Nexstar Broadcasting Group losses widened in the third quarter compared with the same period last year, but the company reported record revenue fueled by improved income from retransmission agreements and new media initiatives.
Nexstar’s 2007 losses grew to $6.8 million in the third quarter, or 24 cents per share, compared with $3.9 million a year ago.
Despite the loss, Nexstar Chairman and CEO Perry A. Sook looked to positive numbers, like the company’s record $64.5 million revenue, up 1.4 percent over Q3 2006.
Next year promises to be “a banner year across the board for Nexstar,” Sook said at a conference call Tuesday with investors.
Political advertising nearly zeroed out for Nexstar, but cash from its retransmission consent and retransmission advertising totaled $4.5 million, a small part of the company’s total revenue but a 29 percent rise over the third quarter of 2006.
Many of Nexstar’s three-year retrans deals were signed in late 2005, so 47 percent of the value of the contracts will be up for renewal by the end of 2008, and 80 percent by the end of 2009.
“Given the industry’s progress on this front since we first took a stand on our right to retrans fees, we expect substantial upside in our round-two negotiations,” Sook said.
New media revenue in the quarter hit $1.7 million the quarter, up from almost nothing in Q3 2006.
Sook said the company expected new media revenue to grow substantially in 2008. The company hopes to have 30 percent of its business from new media within five years.
“We are attracting a new base of non-television advertisers and we are successfully leveraging our platform, demonstrating that local television, with its uniquely powerful local breach, has the ability to thrive in a multiplatform world,” he said.
Sook also noted that earlier this year, Nexstar reached agreement for retransmission with Verizon over all its FiOS systems,
In the next few months, station Web sites will enable user-contributed video, among other features designed to increase traffic.
Chief Financial Officer Matt Devine said the company spent $1.5 million related to its stations��� digital buildouts in the quarter, with $30 million in DTV-related capital expenditures expected in 2008.
The company, which owns, operates or services 49 television stations in 29 markets, expects revenue to drop 8 to 10.6 percent in the fourth quarter from Q4 2006, mainly due to the drop in political advertising revenue.
