Local TV stations forecasted to experience mild reductions in retransmission fees and advertising income, according to S&P's prediction.
In a recent report, S&P Global Ratings has highlighted potential refinancing risks for several major TV companies, including Disney, Warner Bros. Discovery, Paramount Global, and four other broadcasters - Sinclair, Gray, E.W. Scripps, and CMG. These broadcasters may struggle to cover their debt repayments in 2026 due to a lack of sufficient cash or free operating cash flow, according to the report.
The report predicts modest declines in retransmission consent and core advertising revenue for TV stations in the upcoming years. This trend is likely to make TV stations increasingly reliant on political advertising, particularly in even years, as suggested by Rose Oberman, Media & Entertainment director at S&P Global Ratings.
The ongoing trend also indicates that EBITDA will gradually decline and cash flow will weaken for many local TV broadcasters. The industry's concentration of debt maturities beginning in 2026 increases refinancing risk for broadcasters, as many local TV broadcasters face refinancing upcoming debt maturities at higher interest rates in 2026 and beyond.
The report notes that S&P Global Ratings has downgraded some debt from several broadcasters, including Cox Media Group, Gray Media, Sinclair, and E.W. Scripps. It also suggests that groups may find it more costly to refinance their debts in the future, potentially leading to a shortfall in willing lenders.
However, the report does not paint a completely bleak picture. Two broadcasters, Nexstar and Tegna, have stable outlooks according to the report, reflecting stronger leverage and cash flow profiles.
In conclusion, the report underscores the refinancing challenges that several major TV broadcasters may face in 2026. As the industry becomes increasingly reliant on political advertising and faces declining EBITDA and weakening cash flow, it is crucial for these broadcasters to carefully manage their debt and refinancing strategies.
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