Filed at 10:20 a.m. EST on Mar. 23, 2009
Nexstar Broadcasting Group has agreed to provide management services for the seven stations owned by Four Points Media Group, an affiliate of Cerberus Capital Management. Under the terms of the agreement, Nexstar will receive a "fixed annual management fee of $2 million per year," it said in a statement, "as well as annual incentive compensation based on increases of broadcast cash flow at the stations. Nexstar will also be entitled to a share of the profits if the stations are sold while the agreement is in effect.
Nexstar will manage Four Points' station operations and act as a resource on sales, promotion, programming alternatives, production, operations (including e-media), finance, contract administration and human resources. The group is comprised of CBS affiliates KEYE Austin and KUTV Salt Lake City, CW outlets WLWC Providence and WTVX West Palm Beach, MyNetworkTV outlet WTCN West Palm Beach, Azteca Amèrica affiliate WWHB West Palm Beach, and the RTN digital channel at KUSG Salt Lake.
Nexstar Chairman/President/CEO Perry A. Sook called it "a tremendous opportunity to leverage Nexstar's operating and management capabilities to serve the needs of other broadcast groups and to build value for Four Points."
"The agreement also underscores Nexstar's commitment to--and long-term track record of success--developing new high-margin revenue streams to support our goal of creating long-term value for our shareholders," he continued. "Managing the Four Points stations is an excellent complement to our existing station and e-Media operations as the four markets in which Four Points operates do not geographically overlap with stations and network affiliations in which Nexstar owns, operates, programs or provides sales and other services to."
The deal went into effect March 20 and extends through March 31, 2012, with one-year renewal options. The agreement provides for minimum compensation to Nexstar of $10 million if the Four Points stations are sold during the initial three year term of the agreement.