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What: Shares of Media General (NYSE:MEG) were moving higher today, gaining as much as 11% as broadcaster shares jumped across the board on the Supreme Court's ruling on Aereo earlier this morning
So what: The highest court in the land decided by a 6-3 vote that Aereo, a service that captures broadcaster signals and sells the programming to subscribers for $8 per month, was operating illegally. With 31 network-affiliated channels, Media General is among the beneficiaries from the ruling in the lawsuit led by CBS, a blow to the cord-cutting phenomenon, which has put additional pressure on traditional media companies by offering programming that doesn't require a TV.
Now what: Aereo had claimed that it was simply connecting users with a free service, as broadcast TV has always been free with an antenna, but it was not paying licensing fees as cable and satellite companies normally do to retransmit the broadcaster signals. Though companies like Netflix are stealing share from the traditional media players, broadcaster stocks have shot up amid consolidation in the industry. Media General just earlier this week purchased the Harrisburg, Pennsylvania, ABC affiliate for $83.4 million, and is expected to merge with LIN Media early next year. The Supreme Court's decision should benefit Media General even more as it continues to expand.