Nexstar Stays Ahead of The GameSook’s stations show knack for innovative revenue sources 6/21/2010 12:01:00 AM Eastern
Nexstar Broadcasting Group was
hatched 14 years ago this month, and founder
Perry Sook has built the company into a
maverick broadcast outfit. Many cite Nexstar for leading
the way in terms of retransmission consent revenue,
with Sook's hardball negotiating getting pay-TV
providers to cough up significant cash. Citing "virtual
duopolies"-bottom-line-boosting service agreements
with a rival station in a given market-as a core strategy,
Sook has grown Nexstar into a 34-station group
that provides services for another 25 stations.
Chairman/President/CEO Sook spoke to B&C Deputy
Editor Michael Malone about what's next for Nexstar
from his Irving, Texas, headquarters. An edited transcript
is exactly, what comes to mind?
A typical Nexstar station will generally be the No. 1
or No. 2 station in the market in terms of revenue and
local news rank. In an ideal circumstance, it would operate
or derive financial benefit from a second station
in the marketplace, and both stations would drive a robust community
portal on the e-media side.
How does Nexstar look in terms of the political
Because of our geography, we do very well in the even-number
political revenue for Q1 of 2010 was 50% greater than in Q1 of 2008.
will [also] be true for the second quarter of 2010. If history is any
are on track for a record political year by a not-insignificant margin.
Nexstar's KUTV Salt Lake City recently stopped doing news
KJZZ. What would it take for you to eliminate news in one of your
Local news is the primary focus of our identity as a company
and as an
industry. So, it would be the last move we would want to ever have to
as a cost-cutting necessity. Having said that, in medium-sized markets,
you're not No. 1 or No. 2 in news, you're probably not making money with
your local news product.
Do you see Nexstar making an
Given that we're just six months out of the
of 2009, while we are on track to have a record year,
we're going to be very cautious in deploying our capital.
We are paying down debt and strengthening our balance
sheet, and think that is a good long-term course
to take. We are always on the lookout for opportunities
to create digital virtual duopolies and acquisitions that
make sense, but we're going to be cautious stewards of
Are you concerned that the FCC will take a closer
look at virtual duopolies?
The FCC has reviewed every one of our virtual duopolies
at their creation, and we are very comfortable with
the current rules and our ability to work within them.
What needs to happen is some meaningful deregulation
that would benefit the smaller markets. We don't
begrudge NBC and Comcast merging, but why we
can't fully merge two UHF stations in Rockford, Ill.,
or Erie, Pa., is beyond me in this day and age.
Are you pacified by what you're hearing
from Washington in terms of broadcasters'
I think Congress should mandate that the FCC conduct
a full inventory of all spectrum, not just broadcast
spectrum. There seems to be increasing momentum
that this should, and will be, the first step in developing
any kind of national spectrum policy or any
kind of action plan as it relates to spectrum. I think
that the looming broadband "crisis" is promulgated
by statistics put forth by the wireless and broadband
industry, and I think those projections need to be held
up for inspection. At that point you can look at the
wireless and broadband devices-are they as efficient
as they could be in terms of their operation and use
of spectrum? Once you have taken those three steps,
I think you can begin to develop a coherent strategy
for managing spectrum.
Having said that, the Internet was never meant to
be a one-to-many video distribution device. It was set up primarily as a
one-to-one medium, and I think the fact that AT&T has begun to
its spectrum usage vis-a-vis tiered pricing will be an impetus to the
of chip-enabled mobile devices to which broadcasters can deliver
video on a one-to-many basis. So, I'm optimistic that this entire
will put more credibility and credence in the concept of rich video
via broadcast to devices, rather than via broadband or wireless.
Do you have retrans negotiations going on?
We have 16 agreements that expire this year. In 2011, I have
150 agreements that expire, which were the three-year deals
we did in 2008. Retrans, fortunately or unfortunately, has become a
treadmill that I seem not to be able to get off. But it's a
revenue stream for the business, so I'm happy to spend as much time as
is necessary on it.
prompted you to first work in television?
My initial dream in this business was to be a play
by play announcer for the Pittsburgh Pirates when Bob Prince retired. I
first on radio when I was 12 years old, when the radio station that I
on my way to junior high school invited me in to read Little League
the night before on the air. I was hooked from that point forward.
It's the only business I've ever been in-hopefully I
can get it right one of these days!
are you watching on TV?
I primarily watch sports. I'm also a huge fan of The Big Bang
Theory and CSI Miami. CSI Miami in high
definition-it's great eye candy on Monday night
when you get home from work.
retrans is such a large revenue stream for station groups, do you hear
your fellow broadcasters, saying thanks for leading the way in terms of
I hear from a lot of our fellow broadcasters who've
been very complimentary of our efforts in pioneering this revenue
accolades and compliments are very nice, but I have yet to receive my
royalty check from broadcasters. I will let you know when that shows up
the kind words are worth more than royalties, aren't they?
[Laughs] I haven't been able to spend them yet,
let's put it that way.
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