Nexstar posts up quarter in political off-year


Potential buyers will no doubt be impressed by the Q2 performance by Nexstar Broadcasting Group. Revenues were up 1.3% to $75.5 million, with growth in core spot sales, e-Media and retrans filling the big political revenue gap.

“The ongoing advertising rebound in our markets and Nexstar’s effectiveness in driving new-to-television local direct billings drove our seventh consecutive quarter of core television advertising revenue growth. The 4.3% rise in core ad revenue growth, 22.5% increases in e-Media revenue and 18.4% gain in retransmission fee revenue offset the reduction in political revenue and led to record second quarter net revenue and EBITDA,” said CEO Perry Sook ahead of his quarterly call with Wall Street analysts.

“Excluding the impact of political revenue from both periods, Nexstar’s 2011 second quarter gross revenue rose 6.9% year-over-year and by 6.1% in the first half of 2011 versus the first half of 2010. In aggregate, 2011 second quarter retransmission fee, mobile and e-Media and management fee revenue rose 18.8% to $13.2 million from the year-ago period, and these higher margin revenue streams accounted for 17.5% of 2011 second quarter net revenue compared to 14.9% in the 2010 second quarter,” Sook bragged.

In Q2 local (excluding political) was up 5.4% to $45.7 million and national was up 1.3% to $16.4 million. In all, core spot sales were up 4.3% to $62 million.

But political wasn’t completely gone. It was still just over $2 million, down 70.2% from $6.8 million a year earlier.

The big percentage growth was in e-Media, up 22.5% to $.1 million. And retrans was close behind, up 18.4% to $8.6 million.

Further down the calculations, broadcast cash flow was down 2.4% to just shy of $30 million. Adjusted EBITDA was up 1.3% to $25.5 million and free cash flow declined 10.6% to $10 million.

“Positive core television advertising trends are continuing for Nexstar in the third quarter to date and we remain confident in growing all of our non-political revenue sources in the second half of 2011. Beyond Nexstar’s continued operating and financial momentum, we further expanded and diversified our station base and revenue sources through the recent accretive and de-leveraging acquisition of CBS affiliates WFRV-TV and WJMN-TV, and the acquisition of Internet technology provider GoLocal.Biz. In addition, late in the quarter we entered into a new long-term affiliation agreement with the ABC Television Network for nine owned or operated ABC stations and announced that WFXW-TV is becoming WAWV-TV, the Terre Haute, Indiana ABC affiliate on September 1,” Sook noted.

The latest deal for Nexstar was so new that it didn’t make the Q2 release. Just the previous evening the company announced the acquisition of a new station in Evansville, IN, with its current station in the market being spun to Mission Broadcasting.

RBR-TVBR observation: Nexstar was put up for sale once before in 2007, but pulled off the market when the economy tanked in 2008. The market looked like it was on the upswing when majority owner ABRY Partners decided to try again this year to sell Nexstar. But now the stock market is in turmoil, so we wait to see whether things settle down so a deal can get done.