Nexstar is still dark on internet streamer FuboTV; on Tuesday, the TV station group giant’s president and chief operating officer explained why.
“We are in a dispute with CBS right now over the Fubo situation,” Tom Carter said during a Morgan Stanley-hosted investor conference. “But keep in mind that virtual MVPDs contribute less than 10% of our distribution revenue and our distribution revenue is about half of our total revenue and Fubo is the smallest vMVPD we deal with. So we’re talking about a relatively minor amount of money, quite honestly, to both us and CBS. So it’s kind of easy to pick Fubo as a fight to have.”
Nexstar executive vice president and chief financial officer Lee Ann Gliha noted: “We view this as a CBS-only issues and it’s just driven by the specific issues that surround the CBS situation.”
In February, Nexstar, along with station groups Sinclair, Gray Television, E.W. Scripps Co., Tegna, Hearst Television and Cox, removed themselves from FuboTV in support of CBS Television Stations. The CBS Affiliate Board had rejected what was deemed a “below market” deal struck by CBS parent company Paramount Global with virtual MVPD Fubo, and these other station groups were following their lead in fighting against a precedent being set in virtual MVPD negotiations.
“The virtual MVPDs are a different negotiating cadence and schematic with regard to traditional MVPDs, in that, virtual MVPDs, the networks negotiate with the distributor and then pay the station a portion of the money that they collect from the networks,” Carter said. “In traditional MVPDs, we negotiate with the distributors and collect the revenue and then pay the networks. So the networks control that [vMVPD] discussion more. We would like to have something more approximating the traditional MVPD negotiating scheme, but that is contractually not ours, right now. But from the perspective of the overall ecosystem, it still remains healthy.”
Though some other station groups have caved and resumed service on Fubo, Nexstar is holding out, and Carter notes this is not the first time — and likely won’t be the last — it uses this negotiation tactic.
“Going dark on distributors is not a new thing in our business at all,” Carter said. “We did it for two weeks in the fourth quarter with Verizon. And if you want to go back in ancient history, in 2019, we were off the DirecTV for two-and-a-half months. So it’s part of the negotiating tactics, something that nobody wants to pull out and something that they don’t want to use, because it disrupts the consumer and that ultimately is bad for everybody, but it’s a tactic that issues from time to time when circumstances require.”
