An executive with Nexstar Media Group says an ongoing fight between the CBS affiliate board and Paramount Global over retransmission consent on streaming cable replacement services is worth having, even though streaming services represent a small amount of overall revenue.
Speaking at the Morgan Stanley Technology, Media and Telecom Conference on Tuesday, Nexstar’s Chief Operating Officer Tom Carter said the dispute that resulted in Fubo TV dropping nearly 200 CBS affiliates last month is actually part of a broader, ongoing dispute between independent CBS affiliate owners and the network’s parent company, Paramount Global.
For years, Paramount and its predecessor were allowed to negotiate carriage of local CBS affiliates on streaming cable replacements like Fubo TV as independent station owners like Nexstar focused instead on getting retransmission consent agreements with traditional cable and satellite providers.
Consumers moving away from expensive cable and satellite plans for cheaper online-only offerings has forced television station owners to get creative about how much they ask for their channels and where their negotiating efforts are spent.
Last year, Paramount offered to continue negotiating carriage of CBS affiliates owned by Nexstar, Sinclair Broadcast Group, Allen Media Group, TEGNA, the E. W. Scripps Company and others with streaming services on their behalf. The proposal came as a carriage agreement with Fubo TV for those channels was set to expire.
The CBS affiliate board largely rejected Paramount’s proposal, instead demanding to reclaim negotiations with streaming services for themselves. Only one broadcast station owner — Allen Media Group — approved Paramount’s proposal, though the company later said their affirmation was a clerical error.
In late January, Fubo TV dropped local CBS affiliates, replacing the stations with a national feed of CBS programming that offers network shows, sports and news, but not locally-produced newscasts or programming acquired by local stations through syndication. The national feed continues to be carried by Fubo TV; local CBS stations owned outright by Paramount were not impacted.
On Tuesday, Carter said the fight with Paramount and Fubo TV over retransmission consent was worth having, even though fees collected from Fubo TV account for just a small percent of Nexstar’s overall revenue.
“[Streaming cable replacements] contribute less than 10 percent of our distribution revenue, and our distribution revenue is about half of our total revenue,” Carter said. “Fubo TV is the smallest [streaming srvice] we deal with, so we’re talking about a relatively minor amount of money, quite honestly, to both us and CBS.”
The fight with Fubo TV is still worth having, precisely because the money collected from the streaming service is so small, Carter said.
“It’s kind of easy to pick Fubo as a fight to have,” he affirmed.
Lee Ann Gliha, Nexstar’s Chief Financial Officer, echoed similar sentiments, saying the ongoing battle over distribution of its CBS affiliates on Fubo TV was specific to the agreement proposed by Paramount.
“We view this as a CBS only issue, and it’s just driven by the specific issues that surround the CBS situation,” Gliha said.
Other media executives say it is just a matter of time before all sides ultimately come up with some kind of agreement that leads to the restoration of the CBS affiliates on Fubo TV.
“I think this will eventually get resolved here in terms of Fubo,” Chris Ripley, the CEO of Sinclair Broadcast Group, said during a conference call in February.
But if things aren’t resolved with Fubo TV, the fight could eventually escalate to another streaming service: YouTube TV. An agreement between Paramount and YouTube TV’s parent Google is set to lapse in a few months; Ripley suggested the same situation impacting subscribers of Fubo TV could also impact YouTube TV.