Monday, March 23, 2009

KEYE TV Enters Into Management Agreement



Four Points Sister Stations

Consolidate Management


Nexstar Broadcasting Group

KEYE TV (CBS) in Austin and its sister TV stations in the Four Points Media Group will now be managed by Nexstar Broadcasting Group from its headquarters in Irving, Texas. Amy Villarreal, KEYE TV president and general manager announced the new arrangement to station staff in an afternoon meeting Monday, March 23.

Villarreal will remain in her present polition. "There will not be a change to KEYE viewers as this is a change in the overseeing of station operations," Villarreal said. "We are still focused on producing local, highly relevant content for our viewers, optimizing our delivery of that content and creating value for our advertising customers."

News Director Suzanne Black says that she is hopeful that the arrangement will lead to more coverage. "I’m excited about working with a broadcasting group with so many Texas connections."

The Nexstar news release is copied below:



Irving, Texas (March 23, 2009) - Nexstar Broadcasting Group, Inc. (Nasdaq: NXST) announced
today that it entered into an agreement with Four Points Media Group LLC (“Four Points”),
owned by an affiliate of Cerberus Capital Management, L.P., whereby Nexstar will provide
management services for Four Points’ seven television stations located in four markets. Under
the terms of the agreement, Nexstar will receive a fixed annual management fee of $2 million
per year, as well as annual incentive compensation based on increases of the broadcast cash
flow of Four Points’ stations. Nexstar will also be entitled to a share of the equity profits if the
stations are sold while the agreement is in effect. The agreement provides for minimum
compensation to Nexstar of $10 million if the Four Points stations are sold during the initial three
year term of the agreement.

Commenting on the agreement, Nexstar Broadcasting Group Chairman, President and Chief
Executive Officer, Perry A. Sook said, “We are delighted to be working with Four Points as this
is a tremendous opportunity to leverage Nexstar’s operating and management capabilities to
serve the needs of other broadcast groups and to build value for Four Points.

“The management contract is a rewarding endorsement of Nexstar’s proven operating
disciplines and industry leadership and we are confident that the incentive compensation to be
derived from this agreement will be significantly additive to the annual management fees based
on our strategies to improve the market position and operating efficiencies of these stations.

“Notably, the agreement also underscores Nexstar’s commitment to -- and long-term track
record of success -- developing new high-margin revenue streams to support our goal of
creating long-term value for our shareholders. Managing the Four Points stations is an
excellent complement to our existing station and e-Media operations as the four markets in
which Four Points operates do not geographically overlap with stations and network affiliations
in which Nexstar owns, operates, programs or provides sales and other services to.”

Under the terms of the management agreement, Nexstar will oversee Four Points’ station
operations and act as a resource on sales, promotion, programming alternatives, production,
operations (including e-MEDIA functions), finance, contract administration and human
resources. The agreement is effective March 20, 2009 and extends through March 31, 2012,
with one-year renewal options.

The Four Points station group includes seven television stations that are affiliated with various
television networks, including two CBS (KEYE-TV Austin, Texas and KUTV-TV Salt Lake City,
Utah), two CW (WLWC-TV Providence, Rhode Island and WTVX-TV West Palm Beach,
Florida), one MyNetworkTV (WTCN-CA West Palm Beach, Florida), one Azteca Amèrica
(WWHB-CA West Palm Beach, Florida) and one RTN (KUSG-TV Salt Lake City, Utah).
Broadcast cash flow is calculated as income from operations, plus corporate expenses,
depreciation, amortization of intangible assets and broadcast rights (excluding barter), non-cash
contract termination fees, non-cash impairment charges, loss (gain) on asset exchange and loss
(gain) on asset disposal, net, minus broadcast rights payments.

About Nexstar Broadcasting Group, Inc.

In addition to the seven stations in four markets owned by Four Points Media Group LLC, now
managed by Nexstar, upon completing all announced transactions, Nexstar Broadcasting Group
will own, operate, program or provide sales and other services to 52 television stations in 30
markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania,
Louisiana, Arkansas, Alabama, New York and Florida. Nexstar’s television station group
includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and pro-forma for the
completion of all announced transactions, reaches approximately 10 million U.S. television
households or approximately 8.8% of all U.S. television households.

(c) Jim McNabb, 2009

1 comment:

Anonymous said...

Bad news for KEYE. Nexstar taking over means cuts cuts cuts. No AP and no high paid employees.