Nexstar Ahead Of Budget For 2021 Ad Sales

On the heels of record-breaking political ad revenues, Wall Street now wants to know what the post-election landscape looks like. And while the current first quarter will have the toughest comp against pre-pandemic business, Nexstar Media Group Chairman-CEO Perry Sook assured analysts on his quarterly conference call this morning following release of its fourth quarter results that advertisers are returning to television.

“Looking at Q1 and 2021, we continue to see strong core pacing data. We are highly encouraged by the advertising rebound across our station footprint — most notably in auto, our largest category, where in Q4 we grew auto ad revenue by 43% over where the third quarter finished,” Sook said.

“The resumption in auto category spending was complemented by a resurgence in ad spending in insurance, gaming, sports betting, home service, home repair, drug stores, package goods, grocery stores and retirement and nursing homes,” said the CEO in providing more details. Despite crowd-out from political, Sook noted that Nexstar’s sales teams still managed to add new-to-television advertisers in the fourth quarter. And that effort on new business — with incentives and specialized training for sales reps — continues to be a focus for the company.

“Core ad revenue and digital ad revenue in January and February were already ahead of our budgets,” said Sook, adding that that was also true for the company’s networks business. “Having said that, in core and networks we did budget to be down in the first quarter versus and excellent first quarter of 2020. But in terms of beating our internal numbers, which we obviously use to meet your forecasts, we are ahead of plan,” Sook told the analysts.

With January and February already in the books, one analyst wanted to know specifically how well March is holding up.

“We are already up mid-single-digits ahead of our budget numbers for January and February. Obviously in March we are, knock wood, anticipating March Madness back on our CBS affiliates. And that was a substantial hit to our revenue in the month of March last year. So, yes, we see this continuing on in our revenue,” Sook said. He also noted that Nexstar had a substantial amount of political advertising last March, so there won’t be any taking inventory away from core this year. In addition, he told the analysts that core national advertising is pacing double-digits ahead of budget this quarter.

Wall Street is already looking ahead to the next political ad cycle, as are broadcasters.

Nexstar President-Broadcasting Tim Busch provided an early look at the landscape for 2022 political ad spending. “We have approximately 370 House seats of the 435 across the footprint of the company. The Senate races, we’re going to have approximately 90% of those, as there are 34 seats up. I think we’ve got about 31. And on the gubernatorial side, we’ve got about 85% of the 36 seats,” he said.

“It’s a strong footprint. Everything portends to be yet another robust race — probably starting a little earlier in ’21, all the way up through ’22,” Busch said.

Sook was one of the first to declare sports betting as a big advertising opportunity for television stations, and his prediction is proving true.

“Sports betting, which was nary a category — single digit millions in 2019 and the first quarter of 2020 — is now becoming a double-digit millions category for us. That’s relatively a new category, but certainly a substantial growing category for us, which we think we will see continued growth throughout 2021 in that category,” Sook said.