Cable, satellite fees help pump Nexstar’s revenue

A still frame from a broadcast of "Cuomo" on Nexstar's NewsNation.
A still frame from a broadcast of “Cuomo” on Nexstar’s NewsNation. (Image via NewsNation broadcast, Graphic by The Desk)

Nearly half of Nexstar Media Group’s revenue during its most-recent financial quarter came from fees charged to cable and satellite services, the company revealed this week.

On Tuesday, Nexstar said it brought in $1.27 billion in revenue during the three-month period that ended September 30, with $641 million attributed to distribution fees that are charged to cable and satellite companies in exchange for the right to carry their stations.

Nexstar’s distribution revenue accounted for about 50.4 percent of its overall quarterly revenue, according to a review of the company’s financial earnings statement by The Desk, and was higher than the $529 million generated from core and political advertising across its broadcast and cable properties.

Nexstar operates more than 200 local broadcast stations across 116 media markets in the United States. It also operates NewsNation, a startup cable news channel that airs a mixture of hard news and commentary programming interspersed with some syndicated shows that were a carried over from the network’s previous incarnation, WGN America.

“Nexstar delivered another quarter of record financial results as third quarter net revenue rose 9.7%, led by strong growth in political advertising, distribution, and digital revenue,” Perry Sook, Nexstar’s chief executive, said in a statement.

Nexstar was the second station group this week to report higher earnings that were largely attributed to cable and satellite carriage fees. Rival broadcaster TEGNA said its cable and satellite distribution fees topped traditional advertising for at least the second straight quarter, with carriage fee revenue accounting for $377.4 million of its overall revenue of $803 million.

The Walt Disney Company reported earnings along a similar line this week, with higher fees charged to cable and satellite companies partially offsetting lower-than-expected advertising revenue at its broadcast and cable channels during its most-recent financial quarter.

Programmers like Nexstar, TEGNA and Disney have been particularly aggressive over the last few years with its carriage fees: These companies have engaged in carriage disputes with distributors like Dish Network, DirecTV and some cable companies after demanding higher fees in exchange for carriage of their channels. The fees are often passed on to consumers in the form of higher cable and satellite bills. Cord-cutting, a practice where consumers drop traditional pay TV services for cheaper streaming options, has been largely attributed to higher cable and satellite prices.