Irving-based Nexstar Media Group CEO: Inflation gives us cover to increase prices

The higher inflation rates frustrating U.S. consumers are good news for the television news business, Irving-based Nexstar Media Group chairman and chief executive Perry Sook told analysts Tuesday. “Historically, inflation has been a friend of our business because it gives us some ability for — cover for —pricing power and pricing increases. So I don’t think of inflation as a bad thing,” Sook said on the television station owner’s earnings call Tuesday. His comments after Nexstar delivered record annual 2021 profit compared with any previous non-election year, beating Wall Street’s expectations. In election years, the company historically sees an influx of ad spending from political campaigns. Nexstar saw $4.6 billion in revenue, up 3.3% from the previous year. And it brought in $1.9 billion in pre-tax profit.

Sook told analysts that advertising in some sectors has yet to return to pre-pandemic levels. The CEO noted that one of those areas is the automotive industry. Advertising revenue for the company was down 13% in 2021 compared with the prior year, but Nexstar says anticipates political spending in the 2022 midterm election cycle will boost ad revenue. Business spending on advertising fell in 2020 but saw a strong rebound in 2021. 2020 also set revenue records for the company, providing a tough year-over-year comparison. The company brings in revenue through both selling ads and selling rights to TV providers to carry its content. It said half of its retransmission agreements with TV providers will be up for renegotiation in the second half of 2022, and it expects to see increases in revenue as a result. Nexstar is one of the largest television station owners in the U.S., with 199 stations in 116 markets across the nation. It’s the largest owner of CBS and FOX affiliate stations, the second-largest owner of NBC affiliates and the third-largest for ABC, according to the company. In Texas, Nexstar owns local CW station KDAF-TV (Channel 33) and local news stations in Tyler, Abilene and other rural markets.