The Nexstar CEO says that while he’s more than willing to work with the broadcast networks in retransmission consent negotiations, but he’s not going to just hand over money if they’re not going to work for it. And he outlines a new revenue plan involving auto manufacturers, a broadcast network, affiliates and cable or satellite providers.
Nexstar Broadcasting CEO Perry Sook, who led the way in extracting retransmission consent payments from cable and satellite operators, said today that he is disinclined to share retrans revenue with his broadcast networks unless the networks help him get it.
“I struggle to understand why certain networks all of a sudden feel that they are entitled to a piece of this revenue when they had no hand in the negotiation, documentation and collection of it,” he said.
“It kind of reminds me of the bully on the playground who tries to steal your lunch money. After a while the principal of some other authority may get involved.”
Sook made the comments at the TVB Forecast Conference in New York as he accepted the B&C‘s Broadcasters of the Year Award.
“I am aware that one of the primary reasons I am probably up here this money is due to Nexstar’s pioneering work on retransmission consent.
“It is rather humbling to know that what started in my old conference room with holding up a penny in front of a cable operator is now predicted to generate over $1 billion in revenue for local stations … next year.
“I shudder to think where our local stations and local news operations would be — especially this year — without the additional source of revenue.”
After the speech, Sook told TVNewsCheck said that he is not opposed to working with the networks on win-win retrans projects.
If a network were willing to, say, represent Nexstar in retrans negotiations, he would be willing to share some of the proceeds.
“I would be willing to be the test case,” he said. “If you can do better than me, I would be willing to split the difference with you.
“But coming to us with your hand out is not a business development strategy,” he said.
Citing TVB President Chris Rohrs’ axiom that “ideas are the new currency of our business” in his speech, Sook brought one with him.
He suggested that a network, its affiliates, a domestic auto manufacturer and a cable or satellite operator team up to offer an exclusive coupon good for $1,000 off on a new car.
The broadcasters and the cable or satellite operators would market and distribute the coupons and split $200 for each coupon that is redeemed.
“If the distribution partner had a 20 million TV household footprint and the redemption rate was 1 percent — typical for direct mail — the auto manufacturer would sell 200,000 cars and we would have earned $40 million in revenue in a month to split three ways.”
Aside from such new ideas, Sook said, Nexstar will continue to focus on building local business the old-fashioned way.
Each of the Nexstar general managers has been charged with building a “level-one relationship” with the 20 largest businesses in their markets that are not currently advertising on their stations. “This is not a one-call process,” he said.