Benchmark Comments On Fox Cancellation Of Nexstar

According to Benchmark, Nexstar Broadcasting Group NXST currently trades at 8x our 2011E EBITDA of $101 million, below the 10x-12x historical range but at a slight premium to other television broadcasting companies. Benchmark said that last Thursday, FOX Television Network announced plans to cancel its affiliate agreement with Nexstar's (NXST-Buy, PT $10) television station in Evansville Indiana, effective June 30, 2011, unless Nexstar agrees to return a greater share of the station's cable retransmission compensation to FOX. “In terms of revenue and cash flow, the Evansville station is one of Nexstar's smallest stations and the smallest of its fourteen Fox affiliates. We believe FOX's terms are significantly higher than those proposed to other broadcast providers and well outside the range of terms set by the other networks.” Nexstar Broadcasting Group closed on Friday at $7.15.