LOS ANGELES (AP) — Shares of broadcast TV companies rose strongly Wednesday after the U.S. Supreme Court ruled that online TV service Aereo is violating their copyrights.
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. It 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.
CBS Corp. shares rose $3.64, or 6.2 percent, to close at $62.48; Gannett Co. Inc. shares rose $1.48, or 5.1 percent, to $30.67; Lin Media LLC shares rose $1.48, or 5.7 percent, to $27.25; and Journal Communications Inc. shares rose 63 cents, or 7.8 percent, to $8.74.
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 $7.6 billion industrywide by 2019, up from $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 in a research note.