Friday, January 18, 2008

Nexstar Broadcasting creates another duopoly

Nexstar Broadcasting, which already had duopolies (two television stations in a market) in 17 cities, including Joplin and Springfield, has added another one.
A company news release says Nexstar will now operate KTVE, the NBC affiliate in Monroe, La., which was recently purchased by Nexstar's front organization, the largely non-existent Mission Broadcasting.
Nexstar, of course, owns KSNF in Joplin and KSFX in Springfield, and operates Mission Broadcasting-owned KODE in Joplin and KOLR in Springfield. This was the news release Nexstar issued:

IRVING, Texas--(BUSINESS WIRE)--Nexstar Broadcasting Group, Inc. (Nasdaq: NXST) announced today that it has entered into a local service agreement (“LSA”) with Mission Broadcasting, Inc. (“Mission”) for KTVE-TV, the NBC affiliate serving the Monroe, Louisiana/El Dorado, Arkansas market. Mission completed the purchase of the assets of KTVE-TV yesterday for $7.7 million from Piedmont Television. Nexstar presently owns KARD-TV, the FOX affiliate in the Monroe, Louisiana/El Dorado, Arkansas market. According to Nielsen Media 2006-2007 Local Market Estimates, Monroe, Louisiana/El Dorado, Arkansas is the 135th largest television market in the country.

Nexstar now owns, operates, programs or provides services to more than one station in 18 of the 29 markets where it operates. In addition, the new local service agreement represents the 50th television station that Nexstar owns, operates, programs or provides sales and other services to.

Nexstar Broadcasting Group President and CEO, Perry A. Sook commented, “We are delighted to extend our relationship with Mission Broadcasting through the KTVE-TV LSA and believe this transaction brings clear strategic and financial benefits to both Nexstar and the Monroe, Louisiana market. The LSA will be immediately accretive to Nexstar’s operating results as KTVE’s purchase price represents a mid single digit multiple of the station’s last twelve months broadcast cash flow. As with other transactions, we expect to meaningfully reduce the purchase price multiple and see further upside to the station’s 2008 broadcast cash flow as Nexstar will combine certain operations of KARD-TV and KTVE-TV in the Monroe, Louisiana/El Dorado, Arkansas market. Additionally, KTVE-TV has completed its capital spending program to upgrade the station’s HDTV broadcasting capabilities.

6 comments:

Anonymous said...

Randy - A bit of economic education for you:

A duopoly is when ONLY two choices exist. Clearly, in the markets you identify, there are choices other than the Nextar stations.

du·op·o·ly –noun, plural -lies. the market condition that exists when there are only two sellers.

You may wish to correct the title of your post if accuracy is important to you.

Have a great weekend.

Randy said...

While you are correct, the use of the term duopoly comes from Nexstar Broadcasting itself. It has even talked about having duopolies in cities like Springfield where there are far more choices than we have in Joplin. So as far as Nexstar Broadcssting is concerned, it has created another duopoly.

Anonymous said...

You are very good, Randy, at correcting the rest of us, why don't you make a big scene and correct Nexstar for not knowing the definition of the word? Are are you too star struck with radio and television and their "personalities" that you give them a pass?

Anonymous said...

Stunning, Randy. You're blindly publishing jargon from companies that you know to be incorrect?

What happened to "reporting?"

Anonymous said...

Blogging has no oversight - It is opinion rather than journalism.

Anonymous said...

Actually guys & gals, "Duopoly" is a common TV term defining an agreement of operation between two stations in a television market.
In terms of economics you are correct in your definition of a duopoly. However, again, in television, it has a totally different meaning, and Nexstar and Randy's usage of the word is quite correct.
A duopoly can exist even in a market with more than two TV choices.
KOAM/FOX14 are also a duopoly.
According to the FCC, a duopoly is allowed if these terms are met:
There must be at least eight unique station owners left in the market once a duopoly is formed. In effect, duopolies are not allowed in any market with fewer than nine full-power stations (counting noncommercial stations).
In fact, to further your word education, in Canada the term is often called "twinstick".
I'm sorry that you all like to argue, but Mr. Turner, whom I often do not like to agree with, and Nexstar, which is another I'd rather not say I like, are correct.