Nexstar Supporting Minority-Owned Marshall
Broadcasting to Become FCC Licensee
Marshall to Launch New Local News and Sports
Programming at the Stations as well as Minority Oriented Public
Affairs Programming in Each Market
Nexstar Broadcasting Group, Inc. (Nasdaq: NXST) (“Nexstar”)
announced today that it entered into definitive agreements with
Marshall Broadcasting Group, Inc. (“MBG”) for the sale of three
network affiliated stations (“the stations”) in three markets for
$58.5 million. MBG intends to fund the station acquisitions through
borrowings which Nexstar has agreed to guarantee.
For over two decades, the Federal Communications Commission
(“FCC”) has advanced proposals for the incubation of broadcast
station ownership by disadvantaged businesses, including
minority-owned companies. FCC data indicates that African-American
ownership of television stations is abysmally low, with
African-Americans controlling only 0.7% of all television broadcast
stations. Under the terms of the agreements MBG will acquire three
full-powered, FOX affiliated stations, KMSS-TV, KPEJ-TV and KLJB
(TV) in Shreveport, LA, Odessa-Midland, TX and Quad Cities, IA,
respectively.
Perry A. Sook, Chairman, President and Chief Executive Officer
of Nexstar Broadcasting Group, Inc., commented, “We believe the
proposed transaction announced today presents an ideal framework
for introducing and incubating a new, minority-controlled entrant
to broadcasting, and for bringing additional news, information and
specialized programming to MBG’s markets at the earliest possible
opportunity.”
The transactions are subject to Federal Communications
Commission approval, the consummation of Nexstar’s previously
announced agreements to acquire the stock of privately-held
Communications Corporation of America and White Knight Broadcasting
(“CCA”) and the stock of Grant Company, Inc. (“Grant”), and other
customary closing conditions, and are expected to be completed in
2014. Subject to regulatory approval, MBG intends to assume the
obligations of Mission Broadcasting, Inc. (“Mission”) as the
acquirer of the Stations under various asset purchase agreements
currently in effect between Nexstar and Mission.
Marshall Broadcasting Group, Inc. is a newly formed minority
owned media entity owned 100% by Pluria Marshall Jr. Mr. Marshall
is currently the president and chief executive officer of Equal
Access Media Inc., which owns several newspapers serving
African-American and minority communities, including The Texas
Freeman and Houston Informer Newspapers, The Los Angeles Wave
Newspaper Group, and the Los Angeles Independent Publications
Group. In 2011, Mr. Marshall founded Integrated Multicultural Media
Solutions, a media rep firm that assists advertisers and agencies
in marketing products and services to multicultural audiences by
providing marketing services, including promotions, grassroots
marketing, advertising placement and custom content creation.
Mr. Marshall is a longtime media executive and civic activist
who began his media career in 1979, while in college, with a series
of media internships and part-time marketing positions at Cable
News Network (CNN) and WXIA-TV in Atlanta, Georgia. Upon
graduating, Mr. Marshall participated in a yearlong management
development program at WLBT-TV in Jackson, Mississippi which led to
his tenure as vice president and general manager at WLBM-TV in
Meridian, Mississippi. During his five year tenure at WLBM-TV, Mr.
Marshall attempted to become a broadcast station owner four
separate times, but each transaction failed to be completed due to
the inability to obtain financing. Mr. Marshall subsequently sought
to purchase several newspapers from Media General, but was again
unable to obtain financing for the purchase. In April 1996, Mr.
Marshall finally was able to enter the broadcast ownership arena
with his purchase of AM broadcast station WLTH, Gary, Indiana, a
“news talk” radio station serving Northwest Indiana and the south
Chicago suburbs and he continues to own this radio station today.
The station was previously financed by an [African American-owned]
insurance company in Chicago, and Mr. Marshall’s company assumed
the debt and obligations of the previous owner.
“We are delighted to have the support of Nexstar to promote
diversity of media ownership assets among minority operators,” said
Pluria Marshall. “Over the last 30 years, I’ve devoted significant
time and effort in seeking to purchase television and radio
stations. The single key factor in each unsuccessful opportunity
has been the inability to access the funding necessary for the
purchase. On four separate occasions in the late 1980s and early
1990s, we actively pursued, but were unable to obtain financing for
station purchases. Over this period, we made contact with at least
eight institutional lenders that commonly provide broadcast
financing. All of those lenders provided a range of reasons as to
why they would not provide financing. With Nexstar’s support and
commitment to guarantee financing for the Shreveport,
Odessa-Midland and Quad Cities station purchases, we believe we are
establishing a new paradigm that addresses recent proposed FCC
regulation changes while expanding the opportunity for minority
broadcasters to play a greater role in the U.S. broadcasting
industry as owners and operators of television stations.”
MBG will be acquiring the FCC licenses and significant assets of
the Stations, including program contracts, equipment, and real
estate interests in connection with studio and tower sites and will
enter into agreements whereby Nexstar will provide sales and other
non-programming services to MBG. The services agreements will be a
critical vehicle for cost savings, allowing MBG to use Nexstar
personnel for engineering support, master control, traffic and
billing, and other administrative functions that do not relate to
control of the stations or their programming.
Under the terms of the proposed services agreements between
Nexstar and MBG, MBG will be entitled to 70% of the revenue from
advertising sold by Nexstar on the stations and will not provide
for any bonus payments to Nexstar for achieving revenue goals. It
will not be a fixed-fee payment; as total revenues increase, so
does MBG’s share. This transaction structure provides MBG with
incentive to seek the best programming and thus maximize station
advertising revenue while providing significant cost savings
benefits to MBG related to the use of Nexstar resources that are
not associated with control of the stations or their
programming.
Assisted by the cost savings and efficiencies from its sharing
agreements with Nexstar, MBG plans to roll out an aggregate 24.5
hours of additional local news and sports programming on the
stations it will acquire, with more to be developed. MBG also
intends to develop a minority-oriented public affairs program that
will air on its stations and be syndicated to other television
stations nationwide. In addition, Nexstar will add 13.5 hours of
local news and public affairs programming on the stations it owns
in Shreveport, Odessa-Midland and Quad Cities.
Perry A. Sook, Chairman, President and Chief Executive Officer
of Nexstar Broadcasting Group, Inc., concluded, “The proposed
transaction with Marshall Broadcasting serves as a model to
increase media ownership diversity and uniquely addresses our
near-term objectives to complete the pending CCA and Grant
transactions while extending our long-term, well-documented
initiatives to serve the public interests and needs of local
viewers, hometown businesses, and organizations in the markets
where we operate. Nexstar’s focus on localism including expanded
local news, sports and other programming remains a key element of
our broadcast platform and the addition of new minority-oriented
public affairs programming complements this strategy. As an
established and long-time media executive with extensive broadcast
operating experience, Pluria Marshall has the background and skills
necessary to serve local interests while maintaining independent
operations and programming decisions for the Stations.”
About Nexstar Broadcasting Group, Inc.
Nexstar Broadcasting Group is a leading diversified media
company that leverages localism to bring new services and value to
consumers and advertisers through its traditional media, digital
and mobile media platforms. Nexstar owns, operates, programs or
provides sales and other services to 74 television stations and 19
related digital multicast signals reaching 44 markets or
approximately 12.9% of all U.S. television households. Nexstar’s
portfolio includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV,
The CW, Telemundo, Bounce TV, Me-TV, Live Well and independent
stations. Nexstar’s 43 community portal websites offer additional
hyper-local content and verticals for consumers and advertisers,
allowing audiences to choose where, when and how they access
content while creating new revenue opportunities.
Pro-forma for the completion of all announced transactions
Nexstar will own, operate, program or provides sales and other
services to 108 television stations and related digital multicast
signals reaching 56 markets or approximately 16.0% of all U.S.
television households.
Forward-Looking Statements
This news release includes forward-looking statements. We have
based these forward-looking statements on our current expectations
and projections about future events. Forward-looking statements
include information preceded by, followed by, or that includes the
words "guidance," "believes," "expects," "anticipates," "could," or
similar expressions. For these statements, the Company claims the
protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of
1995.
The forward-looking statements contained in this news release,
concerning, among other things, changes in net revenue, cash flow
and operating expenses, involve risks and uncertainties, and are
subject to change based on various important factors, including the
impact of changes in national and regional economies, our ability
to service and refinance our outstanding debt, successful
integration of acquired television stations (including achievement
of synergies and cost reductions), pricing fluctuations in local
and national advertising, future regulatory actions and conditions
in the television stations' operating areas, competition from
others in the broadcast television markets served by the Company,
volatility in programming costs, the effects of governmental
regulation of broadcasting, industry consolidation, technological
developments and major world news events. Unless required by law,
we undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this news
release might not occur. You should not place undue reliance on
these forward-looking statements, which speak only as of the date
of this release. For more details on factors that could affect
these expectations, please see our filings with the Securities and
Exchange Commission.
Nexstar Broadcasting Group, Inc.Thomas E. Carter,
972-373-8800Chief Financial OfficerorJCIRJoseph Jaffoni, Jennifer
Neuman212-835-8500nxst@jcir.com
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