The acquisition of Tribune Media by Nexstar Media Group has created the largest owner of local TV stations, but it also raises new questions about the future of WGN America and a nearly one-third stake in the Food Network.
In a conference call Friday with Wall Street analysts to discuss the deal, which closed Thursday, Nexstar CEO Perry Sook said status quo would be the near-term plan on both fronts.
“Our game plan is to operate the heck out of it. We think, with television stations that reach 63% of the U.S., we can be helpful in promoting the channel. Obviously, they’ve had some recent success with new original programming. Dog the Bounty Hunter [and his new show, Dog’s Most Wanted] is delivering all kinds of ratings increases for the company.” The network will join the lineup of AT&T TV, an internet-delivered “skinny bundle” in October, Sook added. “We think there’s a lot we can do with WGNA. While it’s not a core holding and a core focus of the company, it is part of the company,” he said.
Asked about potentially adding more cable assets, Sook said that would be unlikely, and he noted that cable has become a seller’s market in terms of M&A, making it a tricky proposition to unload a network.
“We like the local piece of the media ecosystem,” he said. “The national piece has a lot more headwinds, we think, whether it’s distribution or audience. The primary focus of the company will still be local television but that doesn’t mean that we are going to phone it in. We are going to operate [WGN America] aggressively until or unless somebody makes us an offer we can’t refuse.”
WGN America has gone through a dramatic evolution over the past five years. Former Tribune Media CEO Peter Liguori, who came to the company after helping launch FX and forging its original programming strategy, rebranded WGN America in 2014 and stocked it with original shows like Underground. The period drama wowed critics and served as a standard-bearer for the network, even screening at the White House toward the end of President Barack Obama’s second term.
As the climate shifted over the middle years of this decade, with cord-cutting and streaming competition taking a toll, Tribune was left with a pricey programming operation battling to stand out in a crowded field. After Liguori left Tribune in 2017 when it was about to be absorbed by a different local-broadcast rival, Sinclair, WGNA pivoted to a lower-cost unscripted-heavy model. Underground was canceled after two seasons.
“I will compliment management,” Sook said on the conference call. “They’ve done a great job of turning it around over the past two years, from a money-losing asset to a nine-digit money-making asset now, in terms of EBITDA contribution.”
As to the 31% of Food Network, he said Nexstar would be “happy to continue” holding onto it since there is “no physical capital that is expended to collect that distribution every year.”