The cash spigot at Nexstar Broadcasting Group is expected to be flowing freely, giving the company to pursue a number of strategic options. One of those options is more station acquisitions, according to Wells Fargo analyst Marci Ryvicker.
According to Ryvicker, free cash flow is expected to easily exceed $200M, or better than $3/share. The money will be invested in station acquisitions, debt paydown and “organic investments.”
On the acquisition front, the company will as usual pursue accretive deals, and further is not expecting any competitive pressure from Sinclair’s recent group acquisitions and its formation of Chesapeake TV.
Q1 spot revenues are said to be pacing in positive territory, and March is faring better than February.
Retransmission will not be a big part of the group’s 2013 agenda. It has 27 agreements expiring, which pales in comparison to the 158 that expire in 2014. That year includes contracts with two of the nation’s five largest MVPDs.
Nexstar is an enthusiastic user of SSAs and JSAs, but will keep the technique in status quo until it sees how such arrangements fare whenever the FCC gets around to voting on the overdue and delayed-again quadrennial review.
RBR-TVBR observation: This is the company that more than any other pioneered modern retransmission consent negotiations, and for that, all local television stations owe it a debt of gratitude. Still, as chief exec Perry Sook told RBR-TVBR readers in a recent Executive Session, there is still a long way to go to achieve parity with cable-only channels.
Nexstar has in general been an aggressive and forward-looking company. Keep watching this group – it can be expected to be among the groups leading the television industry into a successful future.