Nexstar Media Group Enters Into De-Leveraging Buy/Sell Agreements With Fox Television Stations
November 05 2019 - 4:05PM
Business Wire
Nexstar to Purchase Charlotte’s FOX and
MyNetworkTV Affiliates for Approximately $45 Million and Divest
Seattle’s FOX and MyNetworkTV Affiliates and Milwaukee’s FOX
Affiliate for Approximately $350 Million
(November 5, 2019) – Nexstar
Media Group, Inc. (Nasdaq: NXST) (the “Company”) announced today
that it entered into purchase and sale agreements with Fox
Television Stations, LLC, a subsidiary of Fox Corporation (Nasdaq:
FOXA, FOX) (“FOX”), whereby Nexstar will purchase from FOX, the
Charlotte FOX Affiliate WJZY and MyNetworkTV Affiliate WMYT for
approximately $45 million in cash, and will divest to FOX the
Seattle FOX Affiliate KCPQ and MyNetworkTV Affiliate KZJO and the
Milwaukee FOX Affiliate WITI for approximately $350 million in
cash, subject to customary adjustments.
The addition of FOX Affiliate
WJZY and MyNetworkTV Affiliate WMYT in Charlotte are geographically
complementary to Nexstar’s existing operations in North Carolina,
South Carolina, Tennessee and Virginia while presenting financial
and operating synergies with the Company’s station portfolio and
digital operations. Nexstar intends to use the net cash proceeds
from the transactions to reduce borrowings under its credit
facilities.
Commenting on the agreements,
Nexstar Media Group Chairman, President and CEO Perry Sook said,
“Throughout Nexstar Media Group’s 23-year history, we have actively
managed our station portfolio with the goal of serving the local
communities where we operate, diversifying our operations, managing
risk and improving financial results. The planned transactions with
FOX address all of these strategic objectives and the net financial
result is embedded in our pro-forma average annual free cash flow
guidance for the 2019/2020 cycle of approximately $1.02 billion.
These transactions also highlight our near-term focus on reducing
leverage as our net leverage ratio will decline by approximately
0.1 times from the 4.6 times level, at June 30, 2019, announced
when we closed the Tribune transaction in September.
“The Charlotte metropolitan
area is the fastest growing in the country with a strong and stable
economy, affordable housing and a solid job market. We look forward
to adding FOX Affiliate WJZY and MyNetworkTV Affiliate WMYT to our
platform as they represent excellent complements to our already
strong mid-Atlantic presence and will benefit from our local news
and other programming resources. In addition, this transaction
frees up approximately 0.7% household reach (reflecting the FCC’s
UHF discount) allowing us to pursue other opportunistic
transactions that strengthen our local market platform and service
to viewers and businesses. From a financial perspective this
transaction represents another unique and innovative means for
Nexstar to enhance shareholder value.”
The transaction is subject to
FCC approval and other customary approvals, and is expected to
close in the first half of calendar year 2020. According to the
2019 Nielsen DMA Rankings, the Charlotte, North Carolina DMA is
ranked as the 21st largest U.S. television market, the
Seattle-Tacoma, Washington DMA is ranked as the 13th largest U.S.
television market, and the Milwaukee, Wisconsin DMA is ranked as
the 35th largest U.S. television market.
About Nexstar Media Group, Inc.
Nexstar Media 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 197 television stations and related digital
multicast signals reaching 115 markets or approximately 39% of all
U.S. television households. Nexstar’s portfolio includes primary
affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW. Nexstar’s
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. Nexstar also owns WGN America, a growing
national general entertainment cable network and a 31% ownership
stake in TV Food Network, a top tier cable asset. For more
information please visit www.nexstar.tv.
Forward-Looking Statements
This communication 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, Nexstar 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 communication,
concerning, among other things, the purchase and sale transactions
described herein, the use of proceeds therefrom and Nexstar’s
future financial performance involve risks and uncertainties, and
are subject to change based on various important factors, including
the risk that a condition to the closing of the proposed
transactions may not be satisfied and the transactions may not
close, the risk that a regulatory approval that may be required for
the proposed transaction is delayed, is not obtained or is obtained
subject to conditions that are not anticipated, Nexstar’s ability
to successfully integrate the acquired television stations,
Nexstar’s ability to realize the expected synergies and benefits
from the purchase and sale transactions and the timing thereof, the
impact of changes in national and regional economies, any future
regulatory actions and conditions, competition from others in the
broadcast television markets, volatility in programming costs, the
effects of governmental regulation of broadcasting, industry
consolidation, technological developments and major world news
events. Nexstar undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. 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 Nexstar’s Annual Report for the year
ended December 31, 2018, Tribune Media’s Annual Report for the year
ended December 31, 2018 and each of Nexstar’s and Tribune Media’s
subsequent public filings with the Securities and Exchange
Commission.
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version on businesswire.com: https://www.businesswire.com/news/home/20191105006128/en/
Thomas E. Carter Chief Financial Officer Nexstar Media Group,
Inc. 972/373-8800
Joseph Jaffoni, Jennifer Neuman JCIR 212/835-8500 or
nxst@jcir.com
Media:
Gary Weitman EVP and Chief Communications Officer Nexstar Media
Group, Inc. 312/222-3394 or gweitman@nexstar.tv
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