The way Jim Yager sees it, Barrington Broadcasting wants to get the maximum payment possible from cable and satellite companies for retransmission consent. If the networks are able to help the affiliates do that, he’s willing to talk.
“What kind of clout could we [use to] develop the most revenue for this company? We have not closed the door to discussing retransmission consent with the networks, because we think that would be foolish if we can get a higher return out of retransmission consent than we are currently getting or see in the foreseeable future,” CEO Yager said in his quarterly discussion with Wall Street analysts. “We are in very, very preliminary discussions along those lines, but we see no reason just to slam the door and say not only no, but hell no to the networks until we know what we’re talking about. Until we actually get to th negotiating table, we’re not going to know that,” he explained.
Retrans cash is, of course, growing for Barrington as well as many other TV station groups. The exact figure wasn’t broken out in Barrington’s Q3 results, but “other revenues” increased 63.3% to $4.4 million – and, no doubt, most of that was retrans.
Net revenues were down 21% to $24.2 million, largely due to political dropping to $600K from $3.5 million. Automotive advertising was off 42.7% in the quarter. Barrington reported that gross local revenues fell 16% to $17.1 million and national fell 31.4% to $6 million. Broadcast cash flow decreased 31.9% to $7.7 million.
COO Chris Cornelius noted that local direct revenues were down only 9.6%, while local/regional agency business fell 18.4%. He noted that Barrington continued to outperform its peers reporting to the TVB in local and total revenues, although it underperformed on national.
“During the first nine months of the year, Barrington’s retail development staff has written nearly $11.5 million in annualized new local business,” Cornelius noted proudly. He expects many of those new advertisers to continue buying ads in the future and positions the company for strong results as the economy revives and core advertising rebounds. The company is also working on the national side. He said Barrington is pressing forward with “a developmental strategy to build revenues around new national advertisers with sizeable local footprints” in the company’s markets. To date, he said, the company has developed $2.7 in annualized new national revenues from that effort.
RBR-TVBR observation: Network/affiliate cooperation to obtain leverage against the MSOs is nothing new. In fact, it used to work the other way – the affiliates let the nets use retransmission consent for local broadcast stations as bargaining chips to gain clearance for new cable channels. The question now is, what are the nets bringing to the table as bargaining chips for the affiliates to demand bigger cash payments from the MSOs?