Optimum Communications announced that it will not accept TEGNA’s proposed distribution fee increases for its local‑station network. The carrier rejected a 30% hike for major network affiliates and a 50% increase for The CW, citing a lack of added value for consumers and concerns over cost escalation.
The rejection removes a potential revenue stream that could have added tens of millions of dollars to TEGNA’s distribution‑fee business. In Q3 2025, TEGNA’s distribution revenue fell 1% to $358 million, while total company revenue declined 19% year‑over‑year to $650.8 million. Advertising and marketing services revenue also dropped 12% to $273 million, underscoring the company’s need to boost fees to offset the advertising decline.
TEGNA’s strategy to raise distribution fees is part of a broader effort to counteract the 12% drop in advertising revenue and the 19% decline in overall revenue. The proposed fee increases were intended to compensate for subscriber losses and to shore up margins in a challenging media environment. Optimum’s refusal therefore represents a significant setback to that plan.
The dispute occurs amid TEGNA’s pending acquisition by Nexstar Media Group for $6.2 billion. The merger may influence TEGNA’s negotiation stance, while Optimum’s position reflects broader industry consolidation and competition concerns. Optimum’s president, Keith Bowen, criticized TEGNA’s pricing as “egregious” and argued that the market has changed dramatically in the past two decades.
Management has emphasized a focus on reinvention and digital expansion. CEO Mike Steib highlighted the company’s commitment to local journalism and digital experiences, but the Optimum rejection illustrates the challenges TEGNA faces in monetizing content and securing favorable distribution terms.
The loss of Optimum’s business could weaken TEGNA’s bargaining power with other carriers and may prompt the company to intensify its focus on advertising, marketing services, and digital platforms to compensate for the shortfall. No specific market reaction data were available at the time of reporting.
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