Tribune Didn’t Make Sense For Nexstar

Last year, Nexstar Media Group topped Meredith’s bid for Media General and eventually walked away with the prize.  Despite that history, don’t expect Nexstar to try to steal Tribune away from Sinclair.

So said Nexstar CEO Perry Sook on a conference call with securities analysts following release of Nexstar’s first quarter earnings this morning.

“We made an appraisal of Tribune at some point,” he said. “I think you can safely assume since we weren’t announced as the winning bidder yesterday it’s because the price crossed our walking-away threshold.”

For Tribune, Sinclair agreed to pay $3.9 billion and assume its debt. The boards of both companies have approved the deal.

Tribune aside, Sook said that his appetite for more stations is undiminished. “We are going to appraise everything, and we have very bright line walk-away prices for everything.

“We are not going to do a bad deal for the sake of doing a big deal. We will continue to do only accretive deals.”

Rather than bidding against Sinclair, Sook seemed more interested in working with it in establishing a national broadcasting platform that they could use to launch services using ATSC 3.0, the new broadcast standard the FCC is expected to authorize by the end of the year.

To that end, Nexstar and Sinclair in March agreed to aggregate spectrum and pursue 3.0 businesses like datacasting. “With the two companies together, you’ve got roughly 85% of the country with at least 6 megahertz per market and in many markets multiples of that,” Sook said.

“[I]f we build the infrastructure, the ideas will come,” he said. “[T]here are multiple uses and multiple profit-making opportunities that we will investigate, but the market will really tell us what those are. We’re just trying to put the for-lease sign in the yard and see who might show up at the end of the day.

“We do plan to hire somebody to run this consortia. And it will be run literally like a limited liability company or limited partnership.”

Sook said that he and Sinclair are calling other broadcasters “every third day,” inviting them to come aboard.

“We’ve got partnership agreements and things that are being drawn up that would really formalize this and give others the opportunity to opt in on either a founding-member, meet-the-capital-call [way] … or just as an affiliate and share in a lower percentage of the downstream revenues.”