'Duopoly' in Terre Haute
Nexstar Broadcasting Group and Mission Broadcasting are once again proving that, with a little creativity, even small- and midsize-market stations can get into the duopoly game.
Last week, the two entered into a shared-services and -sales agreement whereby Nexstar's NBC affiliate WTWO(TV) Terre Haute, Ind., will handle the ad sales and operations of WBAK-TV, the local Fox affiliate.
On May 9, Mission announced that it is purchasing WBAK-TV from Bahakel, pending FCC approval, for $3 million. The two companies struck a time-brokerage agreement that gives Mission control of the station's advertising time. Mission then turned around and assigned the rights to Nexstar.
Mission is a small group on the grow. Along with WBAK-TV, the group is buying KRBC-TV Abilene-Sweetwater, Texas, and KACB-TV San Angelo, Texas, from LIN Television. Once those deals close, it will have eight stations in seven markets.
Mission Executive Vice President and COO John Dittemier says the company also has a pending shared-services agreement with Nexstar-owned CBS affiliate KTAB-TV Abilene, Texas. Other markets in which the two companies have agreements are Wilkes-Barre–Scranton, Pa.; Wichita Falls, Texas; and Joplin, Mo.
"We have a variety of marketing agreements in markets with Nexstar, and the synergies allow us to make necessary improvements to the stations," says Dittemier. "Otherwise, it would be very difficult for the standalone station to provide new resources for its operation."
Nexstar COO Duane Lammers says Bahakel will continue to control the programming for WBAK-TV until the purchase is approved by the FCC, expected late this year. "We'll perform the operating functions like engineering, traffic, and engineering for a fee for WBAK," he adds. "It's basically everything except programming decisions."
Irving, Texas-based Nexstar owns 14 small-market stations and has deals to acquire two more stations in the works. With Terre Haute, it will have de facto duopolies in eight markets through local marketing agreements, shared-services agreements and joint sales agreements. Nexstar's reach extends from Wilkes-Barre–Scranton, Pa., (DMA No. 53) to San Angelo, Texas, (No. 196). It reaches 3.5% of the nation's 106.7 million TV homes.
WTHI-TV, the Terre Haute CBS affiliate owned by Emmis Communications, currently produces the 10 p.m. newscast for WBAK-TV. Lammers says that relationship will continue for a while but isn't part of the long-term plan. "There are some contract issues that need to be worked out."
Lammers couldn't say if the WBAK-TV 10 p.m. newscast would continue once the WTHI-TV deal ends. "It's something we have to study as we don't know what the economic impact will be and if it will be economically viable."
For now, he says, the goal is to take advantage of what he considers fantastic synergies on the sales side because Nexstar will control the inventory and retain sales revenues from both stations. "It gives WTWO a chance to talk about some programming it doesn't have, like the NFL. We can also sell both sets of NASCAR inventory."
The idea, he adds, is to make both stations stronger and more competitive, not only against other broadcasters but also other media outlets. "We have to compete with cable and radio and things like that. But this will just flat out make the two stations a more powerful media entity."
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