Nexstar has agreed to buy MyNetworkTV outlet KWBF Little Rock from Equity Broadcasting Corp. for $4 million, setting up a duopoly with Nexstar’s NBC outlet KARK. Nexstar President/CEO Perry Sook said the duopoly strategy is key to Nexstar’s growth. “This transaction reflects Nexstar’s long-term strategy of identifying accretive acquisitions and prudently expanding our portfolio by operating multiple stations in concentrated geographic areas,” he said. “Under Nexstar’s ownership, KWBF-TV will realize additional retransmission revenues and we’ll achieve operating and financial synergies between KARK-TV and KWBF-TV. Post-closing, our immediate strategies will focus on leveraging our existing local sales teams, award-winning local news and e-Media operations across both stations.”
Sook said the purchase price, on a pro-forma basis, represents a multiple of less than six times the last twelve months’ cash flow. Nexstar intends to finance the acquisition through cash on hand.
The transaction, expected to close the first half of next year, is subject to FCC approval.
Equity has sold a number of media properties amidst financial woes.
Sook showed reluctance to do a major deal in a recent interview with B&C. “One of the things that is of paramount importance to us today is to not disturb our current credit agreement, which is becoming a valuable asset in terms of our cost of funds and availability of funds,” he said. “To reset that credit agreement to current market rates would cause an increase in interest expense of somewhere in the order of $20 or $30 million, and we haven’t found a deal yet that would justify us doing that.”