Nexstar Q4 revenues rise as company expects $479M from spectrum auction

quarterly earnings

Nexstar Media today reported fourth-quarter net revenue of about $310 million, up nearly 23% over the year-ago quarter.

The company said its new revenue growth helped contribute to record quarterly operating income of $92.5 million and adjusted EBITDA of $134.8 million.

“Our strong fourth quarter and full-year operating results mark Nexstar’s fifth consecutive year of record financial results based on the ongoing success of our strategies to leverage our local market content and community involvement, execute and integrate accretive acquisitions, maintain cost controls and optimize the balance sheet and capital structure,” said Nexstar Media CEO Perry Sook in a statement.

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Nexstar Media used the occasion of its fourth-quarter and full-year earnings to reveal how it did in the FCC’s recently concluded broadcast incentive spectrum auctions. The company said that it did not sell any of the Nexstar spectrum that was offered but sales of Media General’s spectrum resulted in $479 million in expected proceeds.

Media General shareholders will be entitled to pro rata shares of the net proceeds based on CVR issued for each of Media General’s outstanding common shares and outstanding equity incentive awards. It’s unclear how much of the proceeds will go to those sharedholders, but Nexstar Media said the value of each CVR is estimated to be worth between $1.70 and $2.10 calculated by using the estimated gross proceeds, less estimated transaction expenses, repacking expenses and taxes.

The sale of Media General’s spectrum comes shortly after Nexstar completed its $4.6 billion acquisition of the broadcast group. The company said that, financially, the transaction is expected to more than double its revenue and adjusted EBITDA, and Nexstar expects to generate average annual free cash flow in the 2017/2018 cycle of approximately $565 million, or approximately $12 per share, per year based upon approximately 47 million shares outstanding and its current estimate of approximately $81 million of year one synergies and a substantial rise in 2018 cash taxes.

Breaking out Nexstar Media’s performance for the quarter, the group actually saw its local, national and core revenues fall during the quarter, with national revenue down 12.5% annually. But those losses were offset by a whopping 661% increase in political revenue and a sharp 22.8% increase in retransmission revenue, which totaled more than $100 million for the quarter.