Belo Corp.'s In "Negotiations" With ABC, Which Wants More of Affiliates' Revenues

On Tuesday morning, Belo Corp. released its third-quarter financials ("total revenue decreased 17.7 percent"), then followed up its press release with a conference call with analysts. During the chat, Michael Meltz of J.P. Morgan asked Dunia Shive, the president and CEO of WFAA-Channel 8's parent company, if there was "any update on ABC agreement." Because, as it turns out, the network wants more of Belo's retransmission consent revenue -- which, plainly put, is "the revenue [that] comes from cable and satellite operators in exchange for broadcasters' permission to carry or retransmit TV station signals." Belo said yesterday its retransmission revenue totaled $10.6 million during the third quarter, which represented 7.5 percent of its total revenue.

And ABC wants a bigger cut for letting WFAA and other Belo-owned affiliates carry its programming -- not all of it, Shive said, but more than it's currently getting. Because, look, that's big money out there for the taking -- and, some analysts say, the pile's only getting bigger, and what better way to offset ad-revenue losses than by snatching easy money off the top. Said Shive, according to the transcript on Seeking Alpha, "You can call it several different things, but I think it's really a mechanism for having the ability [to] share in the cost of programming. ...

It's a negotiation, it's a discussion, and we expect to complete our agreements in a way that is manageable for the company and continue the good relationships that we have." One suggestion: Just take it out of Hansen's salary. He'll never miss it.

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Robert Wilonsky
Contact: Robert Wilonsky