Earnings Call

Nexstar Seeks Sale Of Some Smaller Stations

CEO Perry Sook says that while it will continue to look for acquisitions that make sense, it is also “engaged in discussions to sell some of our smaller, non-strategic assets and believe that can be done at accretive multiples to the company as well.”
By
TVNewsCheck,

Nexstar Broadcasting Group has been a big station buyer of late, having announced a deal to buy a dozen stations from the Newport group for $285.5 million in July. But in his conference call with Wall Street analysts, Chairman-President-CEO Perry Sook revealed that Nexstar is likely to do some selling as well. Not that he won’t also look at buying more stations.

“I think that we will continue to look at acquisitions opportunistically, if we can find acquisitions that are free cash flow accretive to the company and leverage neutral or nominally leverage-changing,” Sook said. “On the other side of that, we are engaged in discussions to sell some of our smaller, non-strategic assets and believe that can be done at accretive multiples to the company as well.”

Story continues after the ad

Sook did not identify any particular markets as being up for sale.

Looking at the Newport sales, which totaled over $1 billion from multiple buyers, Sook said Nexstar was interested in more than the 12 stations it agreed to buy, “but not at the price at which they were offered because they would not have met our free cash flow accretion test.”

For the 12 Newport stations in eight markets that did pas the acquisition test for Nexstar (and its virtual duopoly sister company, Mission Broadcasting), Nexstar CFO Tom Carter told analysts that the new properties will be a welcome financial addition.

“In the first year following the closing of the transaction, the Newport stations are expected to contribute approximately $110 million in incremental net revenue to Nexstar’s consolidated results. In 2014 we believe that the combined entity could generate approximately $550 million in net revenue,” he said. For comparison, Nexstar’s net revenues for the past full year, 2011, totaled $247.3 million.

Brand Connections

“The purchase price represents a multiple of approximately five and a half times the average 2011-2012 broadcast cash flow of the acquired stations after giving effect to the integrated operating improvements and synergies identified by Nexstar,” Carter said, valuing the projected synergies at around $19 million.

“As such, we expect the acquisition to generate approximately $55 million in additional EBITDA to Nexstar in year one. Most important to us, the additional station operations are expected to provide free cash flow accretion in the first year of approximately 45% over the levels expected to be generated by Nexstar and Mission’s existing operations,” the CFO said. That increased free cash flow, combined with the terms of the company’s pending $645 million secured credit facilities, is projected to reduce Nexstar’s leverage to below five times by the end of 2013 and to below three times by the end of the next election year, 2014.

Nexstar doesn’t provide detailed forward guidance to Wall Street. However, Sook did provide some color on 3Q in response to an analyst’s question about whether core business looked better or worse than 2Q.

“I would say better. We went into the third quarter with the best pacing of business on books as for any quarter this year. Some of that is Olympics. Our spot and e-Media revenue as of the opening ceremony was about $5.86 million on the books. That will grow throughout the length of the games. But that’s 42% ahead of where we were in 2008 for the Summer Olympics in Beijing,” Sook said.

“The third quarter for us looks much more positive even in July, which had the benefit of no Olympic revenue to speak of really and July was a very strong month for the company,” said the Nexstar CEO. “We’re not seeing any slowdown — more the inverse of that. The third quarter looks better to us than second quarter did, certainly on the way in.”

Tags

Comments (0) -

Marketshare Blog Playout Blog

Twitter

TVNewsCheck

Ratings

Overnights, adults 18-49 for September 22, 2016
  • 1.
    4.0/14
  • 2.
    1.7/6
  • 3.
    1.3/5
  • 4.
    0.9/3
  • 5.
    0.6/2
  • 6.
    0.3/1
Source: Nielsen

Reviews

  • Rob Owen

    Easily fall’s best broadcast network comedy pilot, NBC’s The Good Place offers a clever high-concept premise that’s complemented with intelligent, sometimes absurdist humor. Created by Michael Schur, co-creator of NBC’s Parks and Recreation, The Good Place is a highly serialized series that’s essentially set in heaven and stars Kristen Bell and Ted Danson. NBC made five episodes of The Good Place available for review, and the show not only holds up, but also it improves, deepening characters that initially feel one-note and frequently leaving viewers guessing with cliffhanger endings to many of the episodes. The combination of snappy dialogue and winning but flawed characters makes The Good Place a great bet for fans of smart TV comedy.

  • Maureen Ryan

    Pitch has swagger, for good reason. It gets the big things right; the Fox drama about the first female baseball player in the Major Leagues is one of the year’s most assured and exciting debuts. But part of what impresses about the pilot is also the way it confidently strings together so many small but telling details. Ginny (Kylie Bunbury) is the first woman to be called up from the minors to the big leagues, and no show since Friday Night Lights has done a better job of portraying the internal and external pressures that weigh heavily on young athletes asked to do much more than merely succeed on the field. Pitch will likely do a good job of getting viewers to root for it. The hope is that the show won’t be an impressive, short-lived curiosity, but rather a long-term phenomenon.

  • Kevin Fallon

    In a fall TV season that’s already making a splash for championing diverse, distinctive voices in an array of projects that they created, wrote, and starred in, Better Things on FX stands out. The show is created by, written by, and starsPamela Adlon. She plays Sam Fox, the single mother of three daughters modeled after her own reality-show-ready experience raising three girls in Los Angeles following a divorce. Sam is also, like Adlon, a working actress — on shows both raunchy, a la Californication, and animated for children, like her role on Recess. It’s a refreshingly blunt take on single motherhood without sacrificing the warmth of parental love, portraying the dance between selfishness and selflessness that’s at the heart of being a parent — especially one weathering the hormonal fireworks of a household of four women at different ages.

  • David Wiegand

    The fall TV season doesn’t count as much as it used to — we already know that. But no matter how many retreads the broadcast networks throw at viewers in the next few months, this fall will be memorable because of the premiere of Atlanta on Tuesday, Sept. 6, on FX. The half-hour comedy created by and starring Donald Glover (Community), simply and brilliantly recalibrates our expectations of what a TV comedy is and how black lives are portrayed on the medium.

  • Louisa Ada Seltzer

    The second reboot of the 1980s John Candy movie Uncle Buck, bumped by ABC from midseason, has the same tired jokes you'll find on any second-rate sitcom. Too bad, because Mike Epps is appealing and ABC would be wise to keep him around for future shows, but there’s just not enough to this show to suggest it will last past summer. It also airs against NBC’s America’s Got Talent, summer’s No. 1 program on broadcast, which may make it even harder to find an audience.

  • Neil Genzlinger

    Bryan Cranston brings his Tony Award-winning interpretation of President Lyndon B. Johnson to television in an adaptation of the Robert Schenkkan play All the Way, and it’s still quite a sight to behold, just as it was on Broadway in 2014. Nothing beats witnessing this kind of larger-than-life portrayal onstage, of course. But the television version, presented by HBO, offers plenty of rewards, allowing Cranston to work the close-ups and liberating him from the confines of a theater set. Cranston’s performance is a gem — in his hands, this accidental president comes across as an amazing bundle of contradictions, someone who seems at once too vulgar for the job and just right for it.

This advertisement will close automatically in  second(s). You will see this ad no more than once a day. Skip ad