Nexstar Political Revenues At All-time Record

While some other TV groups have been saying that shifts in the political landscape since August kept them from hitting their political ad targets, Nexstar Media Group Chairman-CEO Perry Sook told Wall Street analysts Tuesday morning that his company’s political advertising is at an all-time record pace — with political revenues as of Election Day at slightly over $500 million, or 103% of what was on the books on Election Day 2020. All that remains to be seen is whether there is a senate run-off in Georgia.

“We had 103% of what we had on the books at Election Day of 2020. I will tell you that particularly the PAC money in a presidential year will move around based on races falling in or out of a competitive nature. But as we sit right now, we’ve got more money on the books for 2022 than we did at this time for 2020. We had a two-month run-off election in Georgia — actually two of them — in 2020. And depending on who you talk to, there will either be or not be a run-off election in Georgia after tonight,” Sook said.

Analyst Dan Kernos of The Benchmark Co. wanted to know why Nexstar outperformed on political revenues.

“I think Dan, if you remember back in 2016 we had a similar situation where we were the only company that achieved its political guidance for the year,” Sook said. “I think it’s because we take a very disciplined approach to our forecast model, and certainly as it relates to political, the broadcast leadership team and our FP&A [financial planning and analysis] folks do a very deep dive into each race, each ballot initiative, how much money has been raised, who the candidates are, what happened the last time this race was contested — and there’s a lot of work that goes into it. You just don’t apply a factor to the past and come up with an estimate.”

As reported by some other groups, Nexstar is seeing a long-awaited comeback in auto advertising.

“In total, about half of our categories increased versus the prior year quarter, including our top performing categories of drug stores/medication, auto, home repair and manufacturing, attorneys, and entertainment. We’re extremely pleased to see automotive, our largest advertising category in terms of dollars spent, return to growth in the quarter—increasing in a mid-single-digit percentage over Q3 of 2021,” said President-COO Tom Carter.

“There is still pent-up demand,” Sook said of the auto sector later in the call, so as more vehicles are delivered as supply chain issues are resolved, he said auto ad demand could be a tailwind in 2023 for core advertising.

Craig Huber of Huber Research Partners wanted to know what the financial impact would be to Nexstar if NBC eliminates the 10 o’clock hour of primetime programming.

“Oh, it’d be good. We’ll make more money with an hour of news at 10 than we do with an hour of network. A) We have all the inventory. And B) I would expect if NBC goes from 89 hours a week of network program time to 81 or 82 hours, we’d have less program time and we’d pay them less. We have a number of Fox, CW and MyNetwork stations that program an hour of news in that last hour of prime and they are extremely profitable,” Sook replied.

Speaking of The CW, now owned by Nexstar, Sook expressed confidence in newly hired president Dennis Miller to improve the network’s ratings, revenue and profitability. Nexstar EVP-CFO Lee Ann Gliha reminded analysts that the company believes The CW can achieve profitability by 2025, with a “low-nine-figure amount” invested over the three-year period ahead.