With NBC considering dumping the 10 p.m. hour, it’s already got a taker champing at the bit. Nexstar is not only the new majority shareholder in broadcast network The CW, it is also the largest owner of local TV stations. Therefore, it’d be the primary company on the receiving end of that final primetime hour, and “Oh, that would be good,” as Nexstar Chairman and CEO Perry A. Sook said Tuesday.
“We’ll make more money with an hour of news at 10 than we do with an hour of network programming where, a) we have all the inventory and, b) I would expect if NBC goes from 89 hours a week of network-programmed time to 81 or 82 hours a week of network-programmed time that we’d pay them less,” he continued during the Q&A portion of Nexstar’s third-quarter earnings conference call. “All around, we have a number of Fox and CW and MyNetwork stations who program news in that last hour of prime and they are extremely profitable.”
Extreme profits are an extremely good thing, and Nexstar is already quite profitable: In the just-wrapped Q3, Nexstar posted net income of $287.5 million, 70 percent better than Q3 2021. That includes the lead-up to Election Day, but not this past five weeks-plus of crash political-advertising revenue. (Pause reading here and go vote; there’s still time.)
Thus far in 2022, Nexstar profit is up nearly 35 percent from the previous January-September. With the revenue from those crunch-time political ads, Q4 should prove quite strong.
As to why NBC would want to give up such a valuable hour, the time period is considerably less valuable to a national programmer’s bottom line. Successful nationwide programming demands well-crafted and broadly appealing (read: expensive) entertainment offerings; NBC’s 10 p.m. shows include “Chicago P.D.,” “Law & Order: Organized Crime,” “Quantum Leap,” and “New Amsterdam.” And while some (“Chicago P.D.,” for example) are more successful than others, the overall ROI of advertising dollars at that time of night trend in the wrong direction. In the Netflix era, fewer and fewer people NBC & Chill.
Dwindling linear television viewership impacts every station, but local TV stations can cheaply produce local programming (almost always news) at a fraction of the cost. It’s basically what they all do at 11 p.m. in the 35 minutes between primetime and the national late-night talk shows. There are more viewers awake and available at 10 p.m. than 11, which is why Sook’s earnings commentary sounds like he’s cartoonishly tying on a lobster bib.
Whether he gets his 10 o’clock or not, Sook should hit the town tonight. Today, as a result of the strong third-quarter performance, Nexstar stock (NXST on the Nasdaq) is up 8 percent.