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Stations Stay Bullish on M&A, Retrans

NEW YORK — Despite the number of available stations dwindling as the industry continues to consolidate, a panel of top broadcast executives at the NAB Show New York said there is still room for more deals.

Nexstar Media Group, which completed its $7.2 billion purchase of Tribune Media in September — making it the largest group in the country with nearly 200 stations — sees some opportunities to add scale. Chairman, president and CEO Perry Sook said M&A prospects are limited by federal ownership regulations, but added that other station groups are expected to seek additional scale.

Nexstar's Perry Sook 

Nexstar's Perry Sook 

Sook noted that the available pool of stations is shrinking: In 2001 there were 36 companies in local TV that had a national reach of 2% or greater. Now that has dwindled to about a dozen companies.

“I don’t know what’s on the horizon, but I predict there will be M&A,” Sook said.

Meredith Local Media Group president Patrick McCreery said he expects outside money, particularly from private-equity groups, will continue to flow into the sector, beefing up M&A opportunities.

Panelists seemed to take exception to analysts that have predicted that one of the more consistent growth engines in the business — retransmission consent revenue — is on the decline.

Sook said that he still sees double-digit percentage growth on the retrans front, with McCreery and Gray TV president and co-CEO Patrick LaPlatney in agreement.

Driving that optimism is the belief broadcasters account for about 35% of TV viewership while capturing just 18% of the revenue. And though achieving total parity — which Wolfe Research analyst Marci Ryvicker has predicted would mean a consumer’s retrans bill would rise to $28 per month — isn’t necessarily in the cards, the panelists believe there is room to get closer.

“The numbers are rough, but we think there is some runway there,” LaPlatney said.