Local TV's Rising Price of Retransmission Consent

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Several CJ&N people live in the Cedar Rapids television market - one of several markets currently caught in the middle of a contentious cable vs. broadcast retransmission fee negotiation. A New Year's Eve reprieve between Sinclair's KGAN, a CBS affiliate, and its LMA, Fox affiliate KFXA, and the market's dominant cable provider, Mediacom, means we and our Iowa neighbors (those who use Mediacom) won't have to find an alternate source to watch the Iowa Hawkeyes in the January 5 Orange Bowl.  The extension expires on January 8, which still puts the Super Bowl in question.

Our location gives us front row tickets to a competition that will have more significant long-term repercussions than a sporting event. While the extension is welcome, it's inevitable that both sides are using viewers as pawns, and in the weeks leading up to the end of the year, both Mediacom and Sinclair (click to see respective promos) took their cases to the air.

There are a lot of dollars at stake, and not just in this market, and not just between Sinclair and Mediacom. There are several ongoing disputes, and every one of them is a battleground in the industry's economic war. After a similar Sinclair-Mediacom fight three years ago, stations across the country benefited from Sinclair's aggressive negotiating. Now, Sinclair is again leading the way in an attempt to set a new precedent for retrans fees.

As viewers, though, we can see first hand that it's a costly fight for both sides.  KGAN had at one time sunk into afterthought status among the market's TV news viewers, but an amazing commitment over the past 18 months brought the station back to respectability (perhaps a reinvestment of some of those extra dollars squeezed out of Mediacom the first time around?). At least in terms of on-air product, KGAN has made a remarkable turnaround, and ratings are just beginning to follow.

Should KGAN disappear again at some point from the majority of TV homes in the market, however, we can't help but wonder how much of KGAN's goodwill brand equity it'll consume.  With the agreement extension, KGAN has to be as happy as the most avid Hawkeye fan.  Still, given the public squabble, unless this is resolved, Sinclair will have to work even harder to win back that momentum. It's the price they - and any other broadcaster trying to pave new retrans territory - will have to pay to build a stronger financial foundation.

- Mike Anderson