Nexstar CEO On CBS Stations – Can’t Buy Them Under Current Regulatory Regime “But If That Were To Change, Maybe Our Opinion Would Change”
With Paramount Global and its assets currently in play, Nexstar CEO Perry Sook was asked on a call today if the nation’s biggest broadcast might look at CBS stations.
“Obviously, given our station footprint, the digestion of CBS station assets would be a tough nut, particularly under this regulatory environment and regime,” he said on a call after quarterly earnings. “If that were to change, maybe our opinion would change. But that certainly would have to happen, I think, for anyone to have confidence they could pursue a complicated regulatory transaction in the current environment.”
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Regulators could be a headache as well for Sony and Apollo in their preliminary $26 billion joint bid for Paramount. It would see two more Hollywood studios merging. Sony can’t own U.S. broadcast assets under FCC rules. Apollo can, but it already owns stations and might run up against the current ownership cap – an issue that already scuttled one big deal it was part of, for Tegna, last year.
Nexstar, parent of the CW, is a big company with a hefty market cap of $5.8 billion and an enterprise value of about $12 billion, cash on hand and low debt. So possible acquisitions naturally came up. The broadcaster was said to be interested in ABC station when Disney CEO Bob Iger briefly seemed open to a sale.
“We look at the balance sheet as an asset of the company, and one of the ways that we produced an outsized return was by taking some big swings,” like buying Media General and Tribune. “We will continue to look,” Sook said. “We are being very patient right now, given not only the cost of capital but the opportunities that are out there. But if we feel there’s a risk-adjusted return via an acquisition out there of any scale … we would certainly … try and get to the finish line.”
He said he expects Nexstar to be bigger in three years than it is now. “What acquisitions will lead to that … I can really say. But I am excited to … find out.”
Asked about the value of stations without a network, he said, “There were television station before there were TV networks, and there will be television stations after there are TV networks. And from my point of view, if you are serving your community with robust local news and commerce opportunities, you’re going to be in business. It doesn’t matter what programming you rent and from whom you rent it to fill the times when you are not programming locally — and that is basically what a network affiliation is at this point.”
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