Nexstar Media Group saw a significant decline in its political and overall advertising revenue during the second financial quarter of the year, the company reported on Tuesday.
The largest local broadcast station owner in the country earned just $413 million in overall advertising revenue during the three-month period that ended June 30, a 17 percent decline compared to Q2 2022. Of that, $9 million was attributed to political advertising revenue, a 90 percent drop compared to the $87 million reported this time last year.
Net revenue came in at $1.24 billion, in line with estimates from Wall Street analysts, spurred by higher affiliate fees charged to cable and satellite companies, which grew 7.7 percent to $696 million for the quarter.
By the Numbers: Nexstar Media Group Q2 2023
- Net Revenue: $1.240 billion (+0.5%)
- Core Advertising Revenue: $404 million (-2.2%)
- Political Advertising Revenue: $9 million (-89.7%)
- Total Advertising Revenue: $413 million (-17.4%)
- Affiliate Fee Revenue: $696 million (+7.7%)
- Digital Revenue: $98 million (+11.4)
- Other Revenue: $33 million (+200%)
- Profit: $75 million (-66.8%)
- Net Revenue (excl. CW Net): $1.170 million (-6%)
- Adjusted EBITDA: $331 million (-32.3%)
- Attributable Free Cash Flow: $100 million (-54.8%)
(Source: Nexstar Media Group Q2 earnings report; percentages are on a year-over basis)
In a statement, Nexstar CEO Perry Sook said the company “outperformed consensus expectations in the second quarter across all key financial metrics,” which includes net revenue. The comment appeared to be based on some Wall Street estimates that pegged Nexstar’s overall revenue at $1.22 billion for the quarter, though the average revenue estimate was on the nose, according to Yahoo Finance.
Sook continued: “We are excited about Nexstar’s near- and longer-term organic growth opportunities as we continue to leverage our portfolio of local and national media assets. Our platform provides nationwide reach with local activation at a greater scale than every other major broadcast network owner.”
Nexstar’s latest financial quarter ended about a month before DirecTV was forced to pull around 160 Nexstar-owned local ABC, CBS, Fox, NBC and CW Network affiliates from its satellite and streaming platform. The channels are still unavailable today, with DirecTV complaining that Nexstar has demanded more money in exchange for the rights to redistribute those channels.
The situation with DirecTV means Nexstar’s local television stations and NewsNation are available in fewer homes across America than they were at the end of the second financial quarter. The impact of this decision could be reflected on Nexstar’s next earnings report, which is expected around early November.
On Tuesday, Sook said Nexstar is expected to continue negotiating new carriage agreements with pay television platforms through the end of the year, and he is optimistic the outcome of those negotiations will result in a better balance sheet. The company affirmed Nexstar’s demand for higher fees helped offset declines in cable and satellite subscribers.
Sook also said Nexstar’s political ad woes could be erased heading into 2024, when the presidential election cycle begins to ramp up. Historically, politicians and organizations spend heavily on political-centric advertisements aired on local television stations.