Nexstar Pins Down $75 Million in Retrans
(Feb. 20, 2009) IRVING, TEXAS: Nexstar Broadcasting said it has $75 million worth of retrans deals in place with 179 cable operators, DBS and telcoTV providers. Around $25 million is expected to land on the books this year.
Nexstar (NASDAQ: NXST) started pounding out retrans fee agreements in late 2005, according to Perry A. Sook, chairman, president and CEO.
“The original agreements, primarily three to four years in length, called for revenue to Nexstar of about $50 million over their term,” he said in a statement. “In 2008, Nexstar reported that 47 percent of the contract dollars represented by the original agreements, or approximately $23.5 million, were up for renegotiation.”
Those renegotiations resulted in an increase that is expected to generate $75 million over the next three years.
During the first nine months of 2008, Nexstar recorded about $15.5 million in retrans revenue, up 23 percent from the same period in 2007, the company said.
“Several additional retransmission agreements… will be re-negotiated in 2009,” Sook said, “and we expect further upside to the annualized run rate of our retransmission revenue stream in future years.”
Nexstar owns and/or operates 52 television stations in 30 markets reaching approximately 10 million of the nation’s roughly 111 million TV households.
Wall Street briefly responded to the retrans announcement; shares popped up to 96 cents before coming to rest back in the mid-80s, where they closed yesterday. Since January, however, NXST shares have made a rebound from around 50 cents. The company expects to report 4Q and full 2008 results on March 5.