Nexstar CEO Compares CW’s Potential To That Of Fox

“Linear is not going anywhere,” Nexstar Media Group Chairman-CEO Perry Sook declared Tuesday, after noting that some big media companies are reevaluating their linear TV holdings. His company is growing its linear business. Sook said Nexstar had a productive upfront, led by NewsNation, and noted recent sports deals announced for The CW as the No. 5 English-language broadcast network heads into the new fall season with few program delays due to the writers and actors strikes.

“If you think about it over time, The CW is increasingly looking like Fox, with the same number of hours of weekday programming and its growing live sports portfolio. And with Mike Biard now onboard, we have the team to get us where we want to go,” Sook said.

As recently announced, Biard, a veteran Fox executive, joins Nexstar later this month as president and COO. Tom Carter praised his successor as he prepares for retirement at the end of the year, and analyst after analyst congratulated Carter on his track record at Nexstar.

Core advertising was down 2.2% in the second quarter, but Carter noted that local station data was stronger if you exclude the Top 10 markets, which are much more dependent on national advertising.

“In Q3 of 2023 we’re seeing a slight improvement in the rate of decline for our overall core television advertising from what we saw in the second quarter, due in part to the political displacement in Q3 of last year. Excluding The CW for comparability purposes, our top performing categories for the quarter were auto, home repair and manufacturing, attorneys, air conditioning and heating, and telcom,” Carter said.

“We’re extremely pleased to see automotive, our largest advertising category in terms of dollars spent, maintain its growth trajectory for the fourth quarter, increasing 10% over Q2 of 2022. While overall automotive spend remains below 2019 levels, we are encouraged by the continued rebound in the category and recent reports indicate that manufacturers now have millions of vehicles in inventory, which suggests that the category can continue to improve,” he told the analysts.

“Categories most responsible for the core advertising revenue decline were radio/TV/cable and newspaper; medical/health care; gaming/sports betting; banks/savings and investments; and fast food and restaurants, with about three-quarters of our categories declining in the quarter,” Carter said.

“Turning to political, Nexstar generated second quarter political revenue of $9 million, reflecting the cyclical year-over-year decline in election year spending. We remain highly optimistic about our growth prospects for political advertising in 2024 for the election cycle, with industry projections for $11 billion spent in 2024 versus almost $9 billion in 2022,” said the exiting COO.

One analyst wanted to know whether there are any indications that the softness in national advertising may be due to advertisers moving budgets to alternatives such as connected TV.

“I wouldn’t try to read too much into it. Advertising is a cyclical business. We’re in an economic downturn and national is the most volatile piece,” Sook said.