Excluding political, which is a lot to exclude from 2008, Nexstar CEO Perry Sook says ad sales were up for October and are pacing up for November and December as well. The company reported that Q3 revenues were down 14.1%. And while total ad sales were down, Sook noted record growth in retransmission consent revenues, e-business and management fees.
Q3 revenues of $60.4 million were down $9.9 million from Q3 2008, with most of that resulting from a $6.8 million (87%) decline in political revenues. Sook notes that Q3 2009 revenues were down only 6.3% from Q3 2007, the previous non-political year.
While many broadcasters have reported that even Internet ad revenues were down in Q3, Nexstar saw its “e-Media” revenues rise 8.8% to $3 million. Retrans jumped 27.4% to $7.9 million. Having led the charge for retrans payments from cable MSOs, Sook said Nexstar is a cycle ahead of most other TV groups and will see further growth in 2010 and beyond. The new management fee revenue in Q3 was approximately a half million bucks, from Nexstar’s recent deal to manage the Four Points Media Group stations in four markets.
While Sook said 2009 was the worst year he’s ever seen for the television business, Nexstar is focused on positive growth in 2010 – “and this is before we consider the anticipated recovery of core ad spend.” He sees contested local and statewide races boosting political spending in many Nexstar markets producing “unprecedented activity in a non-presidential election year.” Buys are already on the books for the Illinois gubernatorial primary, he noted.
Meanwhile, Sook believes the TV industry has passed the low point for automobile advertising. Auto advertising amounted to 17.1% of total core ad buys at Nexstar in Q3, down from 23% in Q3 2008. “Probably of more importance, our Q3 auto spending on a dollar basis rose by 7.8% over Q2 levels and was 12.3% higher than Q1 levels. Our individual dealer spending as been pretty much constant for the past three quarters, whereas dealer group spending has been a catalyst of the auto category uptick,” the CEO explained. “With this trend now underway, we believe that we have seen the low of the auto category ad spending,” Sook told analysts.