Tribune Media CEO: Over-the-Top Is "Tremendous Opportunity"
Peter Liguori also touts retrans revenue growth, WGN America's original content strategy and says the firm has enough scale
With CBS and HBO having announced online-only streaming services and content giants licensing content to online players, Tribune Media CEO Peter Liguori on Tuesday discussed his company's take on "over-the-top" offers.
"In general, we see over-the-top as a tremendous opportunity," he said on the company's third-quarter earnings conference call. "It's a potential new distribution platform for our broadcast content, and we look forward to discussions with new entrants who are now looking to pay fair-market value for our content."
He added that OTT also has potential for Tribune's WGN America and Tribune Studios. "Over-the-top players like Netflix and Hulu provide a great platform for monetizing the content we now own," he said, highlighting a "great deal" with Hulu for WGN original Manhattan. "This is an indication of more good things to come," Liguori said.
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Will OTT challenge the pay TV bundle? "The cable bundle has proven very resilient and is a very efficient way to obtain all the great programming on TV," Liguori said. Even if the bundle were to be affected, he predicted that "local broadcast will be a part of that bundle and so will great cable content providers, which is why we are investing in WGN America's programming."
He reiterated previous comments that over the next 3-4 years, WGN was targeting 52 weeks of original programming, but emphasized that this was akin to four one-hour 13-episode series a year. "It is a much more measured approach" as "programming is costly," he said. Salem and Manhattan have done well for WGN America.
"Scale matters," Liguori also said Tuesday. Asked if the firm needed more cable network scale, he said "our scale with our local station group allows us to get competitive retrans fees" and focus on WGN America's original content strategy. In the face of pay TV consolidation, "we are creating scale" and have "every expectation that we will get fair value" in business deals, Liguori said.
Retransmission fee revenue at Tribune Media a couple of years ago was less than $2 million, but is expected to reach around $230 million in 2014, the CEO said. Over the next three years, the company has carriage negotiations with pay TV firms that service about 50 percent of its audience, meaning more upside, he added.
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Liguori called the notion that leverage is shifting to major networks in negotiations with their local affiliate stations "overblown." He cited two accretive recent deals "carved from solid reason, mutual economic fairness and above all partnership."
Tribune's station KCPQ in Seattle last month extended its Fox affiliation, with Liguori saying Tuesday that "the alternatives to striking a new deal for Fox and for us were really not that attractive to either party." Despite higher payments to Fox, the station will see higher cash flow this year than last, he said.
The renewals will also help with the other half of the needed conversion of WGN America's signal from a superstation to a cable network. "In January of 2015, we are on target to convert to cable" given about half of all subscribers will be covered by new cable deals, Liguori said.
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