Of course, I’m thinking about retransmission consent.
It has created one of the most egregious imbalances between "competing" businesses as a result of "who’s-got-the-biggest-lobby."
Do you think the Carlyle Group would be bidding for the Tribune TV stations if it weren’t for this imbalance?
Do you think Barron’s (Jan. 15) would run an article entitled "For TV Broadcasters, Picture Is Improving" if it weren’t for this imbalance? The article’s bottom line: "The TV group looks undervalued. The New York Times got a rich price for its TV stations, and that could lift the stocks. A retransmission victory would boost cash flow."
Oak Hill Partners, Barron’s opined, paid "about $150 million more than some on the Street had expected. Oak Hill paid a stiff 13 times projected 2006 pre-tax cash flow…for mediocre stations."
Stocks for group broadcasters such as Hearst-Argyle (HTV), Gray (GTN), Lin TV (TVL) and Nexstar (NXST) go up and down as Sinclair attempts extortion from Mediacom.
And then there’s CBS honcho Les Moonves, who is "optimistic that we will get paid for our content."
By 2009, Moonves told an investor conference, those payments might add up to significant revenue that flows straight to the bottom line.
And then there’s Congress, that writer of laws laden with unintended consequences.
And then there’s the Federal Confusion Commission, which hasn’t got a clue about the real world.
We’ve got a new Congress, and perhaps a chance to legislate some changes.
The best solution seems to be to level the playing field (to use the obvious cliché) and allow cable operators to pass along the once-free, over-the-air "Substitution Tax" that broadcasters would like to extort from their viewers via the cable operator.
Direct-to-home satellite platform providers are allowed to charge — separately yet, and only for subscribers paying for another package — for so-called "local-into-local" signals.
That hasn’t seemed to slow satellite penetration.
Just the opposite; it turbo-charges satellite sales whenever another market is added, and now the same thing is being repeated as high-definition signals are added market by market.
Cable operators should urge lawmakers to craft legislation to allow local cable operators to negotiate retransmission consent and/or must-carry as they do now, but with the provision that the cable operator is allowed to pass along those costs, with the subscriber invoices specifically identifying the amount for each retransmitted signal. The operator should also be allowed to charge the broadcaster a fee for collecting the revenue.
Seems fair, doesn’t it?