Having led the fight for retransmission consent payments in 2005, Nexstar reports that it has signed renewals and new retrans agreements with 179 cable, satellite and telco companies. Those contracts are expected to produce more than $75 million in revenues over the term of the agreements, including about a third to go into the Nexstar coffers in 2009.
“In late 2005, Nexstar emerged as an industry pioneer in the negotiation of retransmission consent agreements. The original agreements, primarily three to four years in length, called for revenue to Nexstar of about $50 million over their term. In 2008, Nexstar reported that 47% of the contract dollars represented by the original agreements, or approximately $23.5 million, were up for renegotiation. As such, the more than $75 million in revenue to be derived from the new retransmission consent agreements represents extraordinary growth over both the original agreements and the anticipated levels of renewal,” said CEO Perry Sook in reporting on the latest cycle of retrans agreements.
In the first nine months of 2008 (ended September 30), Nexstar recorded approximately $15.5 million of revenue related to retransmission consent agreements, a 23% rise over the levels achieved during the same period in 2007, the company reported.
“Nexstar has several additional retransmission agreements which will be re-negotiated in 2009 and we expect further upside to the annualized run rate of our retransmission revenue stream in future years,” added Sook.
RBR/TVBR observation: There’s no denying that Perry Sook took a risk by setting his company up to take on the MSOs alone and demand cash for something that the cable companies had been getting for free. It paid off and everyone in the industry still owes him a debt of gratitude for leading the charge for what is now a significant revenue stream for the television business.