What’s behind the continuing wave of television mergers?

[Commentary] The recent deals in the local broadcast and cable industries have everything to do with scale and leverage in various contract negotiations. Besides the regular bonanza of political advertising, local television have been prospering as cable systems pay ever increasing retransmission fees. The bigger the station group the better deal it can strike.

Todd Schurz, CEO of the family-owned firm, said the company’s stations, most of them top-rated in their markets were too small a group -- and not just for retransmission. Scale also matters, he said, “in negotiations with distributors -- networks and programs and with vendors too. When we looked to the future, we concluded we are no longer the best owners.” With cord-cutting and digital streaming on the increase, cable may not be quite the license to print money it was five years ago. But it remains a very profitable business with a sweet business model -- both subscribers and advertisers willing to open their wallets.