The Big Money in Broadcast Retransmission Fees

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Aug. 30 (Bloomberg) -- Bloomberg Industries' Paul Sweeney talks with Betty Liu about the big revenue of retransmission fees for broadcast entities. He speaks on Bloomberg Television's "In The Loop."

It 30 minutes to the opening bell.

This is "in the loop" with betty lou.

The countdown begins right now.

Welcome back.

It here is what we are working on today.

France indicating it might join the u.s. in launching its -- an attack on syria.

The u.k. will not take part.

The parliament rejected.

More bad news for blackberry.

Morgan stanley not upgrading its employees to the newest but barry, because it is not sure of the company's future.

And the vodaphone is close to selling its stake to rise in.

-- to verizon.

The company may have to make a tough choice.

Buy or be bought.

Vodaphone now is a takeover target.

Possibly, but it is a huge company.

We are talking about a price tag that is equivalent to the $130 billion deal that we might see in the coming days.

At&t has been trolling europe for assets.

That has people talking about the possibility that at&t makes a play for vodaphone.

We know that at&t has done some work around ee, which is a deal around orange and deutsche telekom.

They say, up from at&t perspective, i cannot expand any further here in the u.s., so they have to go outside.

Regulators will not lead and get any bigger here.

And-let them get any bigger here.

-- regulators will not let them get any bigger here.

They put a fee on the cap -- a cap on the fee they can charge on customers when they're running.

And -- roaming.

We will have $60 billion in debt issued for this joint venture that vodaphone is exiting and verizon has to raise capital.

Can the debt markets bear and other big deal at this point?

A lot of moving parts to this.

What about verizon?

What does the purchase mean for the carriers' bottom line?

Everyone i have spoken to sees this as a financial transaction, -- a strategic transaction, not a financial one.

From a strategic standpoint, right now is not getting much more.

What it does give the extra cash flow from the 45% stake that vodaphone has.

There may be some benefit their to the company.

At the end of the day, an enormous price tag to be gained for a company that you essentially already control.

We will see how this flows into their earnings at the end of the day.

Thank you, cristina alesci on its verizon-vodaphone deal.

I want to turn to the media now and the fight between time warner cable and cbs.

Comedian bill murray and who was the first-ever guest on david letterman's show stopped by the 20 the anniversary celebration last night.

Correct i stopped by and i wanted those at home and in the audience that don't have time warner cable -- [laughter] -- i wanted to see what we got for david.

It will be there as a monument forever.

I'm just calling to say one, two, three, i love you.

And then you show.

1, 2, 3, i love you.

I love that.

Staying with media, retransmission revenue for the top tv station owners is on the rise.

Retransmit should make the 18% to 20 percent of broadcast mentioned -- broadcast revenues.

Turning us is paul sweeney who is the direct -- the director of american research for the bloomberg industry.

Even though you hear about how i these fees are going to adjust keep going.

They just sure do.

It is a new revenue stream for the broadcast stations and one that is extraordinarily important for them.

The tv business, the broadcasters have been searching for a second revenue stream to augment its advertising revenue.

They have found the mother lode with three transmission fees.

The -- with three transmission -- retransmission fees.

They will seek to grow it.

Where does that money go?

It goes to programming primarily.

The broadcast television business, like the cable television business, requires programming.

You have to provide quality programming on to generate the audience and then to generate the advertising revenue.

The broadcasters are saying, the cable network gets paid by the distributors pretty -- the distributors.

They were saying, our audiences bigger than any of the cable networks.

We should get paid as well, in fact, more than the cable networks get paid because we have a bigger audience to every cable operator out there.

When you crunch the numbers at bloomberg industries, you found that univision is actually the leader in recollecting -- in collectingre-- in collecting re transmission fees.

This text has been automatically generated. It may not be 100% accurate.


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