In a tip of the old bottlecap to Dos Equis, I say the Most Interesting Man in Broadcasting is Nexstar mastermind Perry Sook. Look at what he's been doing just this summer: Engaging in a no-holds-barred struggle with Fox over retrans, working to find a new private equity partner to refinance his company and continuing to add stations to his burgeoning portfolio of small and middle-market stations. Cheers.
Perry Sook: Broadcasting’s Action Figure
It’s beginning to wear a little thin, but I’ve mostly enjoyed Dos Equis’ Most Interesting Man in the World campaign, now in its fifth year. (His advice on self defense: “The right look should suffice.”) But it begs the question: If that bearded septuagenarian is the Most Interesting Man in the World, who, pray tell, is the Most Interesting Man in Broadcasting?
Here at TVNewsCheck, we’re all about answering tough and provocative questions like that and we are not going to dodge this one. The MIMIB is … Perry Sook.
The CEO of the Nexstar Broadcasting Group has had quite the summer, aggressively battling Fox over affiliation renewal and reverse compensation while trying to financially restructure his publicly traded company and continuing to implement his strategy of amassing small and medium-market stations.
Fox has been the biggest challenge. After nine months of trying to come up with a blanket agreement with its affiliates for sharing the retrans revenue those affiliates were getting from cable and satellite, Fox finally lost patience. It announced that it would only deal individually with affiliates, and that it would insist on a flat per sub, per month rate. In year one, it wanted 25 cents. Take it or leave it. No negotiation.
It was a hard stance, and affiliates protested loudly. But Fox was holding most of the cards and one by one the affiliates with expiring affiliation contracts accepted Fox’s terms, starting with big, bad Sinclair.
The exception was Sook. He stood his ground, and it cost him. Refusing to pay Fox’s price, he lost Fox affiliations in Fort Wayne, Ind.; Evansville, Ind.; and Springfield, Mo. No more NFL, no more American Idol, no more Glee.
But rather than stewing about the losses, Sook took action.
In Evansville, Sook bought the ABC affiliate, WEHT, from Gilmore Broadcasting for $18.5 million, and created a duopoly by spinning off the former Fox affiliate, WTVW, to Mission Broadcasting, the company he set up long ago to be his virtual duopoly partner in markets where FCC rules prohibit real duopolies.
In Fort Wayne and Springfield, Sook transformed the Fox affiliates into independent stations with heavier doses of local news and off-network shows in primetime. Fort Wayne’s WFFT declared its independence on Aug. 1, and said it would begin offering local HD news at the end of this month. Springfield’s KSFX re-introduced itself to viewers as KOZL — “Ozarks Local” — just last Thursday.
For good measure, the pugnacious Sook sued Granite, the rival that snatched the Fox affiliation in Fort Wayne, on antitrust ground. Sook alleges that Granite now dominates the market by holding the affiliations of Fox, NBC, ABC, CW and MNT.
In another Indiana market, Terre Haute, Sook beat Fox to the punch. He replaced Fox with ABC on WFXW and changed the call letters to WAWV. The switch took effect Sept. 1. ABC hadn’t had an affiliate in the market for 16 years.
Sook has eight more Fox affiliates, each parts of duopolies. During the second-quarter conference call with affiliates last month, Nexstar CFO Tom Carter hinted that Fox is actually negotiating with Sook on those stations and is close to a deal. My guess is Fox will come off its reverse comp rate card, Sook having amply demonstrated that he isn’t one to roll over.
It’s a lesson cable operators learned several years ago. In 2005, Sook took a hard line on retrans payments, telling operators to either pay him or drop his stations. Some operators tested Sook’s resolve by yanking signals and Sook lost millions. But it was they who blinked, agreeing to pay monthly fees for the privilege of carrying broadcast signals. Sook created a precedent that is now benefitting every station owner in the country.
This is all very interesting, but what makes it doubly so is that Sook is simultaneously trying to find a way to replace Nexstar majority shareholder, ABRY Partners, without losing his place as CEO. Having supplied the capital Sook needed to create the company in 1996, private equity ABRY now wants out. It would be tricky business, even without the distraction of Fox.
For Sook, a new private equity partner might also give him the resources he needs to amass more small and middle-market stations — his strategy since day one.
But it’s not like he has to stop buying. In fact, he just closed on his purchase of two CBS affiliates — WFRV Green Bay-Appleton, Wis., and WJMN Marquette, Mich. — from Liberty Media Corp. for $20 million.
No doubt he is smarting a bit from the loss of Four Points Media. Sinclair announced yesterday that it had bought the seven stations in four markets from private equity Cerberus Capital for $200 million, what Wells Fargo analyst Marci Ryvicker figured was 8-9x cash flow. Sook had the inside track on the stations. Under contract with Cerberus, he had been managing the stations for the past two years. But $200 million was apparently too rich for him.
Sook had a good thing going with Four Points’ flagship station in Salt Lake City, CBS affiliate KUTV. On Sook’s watch, the station firmly established itself as the market’s No. 1 news station, surpassing longtime leader KSL.
So, we will continue to keep a close eye on Sook to see how he fares with Fox, how the equity refinancing of the company goes and how quickly he can add more stations to his burgeoning portfolio. How could we not? The guy is a newsmaker. He is … the MIMIB.
And, for the record, Sook doesn’t always drink beer, but when he does, he prefers Stella Artois.
Harry A. Jessell is editor of TVNewsCheck. He can be reached at 973-701-1067 or mailto:[email protected]. You can read his other columns here.
Comments (15)
Barb Palser says:
September 9, 2011 at 3:55 pm
Please. Are you kidding me…..
Matthew Craft & David K. Randall says:
September 9, 2011 at 3:56 pm
Harry should add that if Sook is taking on Fox then, unlike most “action figures,” Perry is anatomically-complete!
alicia farmer says:
September 9, 2011 at 3:59 pm
Harry – Nexstar stations are nothing to envy. Sorry.
Rey Chavez says:
September 9, 2011 at 4:01 pm
interesting? only where that strange tan color comes from
len Kubas says:
September 9, 2011 at 4:01 pm
isn’t the take-away from Four Points that lmas aren’t necessarily a “sale in place” to the managing company? It’s been quite some time since I’ve had a desire to check the “nasty bits” on action figures, but G.I. Joe never seemed to be as accomplished as a real mess cook. So, I’m not sure if this is faint praise or overstating the case. Could it be both?
Dale Palecek says:
September 9, 2011 at 4:06 pm
He does it ‘His Way” and although many may say not the best way he has been willing to take his lumps and he still get’s up and comes back to fight…you win some and you lose some…keep winning Perry!!
Dan Etulain says:
September 9, 2011 at 4:07 pm
What is your fascination with Perry Sook? Nexstar is one of the poorest run broadcast companies in the business (just ask someone who works for them or competes against them). Everytime you praise him makes the rest of us question what, if anything, you really know about broadcasting.
loretta mahoney says:
August 8, 2012 at 3:05 pm
Maybe you think it’s a poorly run company, but the numbers speak for themselves. Plus no other broadcaster had the guts to take on the cable companies for retransmission consent dollars – except Nexstar and Perry. Now everyone is getting those dollars! Perry stood up for what he believed and he beat the huge cable companies.
Kent Replogle says:
September 9, 2011 at 4:49 pm
Harry, now I know why you just write about the industry. Apparently you never worked in the industry. Nexstar is by far one of the worst run broadcast groups in the industry. they have you drinking the Koolade. it’s been years of smoke and mirrors with those guys.
Joseph LoGrasso says:
September 12, 2011 at 6:06 pm
Your comment is illogical for many reasons, but lets make it simple and look at the two most important:
1. Take a look at Nexstar’s quarterly operating results for the past several years, the company has continued to achieve record financial results while reducing debt– I would expect that a poorly-run company would reflect a negative trend in operating results 2. Nexstar is a public company and answers to the SEC, therefore must adhere to strict requirements as far as reporting and disclosure is concerned. There is no smoke and mirrors when it comes to a company’s 10K / 10Q filings. Your analysis is based upon opinion, not fact. You may not like the company, but just because I am not in broadcasting, does not mean I cannot evaluate the financial health of the company– which is on an upward trajectory.
loretta mahoney says:
August 8, 2012 at 3:07 pm
Maybe Nexstar has their share of disgruntled employees. But that doesn’t make them a poorly run company. Just not run like “titanic” would do it.
Barb Palser says:
September 9, 2011 at 5:09 pm
Jon Baynor’s twin?
Andrea Rader says:
September 9, 2011 at 6:32 pm
I haven’t been much of a fan of Nexstar, either, but Perry seems to be slowly coming to the realization that a robust news operation is a key to success. Witness KUTV, or the relaunch of news (in HD, no less) in Utica, or doubling down on news in markets where he is losing the FOX affiliation. And surely Perry’s unwillingness to roll over and play dead in his battles with cable operators and FOX has been beneficial to the industry as a whole.
Joe Jaime says:
September 10, 2011 at 9:57 am
OK he was stood his ground on a number of issues however quality propramming is the life blood of stations success. If he continues to turn affiliates into Indies the game is over… KRON!! NBC to LNC (No longer competative).
Frank Mikisits says:
September 10, 2011 at 7:15 pm
Perry Sook is good at squeezing dimes and quarters out of cable operators and subverting FCC regulations with shell companies (Mission Broadcasting) but he is definitely not a visionary. His failure to launch subchannels has cost his company millions and his online branding (SETXHomepage.com, FourStatesHomepage.com, FortWayneHomepage.net… yuck!) and site designs are the worst in the industry.