Sinclair renews affiliation with ABC

Agreement includes license fee, expires in 2015

Sinclair Broadcast Group announced Friday, March 26, it completed a new affiliation agreement with ABC Network for nine TV stations covering about 5% of the country.

The new agreement expires Aug. 31, 2015.

The former affiliation expired at the end of 2009, but was extended twice, most recently until March 31, allowing more time for negotiations.

Although terms of the agreement were not disclosed, Sinclair acknowledged in its press release that the agreement includes a license fee, based in part on retransmission consent revenue. ABC and other TV networks have been seeking a portion of TV affiliates retransmission compensation.

"We believe that the pass through to the networks of a reasonable portion of the fees that broadcasters receive is a necessary and appropriate way to make sure that the networks continue to be able to provide the most popular programming on television," said Barry Faber, evp and general counsel for Sinclair. "Over time, we expect that the fees paid by multichannel video program distributors to acquire content will be reallocated so that the payments they make more closely correlate with the popularity of programming. As a result, the fees paid to broadcasters are likely to increase to more appropriate levels, which will allow affiliates to share these fees with the networks in a measured manner, while the local stations continue to benefit from this dual revenue stream."

Sharing a portion of retransmission fees with the networks is becoming the new model for affiliation agreements. Belo, owner of four ABC affiliates, is currently in negotiations with the network to renew its agreement, which expired at the end of the year. The parties have agreed to extend the current agreement until April 1.
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