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.
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.”