DirecTV Carrier Dispute and Lack of Political Ads Delay Nexstar’s Q3 Results; The CW continues its march toward breakeven

Nexstar reported that third-quarter results were hurt by a traffic dispute with DirecTV and a cyclical lack of political advertising.

Total revenue fell 11% from the previous quarter to $1.1 billion and profit fell to 70 cents a share from $7.30. Both figures fell short of Wall Street analysts’ expectations.

Even excluding political spending, core TV ad revenue fell 2% to $391 million, with the company blaming “continued weakness in the advertising market, partially offset by the inclusion of The CW Network.”

Distribution revenue fell nearly 7% to $598 million, down 6.7% year over year. Nexstar blamed DirecTV’s outage, which lasted 76 days in the quarter, before the parties reached an agreement in September. An increase in sales results came from contract renewals with operators representing more than half of Nexstar’s subscriber base, based on what the company described as “extended terms and annual rate increases.”

The company took a 75% stake in The CW last year, promising to make it profitable by 2025. Quarterly results showed further progress in that effort, as the broadcast network’s losses narrowed to $60 million.

Nexstar paid nothing upfront for The CW, while former 50-50 partners Paramount and Warner Bros. Discovery each retained a 12.5% ​​stake in the network. Reduced debt and adopted a lower-cost production strategy in which unscripted programming, news and sports programs replaced the network’s long-running lineup of scripted dramas. In its quarterly report, Nexstar said The CW had $59 million in cash on its balance sheet as of Sept. 30 of the quarter.