Sook Builds Broadcast Powerhouse
Industry vet parlays entrepreneurial vision into Nexstar
By Melanie M. Clarke -- Broadcasting & Cable, 1/23/2005 7:00:00 PM
As president and CEO of station group Nexstar, Perry Sook runs a nearly $200 million entity that owns, operates or services more than 46 small and midsize TV stations in 27 markets. And he is busy fighting for all of them.
Sook says cable operators aren't treating his stations fairly. He insists they pay to retransmit his stations' broadcasts—or stop carrying them. He doesn't want ad time to promote the broadcasts, Sook wants cash: 30¢ per subscriber, monthly. Cable executives aren't buying it.
But the onetime-teenage-radio-DJ-turned-corporate-executive isn't afraid of battle—or hard work.
Hailing from DuBois, Pa., Sook received his third-class radio license in high school. His first broadcasting job was at WPME(AM/FM) Punxsutawney, Pa., where he operated the board in the DJ booth and spun records on Sunday nights. Throughout the summer, he sold advertising for the station. “It was a great experience,” Sook recalls, and it put him on his career path.
Majoring in communications at Ohio University, Sook worked as a play-by-play announcer for the college for a season. After graduation, he continued doing on-air work, covering sports at a local TV station. He worked without a crew, setting up cameras and preparing his own copy.
“I got into the industry thinking I wanted to be a play-by-play announcer for the Pittsburgh Pirates,” Sook says. “[But] I realized I didn't have it in my DNA to be a great journalist.”
Instead, Sook took a position as an account executive at WFIV(AM) Kissimmee, Fla. In the first week, he made the biggest sale in the tiny station's history, but the owner never paid him. The experience taught the 22-year-old two things: first, that a business should be managed properly, and second, that he wanted to be an entrepreneur.
Sook left to become an account executive at WOWK(TV) Charleston, W.Va., where he worked with former classmate Matt Lauer, who produced the noon news. “There was more money and opportunity in TV. The quickest way into management was sales.” So in 1981, Sook put himself on the fast track.
He took a job at WPXI Pittsburgh as an account exec, then joined TeleRep as a national account exec in 1983. After two years, he become national sales manager at KTVT Dallas and, finally, general sales manager and acting GM at KXTX Dallas—all in five years. Back in the '70s and '80s, “you moved to move up the ranks,” Sook says.
In 1990, Sook joined Seaway Communications as president; the goal was to help minorities invest in the broadcasting business. But after failing to get board agreement on his ideas, Sook left in 1991 to create Superior Communications.
He spent more than 14 months finding the first station to buy—WDKY Lexington, Ky.—and securing the capital to acquire it. With three small private equity funds and a loan from the finance arm of AT&T, the purchases of WDKY and KOCB Oklahoma City were completed in 1992 for $23 million. In 1996, Sook sold Superior to Sinclair for $63 million. The sale closed on a Friday, and Sook considered his next move.
Sook was propelled by a core business belief: Broadcast stations were undervalued. They were worth more than they were trading for, yet most banks didn't finance them that way. He saw a chance to enhance the stations' value and met with Andrew Banks and Royce Yudkoff of ABRY Partners LLC in Boston. The men agreed with Sook's assessment, and ABRY became his majority investor.
Nexstar Broadcasting was formed the following Monday. It began with the purchase of WYOU Scranton– Wilkes-Barre, Pa. And it has grown, thanks to 21 separate acquisitions, coupled with its agreement with broadcast associate Mission Broadcasting.
Sook's latest challenge isn't adding stations but battling for compensation. His decision to demand 30¢ per subscriber for retransmission has met with resistance. Cable One replaced Nexstar stations with other networks in some of its Oklahoma and Kansas systems. Four Cox Communications systems have recently dropped Nexstar's ABC and NBC stations.
“Our goal was to have cable place a fair value on what we contribute,” Sook says. He compares middle- and small-market broadcasters like himself with larger broadcast giants, such as Viacom, which can charge for their cable and broadcast networks, such as MTV and CBS.
Yet Nexstar continues to grow. In January 2003, Nexstar owned, operated or serviced 20 stations. It doubled in size by buying four more stations, acquiring Quorum Broadcasting, which owned 11 and serviced five, and gaining three stations purchased by Mission. The company spent most of 2004 integrating those acquisitions. In 2005, the focus is to pay down debt, improve the balance sheet and prepare for the next round of acquisitions.
“It takes courage, guts, a supportive wife and luck for it all to come together. You have to be willing to take a lot of risks to make it happen,” says Sook. “But broadcasting is the only business I've ever wanted to be in.”
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