The local TV giant Nexstar is eager to expand through consolidation or other deals, with Republican control of the presidency and likely both houses of Congress.
During the company’s quarterly earnings call, CEO Perry Sook said that he intends to move quickly to pursue dealmaking, and that the real competitors to local TV is big tech. In fact deregulation is the “number one priority” of both the company and the broadcast trade group the NAB.
“It’s evident that the antiquated ownership caps applied to broadcasters do not reflect the reality of today’s competitive media environment,” Sook said. “We believe that there is value to be created for our shareholders through further consolidation, while driving true and new benefits to the American people who want and deserve fact-based unbiased local news ”
“Our industry’s real competition comes from big tech companies who have unfettered access to every screen in America, from phones, desktops to the TV in the living room. Yet our ability to compete with those behemoths is stymied by regulations that were last updated in 2004,” Sook added. “This industry needs strong companies who can compete on a level playing field for both viewers and advertisers on every screen in America, not just some of them. And the time is now to seek this reform and Nexstar is once again prepared to lead.”
Sook also weighed in on the advertising market. Political advertising was strong, and in fact set another new record, with Nexstar securing $491 million year to date, up from $479 million in 2020. However non-political ads remain soft.
“We had conversations with literally hundreds of advertisers, and there was a consensus, or a sense out there, that advertisers were avoiding news as a daypart, national news, national cable news as a daypart because of what they saw as a toxic environment,” Sook said. “We obviously have been working hard to dispel that notion as it relates to NewsNation, we think our proof points on all of the unbiased surveys and original content surveys that are out there continue to put us right down the middle of the fairway with our content, and that this is an island in an environment that may be on others is more toxic.”
He also suggested that coverage of a second Trump administration will look quite different than covrage of the first one.
“We have watched both broadcast and cable networks over the last few days and few weeks, and it seems as though there may be a kindler, gentler consensus emerging, that maybe fact-based journalism will come back into vogue, as well as eliminating the level of activist journalism out there,” Sook said.
And he executive sought to compare Nexstar to Fox Corp., which posted stellar earnings earlier this week, garnering a major stock pop.
“There’s a reason why companies like Nexstar and Fox are not experiencing the same challenges facing many larger media companies with broad exposure to cable entertainment networks,” Sook said. “We both own a stream streamlined portfolio of linear television assets, including a broadcast network, a cable news network and a portfolio of broadcast TV stations with a programming strategy anchored by news and sports without the long tail of underperforming cable network assets. Both of our businesses are delivering strong performances in the current environment, we anticipate the value of broadcast networks and broadcast stations will only continue to climb, bolstered by their value to sports teams and leagues.”
That being said, there is still work to be at The CW, the broadcaster owned by Nexstar. While the company reduced losses by $36 million year over year in the quarter, and cut programming costs to about $270 million in 2024, down from $560 million in 2022.