EARNINGS CALL

Nexstar Looking At M&A, Growing Digital

"We wouldn't do a transaction just for scale's sake," CEO Perry Sook told analysts this morning."But if the transaction was beneficial to Nexstar shareholders and a side-effect was more scale, we would be very interested in that." Some small deals are already in the pipeline, he said. In addition, digital deals are an increasing focus as growth in digital revenue far outstrips that of broadcasting.

Nexstar remains in the hunt for acquisitions, President-CEO Perry Sook told analysts and investors during Thursday morning’s conference call to discuss fourth-quarter 2014 financial results.

In response to a question from Deutsche Bank’s Aaron Watts, Sook confirmed that M&A remains on Nexstar’s radar screen.

“We wouldn’t do a transaction just for scale’s sake,” Sook observed. “But if the transaction was beneficial to Nexstar shareholders and a side-effect was more scale, we would be very interested in that.”

Nexstar currently reaches a little under 20% of the population and thus has a lot of room to grow under the FCC-mandated 39% cap.

“We have a couple TV station acquisitions in the pipeline,” he said, characterizing them as “tuck-under and bolt-unders — those will always continue.”

Meanwhile, digital deals are an increasing focus for Nexstar as growth in digital ad revenue far outstrips growth on the broadcast advertising side.

BRAND CONNECTIONS

“Tom O’Brien, who heads our digital efforts, spends a lot of time traveling around the country talking to digital entrepreneurs,” Sook said, adding that, “I spend about 25% of my time looking at acquisitions in the digital space.”

On another front, Sook said he’s part of the ownership group negotiating with CBS over participating in the network’s CBS All Access OTT offering.

CBS has rolled out the $5.99/month service to its O&Os and, as Sook noted, is in talks with affiliates over how revenues will be shared.

“I think we’re getting to the point where a couple of affiliates will participate in that,” he said.


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