Following a record drop in TV station revenue this year of 17 percent to $17.6 billion, station fortunes will turn, with revenue increasing 5.2 percent to $18.5 billion. According to SNL Kagan's study TV Station Deals & Finance released Tuesday (Aug. 18), over a 10-year period, TV station revenue will have experienced a compound annual decline of 3.5 percent.
However, the growth story for TV stations lies in building additional revenue streams through retransmission consent fees and digital media. Retransmission consent revenue hit $500.1 million last year and is forecast to grow to $738.7 million in 2009, on track to cross the billion-dollar milestone by 2011, according to Kagan. Online revenue is also growing, and will reach $1 billion by 2012.
"Nontraditional revenues have helped to offset some of the revenue softness resulting from the economic downturn," said Robin Flynn, analyst for SNL Kagan. "In particular, retransmission fee revenue has proven to be a high growth, high-margin revenue stream for TV station owners."
The TV station deal market has also been soft since last year, thwarted by a lack of finance and a sinking ad market. Last year, the average deal price reached an 18-year low. Through the first half of this year, 114 stations sold for $550.1 million, but the majority were senior-lender takeovers in debt-for-equity swaps.
"Things could begin to improve in 2010 as a pent-up supply of stations comes to market," said Flynn. "Leading TV station properties in attractive markets continue to be highly sought-after assets," she added.