On 12-10-12 Media General filed a form 8-K with the S.E.C regarding the affiliate renewal for the 8 NBC stations. The deal runs thru 12-31-2015.
There is a variable factor depending on each affiliates retransmission revenues.
For 2012 the company had accrued $9 mil for the first 9 months. Assume this to mean they owed the $9 mil at the end of Q3. .For 2012 the fees will be circa $11 mil.
Now for the RED ALERT part of this filing .The company expects these fees to increase by 8-10 mil PER YEAR in 2013, 2014,2015.
On the positive side, note that MEG has negotiated much higher retransmission fees in the last year.
The net gain from the higher retransmission fees versus these fat fees to NBC for the 8 stations is a question the demands an answer before laying down a wager on MEG.
My read of the filing requires an assumption that MEG cash drops by $11 mil in Q4 for the 2012 NBC fees. Then it goes up by 8-10mil PER YEAR in 2013, 2014,2015. That is a very big number in relation to total MEG revenues and the $68 mil in annual interest.
this is from the 8K:
note- that's over the $11 mil for 2012
from the CC transcript:
unidentified analyst-"how should we think about payments to NBC, I believe in 8-K you filed in December said a minimum of $8 million to $10 million, what's the right way to think about that?"
Jim Woodward:"The right way to think about it is exactly the way we put it in the 8-K. That's as close as I can get for you."
SURE! The unidentified analyst thinks $8-10 mil is the figure for 2013, but that is not what the 8K states. The 8K clearly states the fees will increase by $8-$10 mil PER YEAR thru 12-31-2015 and the $8-10 mil is in addition to the $11mil in 2012.