NXST - Earnings call transcript Q2 2019 | Nexstar Media Group, Inc.

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Operator

Good day and welcome to Nexstar Media Group 2019 Second Quarter Earnings Call. Today's call is being recorded.

I would now like to turn the conference over to Joe Jaffoni, Investor Relations. Please go ahead sir.

Joe Jaffoni

Thank you, Ryan and we'll get to management's presentation and comments momentarily as well as your questions and answers, but first I'll review the Safe Harbor disclosure.

by this made include call comments statements. forward-looking and management conference during may Statements forward-looking its statements projections these based Nexstar on events. about current future and expectations

Forward-looking similar expressions. or followed guidance, preceded expects, statements the believes, or include words by could, anticipates, include information that by

contained Nexstar of statements XXXX. the these for statements, the Harbor Litigation the claims For Private of Securities protection Safe forward-looking in Act Reform

in impact broadcasting, stations the programming industry television of local and areas; to regulatory markets in the in in reductions; of changes regional debt; not fluctuations Nexstar Nexstar; and is from delayed in television the consummating the events. the net statements operating proposed risks on contained required by world including today's Tribune to between is national pricing ultimate of cost announced Tribune close; uncertainties and are and forward-looking volatility news for among the the developments, performance of various effect things or closing approval subject involve in are the conditioned successful factors call that conditions technological costs; government operating service that Media expenses not future timing ability and transaction may of The other be revenue and others that based and subject proposed the refinance of and not be outcome timing economies; and national benefits satisfied major transaction the important integration served risks financial anticipated; obtained and not Nexstar's delay to advertising; thereof; and regulatory competition to transaction are achievement of, transaction and synergies may the proposed consolidation, the transaction; Media concerning risks change and obtained cash potential conditions future the flow is in of outstanding including and including in any regulation may broadcast changes actions

result by information, forward-looking required events, no otherwise. undertakes update or revise of new law, to or any obligation a future Nexstar Unless as whether statements

In forward-looking occur. assumptions, the light discussed communication of these risks in uncertainties may this and not events

not call. of these statements as forward-looking reliance conference date today's of only place should the You which undue on speak

For more please expectations and the see affect Commission. factors filings that could on information these Securities our Exchange with

With -- is over patience you call to my to the Chairman ahead. thank that your President go Nexstar's host and Perry for CEO, it your turn and Perry, now please Sook. pleasure

Perry Sook

review announced growth transaction. quarter everyone. and to you the Thank cash Today results. flow and you, we'll other for us and Joseph returns, our financings ongoing outlook well joining as operating good for and towards transaction, the all upside progress XXXX completing ongoing Nexstar's presented leverage Thank to the we've morning by the quarter shareholder second the today review drive initiatives reduction, most as notably Tribune as well free made the our divestitures as

Carter As here morning. always, this Officer, call me the on Chief Financial our with Tom is

Full one-time on year XXXX plan. remain expectations operating expenses before

on the represents XXXX Nexstar next front consent current focus us. with the the significant renewals Media cycle transaction completion our we start upcoming of growth significant XXXX election the before number XXXX and cycle shared the balance for Tribune of for we've in As retransmission including of as accretive preparations the highly our operations of our agreement

double-digit bringing television distribution the growth. current to operations, MVPD advertising stations progress and resulting to revenue vMVPD in and parity our local respect our leading results spot second value quarter on viewership bundles in With further reflect of trends improving

period. compared in onetime related ex-political net second X.X% period. repack quarter of factors in spectrum by the Nexstar's These offset revenue were payment the our payment political was as revenue to year prior $XX well advertising cyclical as a All million absence up year-ago approximately a told other to

and expenditures. quarter second free adjusted capital by were of as well cash transaction cash before was flow tax in expectations as costs payments operating our broadcast timing impacted and while the transaction EBITDA line one-time flow the with expenses XXXX Overall, cash

year unchanged. cash remain taxes full CapEx for budgets XXXX and Our

situation the year XXXX/XXXX our per flow $XXX over of and at self-resolve approximately remains or million Nexstar's stand-alone the this as So, balance result for operations will legacy unchanged guidance cash a share. free $XX.XX

DOJ we approval received week they Circuit conditional filed with settlement Last the Court. from through D.C. the a

this have Court's in a DOJ approval, divestitures settlement, we which SEC we will to year, the announced approval the position close Tribune we transaction. of the earlier With which includes be once the

loan $X.X and billion we our A combined complete billion of to notes the July components necessary of all comprise loan term transaction. facilities priced million $X.X and the in A when primary issued senior During quarter, $XXX the the financing term second with earlier

compliance ownership the television thereby to a forma addition, during our entered into quarter to broadcaster an City Broadcasting completing two sell with In and local plan Circle FCC rules. in stations we agreement national minority-led and putting pro Indianapolis entity the divestiture

In the synergies aggregate of prior divestitures the of Tribune the projections. total billion. markets gross proposed less initial XX% our exceed of we in estimate our stations than XX flow will proceeds a the the divest The cash and with elimination transaction, for $X.XX gross total station concurrent divested by of in from closing inclusive is approximately certain while of XX proceeds

terms All and financings our attractive blended below at forecasts. internal rates of completed were the

go of expectations interest those cap of of some through run our the on the items an on quarterly including now and you highlights structure, our update this after for which I'll through numbers other XXXX call. Tom will

revenues. X% by $X.X offset X.X% Excluding reflecting quarter partially increase second in a political X.X% decline total year-over-year revenue by local spot or ad television decreased national in million

growth and quarter quarter improved first both XXXX revenue with spot sequential television over of trends quarterly in the levels and spot advertising X%, Overall national local meaningfully second respectively. X%

we versus non-political to in period. comparable revenue expect advertising continue For the full XXXX single-digit low XXXX year, television the growth

revenue local ad revenue sales and initiatives top over rise with year. our XX% television business In continue X million overall flat QX of levels XXXX new-to-television $XX.X XX healthy of were was to to a QX categories generate prior of our core new which the advertising up

million of X.X% net levels reflects prior accounted the compared revenue and $XXX.X mix. and the both net quarter in that period political fee and shift lower period advertising the XXXX of second revenue of the ongoing retransmission of collectively rose Combined XX.X% quarter second to and the for of XX.X% current digital revenue over media in revenue year our evolution

the media million offcycle for comparison way retransmission XX.X% digital our in combined quarter of $XXX.X By second XXXX, and of last revenue. revenue and fee was net QX year accounted

streams by basis on So combined we've two the over revenue XX% a last grown years. these

largely year or distribution of the growing levels, agreements increased recent prior OTT approximately with renewals XX.X% constant. distribution over and period million reflecting Second quarter retransmission which fee revenue agreements MVPDs, subscriber from $XX overall remained contributions

digital of in platform revenue demand $X.X the quarter second to half customer million declined XX.X% changes we or first continue side as experience the buying Total XXXX. approximately impacted select that marketplace

We expect we to these trends market improve to these cycle as through continue changes.

Importantly, Nexstar's a at second a our second business also mid services advertising quarter quarter. percentage single-digit agency grew mid-teens achieved digital revenue digital growth local and over XXXX

local XXX our better our the and leverage have as to the benefited upside Our digital we Masters, across again execute content from packages Indy we demonstrating for we did custom here more in that premium local the NFL our Draft local QX on operations. digital strategies businesses

Moving transaction, close to track for Tribune updates a this which remains on timeline on now with the a few on quarter. additional

from gross in billion of divestitures initial station earlier excess As our I $X.XX $X mentioned of of announced the estimate proceeds the billion. is

flow blended cash approximately the XX.X these of the average broadcast of addition, be times In divested multiple for two-year stations average the to all amounts to stations.

a As our be borrowings result, anticipated at leverage will both and lower closing. than

looking opening at times. leverage transaction net the the that are below will X times. was that And the we guidance know public completed given closing approximately last leverage X.X be Our of we financing, at

agreements Tribune mentioned all of of necessary the the achieve and to to the from and including conditions in all satisfied entering regulatory completed Tribune place the approval transaction approvals necessary have into and to all divest Nexstar we stations putting compliance financing. ownership securing and planned shareholders steps before agreement other finalize merger of the

court are quarter. settlement With the last expect conditions close once in approval to we and continue DOJ's will FCC we closing again other current DOJ transaction conditional the certain of and approval that week, now customary for and waiting this approval the

We have transaction brings Tribune that the for to shareholders. the Nexstar's value high expectations

value our portfolio diversified past successfully completed and we've Over and years scale, three highly integrated to enabled from ecosystem. growing shareholders dozen our us XX for generated and remain technology the have today's increased which media in transactions, competitive

our Tribune transaction. best criteria From will our transaction shareholder value. as the increasing reflects expanding financial but with all accretion progress The our by further to our only goal standpoint towards and our of shareholders, position competitive of strategic of Tribune ongoing of biggest not the ultimately consistency operating improving our and driving flexibility be benefits M&A marks the scale, it strategically base transaction to realize our

the the managing markets With and management and we acquisition long-term team, our structure shareholders. most focused Nexstar, the represents discipline the proven long-term for industry's Media a approach of of operating serve of tremendous capital, cost to our and and near Tribune opportunity record our capital maintaining

return our structure our second value million which through With opportunities reducing in dividend. returning by to of shareholder through we $XXX our cash and reduction capital to and the enhance $XX our our active initiatives, cash approximately and included management free flow, acted shareholders quarter million debt of several strong capital leverage approximately on quarterly

from from than ended net giving a we by operations cash expect XX and be incurrence of after that less approximately expanded reducing debt, see allocated synergies, to deleveraging will end June four period Through expenses to transaction decline leverage free to cash to the flow expected the we of our path generated our outstanding operations rapid Tribune we've divestiture Nexstar's first total times year effect clear something the continue the soon to and Notably, with of proceeds, XXXX. $XXX base of the to million transaction, the debt. six-month the

for turn said, financials. over now all a our Tom that review With Tom? to let of Carter the me call

Tom Carter

with our provide of start Thanks current capital and Perry. review balance I'll income an I'll points on structure everybody. which update after Good statement data, and Nexstar's of a sheet morning QX guidance. some

down net this by political overall activity driven really return during note, as as revenue X.X%, quarter mentioned station Perry not there. same will a in the acquisition year actual years year the of affect the As in prior does just lack prior results materially approximate revenue results and results was

up million from mentioned up $XX the being as to really down approximately was national political the as which The by was Perry revenue mentioned $XXX.X before driven was with spot net fee retransmission down. as $X expected. and I revenue And which local revenue was revenue overall XX.X% X% during for being Total decreased quarter. increase year, to million revenue million X.X% the

X% of over continue revenue improvement basis quarter growth with first second and quarter national a respectively. and to Overall XXXX X%, spot the spot advertising levels show quarterly on revenue trends local sequential

advertising non-television in growth million, revenue to quarter Second million revenue. rise which $XXX the $XXX.X partially in offset retransmission fee by was XX.X% to reflects reduction of X.X% million, $X.X digital

on stated in digital end the certain marginally the of our quarter's and in we top marketplace deemphasis be line growth select to impacted addition to first business profitable lines impacted call, of near-term we anticipate XXXX demand of due platform last early that in at As type non-profitable and in XXXX buying XXXX. in the half of changes would customer

core second Nexstar's levels. a our is as agency which growth business, quarter year-over-year second local meaning websites advertising XX% Perry, quarter digital increased achieved hyperlocal revenue also XXXX services and a over X% digital business, our mentioned

improvement expect the strength this success of in we the initiatives, early digital half in sales in revenue of second and continued XXXX. our believe We to trend see digital the marketing

up direct fixed expenses station Same X%, operating the X.X%. primarily increased expenses in excluding budgeted modest trade expense, net were affiliation a network approximately programming of station increases quarter expenses expense. Second reflecting

$X.X stock-based SG&A expense of Tribune. in the of expense relatively which compared Second compensation $X.X costs included period, while million, to prior the with of level at $XX.X our million and quarter station corporate onetime flat transaction line year to was was relating expectations million

recurring the onetime and transaction expenses consistent with for quarter. second comp, Excluding guidance expenses declined was corporate stock our slightly, which

$XX stock to QX the quarter project the cash on comp overhead third of to stand-alone Nexstar exclusive approximately be and XXXX, Looking transaction of again million, costs. levels to similar corporate we basis, Tribune-related a ahead recurring

likelihood Non-cash year, professional expenses compensation incentive cannot similar fees timing $XX for is of quarter the based issuance million year. new projected the primarily the that equity prior be Cash approximately the quarter variable late to of last to the million the for closing awards for potential services and are and reflecting transaction the severance capitalized be Tribune. on $XX and

X.XX the leverage Turning was June the And first of end end X.XX key was I'll to compares the a the at a this Total QX at key at sheet, Covenant of of it of X.XX -- end X.XX to X.XX of and balance covenant items which review the X.XX XXXX. of at leverage QX the compares couple to and again, XXXX. times X.XX. versus relates XX, QX, as XXXX. lien to end

So perspective. have overall our deleveraging paid initiatives you handsome can leverage an see from dividends

million funded million growing free payments approximately June through to further dividend compared second at our which $XX capital actions closed debt X/XX/XXXX the in January leverage of reduced XX and million debt the reduction. amounted cash the million. $XXX quarter, in $XXX Net approximately $X.XX we when in take to and $X.X value the in amounted to we and initiatives, aforementioned transaction. In funded flow at XXXX debt to applying shareholder MEG of billion billion We our remain to committed to $X.X by return total $XXX including reduction billion enhance quarter, the during

repaid quarter total bringing seven to debt approximately for term in on reduction $XXX early million first we -- an the additional funded loan our $XX end, balance months million. Subsequent funded July, to

$XX with XQ interest cash rate of quarter $XX compared that expense Second XXXX. a million of as interest million interest as to to favorable environment. reduction million, expense million total is to year's Obviously $XX in prior of this compared debt in aforementioned the reflective period $XX well amounted

We Nexstar's be acquisition paid expense interest escrow expect approximately commitment fees interest exclusive QX $XX in XXXX. of funds million on any of and cash to

while CapEx taxes $XX $XX CapEx fully the and million in operating reimbursable from we were quarter totaled digital totaled which repack Second operating due Spectrum is million, million. funds government believe course. cash $XX station

$XX.X QX Overall, tax line EBITDA by was transaction of cash It cash for and the are year-to-date adjusted were is track that than flow our year. free were on cash XXXX impacted forecasted million second our payments, million approximately with to quarter note three-month expenses flow broadcast slightly of the cash before expectations the of period. with higher which operating onetime expectations, timing in our for while important taxes $XXX

$XX.X our the First of million, was consistent expectations excluding CapEx million. half aforementioned $XX costs approximately year repack reimbursable for the with

or unchanged $XX repack our cash flow also legacy to XXXX, QX As are CapEx again approximately is free guidance cash million, third $XX a estimated a $XXX operations roughly while for XXXX be quarter Nexstar's taxes steady-state million at result, absent million. approximately $XX.XX remains share. CapEx

acquisition notes fortunate of to in of As billion it A and Tribune opportunistic X.XXX% leverage June million markets secured loan funding priced and term completed of loan July financed are relates term tapping our loan $XXX $X.XX pending our Media, in and our $X.X senior and facilities. we and billion the B and offering the of

penalties. less market This no of brings high-yield we advantage been favorable interest in the a financing to the allows rates environment having fully Together rate addition has historically Nexstar's structure than the for bond addressed prepayment the and transaction. to market take secured loan have volatile financing, and high-yield than planned lower

proper flexibility. balance weighted the capital of fixed and refinancing average cost and prepayment structure attractive of rate Our and weighs capital and floating

profile significant we maturity well until we point XXXX addition, maturities a have towards reduction. substantial no will with In headway which debt have significant expect we at made staggered

leverage X.X the above times of last the our updated in synergies in a and Reflecting times ad significant close be deal XXXX. leverage for XXXX, covenant expectations to spend approximately structure year decreasing for by our a total X continued $XXX soon transaction capital assumed million with our guidance year-end political one at to

color metrics given that transaction We but these will expectation will improve closes, give once updated this more on information. our the is

management's approximately for million free $XXX delever we to higher pro flow forma ability operations for than combined record cash on Nexstar's XX% our free the confident which is of generation, focus annual free stand-alone relates it flow the remain As to flow cash in projections. cash

flow we closing. be synergies, divestiture Perry substantial cash -- at from the results, recent there to expect As to leverage the upside mentioned free and proceeds identified good lower-than-anticipated our given operating results the

guidance continue at our to sometime quarter. to expect be time which third is closing intent the of Our increase in to the we

our In capital communities. is synergy service realization, including local to structure Nexstar operations, well and functions summary executing all integration,

these growth, well driven results. in have and our disciplines areas as visibility to consistency significant Our as

the With That continue remarks continued to path we shareholder from the enhancement long-term clear results of our back and financial forged closing for and we turn it before acquisition concludes and the to a value to value. Q&A. I'll expect Tribune, for derive believe we our accretive of some near have financial for review pending call Perry over

Perry Sook

flow in cash growing acquired attractive results prepared the is our stations With viewers improving operating Tribune enhancing accretive significant to and borrowings Nexstar success complete extracting a highly of Media. weighted of Thanks average Tom. integrating while record service and synergies cost long-term advertisers, to fully free and and and of acquisition

past combination history our transactions with to in of operating confident developed As deliver ability given in on targets. success and our management our current comprehensive of the integration outperforming we remain plan value we've our and disciplines a synergy compelling this our

combined annual of cash and leverage flexibility continue the weighted will capital returning with to employees, capital to us with strong business our our provide shareholders. allocation meaningfully while of balance and attractive terms our substantial and cost flow in financial investing In free reducing sheet capital our average

success to organization-wide well users and been growth. for as and for local unparalleled marketing our advertising and Nexstar's our results content fundamental viewers partners as commitment has to excellence our

value. reduction of cash election, and cycle continued on enhancement Nexstar free near distribution With the return with renewal a and cycle leverage and reach for and in diversity the increase current large has between delivering upcoming up in the political XXXX XXXX flow our the now pending of presidential to long-term shareholder our number excellent the geographic targets year-end visibility the audience contracts and and of

you us for joining all today. With that thank I'd like to

your to interest. specific the Operator? of open call let's now for areas So address Q&A

Operator

Dan Please first from We'll take [Operator question with Benchmark our Kurnos go Instructions] ahead. Company.

Dan Kurnos

cash Hey is and good Yes, thing the good upside the of people's the blackout. with morning. Tom, kind look mind obviously Perry only unfortunately on flow all free news AT&T

So want itself impact be this? to if of How that kind maybe and you will any that potential of you resolves you short-term? a one there is whether over in playing Perry address if think the financial part Locast think time

Perry Sook

we to and proposals continued Well, and DirecTV, AT&T trade respect to with to negotiate.

going we're do to that publicly. However, not

any leave just I'll not Locast So is really playing these at negotiations. in it that. factor

the of and you and Aereo that end With week the that I the up and beginning have suit same FilmOn see in end it same last the dustbin tried of network will before. think others trick will the Locast

think at progress I announce So and to negotiations, our obviously, we'll have be tell something that we in to make sure point, you. continue to when AT&T we

Dan Kurnos

And of you I'm flattish. in then means subs, Perry, say constant. that just terms did assuming

or of any outlook forward retrans in Just net be going terms helpful? visibility would to

Tom Carter

continued less to question looked Dan your subscriber subscribers, some MVPD, specific subscribers regard terms number in but than that's the in overall traditional paid basically reduction Obviously, are and OTT down in we X.X% we of are paid XX/XX/XXXX, this subscribers. at up base product of paid with flat. actually about X.X% driven are a on and total we've year-to-date, growth and since by

Dan Kurnos

it. I'm that just with assuming backdrop? And retrans Tom net Got outlook the on change any not

Tom Carter

pleased don't near-term be of in outstanding. the and for it all stations, renewals for but as will this -- some and and Obviously, a renewal we're No. material affect get came think to that Nexstar puts to got legacy pending Nexstar and earlier stations announced we week with we've takes CBS we The I deals obviously, believe announced expected. we it it,

Dan Kurnos

guys. Thanks Prefect.

Operator

Thank you.

with from ISI. We our question David next will Please Joyce take Evercore

David Joyce

crosscurrents advertising of it on negotiations some color could gave your some And you Or really was on the there course had that you anything more in did Appreciate businesses decelerated in Thanks. your year that the if shut you much digital the the you. playing more with delve some us -- digital advertising, your there upside different overall earlier that of this of and given Thank advertisers? a was where into sectors? some how what's of during quarter? second digital role is down terms but

Perry Sook

our quarter third automotive actually locally and say the sequential would of is second X%, strengthened we improvement kind with category from local can quarter. in strength in quarter-over-quarter. automotive X national teams was see that that our dealers. that development I which reported advertisers, quarter work a versus Well, continuing local really Tier We are of The the first into coming X%

July revenue core books performed quarter in numbers posted than revenue this and digital the that revenue our book morning. better second we was and just

roughly digital local equal. our say as in got marketplace. forces We two the Our reported digital One heard sales up by that sites our percentages revenue has you revenue local components double-digit by it obviously is earlier our generated is Tom to there.

due we of in and dynamics businesses the in cycling has here our but the were we revenue for the of changes supply-side quarter that the continuing were year. exiting been Obviously, to second performed local some back national well than half decline through again market our in for revenue July digital the better posted some as through digital that unprofitable as results balance see year, the we and that

David Joyce

how standardizing the And role playing Initiative progress that a the role of yet? on on TIP a please? much What's programmatic is

Perry Sook

primarily of Well, say the probably that's implement I us. and it more demand had being quarter is reconciliation back-office forward for in kind thing would a had are the while. and is through and is of the that, that interesting a log people in adopted. interface now piece beginning but we've standards, momentum TIP the design event advertisers than of watershed second area for This the actually we And to that

to and for elements practices attractive we save billing make streamline and goods implement agency's to log you obviously which make that us of the more counterparties reconciliation of on right sell which are expect automate money with. business focused would But efforts more process. other buy primarily now, as lines we And our for to will trying code the do if continue

David Joyce

much. very you Thank Great.

Operator

you. Thank

Please FBR. will We next from take our B. question go with ahead. Silver Riley Zack

Zack Silver

question. great. Okay, taking Thanks for

updated levels still over share remaining on affiliates? you the us XX%? economic then how at some So over give around could expect of post thoughts and see do the renewal, guys And net the evolving retrans between retrans time margins you networks you CBS

Tom Carter

and Sure. the I'll get yes, Tribune question. balance of of for be of excess the re-evaluate in the take continues of talk retrans that margins net And year And that and running indication this math we're the first XX% our to for half have I next of year. that in able term And future that, to XX%. yes, kind the hold properties, a I'll we of about we'll trends. Perry longer but longer-term than excess for once think let immediate

Perry Sook

Yeah, the I MVPDs the networks are and asking turn and in for mean from negotiating listen we asking than expense from long-term revenue more greater us and is for more the the line. line

actually they if increase tandem move in So our margins. we

outlook to dynamic the but is outlook deals in change we in out as future, says, we normal years Tom just foreseeable at looking with cadence So probably no or future no with the the ecosystem. three and the post see change our and networks foreseeable see MVPDs transaction for Tribune the that of

Zack Silver

guidance second Okay. And in guess the where quarter has bit little the you of a in row in guys this informal Great. the a then come calls. provide light your is that I core

wondering less visibility Just dynamics inter-quarter? And you say causing maybe can that? are what what about

Perry Sook

don't of a various think war can takes we not and total the it revenue at the obviously weigh, changes. coming kind plugging too revenue less of is it's along. we lines say single-digit business, kind Well, got but of that and and see tariffs It's in just the a world that any forecast that not I to robust our of year expected, cold. that as other than puts X% for behind trade to a X.X% again, I had what we range does I within think Goldilocks We've kind low was our down us than world control, hot, would It's view we and it's of spot too And prior things but national of right. bandwidth.

Tom Carter

And I will that. to just add

faster I quick more think change. perspective. The lot to being dollar dollars we obviously from our the lot -- stickier view perspective, a our local as and are a national money from

think So Difficulty] of I we would national the [Technical end environment the towards that I the say quarter. ad second and saw

Zack Silver

Tom. great. Perry you, and Thank Okay,

Operator

Thank you.

Research. We will ahead. Ryvicker take Wolfe our with next go Please Marci from question

Marci Ryvicker

Thanks. reasons that to public, is I appreciate AT&T a you the cash negotiate while. you seem to reaffirmed on flow why dark guide AT&T think for and is doesn't you're I your not you your stock since in have of the one market down the believe with but wanting free fact

you retransmission guide? are specifically like talk can for down cash reverse your so enough, then payments, down the you QX this flow revenue, sequential assume can point? historically So hit assuming gotten to retroactive guide? And a you free you've for does I from step expect Anything consent go we or the QX should at

Tom Carter

retroactive is based or I know point, it on at Marci, said whether We my in AT&T guidance our outcome is be a as comments, otherwise. with steady-state. don't what the of this negotiation any

When particular that with are based guidance way we other. I sticking of our have update the one we information what we concrete accordingly. have we game be guidance win are we the have more concrete updating going will think, until so going not to or play we and we may a And that any have knowledge because on

Marci Ryvicker

And then, their just Tribune can saying a press report relates might from divestiture that. the as to or comment if station on it acquire comment another that Indianapolis FCC either waiver on you you a

Perry Sook

in for in waiver, place anything stations to a that There that of waiver Indianapolis owned would there be they there fully along to a course, is so we with expect need the reauthorization in I due which talk think two is that Well, own don't there. there. Tribune see

free to that should we guidance Marci in have I internal give know you get this of excess that know our we that And targets numbers -- flow just cash you. would add to are our

flow we So a to that retroactive we will we that's or the cash free comment will that but put deliver we are what of guide the deal are and be sentence AT&T just and going not, will confident say. whether at on we will not our period end

Marci Ryvicker

you. Thank Okay.

Operator

Thank you.

Kyle next take our will Incorporated. from Stephens Evans We with question

Kyle Evans

from earlier the questions some just those bit got that and issues? growth cycle some maybe more wanted piece to Which the specific. business DSP SSP, I've quarter Thanks. digital Hi. follow-ons. to or mean you that national of us then expect formally be And I does a declines? of little slower follow do And in on just

Perry Sook

year, as would situation in -- through through businesses, somewhat Well, than I for the the the in bottom move is we've as now. results the produce I of that the us unprofitable what but balance we of lapping would changes that but will of resolving terms self of this think doing and year, terms better revolving are be seen it those say marketplace we

So through would balance of the improvement year. incremental expect the I

Kyle Evans

correct, is Is Cox from AT&T out pulled I blacked ads you when with memory my that? guys doing they system. think, were If last the

Perry Sook

but is answer going short I'm not comment that. to The beyond no,

Kyle Evans

Fair a two auto then moving years. maybe know last industry. I outlook of it's And been for kind the longer-term a target enough. the for

Perry Sook

I not the there that's probably that business. know, profitability local XX we pressure speculate, ago. think than our less primary is I can there years dealerships in There guess, business. listen You but the all was automotive cost is in

a pressure. So I think that is

auto think of dealers' are folks attentions. lot a there I competing for

is your to be and no dealers. the our listen just that only is websites And reason dealers money local with. is duplication rest help drive that image, an stick intender for with your for say and and to brand, as there paying there can six but people having we resonance with pay you one job to go auto auto because into you one back site do that's intender Our is some the we can to example for television put local with of our virtual not

every business is years five fewer dealers. staffs our people on we think as prognostications. his car of the in than market. of that imagine in over going That in And job the seeing partner purveyor internal being so that do now to numbers. itself I to are on we know better cars rather to the time, auto than from her you're We see have the to and can't think auto specialist as internally designated also do I calling I but an will everybody's you a it fewer the a drivers much that road job results our I about despite a And or are job and today manifest think is sales our

think -- it recent has a -- only steady-state we growing been I time when comps. recession a has it It's business. So it when Is and it after against business? easy up the been double-digit the were down it's a dropped

our improving don't that absent that of affect extraneous end is credit business and on basis. year vehicles automotive in material price tariffs we but And again or of shocks would way. see the -- a some changing a sequential the or through the So

Kyle Evans

Thank you so much. Great.

Operator

our Thank you. [Operator take Research. next go from with question We'll ahead. Instructions] Jim Goss Barrington Please

Jim Goss

made? for portfolios, Thanks. mix was optimal of your different mix from I you? Or for And Tribune wondering standpoint. an adjusted I have you've a have network if sits is those sort shift with networks some of your the there you that of divestitures would since well if wonder that with

Perry Sook

local brand that, national important for in Tribune the said of not forma presence, be would network pro having the say transaction we more distribution to of local But the affiliation. partner and station reach. if terms the news for to is bit Sure. every CBS a will I its important continue success as largest

We in will distribution as as of -- CW. the terms largest partner for the become FOX well national reach partner

three NBC We will with ABC. be and number number two with

with it's your networks. I relationships in important we to be think I the will important and one network So we every -- have that have of think standing

Jim Goss

once sit area? never that really the of -- cap history of is XX% particular keeping that since change done a portfolio you within the deal within be And station trade up assuming no existing suggests would Okay. of another your what yours still

Tom Carter

up, don't sure not trade when by mean I -- know you that. you said I'm Jim, what sorry I'm

Jim Goss

station to portfolio that position that you Yeah. ability attractive. to an if for either extent you're to mean more would I have be get to like without room reach? mix a would this something network there divest would NBC or something related the to change else trying something that XX% adjust your something Is bigger looking else for to the you make probably or to to be

Tom Carter

Sure. process make in. more in to things was divestiture than opportunities sell. were we to Obviously, the had There interest there we our -- that is stations material think can underperform there that we always optimize stations improvements in

some be closed and post be obviously enhancements see just there are about as may to at chips will played you that's And those try but It's four get tab think we've got So get that Tribune look here. and value of it. continued well, I to available closing. yes sufficient or three, us there five integrate then and I then think

Perry Sook

would add to that. Jim just I

derive base that streams. than multiple any to be our station television would market spread goal our are economic from across that and an more cost revenue think fixed one in and benefit we I

we other close any cap it's time affiliate we swapping transaction, it's get markets have to national UHF or markets. So and Big to CW with whether ownership affiliate, close the we will exit to very whether a two When the discount. fairly that, do on opportunity whether the pairing in be close four

of not room markets we just that be of opportunistic piece is M&A. se, again, acquisition we exiting cap there with like So by can cap double but room per the the lot others. a are you And create and with up will

Jim Goss

debt Okay. And as you in would leverage in capital of are be rating down shift are should any some get thinking lower? there improvement lastly, times related you there four a your And priorities you sort is expect that goals or met? area, as to allocation

Tom Carter

a pretty the repayment, transaction. course there eight that last Tribune into shift obviously over been the allocation but since of on Well to entered the we've is we in months, debt heavy capital

and our allocation perspective, debt way flow. to is are goal the only best be bound debt. We reducing and opportunistic that's a exclusively we return but to capital clearly, and to of We is to the deleverage cash free not of not pay from effect shareholder that down are can

that's absent to the right back some buy should but have So coming now. of not there I think opportunity it you are majority could markets we stock expect where we where in an dislocations

Jim Goss

much. very Okay. Thank you

Operator

Thank you.

question will We Clay Please from with Bank. next ahead. Griffin go Deutsche our take

Clay Griffin

your start to Perry, could coming potential we thoughts the from I’d love initial there. morning. get on good and Hi House efforts Eshoo, legislation maybe Scalise legislative --

Perry Sook

there were The think legislation. Scalise, on I other no that cosigners Eshoo notably

a So very it's of out long the of I -- path. making prospect are committee think it

would our take that quick on be So that.

Clay Griffin

guess, at perspective volume your disputes does of of frequency growing across on then fixed great. or really how partners terms I the the impact an looking variable in Okay, side? industry maybe from on the just just and agreements reverse of that network the both affiliation have you versus And duration are approaching

Perry Sook

short is in look of question short-term, -- tissue all disputes is you among I The not. at encourage to to couple these most probably disputes there comes at to down answer of connected and a common would these least the denominators. your or of it

issue. think I there industry an so, don't is And

Look we're being being the networks aggressive are being aggressive. everybody is aggressive,

Smith of our discussions also kind is Gordon is when there to reauthorization maneuver a the year. I called session will trade think association, political this in So be of in that Congress create of this stellar head later had the noise back front

it we'll in is to There could and for that the of and our negotiation environment in we’ll make of that we’re that. And again giving current good element its shareholders time details this negotiating be just deal continue work not public that will or an and theater tell. company at leave in constructively but a to public

Clay Griffin

about can of product content? upcoming your quick Okay. NBC's one me. us tell What terms integration for streaming Maybe just one of you in

Perry Sook

We yet. about Don't know. know don't it enough

terms so have detail details the there would the CBS streaming it All was told the local been in affiliate involvement a with of component, we but probably that were look like bodies. our shared not of affiliation And -- at meeting Access a that where lot in

So we all tuned. stay I guess will to have

Clay Griffin

Okay. Thanks.

Operator

you. Thank

Huber next We will go Please Craig Research our take Partners. Huber question with ahead. from

Craig Huber

so what's you. your your hear the now? guys XXX are what's from to sense given economy U.S. the you war, around commentary. trade you given Perry, from please? could hearing out there, on what's your few tariffs a we if talk when A large the sense If Great, you could markets advertisers your sense are I questions. with in thank or various start the the macro you U.S. What on ground

Perry Sook

you will generally for a told at recession that all. been the and go the tell I think for that where farmers because a don't into I tariffs necessary don't of get negotiation. are the the start. just to I think people their Midwest have the advertisers Well, sense trade wringing optimistic. when now kind of of eat years it Midwest waiting just element people to hands that couple that upper you our are are from I

their is on expansion is people less don't truck going It but it's I Goldilocks as we you heart would we've not sleeve their Are that they they the tell are whatever pretty are and but tell probably the muted. think to I buying I one farmers right? also and or one that fewer can't earlier stoic -- you but post it wear Mid-westerns longest generally tractor most had said recession either, I or

is of and the cycle. growth reached a there the where a longer end is perhaps So of math so period time lower we business sustainable equation there for

the to incumbent ensure happen to think I forces extraneous in it system hard would almost -- just there a shock that election year. particularly combine an that find I an that forces. absent I it recession doesn't find absent that be would

not next are here of outlook we anticipating probably through year. at the least any economic the to end So real change

at and the what the XX affecting a lens get have see here see then election XXXX anything XX and we months. negative I point, think into that economy let's can or means we in past all this don't the hugely better but to and XXXX, XXXX next positive

Craig Huber

the number Thank had you than the, down you also think or ask want Tom, I ad said better for was second whole you And for was to Perry obviously July for that. July guess closed, quarter. it -- you revenue X% I you, said I your

similar infer Should three the expected? were I the months about, question? X%. June, will I the in other call to question worse thought that That's year-over-yea? month you came quarter, X% a engine pace you that's to maybe infer up talking is first up the than Should on X%, before flat My the ago quarter of obviously second be

Perry Sook

I think, all could you assume, that you said. of what

core if down X%. in second revenue the quarter So, was

We than better are that.

slightly enthusiastic too there. But assume get So -- to if to I a you flattish wouldn't wanted uppish.

saw a off decline demand we in particularly national, month. drop in yeah, then, June and of the think I And

point it pacing will so came stabilize. with worse back performed that And at But I then, think QX, expected. in this than we

Craig Huber

years. obviously an to year And XX% There's People question get sense, of have could. election coming ask if that been cap What if here? sort with your could I expecting here. a I regulation for up ownership changed is

or Do XX% to the at you all changed Thank ownership of FCC, who the is X.X going to at the you. question think to the day? end corollary it Do its jurisdiction cap? you get years? able Congress think the the has that next is actually And here in change be

Perry Sook

is your with whether question because, as the has FCC that's delegated the Well or whether debate statutory Washington the question it's is Congress. the it in to part open an authority of second -- authority

are that There it many different have views happen room, claiming people have in did when what there. to happened been on exactly the

camp FCC the that the of to cap. the a are authority change We statutory has

expect in. that, including not to change this I political I are different the position that. think Others would Fox our friends at taken ownership have a setting cap. you year I tell But national a would realities in

would But lobbying that, think in make harder also always it an even it. you of I are gets even though, not to are tell those for year it we we But election be changes. kinds surprised. anticipating I But

again is But just that man's one opinion.

to counting run are next we So the business, XX any not our the cap ownership months. on contemplating in or for change

Craig Huber

you very thank much. Great,

Operator

with question ahead. our next [Operator Davis Fargo. Please take go from Wells Instructions] We'll Hebert

Davis Hebert

Hi, in here. for squeezing me Thanks everyone.

closing Just think of for we the Tribune said, on, I one all for FCC question the the me waiting you essentially transaction, is are approval.

be that just want I quickly that here? approval, close, if correct? Thanks. should to And you you we Do that. order thereafter, do short anticipate to confirm pretty in get able

Perry Sook

Yes.

sign settlement with the things the DOJ. the settlement with get approved DOJ's the brought way that's DOJ. the suit that to settlement of We judge and they the The are for at waiting the

FCC the still we And transaction. And to the to has judge will has that the grant off a that, be that So, event. sign believe QX on order.

in confident very are We that.

Davis Hebert

you. great. Thank Okay,

Operator

Thank you. questions. It appears, no at this there are time

will back speakers. our I to conference So over the turn

Perry Sook

all we us you, expect forma much to our of We an all will update Tribune look communication guidance. you today. be cash of right, very joining you thank closing next would well, give the -- which And our All flow with the pro we acquisition. forward XXXX/XXXX for on free announce to to

again. good have day. a Thanks And

Operator

thank lines. gentlemen, great Please day. today's call. your have And joining for and conference a has you Ladies now disconnect concluded. call The

Nexstar Media (NXST) 7 Aug 192019 Q2 Earnings call transcript