Nexstar Broadcasting has struck a deal to manage Four Points Media Group. Under the terms of the agreement, announced Monday (March 23), Nexstar will provide a full range of management services for the group's seven stations in four markets, including station operations, sales, promotion, programming, e-media and finance. The three-year management arrangement is effective March 20, 2009 and extends through March 31, 2010.
The deal represents a new revenue stream for Nexstar. In addition to an annual management fee of $2 million per year, Nexstar will be eligible for other incentive compensation based on the broadcast cash flow of the Four Points stations. If Four Points sell the stations during the three-year pact, Nexstar will receive a minimum compensation of $10 million.
"The agreement underscores Nexstar's commitment to and long-term track record of success developing new high-margin revenue streams to support our goal of creating long-term value for our shareholders. Managing the Four Points stations is an excellent complement to our existing station and e-media operations," said Perry Sook, chairman, president and CEO.
The four markets where Four Points operations stations, Salt Lake City, Providence, R.I., West Palm Beach, Fla. and Austin, Texas, do not geographically overlap with Nexstar's portfolio.
Backed by Cerberus Capital Management, Four Points Media was formed in 2007 when the investment firm purchased seven stations from CBS for $185 million.