By Jasmine Brianna Ellison
Local television stations and broadcast companies both benefit from maintaining a relationship. Broadcasters’ satisfy customers by offering these “free” stations and local stations reach a broader audience, allowing the station to earn increased earnings in advertising.
However, since 2016, a record number of stations have been temporarily pulled from their viewers by broadcasters. Local station fees are now estimated at $10 billion, causing a dilemma for the broadcasters to keep customers monthly bills as low as possible.
WTNH News Channel 8, the new channel residents in Connecticut rely on for daily updates on their community, is owned by Nexstar Broadcasting, Inc. A national company with headquarters in Irving, Texas, Nexstar was founded in 1996 by President and Chairman, Perry A. Sook.
Cox Communications is currently negotiating their contract with Nexstar and is at risk of losing WTNH News Channel 8 and MyNetworkTV programming.
Nexstar has already denied HTC, broadcaster in Myrtle Beach, Fla., the ability to provide local viewers WBTW, local news, and MyNetworkTV programming. In June 2018, Nexstar demanded a 163% total increase from HTC’s current rate and HTC was not willing to meet.
“Instead of being a straight-forward business negotiation, retransmission consent is used by corporate broadcasters to abuse their market power to extract outrageous fees from cable customers. TV station owners typically extract the highest per-subscriber fees from a small cable operator like HTC.” Mike Hagg, HTC chief executive officer, stated.
This denial is a tactic to force broadcasters like HTC to approve unreasonable rate increases. Now faced with the dilemma to satisfy customer demand for the desired channels, and in the meantime, keep customer bill rates reasonable.
The Telecommunications Act of 1996 was signed by President Clinton to promote competition, in order to secure lower prices and higher quality services for American. The act requires residential areas to offer multiple broadcast options to stop any one broadcast company from dominating the market.
Between The 1992 Cable Act and The Telecommunications Act of 1996, large television station companies, (i.e. Nexstar,) are not impacted negatively when companies, (i.e. Cox,) don’t comply with their demands, because other broadcasters in the area (i.e. Xfinity,) are willing to pay the increase to satisfy the customer demand for specific channels.
The company currently holds a total of 174 television stations and reaches approximately 38.7% of households in the United States and in 2018, announced they reached an agreement to acquire Tribune Media Co. for $6.4 billion.
With this merger, Nexstar would receive a 31-percent ownership stake in the Food Network, cable network WGN America, and equity investments in other media businesses.
The combined entity will produce $4.6 billion and adjusted $1.7 billion earnings before interest, taxes, depreciation, and amortization. Nexstar would receive a 31-percent ownership stake in the Food Network, cable network WGN America, and equity investments in other media businesses.
The deal, expected to close in the third quarter of 2019, would make Nexstar Media Group, Inc. the largest owner of local television stations in the U.S., unseating Sinclair Broadcast Group Inc.
Protected by the inequitable laws written in their favor, the strategy Nexstar Media Group, Inc. has implemented to monopolize the media industry has proven effective and unethical.
1. Cox Could Lose WTNH, Channel 8, Without Contract Agreement. Hartford Courant. March 2011.
2. Joe Amarante. News 8, MyTV9 in tussle with Cox over fees. February 2012.
3. Michaela Broyles. HTC customers have CBS back, but will it cost them more? July 2018.
4. Cox Commitment. https://coxcommitment.com/. 2018.
5. WTNH-8MYtv9 will be gone after Monday, 31 2018. Cox TV Forum. December 2018.