a letter to the FCC asking it to bring the “anti-competitive” practice to an end. “No matter how the coordination is done, there is competitive harm,” ACA President and CEO Matthew M. Polka said. “When two non-commonly owned Big 4 stations in a single market coordinate their retransmission consent negotiations, what little bargaining power ACA Members have to secure retransmission consent at fair market value is materially reduced.”
They want the issue addressed in the quadrennial review, and say they can site 48 examples of the practice in 43 separate DMAs.
“At the risk of retribution from the broadcasters who are engaging in this anti-competitive practice, a substantial number of ACA Members have reached out to the FCC in their letter in the hope that doing so will persuade the FCC to address this issue as part of the Quadrennial Media Ownership review,” Polka said.
RBR-TVBR observation: Isn’t the real problem when big cable channel providers with five or ten channels ram weak programming down an MVPD’s throat?
“Yes, Small Town Cable Company, you may have the Martian Sports Channel, but you will also have to pay for the Martian Polka Channel, the Martian Needlepoint Channel the Martian Spot-Welding Network and six other fine Martian channels.
Two local broadcasters sharing backroom operations – typically not Big Four broadcasters as ACA dramatically puts it, but smaller television licensees who happen to have an affiliation with one of the Big Four networks – and who by the way are watched far more regularly than almost all basic cable channels yet are still playing catch-up to those channels in terms of compensation, simply are not the biggest driver of cable programming costs.
And ACA uses the word “retaliation.” Really? As if broadcasters are going to see this effort and say, “That does it, we are instantly jacking up our demands by 250%, mwahahahahaaaaa!!!!!”
Both broadcast stations and basic cable channels have dual revenue streams now, advertising and retransmission fees. But broadcasters are compensated for retransmission at a far lower rate than is warranted by their vastly superior ratings numbers.
ACA should be going nuts about cable channel bundling before it gets around to taking on broadcasters if it’s really concerned about keeping program costs down.
And we haven’t even mentioned the stratospheric rise in the cost of sports programming, which is also has nothing to do with broadcasters but is nevertheless hitting MVPDs right in the wallet. It’s another cost issue you’d think ACA would take on before it attacks what is still low-cost and high-value broadcast service.