An investor presentation published this week by Nexstar Media Group was designed to position the broadcast television operator as a company that is well-situated to navigate the turbulence brought on by cord-cutting.
But the pitch deck, which first appeared on Nexstar’s investor relations website on Monday, could also help DirecTV in its ongoing antitrust lawsuit against the company.
Among the various data points offered by Nexstar in its presentation was a brag that the broadcaster “reaches 68 percent of the U.S. population via its local TV stations,” which it said was “75 percent larger than the other broadcast network owners.”
Specifically, Nexstar said its broadcast reach was nearly double its next closest competitors — TEGNA, Fox Corporation and Sinclair Broadcast Group — each of which reaches around 39 percent of U.S. television audiences through their ownership or operational control of ABC, CBS, Fox and NBC network affiliates.
The 68 percent figure appears to include TV stations licensed to several third party companies, including Mission Broadcasting and White Knight Broadcasting, whose stations are entirely operated and controlled by Nexstar.
That business arrangement, known as a “shared services agreement” or “local marketing agreement,” is at the root of an ongoing federal lawsuit filed by satellite TV service DirecTV earlier this year, which accuses Nexstar of exerting too much market control by colluding with White Knight and Mission to raise carriage fees for its channels.
Nexstar itself has around 160 full-power and ancillary low-power television stations licensed in its name. Another 40 stations are licensed to third parties like Mission and White Knight, giving Nexstar control of around 200 stations in total.
In its lawsuit, DirecTV suggests Mission and White Knight are merely businesses on paper, meant to help Nexstar circumvent federal ownership caps, which limit any one broadcaster from reaching more than 39 percent of the American television viewing audience. The satellite company also points to a number of eyebrow-raising issues with the purported executive teams at Mission and White Knight, some of whom are former Nexstar employees.
For its part, Nexstar says it doesn’t do anything wrong: Its use of shared services agreements don’t violate any law, and the company believes it technically complies with federal ownership rules because its own licensed stations are just at the 39 percent mark. But a source at DirecTV who spoke with The Desk on background said the pitch deck published by Nexstar this week is the latest proof that the broadcaster says one thing to advertisers and investors, only to say an entirely different thing to federal regulators.
A spokesperson for DirecTV later said much of the same in a statement provided to The Desk, which repeated many of its positions found in the antitrust lawsuit filed earlier this year.
“Nexstar utilizes sham relationships with its sidecars and loopholes in the FCC ownership rules to exceed both the national broadcast ownership limit and the limit on the number of stations it can own in a market,” the DirecTV spokesperson said. “We have asked the FCC to investigate Nexstar’s unlawful control of its sidecars, Mission and White Knight, and close the loopholes in its ownership rules.”
On Wednesday, a Nexstar spokesperson reaffirmed to The Desk that the company’s shared services agreements with White Knight and Mission “are in full compliance with FCC guidelines.”
Outside the courtroom, DirecTV and Nexstar — and some of its “sidecar” businesses — have done battle on the business front a number of times over the past two years.
Last year, DirecTV pulled stations licensed to Mission and White Knight after carriage agreements covering those outlets expired. The dispute with White Knight passed the one-year mark last Saturday, and the blackout affecting Mission stations is set to reach that same milestone later this month.
This summer, DirecTV also pulled Nexstar-owned TV stations after a similar contract lapsed with no new agreement in place. That dispute lasted for several weeks, leaving vast parts of the country without access to one or more local broadcast station. A new deal was announced in September.
Editor’s note: This story has been updated to include a comment from Nexstar.