Inside Nexstar’s Vermont TV duopoly acquisition


Nexstar Broadcasting GroupThe paperwork is filed and the details spelled out in deal that will put Nexstar at the helm of a pair of Burlington VT television stations. Four companies figure into the transaction.

The two stations heading to Nexstar are WFFF-TV, which brings Fox and CW fare into the DMA, and WVNY-TV, the local ABC affiliate.

The price for the stations will be $16.5M cash.

The deal was memorialized in a single contract, but required the submission of two transaction applications to the FCC since the there are two unique buyers and two unique sellers.

WFFF is going from Smith Media to Nexstar.

Meanwhile, WVNY is going from Lambert Broadcasting to Mission Broadcasting.

An LMA is already in place between Smith and Lambert, and a new one will be formed between Nexstar and Mission. Additionally, Smith held a purchase option on the station with Lambert, and Nexstar will also have the option to purchase it from Mission.

It will either require a change in the local ownership cap rules or an FCC waiver for the stations to be co-owned.

The details of the Nexstar/Mission agreement are these: Nexstar will handle sales for the station, and the revenue split will what seems to be the industry standard for such arrangements: Mission will get 70% of advertising revenue and Nexstar will get to keep 30%.

There will also be an SSA, under which Nexstar will provide various administrative and operational services to Mission. For this, Mission will pay a base fee of $20K/month.

The contract does not specify how the $16.5M is split between the two stations. Nor does it specify a price for WVNY should Nexstar ever be in a position to buy it. If that occurs, Nexstar will pay seven times 12-month cash flow, with downward adjustments for any debt liabilities attached to the station.