Nexstar Cashing in on Second Wave of Retrans Deals

"More lucrative" pacts kick off $22.5 million so far this year

By Michael Malone -- Broadcasting & Cable, 12/3/2009 4:52:13 PM

Nexstar has bagged $22.5 million in retransmission consent revenue year to date, a 45% boost from the same point in 2008. Addressing the Wall Street community at the Bank of America Merrill Lynch Credit Conference today in New York, new CFO Thomas Carter said the broadcast company is on the second cycle of agreements with some 180 multichannel operators-"many of them more lucrative" than the first wave.

Nexstar is hailed as a pioneer in extracting cash from subscription television operators for carrying its stations' signals; Nexstar inked its first cycle of deals back in 2005.

Formerly of Bank of America, Carter joined Nexstar in August 2009. As he made his home in Dallas and had been Nexstar's lead banker, he called the partnership "a nice marriage."

Speaking from Nexstar headquarters in Irving, Texas, President/CEO Perry Sook said the broadcaster has 15 carriage agreements due up at the end of 2009. Half have new agreements in place, and the rest are in the negotiation stage.  Sook would not specify who the operators are, but suggested he would play hardball with them, as he has in the past.

"I don't anticipate the need to revert to the nuclear option," Sook said, "but the clock is ticking and New Year's Eve is fast approaching."

Carter reiterated Nexstar's bullishness in its "virtual duopolies" and station management deals, as well as its "community portal" strategy, as the company view its station websites.

Questioned about whether Nexstar might sell assets, Carter said it was a possibility for "certain stations that might be less strategic to us." But he stressed that the company was under no pressure to do so. "We'd entertain options on some stations," he added, but it would be a "very limited" number.