Nexstar Broadcasting Group announced on Friday, June 6 that it had a definitive agreement with Pluria Marshall Jr. and Marshall Broadcasting Group, a Black-owned media company, for the sale of three network affiliated TV stations in three markets for $58.5 million. The financing for MBG’s purchase will be guaranteed by Nexstar.
Perry A. Sook, Chairman, President and CEO of Nexstar Broadcasting Group, said, “We believe the proposed transaction announced today presents an ideal framework for introducing and incubating a new, minority-controlled entrant to broadcasting, and for bringing additional news, information and specialized programming to MBG’s markets at the earliest possible opportunity.”
Under the terms of the agreement MBG will acquire three full-powered, FOX affiliated stations, KMSS-TV (Shreveport, LA), KPEJ-TV (Odessa-Midland, TX) and KLJB-TV (Quad Cities, IA).
In addition to securing from Nexstar the purchase, MBG will also enter into agreements with Nexstar to provide sales, technical and administrative functions while MBG maintains control of the stations and programming.
According to a Nexstar press release on the sale, under the terms of the proposed services agreements, MBG will be entitled to 70% of the advertising revenue sold by Nexstar for the stations and will not provide for any bonus payments to Nexstar for achieving revenue goals. It will not be a fixed-fee payment; as total revenues increase, so does MBG’s share.
The terms and conditions reflect the FCC’s concerns when it voted to in March to close loopholes in Joint Sales Agreement. The practice of allowing JSAs, where the owner of one TV station was allowed to sell advertising for another station, led to stations being able to effectively operate as owners of multiple stations in a market.
Also, the deal comes at a time when minority ownership of broadcast properties has gone from 18, full-power commercial TV stations in 2006 to none today.
Marshall Broadcasting Group, Inc. is a newly formed minority owned media entity owned 100% by Pluria Marshall Jr. Marshall is currently the president and chief executive officer of Equal Access Media Inc., which owns several newspapers serving African-American and minority communities, including The Texas Freeman and Houston Informer Newspapers, The Los Angeles Wave Newspaper Group, and the Los Angeles Independent Publications Group.
“We are delighted to have the support of Nexstar to promote diversity of media ownership assets among minority operators,” said Pluria Marshall. “Over the last 30 years, I’ve devoted significant time and effort in seeking to purchase television and radio stations. The single key factor in each unsuccessful opportunity has been the inability to access the funding necessary for the purchase.
“With Nexstar’s support and commitment to guarantee financing for the Shreveport, Odessa-Midland and Quad Cities station purchases, we believe we are establishing a new paradigm that addresses recent proposed FCC regulation changes while expanding the opportunity for minority broadcasters to play a greater role in the U.S. broadcasting industry as owners and operators of television stations.”
MBG also intends to develop minority-oriented public affairs programming that will air on its stations and be syndicated to other television stations nationwide. In addition, Nexstar will add 13.5 hours of local news and public affairs programming on the stations it owns in Shreveport, Odessa-Midland and Quad Cities.
In commenting on the proposed sale between Nexstar and Marshall, the Executive Director of the National Association of Black Owned Broadcasters, Jim Winston, told Target Market News, “We have reviewed the application submitted by Marshall Broadcasting Group and Nexstar and are very pleased to see that the transaction appears to be the type of transaction NABOB was hoping to see as a result of the new JSA rule. It appears to be the kind of transaction that should receive a waiver of the rule.”
Winston added, “We still have some questions about the transaction, and we anticipate that the Commission will seek additional information form the parties about the transaction. We are optimistic that, as additional information is supplied to the Commission, NABOB will be able to wholeheartedly endorse this transaction. As described it represents the type of agreement that could be beneficial to increasing minority ownership of broadcast properties and create increased opportunities for minority-owned content producers and channels.”