A new report from S&P Global Ratings paints a grim picture for the future of linear TV in the U.S., declaring its decline “irreversible.” The report highlights significant challenges for media companies attempting to divest themselves of their linear TV networks, a trend already underway with companies like Comcast and Warner Bros. Discovery restructuring their operations.
Comcast plans to spin off its linear networks, mirroring Warner Bros. Discovery’s strategy of separating its linear and streaming divisions. While S&P acknowledges the decline is gradual, it emphasizes its inevitability: “Linear TV’s decline in the U.S. is irreversible, but there is no immediate cliff,” the report states. “We expect the decline will be a steady one that will take years to reach its final conclusion.”
The report’s core argument rests on the declining revenue from affiliate fees and advertising—the twin pillars of linear TV profitability. Affiliate fees are projected to fall by 3% to 7%, while advertising revenue faces a steeper drop due to eroding audience ratings outpacing cord-cutting. Even seemingly safe bets like sports networks, which often feature high-value content such as the NFL, are not immune, with a 2.2% drop in audience ratings for the 2024 season.
The complexities of spinning off linear TV networks are also highlighted. The separation from production studios could expose networks to higher programming costs and potential losses of crucial content rights. “Ultimately, the networks would just be distribution vehicles,” the report warns, “leaving them vulnerable to termination of content rights agreements.”
Analysts warn of a “no-win situation” for media companies. While clinging to linear TV networks diminishes value, they still generate essential cash flow crucial for streaming investments, debt reduction, and overall operational sustainability. The S&P report reflects broader trends, including accelerating cord-cutting (projected at a 9.3% decline in U.S. multichannel households in 2025), and the migration of advertising dollars and sports rights to streaming platforms.