Nexstar Expects $75M from Retrans Deals

The money will flow from retransmission consent deals with 179 cable, satellite and telco TV providers, the station group says. It expects a third of the money in 2009 and notes that more deals are in the works.
TVNewsCheck,

Nexstar Broadcasting Group announced today that it has renewed or reached new multi-year retransmission consent agreements expected to generate more than $75 million in revenue to Nexstar over the life of the agreements, with approximately one third of the revenue to be realized in 2009.

The agreements are with 178 cable operators, satellite TV operators or telco TV providers.

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"In late 2005, Nexstar emerged as an industry pioneer in the negotiation of retransmission consent agreements," said Nexstar CEO Perry Sook in a prepared statement.

"The original agreements, primarily three to four years in length, called for revenue to Nexstar of about $50 million over their term. In 2008, Nexstar reported that 47 percent of the contract dollars represented by the original agreements, or approximately $23.5 million, was up for renegotiation.

"As such, the more than $75 million in revenue to be derived from the new retransmission consent agreements represents extraordinary growth over both the original agreements and the anticipated levels of renewal."

In the first nine months of 2008, Nexstar recorded approximately $15.5 million from retrans deals, a 23 percent rise from the same period in 2007.

"Nexstar has several additional retransmission agreements which will be re-negotiated in 2009 and we expect further upside to the annualized run rate of our retransmission revenue stream in future years," Sook said.

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Comments (4) -

doctor Nickname posted over 3 years ago
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When the networks start taking a share of these retrans dollars how will companies like Nexstar replace those dollars? It's similar to stations now trying to replace automotive dollars and just a few years back trying to replace the tobacco money. It seems like a false sense of security but I am sure Mr. Sook and others will enjoy the money as long as the current deals last.
TVsales Nickname posted over 3 years ago
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I guess this is good for Nexstar and the broadcast industry, except that the retrans cash flow model is just a finger in the dyke of mature business that is deteriorating... Where are the ratings increases, the creative new programs or how about a newcast that is not cut out of the same cloth?
letdecencyring Nickname posted over 3 years ago
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Retrans agreement money is great. Hopefully it will offset the decrease in the amount of money being spent by certain local TV advertising categories. When and if the stimulus package has a positive effect on the businesses that have been traditionally strong television advertisers the retrans money will be the icing on the cake. In the meantime it helps put a layer on the cake.
TVsales Nickname posted over 3 years ago
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Retrans will not replace the enormous drop in advertising revenue this year or next... there has to be something else or stations will begin to go out of business.

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