During Nexstar’s earnings call today, CEO Perry Sook said the companies have hired a firm to find a CEO who can focus full-time on finding new members and orchestrating future revenue opportunities for the soon-to-be-available spectrum.
With the companies currently involved, the consortium has about 90% spectrum reach nationwide. The consortium would like to get to 100%.
Sook seemed optimistic the consortium would reach that goal, saying that most broadcasters will be looking to invest in 3.0 antennas during the incentive auction repack even if the FCC isn’t covering the total cost, because the FCC will at least cover the cost of the tower climb.
Given the 39 months broadcasters have to complete the repack, Sook said it may be some time before the industry starts seeing material revenues associated with ATSC 3.0 and the leasing of excess spectrum to companies in need of extra bandwidth and the one-to-many connectivity provided by a broadcast infrastructure. Sook said it could be as long as 5 years before those revenues start to materialize; but once they do, he said it could be a massive opportunity for the broadcast industry.
“Spectrum revenue could equal retrans revenue over time,” Sook said.
In addition to the spectrum consortium, Nexstar and Sinclair have entered into a coordinated transition agreement for ATSC 3.0 and will soon begin a market-by-market process of organizing the move from ATSC 1.0 along to ATSC 3.0. The companies will put their plan into action in 97 markets, including 43 markets where both companies own a television station.
While Nexstar pursues future growth from ATSC 3.0, the broadcaster is counting on retransmission to continue being a significant contributor to its overall revenues. The company anticipates low double-digit retrans growth through 2019.
For the second quarter, Nexstar’s combined digital media and retransmission fee revenue of $317.1 million was up 157.8% annually and made up 50.6% of Nexstar’s net revenue.