Broadcast TV stocks up strongly on Aereo ruling

Shares of broadcast TV companies rose strongly today after the US Supreme Court ruled that online TV service Aereo, an Indian-American innovator's startup, is violating their copyrights.
CBS Corp shares rose USD 3.09, or 5.3 per cent, to USD 61.93; Gannett Co Inc. Shares rose USD 1.43, or 4.9 per cent, to USD 30.62; Lin Media LLC shares rose USD 1.61, or 6.3 per cent, to USD 27.38; and Journal Communications Inc. Shares rose 51 cents, or 6.3 per cent, to USD 8.62.
The court rejected Aereo's argument that it is merely an equipment provider because it gives subscribers Internet access to free-to-air TV signals captured by thousands of tiny antennas.

The court found the service still amounts to a public performance of copyrighted works, which is the exclusive right of copyright holders.
The ruling could shut Aereo down or force it to enter licensing deals with content owners, potentially increasing what it must charge customers for the service.
Analysts said the ruling preserves the market for retransmission rights, in which cable and satellite TV companies pay broadcasters billions of dollars annually for the right to relay their TV signals to customers.

Research firm SNL Kagan expects those payments to hit USD 7.6 billion industrywide by 2019, up from USD 3.3 billion last year.

The ruling has the effect of "lifting the overhang that had weighed on CBS for the past 15 months," Nomura analyst Anthony DiClemente wrote.
As of midday today, Aereo was still functioning. The lower court, whose ruling was overturned Wednesday, will still have to review factual elements of the case in light of the higher court's decision.
Spokesman Mike Schroeder said in a statement, "Aereo is still evaluating its options."
Shares of larger media conglomerates that are not as heavily reliant on broadcast TV revenue rose more modestly. Twenty-First Century Fox Inc. Shares rose 68 cents, or 2 percent, at USD 34.89; The Walt Disney Co. Shares gained USD 1.35, or 1.6 percent, at USD 84.03; Comcast Corp. Shares rose 62 cents, or 1.2 percent, to USD 53.26.