Nexstar CEO: vMVPDs need local TV stations more than we need them

Nexstar Media CEO Perry Sook expects the company will sign some deals shortly

Nexstar Media CEO Perry Sook said that local TV station groups have a lot of leverage when dealing with vMVPDs like DirecTV Now, PlayStation Vue and Hulu’s upcoming live TV service.

During Nexstar Media’s earnings call today, Sook said his company is currently having high-level conversations directly with OTT services as well as through broadcast partners. He said that he expects Nexstar will sign some deals shortly but that the company hasn’t yet.

“They need local stations much more than we need them,” Sook said, adding that while it may not always be the case, for now local broadcasters have the upper hand in negotiations.

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Sook’s comments reflect similar statements made by Tegna Media President Dave Lougee on Monday. Lougee said that Tegna is also having conversations with vMVPDs and expects it can achieve rates similar to the retransmission fees it receives from cable and satellite providers, according to TVNewsCheck.

Both Nexstar’s and Tegna’s comments about vMVPD negotiations come after CBS signed a new affiliation renewal deal with Meredith last month that will commit some of Meredith’s local CBS feeds to Hulu’s live TV service.

"We are a longtime proud partner of Meredith, and this agreement will benefit both companies in the near and long-term," said Ray Hopkins, president of network distribution for the CBS Television Network, in a statement. "We are pleased that in extending this deal and committing to certain new and future digital distribution opportunities, Meredith recognizes the value that CBS' hit programming brings to their business and, most importantly, the viewers in each market."

Aside from ongoing negotiations to increase digital distribution for Nexstar Media’s stations, Sook said his station group is also now focusing on the transition to the ATSC 3.0, following the FCC’s recent initiation of a public rulemaking process for next-generation broadcast TV standards.

Sook said that of Nexstar Media’s 171 stations, 90 are in line for some kind of repacking activity following the completion of the FCC’s broadcast incentive auction. He said that the channel repack program established by the FCC will cover at least the base costs of switching those stations from ATSC 1.0 to ATSC 3.0 would, so he’s anticipating some acceleration in ATSC 3.0 work.

“Our auction task force has become the repacking task force,” Sook said.

But Sook said that single frequency networks (SFNs) certainly won’t be the first thing that Nexstar does in regards to ATSC 3.0.

“There are other business opportunities that might support ATSC 3.0 better or faster,” Sook said, adding that Nexstar will look again at SFNs after the transition to the new ATSC 3.0 standards.

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Sook’s comments today align with what he said during the NAB Show New York in November, when he insisted that broadcasters can take their time with the transition to ATSC 3.0 and not feel obliged to jump to a full single frequency network (SFN) buildout right off the bat.

“It’s a crawl-walk-run kind of a build,” Sook said.