Assignment 1: Sinclair Broadcast Group

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Assignment 1: Sinclair Broadcast Group Sinclair Broadcast Group, Inc. Is the largest television broadcasting company in the United States of America. With a network of 162 television stations in 77 markets, Sinclair produces its own programs and/or provides sales services to cable TV distributors. The most important channels hold by Sinclair Broadcast Group are FOX, ABC, MyTV, CBS, NBC and Univision. Sinclair Broadcast group is already the nation's largest owner of TV stations, mainly small and medium size TV markets. Given the global decrease of viewership in the US qnd the difficulties faced by Broadcast companies to raise revenue stream through advertising, how can we explain the continual expansion of the company that has just met an agreement to buy 8 New Age Media? The key of Sinclair Broadcast Group's sucess is the Big Money in Broadcast retransmission fees that became the new mother lode for Sinclair Broadcast Group. Retransmission fees, that were not significant for broadcaster ten years ago, are charged by local networks to satellite TV viewers to get an access to their signal. The Congress authorizes broadcast stations to grant or deny retransmission signal to viewers. This legislation leads then to tense negociations every year between Cable distributors and Broadcasters. In fact, it used to be 100% margin revenue for TV stations. But, according to SNL Kagan, broadcasters’ retransmission revenue skyrocketted to $1.757 billions in 2012 (which represent an increase of 717% since 2006). This money goes to programming, to put high quality programs. Sinclair Broadcast plays on its big audience to put pressure on cable TV. Univision is actually the leader in collecting retransmission fees over the last 5 years. It reflects the fact that in the hispanic market (20% of the market) in the United States, Univision is the dominant broadcaster and it is a

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