Nexstar Broadcasting Group Looks Forward to Pa. Primary
Chairman and CEO Perry Sook Speaks at Bear Stearns Media Conference
By Kevin Downey -- Broadcasting & Cable, 3/12/2008 9:59:00 AM
The heated battle playing out between Democratic presidential hopefuls Sens. Hillary Clinton (N.Y.) and Barack Obama (Ill.) will come to a screeching halt in Pennsylvania late next month, with the two candidates flooding the state with ad dollars in the interim.
Good thing, too, as Nexstar Broadcasting Group chairman and CEO Perry Sook explained to investors at the Bear Stearns Media Conference in Florida Tuesday.
Nexstar has stations in Erie and Wilkes-Barre/Scranton that should benefit from a commercial barrage by Clinton and Obama.
Overall ad revenue is slumping, notably with General Motors slashing its budgets. GM accounts for about 7% of auto ad spending on Nexstar stations.
“Local will be up a single digit,” he said. “National will be down a single digit. Trade and barter will be down not an insignificant amount.”
Political and new-media revenue are bright spots amid the gloom, Sook said, adding that the dragged-out Democratic contest is funneling money into states that held elections long after nominees were selected in past years.
He expects political campaigns to spend in the low- to mid-$30 million range this year.
Sook also expects to see a bump in revenue from renegotiated retransmission deals, with about 80% of deals up for renegotiation by 2009.
And he pointed to the Internet as a new revenue source for Nexstar, noting that the station-owner group saw thousands of “tiny” transactions this year.
Online revenue is expected to hit $10 million in 2008 -- about 30% from banner ads, 30% from “ask an expert” campaigns, 20% from video pre-rolls and 20% from coupons and contests.
“In 2007, 70% [of online revenue] is from advertisers who had not used television,” Sook said. “What we found in our local-portal approach is that it’s thousands of little transactions. The good news is that they’ll sign 12-month contracts.”
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