A soft advertising market continues to weigh on Nexstar Media Group, with the largest independent broadcast or major network affiliates reporting $522 million in advertising revenue during the second financial quarter (Q2) of the year.
Total advertising revenue was up just 2.2 percent compared to Q2 2023, buoyed in part by higher political advertising uptake ahead of the November election cycle. Political advertising revenue inched higher to $45 million across Nexstar’s portfolio of 200-plus owned or operated local TV stations, plus its cable news channel, NewsNation. It offset a $24 million year-over decline in core, non-political ad revenue, the company said.
Overall, Nexstar’s net revenue clocked in at $1.27 billion for the quarter, around 2.3 percent higher on a year-over basis, but slightly less than the $1.3 billion expected by Wall Street analysts.
Nexstar’s stock price was down more than 6.5 percent in mid-market trading.
“Nexstar delivered another period of solid financial results, building on our strong start to the year,” the company’s CEO, Perry Sook, said in a statement that accompanied the broadcaster’s earnings report. “Following a first quarter in which Nexstar generated record first-quarter distribution and total net revenue, we did it again, generating our highest-ever second-quarter distribution and total net revenue.”
Sook continued: “During the quarter, we continued executing on our plan at the CW, reducing operating losses by $33 million year-over-year and $83 million year-to-date as our organizational and programming changes are driving improved cash flows and the third consecutive quarter of ratings growth in prime-time entertainment programming.”
Distribution revenue — or income earned from charging cable, satellite and some streaming cable-like services for the privilege of distributing Nexstar-owned channels — was the biggest earner for the company, bringing in $734 million during the quarter, reflecting a gain of 5.5 percent on a year-over basis.
For the first half of the year, distribution revenue has earned Nexstar $1.495 billion in income, compared to $1.034 billion earned from advertising revenue. The company’s first-half net revenue was $2.553 billion as of June 30.
Nexstar continues to build out its local television business, CW Network and NewsNation. The company recently announced new affiliation agreements with stations in Detroit, Miami, Chicago, Lafayette and other markets. Nexstar says it will own or operate at least 49 CW Network affiliates, reaching nearly half the country.
In June, NewsNation dropped the remainder of its syndicated shows that were carried over from its time as WGN America, marking the first time the cable news channel offered news and political affairs programming on a 24-7 basis. Nielsen data shows NewsNation’s audience has grown by 200 percent during weekday prime-time, the company said, though the data also shows NewsNation lags behind Fox News, MSNBC, CNN and, occasionally, Newsmax.
At the CW, Nexstar is focused on building up its CW Sports brand, signing agreements to bring Pac-12 college football games to the network, starting later this month. The last eight NASCAR Xfinity Series races for the season will also air on the CW, starting in September. The network is expected to bring back “Inside the NFL” next month, too.
While some Nexstar executives have downplayed the company’s role in bringing certain programming to streaming platforms, its CW brand has been quietly launching free, ad-supported streaming TV (FAST) channels that offer marathon viewing of original and acquired shows. Last quarter, two new channels — CW Forever and CW Gold — were added to Amazon’s Freevee, The Desk reported. The same channels were eventually incorporated into the CW Network app for phones, tablets and smart TVs, and recently became available to stream on the ad-supported service Plex.
