NXST - Earnings call transcript Q3 2021 | Nexstar Media Group, Inc.

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Operator

Good day and welcome to the Nexstar Media Group Third Quarter 2021 Results Conference Call. Today's call is being recorded. I would now like to turn the conference over to Joe Jaffoni, Investor Relations. Please go ahead.

Joe Jaffoni

Thanks, Katie and good morning, everyone. Safe and the into get review call. the first Harbor we'll language right I'll comments management deemed made other and Securities statements All by of Act of purposes the XXXX. fact Litigation for Reform than during historical and statements maybe forward-looking of Private statements call today's and statements differ that those materially these risks reflected are made cause call. may in subject statements cautions that actual forward-looking during from the Nexstar to the forward-looking uncertainties results to

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

Perry Sook

than on expectations, Ann reins who nicely this and Tom and reflecting President Network back our we're consensus early Carter, from Thank which you, period review in financial momentum morning success third reach, digital and streams. is August. in faster has Thank ahead stronger and free revenue, adjusted another and this net continued recovery quarter Operating achieving taken growth. Digital quarter call advertising, Once were you the of a Nexstar's by core and advantages revenue to delighted morning, CFO always distribution be third and as us Divisions of Tom results in everyone. for our our double-digit Officer the anticipated joining all the our with revenue joined Chief scale again, to cash Gliha, Lee competitive EBITDA associated and me of flow and and good growing Broadcast, highlight Joseph morning, their across Nexstar's

at leader TMT mentioned sought Investor XX entities. is accomplished Ann and finance experience I in other candidate Banking after As TMT she a Investment scale an operations, than more of recent with and Lee at Events, years was

So on M&A will quarter, flow operations growth support our and growth through growth. the then her our financial of have opportunities. to Lee plans provide and many covering return the fortunate With we're our phase finish investments, Ann next we will up review for our value pandemic capital outlook, continued us, Together, turned reduction very focus the from value driving leverage returns, to and we continued and developments, team on of are focus by the achieving high billion scaled report. accretive challenges summary our the Tom an pro competence our I'll have review, program pandemic-related in approximately upsized actualize cycle. aggressively and average of guidance growth. our and highlights $X.XX cash beginning behind we free it that again to created, to platform through managing effectively pursuing and the including forma will quarterly annual 'XX-'XX of with our recent start for a the

acquisition During able Hill, third the via were has the which leverage we across businesses. accretive of quarter platform our our to synergies The

legal. the or multicast expected advertising and our network, TV owned from legal extensive second to is And to XX the and homes. from and betting nearly gaming launched betting We states sports revenue XX% approximately also we operated for increased benefited million presence, our betting of soon sports be Rewind where

third these of in $XXX our execution our our weekly ahead as network growth SportsGrid million. launch quarter, Underpinning its expectations the pacing also million of businesses, nicely programming of of have expenses are on a fourth to on free Year-to-date, full Near-term, of and we of in XX%. $XXX budgets initiatives revenue already the generated soon nine total trends free cash books. representing NewsNation's of the generated we flow schedule. We quarter to more had flow we Also markets XX% year-over-year with in hours transaction partnered continued advertising come. core cash year multicast quarter, our was before with to focus of XX

of have which, meet outstanding cycle, XX% during to share. or of our of recent With XXXX. free revenue we of cash $XX.XX is the pro is amounts million over 'XX-'XX levels all and flow a revenue the our flow of reach forma shares LTM increased to a per billion, in in for free category billion free track XXX $X.X have average approximately $X.XX growth billion households, achieved political billion, television of in benefit EBITDA own. US positioned cash of of We and the $X.X excess that remain our Nexstar return now nationwide people With on what puts and scale flow of initiatives advertising, cash XX of Nexstar or record with assets to exceed annual that $X.X of guidance approximately expected million clearly a be

resources able bigger inorganic pursue and we of before. synergy may we ViacomCBS. will largest potential scale revenue, par XXXX in are our and to opportunities organic Broadcast next XX% generate been growth and have This free on consider cash with which We than competitor to terms affords us not flow in the

business. these being through view of the and our As to accretive we lens of our always, criteria complementary opportunities long-term

prominent can content-driven same reduction to acquisitions markets financial and assets were which other deep At digital where of for leverage capacity other our also We regulations Nexstar's scale initiatives stations return all returns. for of allows in of playbook. capital and in complementary for 'XX QX businesses where permit, time, will further continue television the and synergies look drive our or

addition allocated A quarter, accretive million we of toward In worth while the reduction, to leverage repurchasing common million third $XX our the toward M&A allocated $XXX million in $XXX shares. Class

share Through marking dividends, cash done, increase XXXX. a return a this capital the of the for leverage our total All nine $XXX net allocated months We we September also total quarterly million to of and dividend. shareholders XX% $XX million ended Nexstar was ratio in over full XX, times. maintained million shareholders returned year repurchases towards $XXX while to X.X through approximately

with revenue ahead XXXX to XXXX political, and our to results. political revenue our expect respect between XXXX generate we somewhere Looking

our markets. we scale, in have an Given we're competitive excellent a of of coverage the those majority XX% races, of substantial approximately

Nexstar races, which, races. the XX markets, XX for competitive. seats, races presence. Let XX me most XX house, give XX expected Senate, a states, competitive of in There In markets, the there has are are you the are gubernatorial to which, be there details. also nine In XX where including are in competitive seven in of our are the of Nexstar elections races

done which indicate will is total a before. positioned we've very to all of that to for XX% of be strong what Historically, on do Nexstar. well we're broadcast All we've captured XXXX political US and political year signals ad XX% to say, television, spending

national The political digital Our to omni America's to nationally scaling and source as With across three revenue platform across distribution brands audience penetrate cable leveraging intend platform Nexstar's news. QX has channel local complementary The market to our stations. highly to Hill and delivering expand reach recognized known stations, acquisition political Strategically, network, an news news Hill's content a and presents is the synergistic balanced channels. lines, our Hill's content business reporting, share for of all Salesforce digital of on approach is our We political Hill to Nexstar Nexstar and opportunities our by and unbiased and grow further our leading for The opinions authentic broadcast news The fast-growing NewsNation, leading well a perspectives. that profitable, with as NewsNation

former Correspondent programming US asset news we've from profitable WGN live syndicated television We new programming the shows, And and and of continue original a major hosted show Bankert. DAN Adrienne with hosted by the of including presence, veteran former a and each growing homes three-hour weekday news award-winning America MORNING AMERICA morning reaching transformed two our XX a IN Dan in progress into offerings to ABC national content Abrams, ABRAMS scaling weekday. airing LIVE, year make expansion September, network million cable XX one news by journalist programming launch, and News at since and analyst, end NewsNation's produced a Anchor, hours and

with seeing new are NewsNation is OTT and achieved parity every systems, CPM we news we've highs and cable incumbent networks. - on the Linear fully rating distributed seeking are week. we And

is fastest-growing a pivot In just fact, our This a NewsNation a the over in credible cable on to reflects network television. year. up start contender from

our promoting launch. news seasoned journalists, doubled the now expanding respected We since our awareness of which NewsNation and consumer programming are has

related long-term While in work growth there's acquisition still confidence of done, opportunities to great to and strategy we the have The Hill. be our for the our network much complementary

us to enabled iGaming also and fast-growing scale betting in reach and industries. sports Our have participate the

XX% be betting This gaming category third absolute a in quarter, our largest revenue responsible among to Our category - increasing also all gain year-over-year the year-over-year category of on largest is for the sports categories. our dollar basis. grown has with

across revenue year, - typically more fact, In in the is fantasy It also ready devoted over with one and prevalent, this States, continued SportsGrid gaming from sports. launch we come two to and betting US subchannels in and the digital coming future. states betting and or is mobile diginet X our betting more Network, established, iGaming Yet launched number ever Reflecting we the more quarter, near sports becoming sports this sports legislation opportunity helped category. nine markets number growth in first this to where next ad our sports of September category. nation's many also to legalized approve see wagering with

helps to also communities. scale us give our efforts to Our in our back

We hunger foundation and of of operational the anniversary with to capital management over combined last XXX% that built and has transformational that Over stock this growth financial localism of allocation. IPO, strategies, platform. TSR M&A, highlights year culture our a our towards innovation, XXth the This to than on XXXX% year, highlighting our America United on more hunger, published awareness was X,XXX our community As to as estimate and Hunger call, delivered and States. food more with this past this effort local September Feeding $X.X issues established in raise help to Action the those Nation upon five over company's committed food earlier power with Nexstar's need. demonstration a regarding our insecurity is the returned marked Nexstar Feeding Since month, September, last years. and during We Nexstar's And, diversification quarterly the excellence. of the quarter approach a and monetization century, partnership I America, value disciplined investors over websites issues expense than the and to mentioned the success designated of regarding insecurity revenue aired Nexstar a Nexstar enterprise-wide in in and and million a that founding. stories clear

we expect XXXX call election on Overall, for of visibility and combined valuable confident the to ahead, XXXX-XXXX have Carter, free NewsNation growth the for to With targets sports over over all continued Nexstar said, service let Looking risk of year-over-year to adjusted record exceed industry-leading outstanding betting opportunity actions auto the our return delivering means, upcoming retrans they with XXXX. and our extending our cycle. shareholders. remainder we're next taken now in cycle, in all that returns cash while local that non-political communities, review. results year, have we to we and growing multiplatform to Tom? continue will of sources our audience Tom excellent Nexstar's operations the flow me revenue to the across distribution, all providing the position to generate of and the of that that the industry-leading continue content revenue, ratings financial and growth turn exceptional past category growth year, our deliver or with the

Tom Carter

Perry everyone. and Thanks, morning, good

pandemic the strategies Our strength the and while on results Nation have drive of resiliency the year-to-date scale who growth. results to serving quarter adaptability extremely businesses solid their success local long-term putting the and our to a to leverage demonstrated our more 'XX of proud members than top our of the line of third the and reflect our consistent We're growth. Nexstar - country, and across and communities challenges, ability their continued Nexstar path to consistently offset XX,XXX operating

are results on pacing expect As year XXXX, will opportunities, end be political of growth to entering solid which political a including before note ad XXXX of given our operating - Perry we our internal QX the return and strongly the a cycle. said,

rising the XXXX, there net into strong large retrans XXXX. third that As we $X.XX benefit in look year from X.X% we with to over further quarter will upside in agreements be the distribution of an rebound percentage complete continued will that Operationally, revenue year XXXX prior during Nexstar's billion. the

million Nexstar's multiplatform strong political and year-over-year increased political, decline more continued quarter in $XXX XX%, content leveraging sources. advertising. success approximately to the our revenue, As of our in of excluding consumer deliver all revenue and third reflecting net - reach with approximately growth our we across than unrivaled offset non-political engagement

growth revenue every - marketing segment. we advertising the EBITDA and respectively. line turn from cash demand this with of adjusted year-over-year solutions led free line. - QX Nexstar dollar reflecting quarter before cash EBITDA combined accelerating approximately the XX% one-time top to million, expense rebound go flow expenses to - Our $XXX our local Core management net one-time a to expenses, increase our transaction adjusted in national flow and before and line EBITDA transaction XX.X% third XX% $XXX before and one-time over revenue, million for of brought unadjusted the of free brought television premium

for healthy sales As $XX.X initiatives prior consistently rise of new revenue, generating local and - deliver business, third QX of over a 'XX, sales new new levels increase record to Nexstar's year a many, XX% excuse we've teams, XXXX X% marking quarters, to a QX over with me. of television many million quarter the continued done our of

we in categories nine and retail revenue the and top advertising gaming trends as third XXXX quarter our gains third fourth growth and year. recorded sports betting ongoing consumers of year. the ad categories paced the XX In shopping. services, in levels next with of sports prior biggest Nexstar's We total dollar XXXX with ahead auto, expect top gains to quarter significant to the and the pro category, of quarter, XX returned coming Excluding in exceeded ad betting XX% continue gaming, positive revenue and Nexstar's category forma the in-person

categories. Nexstar move revenue new began vehicles. manufacturers QX. accelerating in quarter, fast-growing are gains, rebound a sales in second and and advertising beginning With continue of in is beneficiary are to primary further our positioned auto share labor advertising of year-over-year seeing return to local working capitalize We ease models promote chain hard on the as teams supply core broad-based Nexstar's be to the issues electric the drive to again

and XX% base, Third year-over-year with our ongoing distribution million. stabilized representing quarter trends and other rose and 'XX distribution fee distribution net $XXX fee platform retrans to that subscriber expectations reflects This XXXX, and approximately the approximately renewals across agreements subscriber revenue in our growth of consistent margin XX% increases support trends. our remained

contractual subscribers source mid-to-high representing four December continue of with Big We to economics, subscribers our over of resulted our distribution retransmission have renewals good we in of contracted through contract XX% visibility were in single-digit 'XX, a reflecting growth 'XX, XX into continued revenue 'XX, 'XX. affiliations our of a XX% growth revenue higher this in percentage of our in approximately rate those expect

positive XX.X% well affected profitable increased total period. operations, year with less the The over digital strategic to operational quarter reflect as discontinue certain over results to million, substantially fall. revenue year's approximately up prior digital actions profitability deemphasize as the the or last realignment digital 'XX Third $XX our

distribution, our digital evidenced revenue and success digital Our usage our top news net our approximately other audience growth was other and the and third net deliver local consumer third to fact and line contributions our of our and continued ongoing other for XXX weather year's content local services for revenue and revenue a In digital contribute diversification in in media across XX% driven act year-over-year the impressive other the accounted The audience increase digital and XXX revenue engagement last Distribution, apps. of digital in is with and small quarter, of from advertising diversification business period Nexstar's push. quarter. revenue the distribution, to revenue. strong Hill contributions mobile The of of development growth significant and statistics strategies quarter websites continued by efforts integrated XXXX, XX% by third revenue. of to of and acquisition agency from network content local BestReviews accounted revenue - -

non-political growth of similar from we continued remainder 'XX, overall all levels of forward, in expect the with revenue Looking high of diversification. our sources

delivered across digital X.X of performance video strength all-time local key to indicators of number including monthly in and of properties the one - users We build XXXX total our for of continue total audience highs X.X when news on reaching record minutes billion. ranking average every - billion month Nexstar's in and digital XX year billion, pageviews total million, engagement, XX.X multiplatform of views total growth

comScore. All of to this according

we're excited going our our expect strategic delivering enable operating not of from continue should in resulting the leverage But of momentum broadcasting flow, of development only Overall, to modest revenue operational organic of attractive M&A growth forward which from to of content this and will mid-seven-figure see the our With growth many and growth of delivering we the and capital results Nexstar year with audience and our and strength cash flow subsidiaries, by us, in savings we cash existing strategy, realignment the front to platform. of digital growth free returns continued digital combined opportunities expense and realization by our the maintaining shareholders. our digital. in record

and maintaining we flow our excellent achieving in the we selective strategies follow visibility of as in variable and top value terms - balance fixed line current targets of close expenses, continue path have the shareholder long-term free enhancement ahead, value-enhancing and the sheet successful building a to of to established cycle, near Looking cash our optimizing we've control clear the M&A. and

to our Ann? Lee financial for turn value out review over results, visibility have it's my while these call for in Lee and update. added the With that, disciplines to the and to Ann shareholders. creating consistency pleasure Our areas new

Lee Ann Gliha

I'm those. good facilitate Thanks, Nexstar everyone. as generated XX. the growth look I've broadcasting Perry one team I'm and Tom my Since they've a banker this this huge I is TMT of time, last these interesting earnings go known other then on items, the hundreds for next and and the most fill Tom to for line provided what has in I've on of for the some fan had couple shareholders. a decades listened to good revenue of easy it's few I've and being me. XX a everybody of quarter going the they've the returns helping from Nexstar CFO should, side, more blanks thrilled you color on calls the to join and on this one quarter. the for morning, Net a built as start and covered our side so broader has expenses over than forward so to providing X.X%. so for like the on a the of was up revenue I'm years color first sector the in Tom

basis, revenue effectively excluding same-station same-station XX%, political. was were up XX%. basis and the distribution net up On up flat revenue revenue XX.X%, Core digital and XX% the revenues was was on up

expense approximately from including expenses. $XX SG&A The Third advertising, of a million million, digital and partial in expenses additional in expenses, and of digital the core result legal as recovery quarter trade station to expenses $XX compensation revenues expenses approximately direct from as of as acquisitions, operating expense all well related higher increased, was primarily Total a and including non-cash Hill. quarter corporate

on $X.X we related of quarter reflected $X.X costs the and insurance approximately CapEx other $XX.X figure are transaction our in third and million of During of above we statement. was was The and some cash primarily proceeds totaled timing million Spectrum FCC line our net a recorded to as other CapEx acquisition which approximately the quarter. of $X.X and of CapEx quarter, guidance repack during from guidance the million received items million allowances slightly one-time approximately flow the reimbursements reflected adjustments, - adjusted the Hill.

to reimbursed this as repack those year. all fully we spectrum CapEx related reminder, being down activities a for wind As anticipate later

million borrowings expense rate. interest cash compared and million to expense declined due million, total $XX quarter interest to Third interest primarily $XX $XX a to last first-lien approximately year, lower lower X% approximately was

to cash higher million in updated EBITDA million guidance a due of and higher tax to quarter We've taxes estimates. ownership Third to in recorded distributions related our as Year-to-date, operating to came have and third TV in $XXX million. $XX quarter, distributions results. were million, amounted entity forecasted equity $XX.X slightly than $XX largely XX% strong produce Food these our from the in investments that continues Network

for comp million project Looking ahead, above for in year, $XX CapEx $XXX $XX indicated overhead million to nature. to no quarter million to corporate net cash quarter approximately some of be area costs $XXX in we ongoing reimbursement we CapEx and quarter, is the other year, corporate are operating project prior the be for fourth legal year, stock will be and come $XX expected for line when on the expected and one-time due in estimates. - in taxes and approximately as and revised the the million are fourth nominal inclusion and million full consideration, Cash in the close with the the than expenses fourth be of guidance included taking previously but in longer we be overhead around accounted million one-time less exclusive of for into Transaction $XXX year. $XX which profitability line comp for full in million should not Operating our expenses Non-cash quarter, expect approximately year. taxes in to fourth slightly and transaction the for less million the to improved million than the figure the are the cash $XX $XXX quarter. full currently to expected item,

borrowings $XX the lower to the the savings $XXX outstanding expense rates. and reflecting LIBOR interest quarter and million to in year, expense million fourth full interest for approximate We decline expect Nexstar's cash for related

million million year. of quarter fourth $XX the anticipate for we approximately approximately $XXX the For TV distributions Food recording and XXXX, in full Network

of XXXX, another billion. is billion, end, to debt outstanding $X.X was Total Turning to covenant from at amounted $X.X repaid purposes $XX $X.XX XXXX times balance Loan covenant debt at lien debt XXXX, first billion, September XXth - end was - which well approximately times our we XXth, XXXX is B. lien subsequent net of December compared our first and - at million XXst X.XX to our ratio Term September billion down for X.XX year $X.X at net below me, our net only sheet. net the excuse X.XX first lien times. Nexstar's first quarter On our first to lien covenant XXth,

net times for covenant times Our total compared leverage purposes at end to quarter XXXX. end year X.XX X.XX was at

our about which on For by cash the repay free earlier make bringing subsequent authorization, XXXX-XXXX shareholders. and of [$XX.XX] we $XXX XXXX on average deliver million forma on a million enumerated we basis price, and when share, on reflects our excited cash capital the factors repurchased to $XX the of $X.XX the effectively prospects $X.XX flow our returned the per XX%. year and remainder of enhance under represents Perry third a share, remain free and annual and per for week, upsized in all approximately the [ph] our flow left of In of the guidance debt. quarter $X.XX yesterday's which pro or returned flow we're to shareholder over in far billion Tom, per we quarter, ability an value - of free this repurchase million to cash CapEx we to dividend quarter the disclosed shareholders. for $XXX confident total of share XX%. effectively annualized shares the based yield share approximately have third cycle yield returned quarter, to end fourth the $XXX acquisitions close Year-to-date announced the Last million The we another with that to

As have over to will highest that, as it questions. we the the to forward, evaluate Operator? allocation going for create in capital done. to always shareholder continue we I'm operator move right to With we value the turn order

Operator

you. [Operator Instructions] Thank Thank you.

will Wolfe question first from with Research. Janedis come Our John

John Janedis

business. ago, a that NFL a the impact there was back the services Perry, on Thanks, lot months going concern good your morning. streaming of few would having

seen the you on And So can now the know been as on into there's you large versus chain issues the advertising. then impacting in press is markets or on ground and of give versus front, upcoming small local? anything what of season? call the out on people - about in your update national us supply deep there lot anything seeing hearing were an Have call on you advertising that you're or are back core terms that a an

Perry Sook

Let the me of are NFL. now, platforms fans games all stance. with mean, with FOX and NFL overriding viewership fall think first the obviously I I on and the NFL of competitive start the this exception streaming secondly, more has positive a, games of the been in

you run to And enhances know get quite didn't Could John, please? what's of increase you those the streaming component is fraction. in millions experience be I that think the your overall again, think the two continue of that's viewing a the and pieces I and by driven I it the telecast the ratings you know ratings last question. measured NFL me for

John Janedis

people anything the markets hearing coming like so. chain small press just now it there Are the What talking not on to a or into sounds and anything talked advertising? That on the call supply you're local for of and XQ? versus the as comments is are XQ on lot your it large seeing to versus national advertising meaning, out, based ground about out with in local issues, side, you around anything customers XQ they

Perry Sook

now versus of seeing between not we're large a difference small. Yeah, much

know you There's market differences everything is in or homogenized. think size fairly no regionality I material at point. this

furniture all far with our catch not most where been shifts we've of to added been despite have on Arlington, front the you automotive Suburbans America and in too You you of know the up well supply made you overtime demand. in turned offices GM are Escalades But, is prevalent, the good results the know, electronics had issues automotive. as think that chain category, that certainly appliance I category, news as know, just that and know, do Yukons here plant kind from the that in are and the affect of them

So quarter by quarter probably will net remain add? we and have year. anything positive second do category next that the in to the quarter the the to fourth headwind Tom, a but year, tailwind half turn first of perhaps a anticipate should you the next automotive and certainly second of

Tom Carter

categories comparison XX 'XX just QX, of looking 'XX. XX at In of up. the in to and QX John, top are

than know, the growth mentioned furniture, You other autos, being electronics, but are that of rest are some from more Perry a et making them affected, perspective. the of ones, that up cetera for

growth and seeing you growth 'XX ex over So 'XX know ex over auto. we're auto

John Janedis

All right, thanks.

Operator

you. Thank

next Our Dan The from Kurnos Benchmark question with Company. comes

Dan Kurnos

Ann. Good Lee [indiscernible] thanks. if additional and Great, morning guess follow-up thanks I there. the Tom, there. John's and color just on question for could I welcome

into think we a Perry, as category is huge QX, obviously called gambling now. sports you Just out going

to standalone quarter trends? there your million of my levels. you that I know, guys Maybe you now then get of number business to know, ex have digital does plus we And back we're maybe website, you not that said, levels $XXX auto? kind not question. a auto first secondarily kind quite you still of Do You we guess, that improve accelerating QX, quite, in back with we're even XXXX In QX do would $XXX XXXX million ballpark you know know. be it's a I get

Obviously, I larger do you in everything maybe future? digital the about sometime operation you of But has Thanks. standalone give that guess much gets? of monetizing? How a us know sort So how having big long-tail consider you now on kind synergies. think thoughts right can you your

Perry Sook

prior top relate quarter, anywhere it XXX% over if product XXX% Well, between up third sure. to I categories everything the and you as - at I XX mean look year. was XXX% know, our for

you know automotive down with about increases major So XX%.

you a if than, thematically other year, you'll see I the know change remember into know huge quarter obviously quarter don't fourth last much a quarter. that So, of you fourth political

So there of but was that won't displacement, obviously back, political have that is near some we inventory magnitude. be anywhere order active,

positive you the months the our and as as got make two And literally of so budgeted morning ad to said year earlier, XX% that of you point. last we've know books this for on we're I revenue know the

about good quarter, very the feel XXXX transition into fourth So, we good very about - I think XXXX. feel we

Tom Carter

continue technical can And opportunities and know, regard like across I or of the we content do more that our plumbing. actual with The the less think acquisitions see you'll digital, we acquisitions you to spectrum Hill multiplatform see there. us content With more carriage utilized to you know digital be grow, have, acquisitions that will

know feel good a us for from broadcast a and think I beginning XXXX. a revenue monetize we you'll I - think you about into well think that from a our a we'll cable linear perspective able to QX distribution and will, be see nine-digit and digital, serve from that and digital I from

Perry Sook

terms digital surpassed advertising of of all advertising dollars. television total in Look, now

So, we reason told our management happen team, here. company there's that permitted to not that this no in is

build as the continue of content of content-first you'll for dollars. to to I we'll to see, base said, broadest build Tom and think amount of distribution So, on us kind compete strategy a the allow largest

to So, you to a look could - I potentially and continued stations. see build know revenue that of for ad know over continued point broadcast support it's that and we where think growth you digital the know rival the the investment you'll time, from you

as where where are. and that's to dad is the obviously ducks used growth hunt it my to helps So, say, the

Dan Kurnos

Love Appreciate it, Thanks, it. Perry. guys.

Operator

Thank you.

Fargo. Cahall with comes Wells question from next Steven Our

Steven Cahall

Thanks. Maybe advertising. to on first just follow-up

You made QX pacing is strongly. that comment the

advertising? the quarter you us to I Hill business a clarify, could maybe related is of contribute broadly? follow-up. wanted contributed will And have comment a in quick then give that more the is how Just The sense specifically And fourth that a to Or in much Thanks. the quarter? about

Tom Carter

Broadcast - in continue make over a QX market I QX XXXX levels core that to we just advertising continues advertising to advertising would total won't yet, but be to up basis. It say on regard. be will progress back - Total the improve.

say you So perspective. perspective, being you would that that from we're from Hill The still on auto specific improving, - comments Ann, is know have I any down do by weighed Lee - we're it but

Lee Ann Gliha

of Yeah you you on know in was The the Hill of small a quarter only percentage the that in it know very terms it there. contribution really was

like over from million So $X a it of Hill. was The little revenue

Steven Cahall

I industry. an easy Ann think not to then, enough the on But Nexstar, you're And you this but Great. one to new Lee certainly is know, you.

know more the just know, debt I see you've paying than your and paying as role think you down you dividends. you said

business, any organically give So when capital. for where strategic us think you like either Thanks. or the look growth Could at more areas you'd color that? you allocating about some inorganically, on to

Lee Ann Gliha

to to and with know out said. to other Look, you And we better. And can seen of includes grow I a we be what be television last there's continued to businesses from have Yeah. of in assets that then other station just know, our do content, in doing know grow spectrum? that the It's you've doing know are XX because make there there to we past, a be mark think - from to sort we to we able and that what what I So continuing kind going pursue is, it's for far from both think we it? it's need from what too a sort where we're could years know, afield things And regulatory perspective. which of platform. did obviously, we've we perspective. you the you digital could the I you you do next then, area acquisitions invest know I have think the complementary continue continue the of you XX also the continuing think don't lot that to returns then want perspective, a with question or to we've this that But to of it's business, this that same know I been really to

Steven Cahall

Thank you.

Operator

Thank you.

Our Bank. Watts comes next from Deutsche Aaron with question

Aaron Watts

me. to and NXST. the everyone Ann, for Two morning, welcome questions Lee Good

we partnerships, today think actions is in another the streaming to where round network your heading and are an the The the been margin networks next their on cycle. for the comp long-term Curious that? from years, services. this don't of about first appreciate some on given and have XX-plus network to the those NFL how reverse be to over desire Make on light you pay I during back months, by opportunity that broadcast helped see might where for in if and it have increases relatedly is should focus perhaps new of partners few where next the you and question push the to your renewals you especially taken of deal on you retransmission and fees bolster

Perry Sook

would NFL for first offerings say the you Well, the other networks of out Olympics, much, know know, ala NCAA the the there. sports I the all, pretty and and we've always all carte you pay helped

in that. change no So,

know to competing that, And therefore have the what should the are - impact increase the we and networks future their and MyNetwork we buying look some And non-Big we're to compensation. that - less fees at the And the say, to mix because know paid our us when unique have at you denominator and approximate payments, you Big and as think at in stations than see, And of out think stations, and very stations little in far markets, would relatively on large retrans of numerator of you reverse obviously we're an or bring for us. higher that our foreseeable the I can be decrease I change that any We revenue network that not fact and I therefore, I - four. a as think very above that negotiating I CW competing or regard. to means, cost continue a obviously XX% four at margin exclusivity XX% streaming margin. oftentimes negotiations. note the come with But that are to decrease believe. desire effort at with changed Our of of with upcoming rate that do certainly our our not we comes fees at cost, from networks know, therefore will would themselves and look and has the offerings an in you you of take that

you So to I or portfolio. can in the market to station mark because us uniqueness of terms of mark market margins, don't the retrans think us our the of

Aaron Watts

desire further to ratings, Perry. Okay, IG to down rated leverage maybe Tom, grade more if the helpful, you'll production lose could land. want cheaper and with that's capacity one there longer go ever And flow you certainly or your is would Tom free Ann. to to. investment capital, capture to want in achieve sneak be to benefits financing? of company obviously the drive you that, duration it that guys cash is and your Not the you in headed Thanks. have direction Is cost if you for mentioned this to will I that IG a where do Lee I keeping

Lee Ann Gliha

we're don't to I Ann. try think rating. intending drive Lee to investment towards grade is an This

X.X done target And nice there's said times the there. debt we've back but get know really in level. I before think or is, our as know deal, repaid then we've know, you you down around our a you a leverage to little levered that been past up if - what we've quickly bit, is the to

So, I same think the - we'll probably of see more

Tom Carter

business No, free yield embraces cash flow the we've I from obviously that know you think high model I market think perspective. our a from benefited

grade, capital of you amount to but reduction some substantial. would to rating debt allocated have really So, yes, would that I'm the investment from to be be an investment benefit which not grade with we being know, receive commensurate to sure it's get would

at able debt now we're being our So, of a attractive think kind this juncture. I place leverage to at from price in happy levels

Aaron Watts

great. Thank very much. All you right,

Operator

Thank you.

Our comes question Craig from next with Huber Partners. Huber Research

Craig Huber

Great, of thank you. My auto, course. first question on

XX% you the said auto the quarter with local have national at in quarter. for difference you a I was fourth it the third auto pacing major of seen down side dealer side? think versus and year-over-year What's a on

Perry Sook

repair body shops service, Tier collision are advertising know, are and revenue, advertising you No, actually X people and our like some things some because people that.

slightly pacing and X is maybe on better Tier X than our X. know, You par Tiers revenue

We're I automotive as revenue think off on canceled the the you for as this somewhat into know the up issues end went chain year the going that perhaps throughout was revenue you think supply category. we'll what we with on. and on saw, for know is less quarter that we the quarter so we about probably and did same third less books, in area quarter books a cancel to

Craig Huber

pacing ad the care think a appreciate the let for what us know quarter? number just would I core fourth you in that. revenue is you also Would Okay. that overall on And you then basis to - year-over-year also

Perry Sook

and again, it's each all-in it's together, taken I all it's know different Digital Yeah, a a single-digit a positive Networks. and for And positive But Broadcast, number. are positive number number. you mean, individually three

Craig Huber

is than So number some less revenue what is core the just year-over-year XX% up you're TV saying? ad

Perry Sook

number single-digit A -

Craig Huber

Okay. Very - good

Tom Carter

Single-digit percentage. Yes.

Perry Sook

out you obviously political ex of to And have that, right.

Craig Huber

Right, year-over-year? please. X% okay. your the number subs, down And for roughly retrans How that quarter? that say then Was

Tom Carter

- I

Perry Sook

subs, Retrans no.

Tom Carter

It X%. down than was less

Perry Sook

Right.

Craig Huber

two slightly one then And better versus that the or was is prior - say line if - quarters - how you it trend would is the

Tom Carter

the positive trend has continued, - That's yes.

Craig Huber

much digital Thank side two acquisitions, You Okay, press the in release nitpick revenues local mentioned pretty year-over-year? the the excluding did side, you. how on guys up digital was where my question last well.

Lee Ann Gliha

question The is a - with forma on pro basis?

Craig Huber

yeah - Same-station,

Lee Ann Gliha

up? - Digital was [ph]. Same-station basis about revenue digital with up what up revenue [XX%]

Craig Huber

Very Thank you. all good. I That's had.

Operator

you. Thank

comes question from Jim next Our Barrington Research. with Goss

Jim Goss

it an have political - you. Congratulations given ads you from neutral regional do NewsNation. both have competing regional national? question national know to the One the Or parity networks that the you is about others. of And service? versus neutral might? Thank ads of your of on all sides the some stance. opportunities? achieving more CPM And what get Is that within and mix Do the with combination than you other opportunity

Perry Sook

to our revenue year. hour all that to next did and his Hill million Rotem through hours as a an Friday, certainly XX it expect $X political our as primetime, minutes And political, as cable acquisition national Dave delivered and The but we'll in networks It's all political the doing in cable national, two the programming, NewsNation of interconnect except our so, of about is sell on three that would last well of national live year we're do just hours with day of Monday you in to obviously most we know, was fact and by local Salesforce. give relates back we with

mid-term ads, in all are know, House politics state the national races, elections real again, it's issue local. There's local Although, you Governors. Senate it's referendum no and

we'll inherently cable than terms national ad play revenue, rather political that a broadcast more linear would much but linear be of get in a So some.

Jim Goss

Okay.

potential. regional why asked the about I that's Now,

and there or it had The - other - audience economics your the frame versus and potential? it program availability the you it significance. potential about I importance access question is Is very can of distribution minor some is and at relatively between look and cost there Rewind TV. is Is

Perry Sook

grow it programming TV, rated platform, the in - over we time. a we'll of terms were the advertising Primarily of would easily on has that we XX sitcoms bifurcated networks and XXs just reaching if something focused million on not be audience but kind in network, Nielsen in is bifurcated now the TV is Antenna distribution right now It delivery. And do a our approximately contributor basically homes. that top of and it Antenna syndicated a sitcom for programming the double-digit next with potential and the We it's by like made what virtually has to total diginets our which more And XX XXXX. made But distributed million that top network. cable cable direct the XXs And XXs Nielsen the of it rated revenue doing earlier response, now own is and just well. and in in is and Rewind XXs Antenna this we very this TV, year. but be TV just we it

Jim Goss

very Okay, thank much. you

Operator

you. Thank

Capital. comes from with next Our Loop question Alan Gould

Alan Gould

got I've question, the taking for Thanks two questions.

And could read versus XXXX. you and might any chance can that. have that and you anything for And I'll - I for what XXXX? next then for said into question how imply what that Tom after Political, XXXX? between Perry. XXXX political XXXX doing But versus into for beat know read might 'XX this imply is year? year First a

Perry Sook

and Florida, House, the and Ohio, Michigan, Governor, Maryland, in competitive I and ones irrationally and Wisconsin, literally think races the political, will footprint but again, want I - to be of have XX Nevada, of XX mean, XXX the Well, Florida, look of will Pennsylvania, year Georgia it in we Senate races, don't XX to participated Carolina, races. as relates at Kansas, you the participate be North we've here be and races, to XXX our exuberant in particularly going as XX Pennsylvania, going we're next to the we're Georgia, Wisconsin

well. So, we we'll think very do

than where be are to where revenue, what a not a who's for guiding a total on, million we're We XXXX ad greater exceed I who in guiding than goes number change, course $XXX races that year that maybe money of equal closer a revenue. that lot but wild most equal is But know generate card to terms of of flows, the in, XXXX terms or in kind it's, in and you over think are would political number to that will folks think out, not the thinking, as next that but we I to drops or year. of

Alan Gould

And flow Tom, you've a yield, anticipation in of political, the it visibility. you has million the consistently incremental and back $XXX word lot been increase a generating next Would buying Perry. big you're cash I for Thanks, is about about it I what release be haven't talking that year? this seen pre-pandemic press Tom of and mean, should visibility, in have worth revenue to going plus since about political you're quarter now then cash out of year. talking free to flow XX% coming sense make each a year

Tom Carter

what to - pay return in shareholders from back stock to us a out probably bring buy borrowed you typically skis would bit it doing of would it spending perspective. would you we from a capital that increase and our to basically, know, have take debt we that we're or which think I to little not over you know, Well, be dividends, a know

that a get little countercyclical that would fact not of distribution I to So, in due that bit you the would we every I is anticipate being cash flow know, our Network other March largely tell Food to the case. relative broadcasters large year. But the you

political flow. our our significant but than typical you may the of year, our in modest larger free it'll of free cash be would QX broadcaster a will to because a think for broadcast and largest it in having a kind free cash what countercyclical be and will EBITDA flow QX, - flow, cash So first of not be be quarter

availability more and that increase resources and QX in you'll see So our we'll that will we to point. when allocate get

Alan Gould

Okay, thanks.

Perry Sook

to that literally factor you us allocation surface. which think to all the And of every the be that going something that almost are know three M&A bubble you currently x the that up of day. know I what opportunities think the talk determine will percolating capital I is about is

Alan Gould

Okay, thank you.

Operator

Deutsche [Operator Murphy Instructions] you. with question Thank comes Connor Our from Bank. next

Connor Murphy

sort deals are of you? we have a bunch top heading then of you. products. for national on you secondly you about Hill little Can more better just and next Hey, to end of quarters political awareness expect a guys. coming distribution platforms know that marketing How the suite conversation cycle, the about ahead you national to know even you the guess spend push talk a those obviously have big that digital NewsNation, a a into we positioning I of year? has over ad build couple incremental news how NewsNation your advertisers drive evolved? of NewsNation The up Thank next with you should 'XX And of as think Now of as on 'XX? at

Perry Sook

that. work our We'll start through backwards all way of and

from or are MVPD year a next of all perspective. We in or know, MVPDs in in deals question of all enhancements up you distributed per of expire is a distribution participate just point renewal most virtual we to NewsNation is be of it'll rate already some on the the that Most that what XXXX, make now. XXXX. at can those for those

can do it's So what upgrade. we to again,

means, a in promotional say terms awareness country. know for You like greenfield continued to opportunity number up NewsNation. of will of see is XX% push, to a I'd XX% is that still our But as the us you

was for without not in But You likely their that The ability incremental in you the as million fourth anecdotally $X quarter, from know, an in not revenue portfolio plan. our know would Google and Google. happened the $X advertise that to Salesforce result did secured Hill ownership our the a million order portfolio that to have

of preview plans, all of synergy So our year. that's We're with on do. payroll we the Hill, I and know think all happens attraction integration our still benefit not realized targets, still in first of what you yet the phases can early The of we most are of people that coming in but a the the

The visibility a name we're we new our hugely kind ad for of there. Washington about with which and General will Hill elevating an think to individual in insider in Manager be the experience, So beneficial community

improving you about prospects NewsNation. well The Hill So BestReviews as we're continue excited for the know and as our

your think concept integrated know So of you you'll all I the together, taken as of time XXXX. of cell you an see goes know more on proof in

Connor Murphy

Okay, thank you.

Operator

you. Thank

question next Our from comes Monica Onex Credit. with Liu

Monica Liu

Thank congrats Ann. then quarter to on you. and new the Lee Congrats the role,

repeating Just mind increase to wanted to follow-up you drivers contributing comment there. some you're the you. the I'm OpEx about the Thank revenue? increasing retransmission [indiscernible] also, a if wondering expense about of if you reverse as on of increased the revenue. seeing that It And percentage talked on operating also of that. your some increase. of looks Understand of percentage direct like

Lee Ann Gliha

think there. of I so things Yeah, couple a

digital higher before recovery said I of primarily revenues what the a related just core was it in to So that, advertising. was and result

acquisitions had everything some and from is well in from the - know the Hill we expenses number, new as kind commissions like that The So of like. you some and expenses

night political XXXX in a it to were a, you remember it. quarter-over-quarter, at I of is Tom of last a as you this if think look talking and revenue know, about lot you got revenue got I percentage

there's looks that revenue because that So better quarter, the quarter. just margin more in in

Monica Liu

thank Okay, you.

Operator

you. Thank

Huber Our next question with Huber Partners. comes from Research Craig

Craig Huber

is standard if Yes. there? us plan I the Nexstar side? new be the business significant somewhere how What's And update a with that? could I to ATSC guys The Maybe revenue just longer-term X.X. ask. have you you could on follow-up if

Perry Sook

have can know of just know know the anticipate the before to X.X end Nexstar And have year. signal literally by the the you you people markets year We platform of it. drive this will XX the the air build on US, next you reaching of of markets to charge country on That's having an by we with you end markets. ATSC portfolio. XX% you road reaching half XX is this well Sure, the approximately and approximately toll

the we're per on is as kind developing of use before uses sale excited, both a can on and think build of and know pop sets this But ATSC and valued Consortium done you involved X.X in out you cheaper Pearl are a to coming basis to “light any which be online valued So, store an XXXX. local appointment And case. spectrum - a [technical household of or as sets is the BestBuy very primarily per light in build - we more on we quote the appliance basis. well build in infrastructure difficulty] - the the your is But we're I the in know, there'll set retrans we've household now, got - typically terms spectrum. and

spectrum think And we much so revenue you as from as from ancillary I revenue of be the valued they're that know, do measured uses of generating we'll XX now, kind and our I've same way. today. years from And before said distribution

problem, sorts know there's know of particularly think ground, take all towers be on XX each our to there. hotspot to scale. in you like mineral significant. think it'll autonomous side We there's cars, in broadcasters, there's the you is almost it's rural of I some think able get it's but markets we I to out to our know smaller just the television Wi-Fi have we know, monetize broadband become of a internet the build the backhaul, you helping years you But rights it, the of this of hours broadcast think

pass can use infrastructure, ancillary build use could dozen other the cases got for a the but uses. know, spectrum and two then you I there's we list So, we've out probably ultimately to here, through signal

our rental spectrum our diginets you between that million a, know is and know, know $XX plus You you business.

this So it's like spectrum not from innings we're our ballgame. of not is middle just but now, money the making the

think put SD four-digit when a nets equivalent signal of where know you got than I an out signal big or and and the know, signals money rather HD the nets add we've XK. know you we you or HD couple X.X comes XX-digit and an could in a

more and be it's enhanced we company we're we're leading us can so and these much to and bullish the that build with ATSC charge today. real it the X.X to begin advertisers. think can discussion out then to once existing an I experience we're gives in of estate use transition that so trying that uses we transition obviously we viewer But to that cases customers, some viewers other to develop that for test

Craig Huber

That's, great. Thanks, Perry.

Operator

I will back questions over remarks. turn you. no closing I'm showing Thank this further the at call for time. now

Perry Sook

forward joining New today. look importantly, update us We the quarter our most very 'XX update our you Year guidance you cash thank to joining two-year but the you much Well, 'XX for flow for cycle. everyone and on in results, to free fourth to

So thanks joining we'll the you in us, talk look for to soon New and with forward Year.

Operator

concludes today's This call. Thank participation. your you for

You may now disconnect.

Nexstar Media (NXST) 2 Nov 212021 Q3 Earnings call transcript