Nexstar is now the nation’s largest television broadcaster

handshake
Nexstar divested 21 stations as part of the deal. (Pixabay)

Nexstar Media closed its $6.4 billion acquisition of Tribune Media, making it the largest television broadcast group in the U.S.

Nexstar owns, operates, programs or provides sales and other services to 197 television stations and related digital multicast signals reaching 115 markets, or about 39% of all U.S. television households. As part of the Tribune deal, Nexstar also took ownership of cable network WGN America and a 31.3% stake in Food Network.

Nexstar also successfully divested 21 broadcast stations as part of the approval of the deal. Tegna bought 11 stations for $740 million in cash, E.W. Scripps bought eight and Circle City Broadcasting bought two.

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceVideo!

The Video industry is an ever-changing world where big ideas come along daily. Cable, Media and Entertainment, Telco, and Tech companies rely on FierceVideo for the latest news, trends, and analysis on video creation and distribution, OTT delivery technologies, content licensing, and advertising strategies. Sign up today to get news and updates delivered to your inbox and read on the go.

“The completion of our accretive acquisition of Tribune Media increases Nexstar’s geographic diversity and audience reach with national coverage and an expanded presence in top 50 DMAs, while offering complementary media assets and investments, scale driven synergies and further cash flow diversification,” said Nexstar Media CEO Perry Sook in a statement. He added that Nexstar now generates average annual revenue of about $4.3 billion (on a pro forma basis).

RELATED: AT&T ends Nexstar blackout, sets new deal with Starz

A freshly consolidated Nexstar will have added leverage in negotiations with distributors, which can help the company continue to grow its retransmission fee revenues. In the second quarter, Nexstar said its retransmission fee revenue rose 13.8% to $314 million. The company recently flexed this new scale in retransmission content talks with AT&T, which resulted in an eight-week channel blackout before a new deal was reached.

AT&T CEO Randall Stephenson said during his company’s most recent earnings call that Nexstar opened negotiations by asking for a 100% increase, and wanted to include the Tribune assets that they had yet to acquire.

“Now the spread is they’re asking for a 50% increase on broadcast channels that again are free over the air. And, so that one may take longer, but we’ll just have to be a resolute on this one,” said Stephenson according to a Seeking Alpha transcript. “We’re just not going to impose those kind of price increases on our customers.”

Broadcasters like Nexstar seek increases in retransmission fees from MVPDs as networks like CBS seek increases in affiliate fees from broadcasters. But, Sook said as affiliate fees and retrans fees rise together, Nexstar can increase its margins.

“So, we see no change in outlook in that dynamic for the foreseeable future…our foreseeable future is probably three years out post the Tribune transaction but just looking at the normal cadence of deals with networks and with MVPDs we see no change to the outlook or the ecosystem,” said Sook according to a Seeking Alpha transcript.

Suggested Articles

Hulu with Live TV will raise the price of its base package by $10, bringing the cost up to $54.99 per month. The price change will kick in on Dec. 18.

As AT&T TV Now falls back in the pack, Sling TV and Hulu with Live TV have emerged as the co-leaders among virtual MVPDs in terms of subscribers.

Verizon's Stream TV device, for now, doesn't support Netflix.