Nexstar Puts Stations on Block

Latest group to test the waters with possible sale

By Michael Malone -- Broadcasting & Cable, 7/21/2011 8:08:20 AM

The Nexstar Broadcasting Group stations are potentially for sale, as the company's board of directors "has decided to explore and evaluate strategic alternatives intended to maximize shareholder value, including a possible sale of the Company," said Nexstar in a statement.

Nexstar has tapped Moelis & Company as its financial advisor and Kirkland & Ellis LLP as its legal counsel in the process.

One of the early groups to extract substantial retrans cash from subscription TV operators, Nexstar has been locked in a nasty spat with Fox over affiliation agreements that are tied to sharing that retrans. Multiple Nexstar stations affiliated with Fox, including WFFT Fort Wayne and WTVW Evansville, have announced they are going independent in recent weeks in the wake of the battle.

Nexstar says there is no timetable for the possible sale process, and that there's no guarantee it will result in a sale.

President/CEO Perry Sook was not available for comment.
The Wall Street Journal reported that the stations might fetch as much as a billion dollars. "With a market capitalization of about $210 million and an enterprise value, including net debt, of more than $800 million, Nexstar could fetch more than $1 billion in a sale," reported WSJ.

Nexstar owns, operates, programs or provides services to 65 stations in 36 markets, including WBRE Wilkes Barre and KARK Little Rock.

A wide gap has existed for years between what buyers and sellers think stations are worth. But with the likes of Freedom, McGraw-Hill and now Nexstar putting their stations on the block, some appear confident the valuation gap may be closing.