The Local TV Reckoning: How Pay TV “Singularity” Threatens American Broadcasting’s Last Mile

In a recent analysis for clients of their Madison and Wall advisory firm, media economist Brian Wieser and analyst Luke Stillman introduced a concept that should alarm local broadcasters — “pay TV singularity.” Their thesis: The U.S. pay TV market is nearing a tipping point where traditional cable and broadcast television can no longer deliver reliable mass reach for advertisers — a shift that could upend the economic foundation of local and national TV advertising alike.

Wieser and Stillman define this moment as the point when “there are zero ways to get half the population via cable” — a structural collapse in the usefulness of linear television for mass-reach campaigns. While their analysis centers on national advertising and the broader television marketplace, the consequences for local broadcasters are even more troubling than the national conversation implies.

The Point Of No Return?

The singularity they suggest is already here. Pay TV penetration has plummeted from over 80% in 2011 to just 34.4% by the end of 2024, marking the ninth consecutive year of subscriber decline. This is not cyclical. This is structural. And for local broadcasters — the stations that depend on cable carriage agreements, retransmission fees and reach metrics tied to traditional TV households — the singularity poses an existential threat. Unlike national networks that can pivot to streaming or specialty content, local stations are tied to analog economics in a digital world, and the financial model that has sustained local news, sports and community programming is hollowing out in real time.

Understanding this crisis requires examining a number of interconnected revenue pressures that are converging simultaneously on local broadcasters, each with its own implications — and none with obvious solutions.

The Retransmission Fee Trap

For the past 15 years, retransmission consent has been local broadcasting's financial oxygen. When cable and satellite operators agreed to pay broadcasters per-subscriber fees in exchange for the right to distribute their signals, it created a revenue stream that partially compensated for declining advertising. But this lifeline is strangling as the subscriber base evaporates. Pay TV households dropped from over 86 million in 2014 to approximately 56 million by 2025 — a 35% collapse. With vMVPD services continuing to hemorrhage subscribers (losing 1.04 million net in Q1 2025 alone), retransmission revenue has begun its inevitable decline.

The math is brutal. Gray Media, the nation’s second-largest owner of broadcast stations, saw retransmission revenue drop 6% year-over-year in Q3 2025 while carrying $5.6 billion in long-term debt. Nexstar, despite its massive ad-friendly scale, derived 54% of its $5.4 billion annual revenue from retransmission fees — a dependency that inverts the entire business model. When that revenue stream shrinks, the leverage shifts entirely to the networks. Nexstar and other station groups are already reporting "network fee pressures" as networks like ABC, NBC and Fox demand higher reverse compensation (the share of retransmission fees networks take from their affiliates), essentially taxing the remaining subscriber base harder.

Softening Spot Advertising

Local spot advertising — the bread-and-butter revenue stream that once sustained local stations — is contracting from both ends simultaneously. S&P Global projects core local spot revenue will decline 4% to $7.66 billion in 2025, a painful retreat after 2024’s political and Olympics bonanza. But national spot advertising is disappearing even faster, projected to fall 4.3% while the long-term trend shows a 4.9% compound annual decline through 2030. This forces stations to compete for smaller pools of advertiser spending.

More insidiously, the demographic collapse of local news audiences is making even remaining dollars harder to defend. Only 20% of adults under 30 regularly watch local TV news, down from much higher levels just years prior. Meanwhile, 65% of adults over 50 still watch regularly, creating a viewership skewed toward aging baby boomers — exactly the demographic least attractive to many categories of national and local advertisers. Local TV stations are becoming niche demographic plays rather than mass-reach vehicles. When an automotive dealer or home services company can target Gen X homeowners on YouTube with a lower cost-per-impression and better attribution, why would they pay traditional linear TV rates?

OTA Antenna Growth: A Mirage Without Monetization

Over-the-air (OTA) viewership is the one apparent bright spot in local broadcasting. Nielsen estimates that about 22.75 million US households now watch TV via digital antenna, a number rising with the pace of cord-cutting. In some markets, like Oklahoma City, OTA penetration exceeds one-third of all TV homes. On paper, this should be a windfall for broadcasters: OTA signals deliver clean, uninterrupted viewing, and audiences gravitate to live programming — news, weather, and sports — the very content that justifies heavy local investment.

But the paradox is clear: OTA audiences generate almost no revenue. Retransmission consent fees from cable and satellite operators — not local advertising — have been increasingly underwriting broadcast operations. As antenna viewership grows, measurable ad dollars aren’t following. A viewer watching a network show via Roku creates trackable, targetable engagement data - as well as an environment where relevant ad messaging aligned with that data can be inserted. A viewer watching that same program over the air generates little more than a Nielsen sample estimate, often unreliable and invisible to digital-first marketers.

In short, the expansion of OTA households confirms that broadcast TV still matters to viewers — just not to advertisers. What looks like a resurgence in reach masks a deeper problem: relevance without revenue.

The Eroding Value Of Network Affiliation

The relationship between local stations and their network partners has inverted. Historically, network affiliation was a gift — the network provided content and brand, and the local station added news and local flavor. Today, networks are increasingly demanding higher reverse compensation from affiliates while simultaneously pushing those same affiliates to compete with vMVPDs who negotiate directly with networks for streaming rights.

This creates a Hobson's choice for local broadcasters: accept ever-higher network fees in a shrinking retransmission environment, or risk disaffiliation. A few stations have called the bluff. WPLG-TV in Miami ended its ABC affiliation in March 2025 after nearly 69 years, unable to reach terms with Disney on reverse compensation. WJXT in Jacksonville became an independent station in 2002 when it disaffiliated from CBS. But these instances remain rare exceptions. For most local broadcasters, the network affiliation remains essential for content production and audience reach, even as the financial terms deteriorate. The FCC's Dual Network Rule has historically prevented mergers between the Big Four networks (ABC, CBS, NBC and Fox), a restriction that forced the networks to negotiate fairly with affiliates. But in September 2025, the FCC announced it was considering lifting the ban on Big Four mergers, a move that could further erode affiliate bargaining power as networks (potentially) consolidate.

Consolidation: Symptom, Not Solution

The industry's response has been consolidation. Nexstar controls nearly 200 stations across 116 markets. Gray, Sinclair and Nexstar together own approximately 40% of all local stations in the country. The theory is that scale produces efficiencies: aggregated newsrooms, shared resources and better collective leverage over networks. And there is merit to this logic — a duopoly in a mid-sized market can justify investing in a weather radar system or deeper investigative journalism resources that a standalone station cannot.

But consolidation is also a sign of structural distress, not strength. As ownership concentrates, the primary consolidation strategy has been cost reduction rather than revenue growth. Newsrooms already stretched thin are consolidating further. Shared services agreements that reduce station independence multiply. The FCC's likely relaxation of ownership caps — now expected in 2026 — will accelerate this further. Yet nobody genuinely believes that combining stations in Indianapolis or Tampa will meaningfully change the fundamental economics.

Age Cohorts And The "Never" Problem

Perhaps the most intractable challenge for broadcast television is demographic. Viewers aged 65 and older remain loyal to linear broadcast and cable, but households headed by adults 18–34 are now predominantly “cord-nevers”: 52% have never subscribed to cable, and 80% regularly stream instead. This generation does not view local broadcast TV as a standard distribution channel. They expect content to be on-demand, personalized, and algorithmically curated. The very idea of a local news broadcast at 6 p.m. or 11 p.m. runs counter to their media habits.

The critical insight is this: the generational divide is not a phase. Research predicting that millennials would adopt traditional TV as they aged and started families has been decisively proven wrong. In fact, the opposite has occurred. Sixty-two percent of Gen Z parents deliberately choose FAST channels and YouTube over cable when watching video with their children. More than 90% of families with kids aged 2–17 rarely or never watch traditional cable. Gen Z parents are not teaching their children to watch the 6 p.m. local news; they are learning from their children how to navigate YouTube, TikTok, and FAST channels — and how to expect control over what they watch and when.

This represents a permanent structural shift, not a consumption preference that changes with life stage. As Gen Z parents raise their children to stream, they are codifying an entire generation of media consumption that bypasses broadcast television entirely. By the time today’s Gen Z children become parents, the infrastructure of traditional local broadcasting may be unrecognizable—or defunct. The audience replacement problem is not simply unfixable through content strategy; it is essentially unfixable through any strategy broadcast television can employ.

So What Can Be Done?

First, local broadcasters must diversify beyond traditional advertising and retransmission. Nexstar’s investments in NewsNation and The CW, though only modestly profitable, show the right instinct: develop proprietary digital properties and original content that can generate direct advertising and subscription revenue. Direct-to-consumer streaming apps for local news, pioneered in larger markets, provide a path to understand audience willingness to pay while reducing dependence on MVPD distribution.

Second, the industry needs regulatory clarity on the “streaming loophole”. Networks can license content directly to vMVPDs while broadcasters cannot. If platforms like YouTube TV or Hulu Live can bypass local stations, the same platforms should negotiate directly with stations for local content, restoring some bargaining power in the streaming era.

Third, broadcasters should explore modernized public media policies. Local news and public service programming remain among the few elements with clear public value. Redirecting a portion of retransmission fees or carriage obligations to support essential journalism — similar to PBS or public radio — could help sustain content that the market alone no longer supports.

Fourth, consolidation should be allowed with public-interest requirements. FCC approval of ownership changes could be conditioned on demonstrable investment in local news, diversity, and community service — not just cost-cutting.

The Likely Outcome

Even with these measures, local broadcasting faces an uncertain future. Revenues will likely decline, newsrooms will shrink, and audiences will age. The medium will not vanish — older Americans still rely on it for news and emergency information — but it may increasingly operate as a secondary business, focused on efficiency rather than innovation.

Wieser and Stillman’s “pay TV singularity” frames the challenge nationally, but the most visible effects will appear locally: smaller newsrooms, reduced investigative reporting, underfunded emergency systems, and communities losing key coverage of governance and civic life.

Local stations face structural limits: they cannot sell premium content to streamers, cannot match the targeting of digital platforms, and cannot follow younger audiences to services where they lack leverage. Without new revenue models or regulatory adjustments, local broadcasting will remain relevant primarily to an older audience, increasingly constrained by shrinking carriage deals and audience replacement challenges. Its future will depend on innovation, diversification, and policy changes rather than traditional business strategies alone.

Local News To Peruse

• YouTube TV Blackout: Nearly 25% of Subscribers Have or Plan to Cancel Over Disney Dispute, Survey Finds - Lucas Manfredi [The Wrap]

• Station Execs Bullish on Prospects for 2026 Ad Market, Deregulation - George Winslow [TVTech]

• One Battle After Another - Carolina Abbott Galvão and Riddhi Setty [Columbia Journalism Review]

• Localism Offers Potential Leverage In vMVPD Battles - Mary M. Collins [TVNewsCheck]