CW Addition Lifts NexStar Media to Record Q1 Revenue of $1.26 Billion
Nexstar Media Group said its purchase of The CW Network led it to pull in record revenue in the first quarter, despite the network’s continued losses.
The parent of NewsNation on Tuesday reported revenue of $1.26 billion for the first three months of the year, up 4% from $1.21 billion in Q1 2022. Of that, revenue attributed to The CW was $57 million.
NextStar said a 9% gain in distribution revenue to $728 million mostly related to its ownership interest in the TV Food Network also helped boost the total, more than offsetting a 6% decline in total advertising revenue. Core advertising revenue slipped 2.6% to $417 million in a soft market that also saw no Olympics-related ads, and political advertising revenue plunged 67% to $8 million in the absence of mid-term election ads.
Excluding political advertising, net revenue increased 5.3% year-over-year, the company said.
“All-time high quarterly distribution revenue and the benefit of The CW acquisition more than offset the cyclical year-over-year decline in political and Olympic advertising, resulting in record first quarter net revenues for the company,” Nexstar CEO Perry Sook said in a statement.
While it buoyed revenue, The CW lost $83 million overall, down from a $94.3 million loss in the fourth quarter of 2022. The company, which closed on the purchase in October, previously said it expects the network to be profitable by 2025 as it transforms its programming.
That weighed on NextStar’s net income, which fell to $111 million, down 56% from last year’s $252 million.
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On a per share basis, the results came in at $2.97, less than half last year’s $5.99, despite a reduction in the number of outstanding shares, but besting the $2.13 forecast by analysts surveyed by Zack’s Investment Research.
NextStar shares rose $2.24, or 1.4%, in midday trading, to $168.35. The stock closed Monday at $166.01, down 4.7% since the start of the year.
The company said it is “making continued progress on our plan for The CW with key personnel appointments, further overhead cost reductions and new programming additions, including our exclusive multi-year partnership with LIV Golf.”
Sook also pointed to the growth of NewsNation as a bright spot in the quarter.
“NewsNation remains the fastest growing cable news network with Q1 2023 marking its highest audience delivery to date,” Sook said. “As we expand our programming on the network, it continues to be validated by industry watchdog groups as non-biased and a reliable source of news.”
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The all-news channel was included in NextStar’s multiyear deal inked during the quarter with YouTube to extend carriage of NewsNation, The CW’s affliated stations and NexStar’s 40 CBS affiliated stations, along with a series of other stations that will appear on the platform for the first time. NextStar is the largest owner of national TV stations.
The company also said it cut its debt during the quarter by $31 million to $6.92 billion.