Nexstar Ups Local Programming, 1Q Ads Rise

As far back as 2005, Nexstar Broadcasting was an industry icebreaker in creating the retrans consent revenues that local stations collect. Now the company is onto a second round. Nexstar had 18 retrans deals up for renewal this year -- completing seven, while the remainder will be finished by Jan. 1, CEO Perry Sook said.

As the stations benefit from the revenue streams, networks have been looking to grab a share. Sook said Nexstar has made one deal, including a sort of reverse compensation.

But that network is not looking for a percentage or share of the retrans dollars -- just cash. The agreement calls for a straight payment, with annual increases throughout the duration of the affiliation deal.

Speaking at a UBS investor conference Monday, Sook said stations have been paying networks to defray costs for sports rights for the NFL, Olympics and NCAA basketball tournament for some time. A reverse compensation is not entirely new.

Like many station groups, Nexstar is losing the "Oprah Winfrey Show" next fall and plans to replace it with local programming -- a 4 p.m. newscast with more of a lifestyle focus.



In three markets without "Oprah" -- Austin, Rochester and Amarillo -- it has already added a 4 p.m. newscast to replace syndicated programming. Sook said ratings are up and revenues are between 50% and 200% higher.

The "lifestyle" news allows the station to sell integrations, such as a local chef appearing to promote a restaurant with a cooking segment.

Looking ahead to 2011, Sook said ad bookings for the first quarter are coming in at double-digit percentages -- higher than the first quarter of 2009, for both local and national advertising.

Sook said Nexstar, which operates 62 stations in 34 markets, has had a soaring 2010 with political dollars. Political revenues are 19% higher than 2008 levels, when there was a presidential election. Dollars were also 45% higher than 2006, the last year with a federal election for Congress only.

Also, growth came not just from candidate spending but so-called "issue advertising," which accounted for about 40% of political dollars.

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