Nexstar Earnings Down 13%

Retrans gains keep losses not as bad as rest of pack

Nexstar reported net revenue for the first quarter of $55.5 million, a 12.9% decrease from the same quarter last year. First quarter 2009 total operating expenses declined 11% from the same period in 2008.

Broadcast cash flow totaled $14.2 million in the first quarter, compared with $21.3 million for the same period in 2008. Retransmission consent fees represented $6.6 million in the quarter, up 42.2% over the same quarter last year.

"Nexstar's first quarter revenue performance again proved to be industry leading," said Chairman/President/CEO Perry A. Sook. "The growth of the company's diversified high-margin revenue streams softened the impact of the challenging economy. Nexstar continues to introduce and develop high margin revenue streams. Late in the first quarter, the company entered into an agreement with Four Points Media, an affiliate of Cerberus Capital Management, L.P., whereby Nexstar provides management services for seven Four Points' television stations in four markets. Nexstar will receive quarterly management fees and an annual incentive fee based on improving the operating results of these stations."

Nexstar's earnings report was delayed a few days following the resignation of CFO Matthew Devine Wednesday.

Sook said the group's duopoly/virtual duopoly strategy will help the bottom line going forward. "Nexstar was also active in strategically managing its station portfolio with de-leveraging and accretive station acquisitions as the company purchased KARZ in Little Rock, Arkansas, which created the 19th duopoly for the company," he said. "Earlier this month, the company entered the Florida market with the acquisition of Jacksonville's WCWJ. The recently acquired stations as well as new management fees and expected continued growth of our e-MEDIA and retransmission consent revenue streams will help offset the impact of lower political revenues and the weak economy in the balance of 2009."

Nexstar closed on WCWJ for a little less than $18 million. Sook recently told B&C he's eager to enter more station management deals, like the one with Four Points. "We're trying to become the Starwood of the broadcasting business-you own the assets and we'll manage the business," he said, citing the hospitality giant that manages several hotel chains.