Networks' Reverse Compensation Take to Hit $1B in 2014

Reverse compensation from affiliated stations could become a billion dollar revenue stream for the major broadcast networks by 2014, according to a new analysis by SNL Kagan.

"For major networks, sharing in affiliates' retrans [retransmission] revenue stream is now a given, and although slightly different models are emerging, network partners appear to be planning to receive at least half of the income flowing to affiliates," according to the Kagan report. "Reverse retrans, added to the retrans revenues going to the nets' owned-and-operated stations, produces a major new revenue stream for broadcast networks." For 2011, Disney, which owns ABC, will be getting the most in reverse compensation at $53 million, followed by Fox and MyNetwork TV owner News Corp. at $39 million, CBS at $28 million (also including the CW). Comcast gets $5 million for NBC and Telemundo. News Corp. generates the most retrans revenue from cable and satellite operators at $257 million in 2011, according to Kagan. CBS gets $181, Disney gets $104 million and Comcast gets $16 million. Kagan says ABC gets the most in reverse comp because it's completed agreements with 60% of its non-owned footprint, more than the other networks. Those figures should grow significantly in the next few years. In 2014, News Corp. will rake in $296 million from affiliates, CBS $284 million, Disney $231 million, and Comcast $202 million, for a total of $1.037 billion. At the same time, the broadcasters trans payments from operators will be $1.562 billion.