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Nexstar, the CW owner and giant broadcaster that’s angling to get even bigger, said it’s made a home in local media because that’s a lucrative place to be.
“Everybody’s focused on networks and streaming and top down and national media. The local media space, which has been ignored, is one we’ve chosen to build a dominant position in, and it’s that last mile connection with both the viewer and the advertiser that I say is the least sexy, most sticky part of the media ecosystem,” Sook told investors at the BofA media conference today.The largest owner of TV stations in the U.S. last month announced a deal to acquire a rival Tegna in a $6.2 billion deal that challenges long held limits on control of local media.The merged company would own 265 stations in 44 states and the District of Columbia, representing 80% of U.S. TV households. That footprint far exceeds the longtime 39% limit on ownership of stations, which had been kept in place by both Republican and Democratic administrations over the past three decades. Sook has been lobbying for relief for years and now Donald Trump’s FCC chair Brendan Carr has indicated an openness to consider easing those restrictions.“We think that the administration has been consistent that they want to eliminate unnecessary and outmoded regulations, and that they’re making good on that vision and that promise,” Sook said.The broadcast network Upfronts, he thinks, tap very concentrated big dollars, but from a fairly short list of clients. “Contrast that with us” – Nexstar’s thousands of customers across 40 states. “The dollar volume of each may not be hugely significant, but the collective dollar volume” is large and a much more diversified revenue base than at the national level. “We don’t have red carpet openings or premieres, but we go to the opening of supermarkets, of car dealerships, of furniture stores. At our essence, we are a local service business … All transactions … happen at a local level, and we are at that point of purchase with a branded relationship with both the viewer and the business owner … and it’s prohibitively cost ineffective to try and build something to compete with that.“I mean, you couldn’t ask for a much better position than that in terms of the media ecosystem.”Nexstar has been bulking up for years, acquiring Tribune Media in 2019 for $7.2 billion and Media General in 2017 for $4.6 billion.Sook thinks that “structurally, there’ll be more consolidation. You need big, strong companies to even attempt to have a fair fight with big tech. And no one wants their local news delivered from a chatbot. So there is a vested interest, I think there’s a national interest, in having a free and independent press. And when you think of what’s happened in newspapers, what’s happened in radio, the last bastion for free and independent press is local broadcasting newsrooms. And so I think that, you know, five years from now, they’ll probably be two companies that are in the local station business, that investors care about.”
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