Cable Operators

Station Stocks Slide As FCC Moves Shake Up Retrans

Sinclair Down 4.5% As Chairman Proposes to Eliminate Coordinated Retrans Negotiations 3/06/2014 5:00 PM Eastern

Stocks at some of the top station groups were clobbered Thursday after Federal Communications Commission chairman Tom Wheeler proposed eliminating coordinated retransmission consent negotiations, a move that could lessen the grip some station groups have on distributors in both rural and urban markets.

Wheeler’s proposal would ban two or more separately owned stations from jointly negotiating retrans deals with distributors. In addition, the agency would adopt a “rebuttable presumption” that coordinated negotiations by any two stations in a market are not in the public interest.

Cable, telco and satellite operators alike have complained that stations that band together to negotiation retrans deals artificially drive up prices – which are passed on to consumers – when they are supposed to be competing against each other.

Station group investors appeared spooked at the news, driving down shares of all the major publicly traded station groups.

Sinclair Broadcast Group, which owns about 167 stations in 77 markets across the country, took the biggest hit, closing at $28.73 per share on Thursday, down 4.5% ($1.34 each). Nexstar Broadcasting Group, which owns, operates, programs or provides sales and services to 72 stations in 41 markets followed, closing at $41.94 per share, down 3.8% ($1.66 each). Rounding out the sector, Gray TV, with 46 stations in 31 markets, dipped 3.8% ($46 cents) to $11.61 each; LIN Media, with 43 stations in 23 markets fell 3% (69 cents) to $22.57. Gannett Co., with 43 stations, finished the day on a positive note, up 7 cents each (0.2%) to $29.47 per share.

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