NXST - Earnings call transcript Q3 2020 | Nexstar Media Group, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Nexstar Media Group Third Quarter 2020 Results 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.

Joseph Jaffoni

Thank you, Keith, and good morning, everyone. read into Harbor the to we'll and going right get call. just the language Safe then I'm All statements may and Securities conference statements call comments purposes Litigation made by than for XXXX. of management Reform statements Act historical the fact of be of forward-looking other deemed Private during this are call. these forward-looking from and those by to the uncertainties to that Nexstar cautions subject results materially that may made differ the during statements forward-looking statements risks cause actual reflected

uncertainties, or otherwise. that, and December my please any the over ahead. Nexstar's to additional Nexstar's details Sook. undertakes risks now forward-looking For conference With turn to for Securities ended these on whether no Report year pleasure go please revise Perry subsequent the your and update XX-K result CEO, statements, Chairman Nexstar XX, events see Form Exchange with on host, of Perry, Annual Nexstar and Commission. and to obligation public a the it's filings or future as new information, XXXX

Perry A. Sook

Thank you to all results. you, quarter third for everyone. and operating Thank morning, Nexstar's record us review joining and good Joseph, financial

our with ability the of to our Nexstar During we overcome the to challenges expectations. outstanding each all by third quarter for consensus record nicely quarter, delivered cash the manage to and thanks these operating profitability, continue presented teams the dynamically flow, adapt pandemic, growth. and most business third of continued exceeding revenue, net metrics,

morning. always, As here is me call Tom Carter the with on this

be new nation's CFO a and of replace subject team for of focus just Chief local the that leveraging in value leading enormous responsibilities a create shareholders. couple produce we the on the As of volumes our of weeks value to touch I'll on assumed a company optimally as more position content that the media continues minutes. President few and to eventually Officer will further we Operating additional as to Nexstar's ago, has Tom himself and announced recruiting

quarter repurchase completed additional share $XXX increasing million, to of approximately and that market combines efficiencies just capital now under authorization. content Nexstar repurchase results. capacity outstanding shareholders. operational financial by of digital flexibility company by and million we our In which progress deleveraging had time, the EBITDA reflecting to and XXX.X%, and growth, the that record further further our the capital opportunities as dividends. to net our more we expanded significant allowed terms our enhance reduction allows same we maturities. blended year-over-year also lowered restricted the flow to announced extending and the our strong for operational create return pedal in to activity with initiatives BCF, payments issues bond two $XXX cash this revenue Third with free We free share $XXX.X $XXX.X broadcasting us million returns respectively, and XXX.X% expanded added adjusted of these a cost growing net on and quarterly in capital flow We future flow million. generated through and benefit of two we our Nexstar to quarter, monetization and quarter model, noted positioning Throughout basis. the debt the made leverage while capital Nexstar the regard, This transactions cash increased an allocated for by the XXX.X%, lower increased XX.X%, repurchases authorization third of metal At cash an realignment metrics had the

new months as the television in on some we'll two NewsNationNow revenue as provide Xst, On approximately country, on September just and the operating color front, well operations the reaches successfully our NewsNation, million households those of newscast, WGN a launched we America's national mobile which the first sources accompanying primetime moment. across app, XX of

X.XX million terms focus have in onetime operations free net of will issued million $XXX.X enterprise-wide year million and QX strength $X.XX shares. year-to-date, and cash revenue strong outstanding fourth model our nearly high we of XXXX our repurchase finish business quarter, line. cash XX.X free QX reduced expectations With in approximately generated leverage XXXX $XXX enabled In for count every on to bring X.X flow Nexstar flow transaction shares and free cash primary Xs. in of to flow expenses. the net a in the approximately of months Reflecting in about The we million managing generated and shares before our share of for financial metric, the of to performance the first nine with us million dollar our

free XXXX return to reducing remaining our capital while per on select flow shareholders our about last result, leverage share to to share to $X.XX compared $XX.XX accretive the amounts million same share aggressively with per year-to-date a time authorization, Furthermore, opportunistic As cash acquisitions. plan at share per approximately and year. on continue we pursuing are with $XXX repurchase

projections. the total XXXX political new-to-television healthy a as Nexstar's resulted market a quarter, generate revenue QX, drove over from a third our back strong XX.X% Nexstar's in to increases consistent rise third internal in way second marking initiatives advertising XX.X% recovery teams categories new rise the of new-to-television of XX.X% sales we local million as sources spending our diversified the attracting $XX.X across in levels a generated continue revenue business. sales which and benefited period. to as our quarter, comparable Turning year-over-year exceeded by quarter television key the In industry-leading share total over spending in in rise same and business and scale, of in execution advertising well station revenue

initially spending, categories. year-over-year key to of advertisers we our pandemic modifying growth top saw third in generated the four quarter national their nine and rebounds the local in categories reacted by While we several as across

and in continuing quarter into We quarter quarter also core third to-date. improvements second fourth performance same the the our saw month-over-month the revenue station advertising from throughout

of advertising revenue core and $XXX.X political million. advertising of revenue Third quarter million $XXX.X television of million $XXX.X includes revenue

political for runoffs, potential revenue XX%. our us in additional Third projections candidates year Day action will full our with exceed quarter approximately $XXX by spending Election now for low the political committees and prior by range expectation million political net spending with the exceeded and and XXXX behind we

that we final our the Election exception continue see to pacing due fourth up in ahead to Day. of reflect will the the record five Looking improvements political October month-over-month quarter, of and results to with to our political core displacement weeks spending led data expected

quarter a highly in advertising is in pacing ad category the is as category, the wagering. We box The our largest food, station by core by auto, rebound up finished. across spending our resumption are most which from resurgence where encouraged big third in advertising complemented notably alcohol, spending retail footprint, category a attorneys, fast auto spending sports furniture and in big improvement, of well new home as significantly

incentive strategies, training, digital. have our performance support, broadcast and spend and both structures capture focused in ongoing sales very Our development proven effective in in in and education, business new (XX:XX:XX) ability to ad

our ever, to appetite engagement coverage. numbers. the Now informed statistics year everything stay latest more remain and viewers current continue Supreme show pandemic and Similarly, developments to political to television rely news consumers' over election the prior to nominations on for digital than XX% about Court increase significant a the from

in of in leading and on annually. over stations, Nexstar by national XXX,XXX newscast, NewsNation, X. America's deep our number WGN's and August XX number digital X now total With unique hours information, reach news users, market September Comscore. overall Nexstar's content terms properties and launched number successfully as measured ranked for In and local XX local NewsNation, of WGN – of produces national We primetime news,

newscast, in NewsNation's nightly XX NewsNationNow monetization are which of the goal to well now pleased an as In day with very team overall ability and another NewsNation We're app to the opportunity and the presenting creates as producers through true newscast unbiased the diversification. manner. live of and addition our hours to delivering a the content news revenue of stay for reporters online mobile product news

President is Our with NewsNationNow Michigan. Trump's cable the the ability passing, providers fact our passing incumbent to Justice by Ginsburg's Seaver, pitching diagnosis, that COVID great news compete break the and kidnap was to the plot app quickly governor first of Tom reflected the on the to news the of

improving attracting and digital we strong from for on-air leading are national on and three advertisers. the of offerings the Going interest nightly hour national awareness telecast focused forward,

As digital operations we digital month across and Nexstar's moment we of with a reach, last value into the ago, divisional the our to content, maximize national we whereby growth referenced usage announced company consumer as Nexstar broadcasting accelerate platforms. a combined an Inc. proven of appointment called leaders, operational structure, new realignment along all significant is intended our of new The

broadcast streamlined the platforms, and reporting expense influential to We expect as in savings expect we and result efficiencies increased screens advertisers And with news devices. marketing realignment. see spending mediums opportunities a to local and to for our from XX/X business continuing our XXXX and digital the figure of synergies, allocate particularly being we unparalleled advertisers resulting this effective structures and brands most all of brands, and as digital mid-X across offer a broadcast

the NBC from renewal XXXX fee revenue growth December long-term fee into renew retrans multi-year approximately of Tribune and subscribers, base, subscriber have expectations. consent we which from XX% from with distribution annual left transaction, XX% year, source CBS, of year-over-year this network our economics the agreements new our and projected With derived distributions. of contractual adjusted the last and of and as and also addition retrans XX% in retransmission XX% our more XXXX bulk half solid for subscriber than our of approximately we're is remind which synergies of distribution XX.X% to has Third full affiliation expected to renewing, year's in through I'll balance equity FOX of counts year. consent our subscriber beyond. million, completed that everyone our a XXXX XXXX reflecting rose contractual to to the MVPD our quarter consistent now under of with back continued total distribution and Media be last income base EBITDA quarter and representing of is $XXX.X the this OTT visibility agreements were reprice benefit XXXX contracts that our agreements approximately Nexstar consent

on XXXX. affiliations our our With flexibility provide committed XX of XXXX December our XX and cash financial As and our flow, of enhance our we through focus structure, through four December to liquidity contracted contracted position remain of cost to are XX% actively our business support managing big and over of result, returns. our affiliations generating capital four shareholder big free a are XX% of the to capital over

months reduction, $XXX.X repurchases, cash and the During allocated approximately we million share of first opportunistic toward debt nine XXXX, dividends.

record year-to-date XX $XXX.X strong highly toward political including in to position fee confident $XXX credit our at Nexstar cash rates, revenues further and approximately remain cash sheet path revolving deleveraging. we in million record With historically free Additionally, million to our a balance our and distribution maintains access September ability liquidity contractual flow, facilities. under LIBOR maintain low with revenue,

to-date a net actions to take adaptability stations quarter of foundation with growth the Reported our in of XXXX corporate structure, operations and the impact savings of area cases, fourth teams million. the increases quarter expense platforms and of expense corporate our Our local despite trade initiatives of savings leading offset budgeted coast-to-coast challenges in third offset affiliation of expenses million the related reflect which $XX cost to the in from year-to-date resulted revenue. rising financial in and our in a the economic of million as pandemic. direct quarter our exceptionally We expense overcome third strong a summary, $XX assets, range by levels, totals partial pandemic. of reflects of expenses and primarily now $XX to In and cutting in and many network operation acquired additional well the immediate operating to full that over have excess implemented budgeted quarter and, distribution operating the performed presented Nexstar's Tribune operating Nexstar's

to our and cash our with Our shareholder continue and cost management to flexibility of activities. the capital creation balance highlight to-date allocations sheet both structure XXXX us support that flow active our provide free in value financial

and confident our fee supporting local Nexstar creation. distributions strong With growth, long-term Tom? balance serving created costs, remains low which will that, the unrivaled Nexstar control top resiliency XXX% financial our year-to-date value highly the our shareholder expense, cash have our reduced Food over to building the communities, and have flow record review. shareholders. distribution Carter me call growth strategies of long-term optimizing of close in operating and Tom for Network returns With of enable As variable to extend and our business believe These and our our fixed we our now interest line, all historically contractual long free rates of our sheet. while marketing a maintaining growing result, strategies revenues, platforms, financial our strengthened LIBOR our disciplines the to turn and let

Thomas E. Carter

good Thanks, Perry, and morning, Media release, this the the I'll acquired company's results in quarter operations from XXXX. reflect outline ended broadcast a months XX, press three we X/XX/XXXX Tribune everybody. Nexstar morning's September actual – full on and digital stations as results outlined the and which for legacy

equity Nexstar Term reflect an of equity stub loss third start to transaction, from – Broadcasting, the television reflected X/XX/XXXX $XXX Tribune million distribution of for contribution Term comparable distributions $XXX legacy million of full. existing principal flow incremental on period line full advertising $XXX of is XX, XXXX (XX:XX:XX). operating of is capital activity million that $XXX Network the the quarter Nexstar. is from assets included in Tribune in Concurrent million with full in operations $XX back allocated entered ownership three-month the period in net XXXX the onetime transaction and revenue. stake actual under from on balance three, results cash $XX revenue Loan revenue its a results Inc. investments. ended transaction the September the allocated acquired of BX acquired Nexstar's or a in acquisition Nexstar to Mission of existing quarters XX, through aggregate from The million investments statement period into and during security respectively. quarter TV under fee in $XXX Nexstar XX.X% million America, amendment, September Tribune with reflects impact also at aforementioned Broadcasting The Food the the of and XXXX Mission and in from included a million, partial $XX.X incurred – On statement core million income which QX and end. and quarter Mission income in With X/XXXX million under reflect WGN capacity availability quarter and the investments under in was other credit closing amount XXXX, and available ending All to repaid of the A the its expenses $X X/XX Mission while acquired markets revolving which and its the the an update the I'll borrowed which Nexstar. A cash the on hand and facility that, also on revolving voluntarily facility results prepaid facility sheet also reallocated in Loan quick of

from now Mission and $XXX.X senior we of to parties' to credit proceeds existing had available the and used of from due and same-station of carriage billion an We quarter cap Inc., company we continuing were the a Broadcasting, up digital revenues to was I'll into revenue, for quarters the some revolving local down first since pro net improvements our facilities such, revenue future website X/XX/XXXX, and – due monthly by decline which sheet trends divested revenue on with subsidiaries XX% combined basis for was the On agency notes As the approximately company, senior a commercial the late of the pandemic. sequential the in restricted buying and X.X% purposes. continuing review related implemented related I'll XXXX guidance excess quarter, fees (XX:XX:XX) corporate revenue the on stations, note $X expenses, impact To advertising Nexstar marking million cost due QX million services unsecured unpaid that available depressed income fee since XXXX. due down excess and $XXX.X of Nexstar with general balance due approximately endured had available net on in Nexstar going related third in our XX% accrued onset a September in driven in to $XXX outsized up interest cutting points XX% approximately And remainder QX to growth operating dispute. sharp and offering QX pandemic. of the the initiatives. savings COVID-XX X.XX% local are same-station revenue, along to and full to data, of available on interest, levels Mission. AT&T $XX distribution million These – forma softer million basis. on and combined the and levels certain in to with with up XX% million offering a pay and And XX, XXXX, station customer offering of resulted provide and range approximately of improvement a On and XX%, unsecured prior XXXX corporate after distribution the budgeted obligations update $XX million consistent the from $XX completed QX. from $XXX of X% million offset statement we've in seen notes the forward. guaranteed the to senior and expense senior are political April anticipated The redeem premiums, QX, and XX% fee both the of Nexstar's advertising under on basis savings

without not or this workforce. of furloughs All fact the pay that layoffs, – general addition we've freezes to in we this the done requiring have among

As with quarter of and flow X will morning's we we of broadcast longer effective report combined commencing fourth release, digital noted no cash because XXXX, November our this that the broadcasting in given that. operations,

metric back cash course by we to for comparable able adjusted EBITDA the will continue adding However, alongside investors will expenses to be of flow. a report free corporate combined calculate which still to operations

approximately trade expenses and affiliation up offset of the in our Tribune year, $XXX million, net prior operating quarter related were rising $XXX network to expense primarily budgeted prior fee of from direct to quarter $XXX distribution million the a – incremental expenses up reflecting in million full partial in growth as revenue. a the Third

approximately mentioned, compensation to Corporate quarter. Third of the year inclusive of during realized previously Tribune million down response to station programming the synergies SG&A operations. the of pandemic. quarter excluding expenses million $XXX $XX.X XX% the expenses expenses as acquisition were from and one-time and, fixed was expense the previously mentioned due activities of $XX.X station the prior over Tribune forma stock-based Same the million were was reduction transaction inclusive approximately in expense million $XX.X there pro

Third $XXX.X quarter the to were the shift approximately quarter. $XX.X reimbursements we CapEx in CapEx of million, $XX.X QX, approximately ongoing of million, from repack operating reflecting disclosed and tax cash transaction previously CapEx expenses from during and $XX.X taxes million, total approximately million some FCC received totaled spectrum QX the

repack As reimbursed CapEx-related during wind for a those as reminder, anticipate spectrum to we activities fully being the down XXXX. all

Third $XX.X million, increase $XX.X rates to incurrence prior XXXX. in the quarter to $XX.X fund the levels. expense interest lower lower million year's quarter debt in by down to with borrowing the interest total to Tribune, of $XX.X interest expense million was from first-lien million and compared due amounted Cash offset partially

distributions expectations $XX agreement QX Food XXXX. half realization of Third in rebound ownership in of million robust quarter synergies related the received Year-to-date, distribution million transaction equity all and TV to transaction, million, of flow include of growth flow free TV approximately executed before Network from investments Network. second the Tribune we renewals $XXX exceeded our political distributions. cash in the Adjusted XX% cash approximately EBITDA core consensus $XXX the million and in $XXX Food the free of adjusted revenues, EBITDA to and This related reflects expenses,

a basis of recorded a TV on reminder, quarterly from we largest quarter distributions first received Food with during each year. Network the the As payments cash

of For Network quarter reporting we TV the million in anticipate fourth distributions. XXXX, approximately $X Food

September approximately and the overhead corporate come year. of to quarter, approximately approximately still our overhead are full a approximately come the expected $XX transaction the expected $XX will approximately projection year in $XXX $XX QX our the expectation million Transactions we're For quarter million. expenditures expected unchanged is X to taxes fourth at fourth costs full we're on year for comp million current expenses launch to will be exclusive $XX cash prioritized and in $XXX capital cash for have financial expecting to The and Operating Non-cash for approximately taxes investment as million at in cash in and in million projecting recurring in operating between maximum the related maintain with projected XXXX and $XX the approximately flexibility be we the $XXX comp environment. guidance million below and well should to Fourth million year. of be $XXX for corporate of full $XXX CapEx the be million came quarter. NewsNation cash million. million – quarter stock

the quarter we Nexstar's reflecting in expect interest decline of approximately million related million for $XX refinancing cash some year, senior savings be for fourth Finally, to and the $XXX LIBOR to the and expense of aforementioned rate notes. interest the the the full

with the Turning issuances, two $X.X amounted XX noted which was billion sorry, billion the transactions purposes of net the at capital cash lien-term the senior X.XXX%, reductions billion the million Nexstar's I at consisted and was and to for is $X sheet, reflecting debt amount. my in mentioned the Net $X.X of outstanding covenant $XXX.X the new loans billion and – million. as balance I'm markets in debt approximately net first-lien which $X.X $XXX with before to compared note X.XX% beginning billion face limited Total balance debt $X.XX QX, debt senior X/XX/XXXX. approximately of billion first to September $X.X sub to in billion approximately comments at the note $X.X

lien covenant our at which year-end covenant compared is net lien first-lien first X/XX X.XXx our approximately first ratio X.XXx. X.XXx – was below well at XXXX, net covenant of Our to

a maximum lien covenant reminder, a of net of any time. our cash $XXX at first cash As permits – to million netting

compared to XXXX. X.XXx approximately leverage at net Our at quarter X.XXx end was year-end total

cash of our to Nexstar's debt is onset pandemic, liquidity long-term is which with ended best In in million on At QX At we to operations meaningful same the position returned hand preserve of of approximately first-lien environment during credit adapt million repurchase took cash company normalized order financial time facilities. through operations. to of reminder million return a various as for dividend and cash approximately X.XXx. approximately the aforementioned retention the regard, continue million our to $XXX Nexstar the payment $XXX shares through only we our and success available $X.X $XX and shareholders $XXX to current this million. the to immediate under covenant and the business prioritize to quarter revolving actions in the of Class A quarterly As we the

We also the million the aforementioned during $XXX in quarter. repayments debt made

Year-to-date, we in to value at reflected million the XX debt million million we at under our these repurchase approximately the bond the the have approximately program now directors billion shareholder share $XX share actions our share returns. we an capacity With capital enhanced up approved bringing company's given positions the believe million, $XX share our an nine repurchase In structure, authorization quarter issue, of represent our have in repurchases. is shares announced actively during shares, the X.X creation cost total of new reductions, in approximately $XXX As $X.X $XXX million of in expansion $XXX of for dollars board value first and for exhibited. million $XXX shareholder have of time. XXXX our X.XX% have to and execution allocated revolver capital million the additional a consistent approximately repurchased count strength including this opportunities managed during Reflecting conservative that creation. We the $XXX by our authorization and business remaining to and believe of the months per we financial of September, the liquidity repurchases. we payments share share approximately million dividend we

long-term operations authorization to repurchase in shareholder buoyant flow company's opportunistically recent expanded this aggressive in our our can a enhance cash to and reflects that growing We commitment from repurchase front. value. capital activity the manner free Our intend confidence in and remain

Digital, Nexstar allowing restricted more $XXX In addition, future. the million, LLC aggressive bond outstanding Nexstar repurchase Digital estimated payments – Nexstar for the increase capacity of two approximately issues to through shareholder the into merger is thereby, Inc. Inc. activity by in under

we million ahead, with distribution digit the in $XXX upturn revenue, expect in to what excellent have core the for we an XXXX. continued now with a strong political year in approximately to booked advertisement into amount Looking double and meaningful QX, be the year-end in the growth year-over-year be visibility

enjoy As committed leverage flow high-X – our a on of leverage our our payments remaining to majority with target additional optimistic position cash range plan while we the all remaining our allocating remain progress repurchases vast made and significant and our reducing dividend total revolver. while by leverage reduction capacity acquisitions. on optimistic cash such, strong always we the XX/XX/XXXX, and share towards free net under and confident reduction for potentially are (XX:XX:XX) accretive in Nexstar has already exceeding to

rates, XXXX. recent serve operating us related will interest prioritization and XXXX as expenditure in finish expense capital reduction markets also we expense begin and LIBOR the to savings addition, or In activity capital our well favorable

while in of our Looking are a synergy perspective quarter generally and cyclical in our political In cost scale capital maturity – and that QX QX be QX see the challenge year revenue. over most into generally are is capital pandemic, XXXX, XXXX, results and ahead last operations advertising. early XXXX, QX summary, and like the of is despite structure realization the our shape over our leadership the unprecedented operations given offset will while impact of in flexibility, again any and – with favorable. (XX:XX:XX) will the will in in be great substantially strength the political the

month. activity we'll We announced the from changes last organizational our and have accelerated structure benefit repurchase we

local has to been never advertisers and communities stronger. service local national Finally, our our the and

the to financial have continue and we our and remarks and shareholder it our review and healthy back drive in growth value for into the I'll and of ability some going results consistent visibility call Perry to confident over significant turn consistently We concludes forward. enhance closing remain Q&A. healthy to before and That healthily – have

Perry A. Sook

Tom. much, very you Thank

Our results actions take in XXXX the value. to and drive continue shareholder our comments we highlight today to

shareholder key maximizing focus ultimate our With the now Day Election our who value Nation essential across employees' I behind management portfolio. of the briefly goal by employees us, our highlighting Nexstar of for want to our some a of is work. work While local thousands team, communities close supporting is

allowed this Our the information our to pandemic. the the serving evolving has critical regional separate state virus. the with addressing communities and and regard, core meetings, In news XX need Nexstar us year-to-date value responses has produced of they to hall local navigate through town successfully

Nexstar specials country. relations have and XX race civil stations unrest related to Additionally, our produced recent different in

nation's national Nexstar the debates life of R. stations February, award of you another earlier the exclusive joining board And our everyday support. change. XXX support, received United senate results. Awards Nexstar of forward along Awards. company interest, to Last and us creates month, markets stories in local gubernatorial, be report entire Nexstar in a Awards Murrow their you XX voters border for four and is of the total Edward Nexstar behalf local special immigration the Catalyst We national of continued our catching total and this for the the directly to on across country news including programs cross-platform look series races year, in also a recognizes And covering States about meaningful the for Emmy the allowing Mexico. XX and Nexstar's earned year's strategic with operations XXXX for candidates nation, As which election, honored Nexstar to the a XXXX. hear from produced Award seeking And team, prepared October that finally, QX thank social our with the management advance highlighting communications proud your regional Murrow a today. to with up in in received and positive XX

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

Operator

ahead. Dan question with Benchmark. We'll you. The take Kurnos Thank first go our from Please

Daniel Kurnos

one a morning. Good Thanks. It's me. new for

right group than publicly now. your the well-deserved, think obviously. a commentary to Perry, then optimistic, First off, lot congratulations, just Tom, better core frankly maybe more peer I And is

explicitly outperformance love hear out I'd now? and and optimism called of auto. driving about more to what's pacing that right You kind

Perry A. Sook

than of better quarter with in continuing are it's think results political even month XX before the October. came that that, And third advertising seen monthly so there. that the and month the to pacing finishing October, than ebb revenue we through prior fourth was sequential the we auto our relation points, half our improvement the with the have of I QX. in of core for better the displacement is in the than Well, But continued with for of facts and fact there QX year the exception all exited better low every where quarter uninterrupted auto month since of that April. in year is Obviously,

we year-over-year is So, an new-to-television a for the is a a and quarter per sports up Busch and business quarterly us, eight-digit betting just his category which on That as millions last a category And done have substantially double-digit revenue job basis. generating didn't exist on quarter-over-quarter now reported of teams basis. year. great Tim

So, I our can think that hustling just really results that. indicate teams are I tell and the you

Daniel Kurnos

misheard of you there's footprint lot smaller then, clear, I expect you to And year. even coming pretty unless growth timing with lately. Perry, That's really end still obviously, a I be think, a around think retrans the call in noise, that source of the were at up this I been a net you This of just helpful. that (XX:XX:XX),

you're I So, XXXX? want growth strong in just retrans that still to net anticipating confirm

Perry A. Sook

Yes, we are.

Thomas E. Carter

contracts. mismatched timing have Yes. And any don't we

big our and at of we have approximately and those XX-K, If a XX% you go affiliates you'll – approximately for that XXXX. coming up XXX we XX back renewal have in have look four we see

subscribers side and our and between now at the retrans renewing of approximately have look you on revenue XX% – year-end. we If

better much of the a got and we've So, match expense the revenue renewing contracts. renewing

we So, see from that don't material perspective. any impediments

Perry A. Sook

escalators beginning contracts are And large annual existing calendar also by there reset at of a and year. that our the in

Daniel Kurnos

And Perfect. just...

Perry A. Sook

And question growth. the short your retrans continued yes, answer is to net we expect

Daniel Kurnos

Perry Tom. Thanks, Yes. and

know you of spent I Just discussing lot capital quickly, a know, time return. just don't Perry, I

probably cash with end noise despite distance this the incremental original savings... year flow You we've all the had going free guys within your are year of cost to the guidance spitting and

Thomas E. Carter

that again. a more Dan, one Say again say Wait minute. that time.

Daniel Kurnos

wrong. pre-COVID your cash end year is going distance free you're sure math unless of to spitting the my guidance within pretty flow I'm original

have the correct And tremendous do. that this the case flexibility. to Court this me, free you you Tom. view could just point optionality – here? things feel know incremental Perry guys and at of your So, point. with mean I have I there's guys some But SEC, incredible amount here, cost you what balance savings Supreme at there's do But how you

would really get on the you're dividend I and more focusing any you So, near-term or the know incremental either on when there aggressive color be buyback helpful? just but debt do

Perry A. Sook

can again, this that talk timely, space There television in-market and some are Well, because that, acquisitions at. I and occasional the looking Tom there the accretive you are small factual mean literally it's tell I we're in digital every I opportunities. day. about

a and in is of on which debt, paying annual in for will And and fair year north landscape on think I Court activities, we increasing dividend an in of amount what our the May have of like. meantime, reducing dollars next to constantly XX%. waiting spending back we're probably basis, aggressive that stock. June clarity of absolute Supreme something very constant leverage while on the And or obviously, buying as come down been looks money

right maintaining So, know what option we options do, think thing the the to value we all right are. is that but now

Thomas E. Carter

quarter. quarter Dan, back third of we But, point almost in our I the would this X% also bought – out stock

see that, being substantial annualize that forward and – So, stock. as at the a a of see we if as we current you And that potential amount is levels, well. opportunistic going

an at because But is I walk this the of been be cash example say of in this, gum people times. to several chew because flow that of the lot same think and that on can to quarter, going quoted done I again massive. a time. but fourth when work going know free I is political, we I've we've on the that (XX:XX:XX) be great So, the

the interesting a really had from I in never traditionally timing TV I the the year. that we Network your problem year we because Food and distribution of guess of it's some every great have QX TV a a And have February perspective. Network Food from seasonality get infusion point and of so, broadcast cash of is in optionality in but great we appreciation business, QX, don't this, anymore, low Well, massive a for

to So, good be from perspective. quarter another QX is going a free flow cash

gives So, of I in got able it different as to, I've we've a think options visibility I aspects and number really simultaneously. execute before, us we'll be great good some think, said and

Daniel Kurnos

Bowl in you doesn't on so And CBS, (XX:XX:XX) hurt you either. the that Super XXXX get

Daniel Kurnos

Congrats, guys. the it's print. great It's a just all Thanks for – color. around very much

Perry A. Sook

Thank you.

Thomas E. Carter

Thanks, Dan.

Operator

We'll take ahead. from question next Please our Kyle with go Stephens. Evans

Kyle Evans

June. have bit not for timing going around I'm brackets little we have the some know Court good there, originally kind May, them the end I to your get the was, today. we there? had pre-Tribune and you could what stuff. a put if sure a the contribution Thanks. of harder understanding market, opportunity I you appreciate duopoly Supreme push of – that I books from what was Hey. But on the on I'm

there will be appreciated. help Just some

Perry A. Sook

national would nothing – Well, case do market ownership with Supreme has Kyle, cap. end deal restrictions as it know, the and Court to the the Court with the you Supreme before

– have But the (XX:XX:XX) than other the a that one successful. of So market are to with economic your look an in something MyNetwork is that major we opportunities presented stations two-thirds again, our the we would attention themselves. from I if call station. our opportunity at certainly operations, would benefit market approximately combine tremendously the derive markets stations and CW take stand-alone to more operate But

of So top are and end toward of the market now our it's opportunities is third way the the constituted, the many other those portfolio list.

Kyle Evans

Got it.

Could brackets and put of April of in you displacement kind a saw some bit little October? number improvement what XQ sequential a October. around give mentioned You us core intra-quarter with for since you pressure in

Thomas E. Carter

say the a generally was with QX. to single-digits down say And quarter I to be as would mid-teens far on I down would basis October, a it's speaking, so of mid high in core. same-station QX exception going

Kyle Evans

replay then again? those And Could you. for Perry, XXXX Thank renewal riffed and network metric you I'm XXXX. numbers those through you sorry.

Perry A. Sook

was sorry. I'm that? What

Thomas E. Carter

You're talking about retrans renewals?

Kyle Evans

that. XXXX. network. thought I You renewal misheard were XXXX Maybe I gave and network the numbers there for

Thomas E. Carter

so done. of we you either the it's not what have do end it's we of it's approximately the page And coming out much And by we of on have if XX Well, XX XX-K four where up. this the XXXX big page One math, booked. affiliates affiliates. the – page again, list renewal; is or XX% is our through

XX% renewals call retrans renewals. now think our up of that's up end have it of and between about XX% XXXX. the that, we If you for Well,

of XXXX, the and network XX% the retrans any regard the affiliation. synergy sort So to we've the the and affiliations of through of with that's our revenue contract. of lack got then end under arbitrage And

beyond. So bulk XXXX really, affiliation of the the in renegotiation comes and

Kyle Evans

would Last it. core to material today it WGN's the XQ? look Got what Is Thanks. in one. like model and

Perry A. Sook

about WGNA? talking you Are

Kyle Evans

Yes.

Perry A. Sook

WGNA's advertising the revenue in nine is a nine-digit low digits. number. Fairly

Thomas E. Carter

total I would of say high advertising. single digits core its

Perry A. Sook

fair. That's

Kyle Evans

Great, you. great. Thank

Operator

Silver B. next Please Riley. Jack Silver] question from We'll (XX:XX:XX) take (sic) ahead. go [Zack with our

Zack Silver

Okay. taking for the Great. Thanks question.

of had really We've level step-ups before high for healthy political maybe the one of and leg you Thanks. what really side the to next be got you dollar a drives hear talked growth retrans sort viewership on think you couple reach more a interesting that guys Nexstar. me. share a Just parity of cycles huge rate XXXX. about. It'll cycle in you the from We've for

Perry A. Sook

done political to this two be be on runoffs for runoff not year. January of one, There'll Sure. in for potentially next Georgia X year. Well, we're contested with races the

the if think will. synergies going digital one cable under where only our everything and and sales, and and I this approach. and one And financial this you multi-platform is synergy company mean, approach, broadcasting operating One a one see brought putting of you're together Nexstar from not roof to literally year but P&L, we I go-to-market silo spent one we

year San is the we that acquisitions internally XX we among a little weeds being the ATSC And our is end of digital. and Houston, Los in leg opportunity tell or what investors, select have Cleveland target X.X, to the see others. we big X.X, with terms will growth. another Dallas, of next to Francisco, this have in operating ones, our year. that ATSC And about these organic some with launch dozen markets think air but some Angeles, it to we may really you a will I accretive are by and and again, make in of wonky on the be While markets talk next

approximately air, current will allow the next signals. So that over US signal to us by offensive put hope third the with of a It a a the and growth the meaningful. device people difference seamlessly go Nexstar think year we HD. becomes before four X.X ATSC transmission XK IP-based to is both for case end that eye covered and allow probably the business ultimately device, still is and for the is it period which But that's even an to to have or of out we that defensive. leg years the will we the again, from noticeable also And next to of is five And that over standard business. think off monetization

come this on free us annual the here machine, the for an look platform, out to amount terms next free years. process of just cash the how the with flow-generating value give of you cash that optionality several to going at basis if in So create again, power want it's this we of will

Thomas E. Carter

end and market mining after and we assets did ownership, – we really we focused FCC have. to agreeing case prior take to singularly to Supreme improving we Court the from Tribune additional the value the regard operations on the When are with up

right think from and product nothing, do and now America, I poster a advertisers' from the it – reruns our child can that has value taking clearly from is WGN for turning You NewsNation on we into that perspective. an perspective, something

coverage, back NewsNation go political political the America the on coverage largest WGN Facebook. in at the you was and look advertiser If

Perry clearly also, strange see value large underperformed. they know, mentioned the of but kind – have And before. market this. bedfellows, CWs I these are it in It's that So historically

degree news markets CW underperformed The network such either or number a we in the The MyNetwork. that of fact, a CW secondary more local with of to a matter any As about of sort affiliation than we're really large are

greater to that realize contributions taking assets underperforming cash have potential perspective substantial and and business. on of believe that those financial financial the are to the of really value and it's from terms realize to statement just we side make So flows income a that to greater and the in –

strategic, create are and areas we're to value. tactical So there that in are there both short-term long working all

Zack Silver

can then That's that in And on of if given just early engagement expectations any But with give? interesting. is you Or days? viewership it. Apologies it's if viewership I Got terms not, this. really and the engagement your numbers NewsNation. missed offering, meeting and NewsNation

Perry A. Sook

headline the that on WGN awareness. is nights I that America a week, primetime seven so Well, guess job is Sure. that XX% in of knows one, is America NewsNation is increasing

the and other the know, finances plans is renewing Not to you going in the project initial that. itself basically we outlay in than and now do CapEx As forward rerun launch have NewsNation's in allows rearview now which to mirror. contracts expansion, us invest

as you happen pleased if it I product. little hard had where the and on. $X – very working bit can't never Nation million. was year and correspondents done from that just news are about very that clients. night. reporting providing stations Facebook and has of happening, true know America. opinion. to business with every with don't Nexstar pundits political point organization not We've news on from tell we anybody, facts, of all WGN America well live around America, never country existence, financials watch never I'm advertising country business our again, localities in night. to XX that's as tend talking with a it done correspondents our revenue I roundtable Pharma differentiation. the they're going see directly have now a I and was you. any WGN in with election of biased its of And And to So this And mission WGN the was not has what about balanced, states we on than the and mean, I it staying other have NewsNation not from employs any our of more And shots

we continue long will and into goes day So to time is attack on. it that but expand results, for more parts product haul awareness the early the obviously as the we number the we're issue in very pleased one as with

Zack Silver

Thanks, it. Thanks, Got Tom. Perry.

Operator

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

Craig Anthony Huber

How think Thank that Maybe months X% the question X% retrans missed this, Great. it but was I year-over-year? three subs. a down ago much quarter. us guess down I in told first. I you you. to the housekeeping second was

Thomas E. Carter

down I was, trailing down quarter down on was say trailing the most trailing a currently and basis, way a of But on recent basis. mid-X% X.X% it's X% it less. last XX-month and it's XX Seasonally, X% best It it's a The if XX on between any anyway. slightly between that would down and X% was quarter. Yeah. basis, quarter

Craig Anthony Huber

Okay. helpful. That's

Thomas E. Carter

So slightly better.

Craig Anthony Huber

month, the of Okay. is I think mid fourth Appreciate that. have quarter then to high core I you advertising October, digits. down Do that correct? except said And single for the for guys

Thomas E. Carter

That is correct.

Craig Anthony Huber

I amount mean, question. dealing? Can us up sense a sense? you there's give October ended a of can huge us a political Near-term October. give in how displacement But you

Thomas E. Carter

digits. I would say low double

Craig Anthony Huber

well the scheme things. up of in So held pretty

stations viewers opposed four Okay. picture of TV your your you content MVPD? that. big what Within Big Appreciate question. various for your over-the-air as to markets, think percentage consume

Perry A. Sook

higher not would terms fewer company XXX-channel XX over-the-air that's of necessarily homes It's because viewers – because the in viewership just the depends the XX% the over-the-air market, be XX% the to or approximately those it's is XX-channel across have distribution. households. stations universe; maybe – but average choices, universe. TV a viewership over-the-air in approximately it's the mean, a to of there's But it on I

Craig Anthony Huber

Thank I Great. That's all you. had.

Operator

question go Bryan our We'll Deutsche ahead. with Kraft from next Please take Bank.

Bryan Kraft

a ones. morning. had Good quick just I few Hi.

all First, sheet. that any update ask the to also you at on on Has the balance relationship evolved Peacock? with Wanted yet?

Just your revenue into lead-ins it news point seeing this of underlying, to lack debt then it And hurting of trends sense encouraging. or how anything? rate very full rates impact you any loans any know For of I viewership? Are from the the fixed evening from Thanks. example, are is bonds? are are? kind about the you where one. the of – Is make refinance schedules to interest broadcast thinking ad last Does more there bank at versus mix on there term given an the negative impact

Perry A. Sook

I'll not October in and – COO And represents where year-over-year here with President second through September of local schedules. revenue ad-supported up answer the that our and the the our probably our who XX% local than Obviously, titles those viewership first products. remind virtually we did revenue leave and you networks generate that for board from question XX% the still now were have last revenue increases half between comes the primetime middle continued CFO, high ad-supported of quarter and together the at down has be news. come more over and were I'll patchworking across Nexstar and me. our news levels from to but up they've network

was...? far. so you real been four out programming a of as schedules net it's anything, are I forward. rolling been our a And their as look big going the over terms more the originals and in in But of of most So the But the if the month even we question patchwork, make their positive where series we their first return areas money. know, there's no it'll the and normal closing speak November, to networks' think effect lot

Thomas E. Carter

Peacock.

Perry A. Sook

their Was NBC of in to it's There's infancy is at involving this point, not affiliates not stream. mean, the That's whether it's Peacock But really or such continue model. at this It's model. kind it include about not. been Peacock. doesn't a as or the a video-on-demand No. good Comcast of thing and is Discussions what – focus point. a is I local currently affiliate

of could I goes the some So it's affiliates necessarily life That at being don't know material. on that a part point, change without it. but

Thomas E. Carter

that ask time. of beyond structure. the point take continues notes. same be this to required me strategy refinancings debt look strategy strategy bond and more a would next the to us capital feel regard I'll a was the little where go driven I it's at that have $XXX fixed return time this just forward. capital towards structure deal see I the But taking say we of and definitely upsized But would right debt for to acquisitions look slightly clearly, at did the million look, Obviously, to capital out with be can in year versus there the If capital of is debt. percentage question I a say rate acquisitions. to We shareholders. could opportunistic the And We probably the regard all the we and I shareholders, higher going to at premature to too by go would is that. above just say with better of what return now. playbook

Bryan Kraft

Got it.

Okay. Thank you.

Perry A. Sook

we Well, free debt, to and mix it's with to down cash see so down pay fixed continue you'll also – need pay something rate a expensive more hard it's to I our here. think

our cash. have what to to free we as do optionality So with

Bryan Kraft

Great. point. Fair Thank you.

Operator

question from We'll ahead. take Janedis go Research. Please with next our Wolfe John

John Janedis

the continuing, the willingness top I've any but on changes in up accelerated the for in of it, engagement a feel COVID guys, advertisers' has out follow-up seeing (XX:XX:XX). just Janedis. wanted coming are demand hour commit improvement confirm. the into And digital spoke digital around to from headlines Coming like you change or offerings? with got to or of Doesn't holidays? the the just you to

Perry A. Sook

digital our on up. offerings engagement obviously is Well,

the into that again, and home repair/home this quarter, through look make So for at we're the even more spent engagement, yes, user-friendly At post-election now. fourth yes, to and team is and QX, additional on. categories. And the pacing month seen that sports various and we're out not again, on you that improve websites the and end a of lottery reluctance. quarter solid pacing And second as mentioned operating our offerings in the for but, are this gambling, improvement, and Karen the Brophy of of time site. XX-plus-percent categories point, standard going service our is continue updating betting of them outperformed auto we increase all to procedure and focusing in That's We've the year the building on medical/healthcare, here. her

spent not and than it's dollar results versus quantum So better we than prior absolute year. where a the points timing quarter issue; it's XX being exited that's third better

the So we has back to flat been exit flat fourth we're that that the from and but year closest not our best it we quarter been. anticipate being have to velocity all yet,

earlier in we'll unaffected only as the a for of X substantial Now, and COVID in after think mentioned have revenue quarter first Tom because you'll prior leg quarter of hope that, see LTM. is down that's pandemic. our the But over core performance during the what – low X in year terms base of Qs the increases worst because I the we of

John Janedis

Sorry.

thing or mean, run feels or on a, million-plus be last one the it's rate? have materially I days still category gambling. does early like the $XX Just XX to in potential It say, terms X there. higher of here that top

Perry A. Sook

yes. Well,

XX I category, more the books we at lottery look ongoing. that double-digit you've all-in, have XX% category. all-in, got gambling And think QX. of that that was made for and betting after sports and it the all a is probably state if you was lottery dollars But in up top QX, in business is QX if on it for – a high and if of example, we teens exit the it

see it I and form advertising, are and that So ongoing. buying talking involved like and that for distribution, addition can business those of to might the discussions all you we're in tell short form want companies to growing to in I produce that access long our to content us

in engaged fully we're think I So category. the

where will footprint continue it's that expect a to grow to basis state-by-state grow. again, And think continues category I now. to on is built And that we'll the not we do out fully permitted. continue So gambling as grow, it's because

John Janedis

lot. a Thanks

Operator

go next Wells Fargo. from Cahall our with question take Please ahead. We'll Steven

Steven Cahall

Thanks.

pretty some is this this is understand a to like It just a just lot office seems savings. maybe sure I'm the the trying benefits so the bigger First, reorganization. than big of deal, back of

So that potential I are on just guidance. was on long-term the expand revenue little hoping got bit you the new follow-up from could what quick initiative, and a a then I've if benefits

Thomas E. Carter

products, them. we views country, are autos, we multi-platform historically with X.X degree delivery A the and partnerships will can into be you with have good page partnership we of tell be than and has there used large consumer But information. a whether for area broadcast would been I again, XX% kind national can agreements the number of signals looking in Most did the But been to categories that's meaningful our we have of us one one from immediately where, participated are contractual Tribune and to now, have billion us. that reach markets that has say because of of a have reach Well, that areas not tailor-make the it those do some front they're continue really and direct-to-consumer. where that's of and we obviously the are be escaped quite that lucrative more be demographics really large number reach focus reach I that we would and these of can auto substantially areas of assets could addition and sales, local. and job before, dollars. that

Steven Cahall

comment the Great. next outlook a And for year. on then

or last that flow year, QX being said QX QX top look of for of we and could lot the then or against above? like would all line the or cash EBITDA kind a be Was free same comp also political. that like you You think up, QX would Thanks.

Thomas E. Carter

it an perspective. of And process be EBITDA would geared comment revenue. well. was attributable through a But specifically right XXXX say the budget now the could Well, as to going we're I obviously, towards entire from lot

Steven Cahall

Great. Thank you.

Operator

our take We'll go next Barrington ahead. question Please Goss Jim Research. from with

James Charles Goss

A Okay. couple them. of

First, national to dollars fourth there your I'm to the additional quarter. talk wondering that challenges results. regarding the you about political in the fundraising potential think has level add at can if been election

Perry A. Sook

Yes.

We we speak. request have a (XX:XX:XX) as pending

James Charles Goss

beyond dips as and a think the you in as any viewership of I'm the are probably require But not It perhaps of it payment. period. perhaps process programming just wondering NewsNation. about do the itself regarding bit rerun the presidential letdown in Okay. And relevance terms costs content the election will you does with secondly attention just the there election? be of after does for pay it to refining news the little

Perry A. Sook

of up are opportunity, affiliate buy that opportunity the us lot the generate, than will smaller our are start of but good. than or pleased of with buy whole opportunity right far revenue don't distribution We're even news, that in going to be and also advertising Crossfire frankly, up to And stream. I give sides CNN – we that to look in have we And fees We're that have validate grow. right obviously House, We're expanding we is to democrat to into the night. so say continue it's prospects our morning then potential shows a there. CNN going mine the at want the our or we lane news opinion. being things if got a new to of Well, or tell the potentially parts Fox hand issue a do, and rather swim on continue I an some White which launch Bloods. think quite and advertisers than think; show. is debate And at have people But a to no what on in about a talk question turn the and term, Jim, issue what's is borrow kind personality-driven about day me has and about? me And will a think greater been again, me launching, would swim and around PBS our I'll to don't Blue think opposite the the left I'd the Fox MSNBC other and which here tip other that. reruns opening far category talking there's talking lies helps like to this focus every which I And that works, tell itself the and again lane my it we've what and just is therein don't on that mind of we make distribution own and largest which largest thing a the our show to point, we're when revenue

And long said, And on this we profit have this Tom we this grows, to will let one continue growth and as grow. example and portfolio, got we a alone again, go from we it. we organic awareness spent we've as the of operating portfolio are think years way CNN, until XX assembling NewsNation to of So laser-focused News. – is Fox now maximizing

I tuned. stay say just So would

James Charles Goss

all your of in are part area other it there. One NewsNation same terms from of done X.X. in across very to broadcast have local having certain the it half versus for same Okay. the being localized sort guess ATSC news, of opportunity the did you Can I be implication ad-supported that area, related country? maybe is would content Well, unique of some program a say be of that so revenues it

Perry A. Sook

would our can read develop about an through months There is betting frankly, a the investment coming think more distribution the diginet out we through opportunities to and folks probably yes, ancillary wireless esports, either ago. But given horizon. further now and the year, we sports But uniquely in mentioned can made our spectrum X.X XXX things and distributed to partner lease in But addition we three and no woodwork talking of we've We company think company the I out from another app. television like we folks recently own. folks now, Things being of new are out got But diginets days in partner this have to has we that, that for streams localize some concepts. time diginet But started platform. need ancillary country. ATSC on scale potential the potential a of which generate because uses there for bring with out are one times bring own there that And the linear value business creation the to of diginets us opportunity. got to to distribution next it diginets in best with an not little is of linear By diginets up signal. other Quite be that in throughout that's I couple that to up a five now, there does probably four are two opportunities. And esports up addition than highest in area. that that we connector ATSC of there with X.X, there. or right two who is our of lot But our about. we current to there. you us Internet brought others glad spectrum right that opportunity that we I that have I'm And you might their get are the that just it in our us this and I squeeze that

XXs and already. scheme XXs company of of past opportunities But folks that the not those a has for a we're net again, from and It double-digit it's this it. huge it billion quarter. have with the growth And an and, the revenue But millions, we've XXs a category. we growth scope size organic So us, the area did in and of and in that's mining of over revenue it's spectrum profit lease of company is millions all the the with revenue into revenue assembled. nice into profit given is $X margin that that of millions

James Charles Goss

Okay. Thanks for your perspective.

Operator

any like for closing remarks. speakers queue. to questions additional back turn to the We in conference have I the no would further your or

Perry A. Sook

today. on We very a in our perspective joining you QX look forward for much reporting we'll us thank February you point, for XXXX Well, to everyone that results. And XXXX. early guidance give at and

joining thanks a afternoon. So nice and for us have

Operator

this Ladies appreciate and We your conference. concludes participation. gentlemen, today's

now You may disconnect.

Nexstar Media (NXST) 5 Nov 202020 Q3 Earnings call transcript