Earnings call transcript Q3 2022

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Operator

Good day and welcome to the Nexstar Media Group Third Quarter 2022 Results Conference Call. Today's call is being recorded.

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

Joe Jaffoni

Thank you Jake and Happy Election Day everyone. Harbor then Safe into get the call. the read language we'll and right I'll comments management be made call and XXXX. Private statements All by Act Reform statements for of of historical Securities statements Litigation other during of fact forward-looking may deemed purposes the than conference this

Nexstar call. forward-looking to risks from differ uncertainties cautions those statements statements may that reflected to these subject forward-looking the made materially the during cause that by are and actual results

uncertainties, and December please Nexstar's additional future a as filed any details filings risks For SEC. undertakes for new Commission ended of these on result with report year with Exchange Nexstar revise XX-K forward-looking public no XXst, see statements or Form Nexstar's and on events information otherwise. annual as subsequent obligation whether and the or the to the Securities XXXX update

my It's Nexstar Perry and CEO, pleasure the your to turn please host now conference Chairman ahead. Perry, to Sook. over go

Perry Sook

and CFO. me We to discuss morning Joe are Ann Operating day third financial quarter Officer; and Thank everyone. record President the our election and joining With call our results. appreciate us morning Gliha, Tom today this Nexstar's you Chief good on this on Carter, Lee you

I'll by Ann's as and well to a financial get of as review developments start with Tom's recent questions. highlights your Lee summary followed operational review then we'll

revenue, and financial of EBITDA, outstanding high shareholder net returns quarter and period results another delivered Nexstar cash adjusted flow. all-time third free including

distribution, Our digital record year-over-year revenue. by strong growth in top bottom-line and political advertising, led and performance was

model our cash of the of the substantial generate and year-after-year strength ability benefits and to excellent scale free Our shareholder and ability consistently operating returns underscore results resiliency to and our the flow. and deliver of record levels quarter-over-quarter

nine-month months our XX% and million The flow. In and free we repurchases return $XXX increase over and quarter to returned the approximately represents of million year XXXX, last and XX% respectively shareholders $XXX dividends. share shareholder a in the third through of nine first cash

election quarter of today's net day, clear represents today we we fourth pleased our XXXX visibility the XXXX day. political $XXX pretty potential impact into elections. any of the that have I'm to election equates our excluding total announce of As that runoff booked revenue political as revenue and year for the of million, as XXX% of million year for $XXX which election net to

midterm years. has record election election political advertising year political nearing our presidential but overall XXXX it advertising, only been record for not for an is our a including

positioned at not remains I'll minute. Once it medium of voters alone for And candidates again NFL and local using owners choice uniquely television Ballmer, something local broadcast local Nexstar are Steve broadcast advertisers in to broad the organizations is team like local at in scale. reach the as the scale Sports a reach across the see offer the like the country. creators, candidates all about audience, talk and and content television power of to

our As been I'll part of have call of earnings mind cover that three for investors. areas today, top

impact well how offset economic business Nexstar's First, and of is I'll these positioned the discuss to the challenges. environment

ability our recent on media remains our of Nexstar longer growth term this on update the CW today's succeed briefly third, one we renewals confident and of to an provide in distribution best-positioned including I'll touch why why of to of I'll to Second, our be marketplace. business drivers stream. our and companies the And continue revenue grow acquisition the

to investors competitive have several and enable come shareholder continue advantages distinct expect cash returns business us the Our has to Nexstar. from performance, financial will delivering flows that

a We revenue diversified have model. highly

television third distribution historically we For than quarter with recurring downturn. than This of to core revenue. been ever revenue have we one-third been And revenue and net several are now less advertising has years before. has and total source less from dependent economic periods advertising, on XX% over revenue of resistant our from been our of revenue contractual coming derived

broadcast the valuable. for audiences Our advertisers television creators, at content remains importantly, Today access only scale. audiences owners sports place to local are and organizations, most team

We and entertainment sports have by top-rated audiences over consistently decades local these providing developed content. news,

broadcast seven A or Thursday great Amazon example broadcast. watching choice a Night watching XX% prefer of on shows Local no the viewers the have viewers audiences when see on as broadcast choosing local NFL prefer delay pull the station. have shoulder it game ancillary via Prime to and Nielsen on We we or the for on and games their from can power watch that where Amazon is delivery. station, the of NFL a what broadcast Prime and NFL that programming local Football station that local data of This first of seamless with to a a resonates average no they us. provides has audiences surprise Thursday's comes relationship their and are technology games to via watch with,

CEO reach able is agreement Microsoft Ballmer owner, the Clippers Clippers LA platform television to our LA that help former is audiences currently our the new by demonstrated The Steve further are to broadcast with to and bringing Clippers who attractiveness reach. back of not

exclusively, LA along with this season. a air over the station KTLA number will stations one of NBA of XX California games base number air the our Our other Clippers, of

competitive advertising moat an business. We economically around local unparalleled our resilient have built

the excuse serve more a of Over the in sellers America. we've last reaching of markets XX% SMB have relationships XX,XXX we team advertiser and – than decades, our stations local XXX over me, local X,XXX over and developed X.X cultivated

than isn't investment. the replicate there companies it can scale On requires both is streaming easily larger consumer the and meaningful This TV one or in AVOD level as industry sales local greater no local something with reach and the resources Nexstar.

to and efficiency only delivering our our streaming are scale embarking an and a model, has replicate results now of currently deliver. pure-play companies our some on effort platform While and proven today, the can business ours consistently

the advertising accounted dependent Look approximately the mentioned, accounted beneficiary for political election and total which not record-setting previously approximately XX% revenue of revenue, net last I a at which on average. advertising on As economy. are spend, for ad of our revenues two television is we significant political cycles

scaled and representing distinct in races spending. of advantage optimizing our shares XX% our Our advertising competitive a focused markets leading contested presence approach to in Nexstar gives capturing of opportunity our political over

quarter was basis over Third up approximately quarterly revenue sequential of a increased and forma XX% political XX% QX pro on XXXX.

As earlier, year deliver I mentioned we track QX. on record election midterm to are in revenue

leverage model sheet great have efficient and balance pay operating in times to shape. expenses is our operating We only an close attention we with net X.X and

Nexstar the record shareholder of media value challenges, creation. near-term and to factors strong in these together continue and offset enable extending our to growth long-term will any from Taken us apart set industries, and other others industry while

markets agreement with our Nexstar's cable reached Turning Verizon distribution recently to local stations multiyear now carry comprehensive to We news a in national renewals. XX distribution television FiOS fast-growing and agreement Nexstar our all less network with markets. of than partners half remain for now year-end. distribution subscribers in NewsNation renewal in We active Verizon our before slightly with up of negotiations remainder total the

While consumers. of recent a also XX% viewership in aged consumer between the the continuation subscriber sub found we the versus Moreover MVPD adult ability get continue older, in we total research in experience paid Litman rate that stations and the quarter, continued a an the did attribution, half when base the distribution XX% our of service, TV excellent entrenched adults a than confident to households representing us attrition we slight phase to paid of XX broadcasters percentage fact TV of report providing our disparity population, to uptick MVPD be the the third fees, revenues even that a [ph] of moves given more our in of to get have and our the or virtual with service. pay grow

Starting Before lead the to Nexstar that growth briefly to shareholders to material unbiased I make progress, believe the term, with national NewsNation, continue building Network ATSC we can and NewsNation, call on I over three the network. value want creation nation's news hand organic we up over long Tom, to CW only including prospects the touch for X.X.

programming majority news watched population of an the XX remains television cable for and network source for the cable by fastest-growing of now looking appealing per the NewsNation of offers news the to news. in day most genre unbiased hours

GenX independent those view Gen According a profitable network over is building news a and Gallo XX% [ph], millennials to as Nexstar national audiences. XX% Z to serve of and and differentiated over recent politically themselves and poll of

being a We will in XX/X XXXX. of XX/X cable anticipate be end network the news a news network by we year next QX and of

local stations only TV Texas up Ohio, We stations local US months continue our races the to NewsNation, election, Senate enjoy valuable governors and content and synergies in between the hosted The In for and of and several races Georgia Pennsylvania in to key Illinois. debates televised the our Hill. running

the an from increased Hill Main Hill Channel Nexstar read policymakers We content as agenda-assetting leveraged Hill for on network. the and ratings influential for launched Capitol to drive Nexstar on awareness success building Digital consumers Street. digital this and to also exclusive NewsNation Fast lawmakers, to essential The

the Moving to interest advertising company's CW. value create group, Nexstar the CW acquisition Nexstar affiliate of content CW its Network. XX% Nexstar via The On in September solidifying video-on-demand participant as app. closed ownership the previously the expected by in to XX, as a transaction announced This services for revenue largest of outside our is on news the opportunities establishing diversifying CW a shareholders and

Nexstar improve you long-term He the to support ratings, excellent and to a as the revenue appointments profitable we we're are start. Dennis both his that reimagining to programming, on to The a with we prior Dennis personnel run vision our to on President knows on air CW in goal Nexstar through businesses record and and Miller our success also how the and years executive in CW our CW is the appointment, his And and will and a with Board he's app. of the for for make We focus and ability focus eight seasoned network. profitability. an served confident Operationally, and appointed continuing entertaining CW off of of many know television industry.

potential to continue X.X business and discussions progress this for we the and rollout also our accelerating make service. We technology partners with of on are ATSC

continue end our using the of this applications could decade. We by for of believe spectrum rival revenues the to the retransmission services revenue opportunity our

In results the we flow good companies. well consistently remain peers We summary one feel media year-to-date balance as generation diversified very Nexstar's for most from year. cash the our see and other as our free results strong what and of about our powerful differentiators of

local enabled resilient our and to despite interest objectives year in us advertising our and political quarter rate a advertising the achieve headwinds, an Our XXXX year Olympics revenues market to versus increasing stellar grow last to of ability distribution environment. business, absence continue the has

are we Said on estimates pacing more free that our embedded XXXX flow in are cash guidance. XXXX, over-deliver to XXXX plainly, our

of renewals continuation half agreements representing to earlier, advertising we'll which strong of quarter distribution benefit upside fourth XXXX political trends, discussed while subscribers. expect from than see our more We of revenue we

to approximately XXXX another political Looking agreement year from we to record combined election expect wave forward, benefit the benefit XX% distribution XXXX renewals with for of another presidential for of advertising, our of subscribers. the due

With Tom? that, Carter the Tom for let turn over call to our operational review. me

Tom Carter

operating was digital we XX.X% media which by saw. everyone. in strong revenues. third revenue, of $X.XX and advertising, advertising Thanks distribution declines strong advertising like high Total core revenue, political net of generated Perry, in third reflecting than performance increases quarter growth and morning record with more billion, quarter all-time total television revenue offset advertising We other of good companies another revenue record year-over-year quarter driven

XX% spot revenue revenues. advertising, year-over-year X.X% quarter. inventory also rates primarily absence driven political Olympic our television which double-digit core of by decline TV national decline ad of The was and displacement of the affected Our core approximately in represents advertising

trend market advertisers advertising the ad represents Mitigating impact revenues. which television revenue, despite XX% advertising levels advertising the television consistent significant local declined more our cycles. allocations the This was approximately local of towards the is line of maintaining historical spending with economic just during political national quarter. year-over-year, advertising X% our throughout in of Local core television inventory with

largest manufacturing, growth the advertising of categories extremely stores/medication, increased to see entertainment. half in In of including to attorneys the prior over We're quarter home mid-single-digit auto, XXXX. total, about percentage increasing category versus of repair, spent returned automotive QX in our of a dollars drug terms categories pleased and our top-performing at our year quarter,

of up health healthy deliver betting teams funds a sports categories addition, business the key in prior The running decline which minute, to and million talk program our the more advertising core and care. COVID-XX revenues services I'll advertising new $XX.X out, for responsible were medical revenue and related television to direct due center and of to was local sales which over quarter, In Nexstar's for initiatives new local government insurance, the year. X% about sales continue generated levels response gambling, marketing

their and the a of mid-single-digit general fewer gaming established reduced by launches declined in larger spending dollars in of movement betting sports millions to category state year-over-year dollars by a and to market national more betting advertising sports due The quarter, operators the markets.

the for however, quarter, television gaming propositions advertising was in and game the online legalize of to sports impactful companies dollars redirection Most by to sports-betting gambling voter California.

sports in online in September is the related remain those gambling propositions, betting would If Massachusetts came to as state political and January large Kansas sports cautiously a XXXX. up. us, Ohio, online dollars betting. have year, we legalize online and which is Nexstar We optimistic of this of include category continue expected about in category states as to received advertising been well. comes for our XXXX this

forma was from Senate seats primary and New races levels. Illinois, Ohio Nevada. Pennsylvania Pennsylvania, of quarter in Ohio Texas, Governor $XXX.X and key XXXX pro Nevada, spending Oregon, Third for advertising strong QX races around of approximately and XX% Mexico, benefited ahead Island, Nexstar Rhode elections political in million and

of more of Record a and political year the As rose million, third than of quarter terms revenue percentage quarter approximately escalators advertising, represented candidate subscriber agreement distribution X.X% XX% accounted attrition. on revenue. rate offsetting in $XXX prior for to issue renewals revenue from XXXX XX% reflecting annual spending PAC and improved spending distribution total

direct-to-consumer during While retransmission of MVPD growth subscriber and offset did sub marginally we quarter, services a faster in decline. continue our rate year-over-year virtual MVPDs experience to attrition other fees and the

expect good growth have distribution rate up ABC XXXX. this net of year. to the affiliate With with our our the We continue of fourth quarter, from approximately economics into to end also revenue half this a our in visibility only continue renewing at higher source subscribers we in

revenues on Peacock. step should But and Paramount generally. color distribution TV MVPDs other a Nexstar and wanted back YouTube how more for and think provide like I our Comcast about revenues like minute, from Charter, platforms investors Hulu, and some virtual taking distribution a MVPDs direct-to-consumer generates to our like Plus linear

linear MVPD negotiates the comes matters. scale and our where directly MVPDs really our This Nexstar into For Carriage. is for relationships, to play these contracts

the in services. broadcaster of the typically number generated far affiliate are largest We the our or local networks broadcast significant by the portion stations a and MVPD one the number and for two viewership

historically paid time renewal, once content the contract these years. negotiate to At in low contracts viewership percentage every seen relatively rates share us with typically step-up significant by the the We relatively content owners. higher owing three the MVPDs delivers the MVPDs versus of of that of to we have fees our compared to other

typically also these contracts. in escalators have annual We

when to the networks them. see you that distribution like we distribution in our contracts portion So fees the affiliate we years distribution with usually year. have of more this especially of will half by return pay than revenues subscribers revenues, them year-over-year increases XXXX linear end in with a agreements of renegotiated negotiated Separately, to

broadcast the MVPDs, including control we virtual now the networks which negotiate carriage. to respect With the CW,

the net affiliation that fee. paid Nexstar distribution is fee So implied of has a

our On from the big subscriber generate affiliation an MVPD MVPDs rates the revenue sub received net from per relationships. linear affiliates, same for apples-to-apples the about fees our four after are net rates basis as virtual we the we

as attrition in approximately growth renewal with revenue subscribers in XXXX. more which than end a our XXXX. growth will subscribers our XX% the be XXXX renewing of XXXX, subscriber little distribution we'll cycle, into Given will half of we our even continue renewing at have drive of This

the and feel item we good this beyond. next and about line years on two our for So growth

increased by digital year-over-year The This strong approximately increase business and services X.X% our local back items. our and agency growth full moving revenue $XX to digital advertising year-over-year from driven Hill. Now rest of to was line quarter in revenue a million. revenue QX the contribution

record top of third line million. of and and $XXX cash adjusted growth Our continued drove flow free management expense EBITDA $XXX quarter million

free adjusted supporting we're take cash Nexstar XX% continue in margins our leadership EBITDA we we generated of to communities role while executing where to well business, a operate. and EBITDA XX% we have approximately converted on flow. And adjusted

stations front National News from News Coverage, including Delta Breaking recognition Radio Award Murrow earned On Nexstar Innovation, Association, Professional and Excellence and for in Podcast. R. the a from Society the Sigma Awards Chi Digital of four Digital the Edward Inc. Journalists Media journalism Television

content of our fact-based develop standards high relationships newsroom Every and day journalistic with produced and enable Nexstar's and communities. us our to unbiased maintain audiences trusted integrity and our

well-established direct near-term areas, while we advertising, political digital even summary of new and growth In the actions preserve with months, our cannot local clear economic control us. advertising, reflect our to key across cash growth more to continued strong a have distribution, drive take continued with opportunities And performance in we drive our strategy. results growth how ahead long-term coming including the flows progress evolves and very can playbook we against situation

growth we and serving remain we our on capital control, focused can Looking shareholders. structure, ahead, and delivering opportunities, for what our results maximizing our our customers communities maintaining

With of the over to update. Ann? Ann review the call for Lee to Lee the remainder my financial turn that, it's pleasure and

Lee Ann Gliha

Thank you, Tom, and good morning everyone.

have our our on delivering shareholders. record results executing We significant returning on to capital and progress build QX, in continued strategy, to

Bob the by to so I Nexstar's guidance revenue gave Network. expenses on details most on business will CW and and some jump points you Perry The followed the of the of side,

related of as calculation programming, a Hill. of The from in EBITDA NewsNation as and a to related other by revenues, expenses third result direct increased variable costs quarter is million programming as which to X%, $XX SG&A our reduced to operating costs move full Together from payments from content, to and quarter news of expenses increased well or syndicated the primarily offset programming higher adjusted related programming higher syndicated

given on growth revenue percentage and political growth. net expenses revenues focus our controlling decline expense of significant a As total our

$XX.X acquisition grants was new grew and to and associated million new of million which due expense approximately including CEO's in non-cash approximately contract associated onetime approximately primarily $XX.X development various corporate corporate part with of the compensation $X.X CW expenses the of the million, with Our activity.

Again, supply to quarter Third due to $XX.X in was was equipment approximately CapEx primarily lower million. delays due receiving than disruption. CapEx chain expected,

of to interest the approximately increased the as expense predicted earnings not quarter call. $XX Third than as forward total last as increase lower million, time did curve at much expected, rates interest our

lower $XX QX. $XX spreads by increasing refinancing Cash interest primarily to expense part and was our and debt of portion compared due to million offset on debt million our in year, a repayments from last interest rates approximately in

million. cash quarter taxes $XX.X were Third operating

million from year. the tax payments distributions related XX% distributions due year operating income Network are and a to TV in the versus We to in are for decrease XX% primarily recorded investments last equity $XX over quarter, our in These ownership represents interim Food quarter. year which this third prior lower

for approximately expect in stock vary ahead, the of to project full the the million year. be year, comp grants. but based for quarter for and and and $XX Looking million excluding corporate cost we the stock $XX overhead we approximately corporate million expected overhead exclusive of price CW, will around to the in Non-cash transaction impact million the the be $XXX fourth comp on actual is and $XX quarter area fourth

Nexstar the For cash our year for around will calculating cash tax business. be when rate used CW expectations before before benefit attributable other tax tax We for onetime given expect the million that now XX.X% the any and losses $XXX to current adjustments. that the a taxes, we estimated taxes

to CapEx to projecting get target for than million currently for fourth the our $XX more of are the cash We year. $XXX quarter of million

chain has fourth spend been into pushed to been equipment CapEx due supply has the quarter. As delayed issues,

and years. than CapEx number typically non-political As a more we to reminder, years political even spend

rate cash for continued fourth refinancing full approximate expectations of We the the interest repayment. million for year recent and a net $XXX to million quarter environment, interest and increasing debt our reflecting expect Nexstar's expense $XXX for

billion. $X.XX debt at first $X.X outstanding $X.X was Turning XXXX. to lien of from Nexstar's for sheet. down XX, Net purposes the is covenant billion debt of September December billion billion. net amounted end, balance Total as debt XX, approximately XXXX as $X to quarter

only lien covenant times, first our at which X.XX was September below X.XX Our first lien times. XXXX and covenant XX, well of ratio is

expected net X.XX sale properties close one was positively Also Our total quarter X.XX net our $XXX in from times X.X times the anticipated month. remaining impact December at XXXX is real XX, at of times, in to of estate later leverage approximately down quarter cash proceeds end million. Chicago to this for our and Transaction of expected QX. fourth is

leverage end and indebtedness, payments a to by to the XXXX, of from EBITDA We decline of expect amortization reduce a the given mandatory year. combination portion due cash for free outlook of our our to increasing further allocating flow primarily

an subsidiary under As the be designated ratio. on agreement will leverage have and therefore CW our as will a unrestricted no reminder, impact debt our

with will be financial results results in GAAP. accordance with consolidated of The Nexstar's CW the

We Nexstar's a basis. revenue, including investors EBITDA presentation the adjusted also supplemental the excluding one, free that reflect: operations cash intend to and standalone net and CW measures with flow two, provide on CW operations financial non-GAAP for

be with business going back to said flow mind, In until keeping investment the So forward we our overall QX in for we respect outlook. to continue expect to the guidance cash related our will free it particular, and in. CW, financial I reported which report in bring excluding to separately guidance, the

August low our expect the nine-figure as to amount by plans, As XXXX investor we and plan. profitability invest three-year we implement our believe period can we stated bring a we over CW call, based to we on on this our

commitments of quarter time, consideration this network's the losses upfront will for price Given of over of no cash be fourth XXXX in than proxy an made purchase an drag ongoing network, flow. as or for broadcast we acquire a on there rather towards majority XXXX. the view us each as the to XXXX investment weighted XXXX, for season, and programming the quarter was Since these existing the amount

the amount EBITDA. of $XX a just under the with revenue quarter CW million negative generate fourth in adjusted anticipate will We comparable

right on as you and media, getting we in have place in the executing synergies the addition, In are seen our people there.

against interest the an to eight-figure these and be attributable figures low charges quarter. XX% portion offset will amount to the Nexstar of of the there an able a of CW at will be losses in incremental restructuring taxes in So payable Nexstar. has related

As environment, the of reap a financial uncertain we move benefit into management. economic we disciplined will more our

the We remain proficiently no in DNA well Nexstar, strong ability what positioned At through conditions deliver matter this our our XXXX growth and focus returns the free are confident we flow continue shareholders on generation continue is cash appear. to market to of we navigate in future. and to that generate for to time in

That Operator, concludes financial for open the call. the review the for please line questions.

Operator

we And Kurnos Instructions] with Benchmark The Company. with Dan will [Operator begin

Dan Kurnos

Great. the morning. Three, quick. Thanks. We'll Good with if I can, I'll keep start one. them easy

the You geographic above a guide and to were on report broadcaster everyone from Obviously, else a political. there have you heard great shift. We gotten guys are only lot that had job guys share done the around why press positive I if incremental you're getting any political? don't the you guys outperformed of But very that. debate. on you thoughts just incremental know from dollars around And have of exclusivity

Perry Sook

political only situation, its think Well, the for were we that the had if I similar back Dan, XXXX, we a achieved you where company to guidance year. remember

contested. disciplined has time a been to FP&A dive folks as much how race take each our think who to race, leadership the was the it forecast political, our money a and we I team it's what each do ballot initiative, raised, into because are, this the certainly broadcast very approach last candidates relates and very happened deep model

that an folks And into there's that estimate. I'm a not the a that's don't goes up that it. of with do. apply what past We other come just that saying factor lot work three and to a have similar work. inches XXXX, book I in XXXX. of a have my for our is political is is there one lot thick a buildup for we'll office and But

work, to think research the doing doing staying business. close your obviously and So the I it's

Dan Kurnos

Tom, lesson thanks education retrans. All Fair on the enough, Perry. right. for

be your wondering, to anything look there's no we underlying. clear, and if Just it to change sounds like retrans as forecast out, net I'm

have side You you peer side. the guys get that to incremental benefits reverse maybe on closer to scale of keep MVPD linear blended wondering, and I'm might group? help average the some the the net obviously, in if

Tom Carter

this going say regard heard But times, to one you've We're of us many to think matter change up I negotiations with MVPD. have at forward. Obviously, I'm as fronts. we evaluating with scale of number with and to expectations that specifically, subscriber does on Well, network year-end. terms of number are or our time. MVPDs specific regard XXXX, XXXX between of a comment in not going in agreements any no a any now

slight as mentioned seeing we attrition. a Also in before, uptick are we

into with but All regard not of changing to that our goes this at XXXX, the calculus we're guidance point. XXXX

move As know, and the updated basis, be with have reiterated and guidance regard that we year as more always a doing the of on to first cycle informed give more the quarter subscriber data you trends. we'll and guidance in through negotiation we here attrition we

Dan Kurnos

Got of my it. And last that was kind question.

Tom Carter

as I on only Lee we The Ann on say, would thing mentioned, are flow. track to over-deliver XXXX cash free

XXXX a good really the in XXXX So of we're in spot. terms guidance

Dan Kurnos

end. the just we we're, the if get XXXX? mean view the on was blackouts and still I blackout blended to at XXXX exclude I is had to That's we I If we any really, have and small. CW dark, going exclude, mission but -- you what do the think

Perry Sook

flow? cash free or retrans talking you Are

Dan Kurnos

Free cash.

Perry Sook

free flow impact into go it think, free is a the a is gathering We very established XXXX our And information right? flow. good to yet could But our take handle year, of from that out operationally, guide. for deviation cash on rates rate increases think interest primary cash projections feel interest. We're XXX because basis particularly guide. guide. want rates that a interest exceed I will but flow is biggest the and that that be point any our get element I free that's interest the next still bite We to we Well, despite a determine increase going would in cash

Dan Kurnos

Appreciate it. the guys. color, Got very Perfect. much. Thanks

Operator

next Our will with Partners. come Huber from Huber Research question Craig

Craig Huber

us first the a Thank question, quantify retrans basis. your retrans? what here, a for is percent got it -- for what you Obviously, you about year-over-year trailing is usually bit you. little on could My XX-month change subs, talk what if worse just but

Tom Carter

that end. streamers MVPD's, we the mentioned since I the as quarter increased MVPDs, the June virtual that includes and has calculate Well, it the way approximately X% diginet

Craig Huber

all And year-over-year, a it when is roll we it ago what year versus up?

Tom Carter

Yes.

Craig Huber

advertising. expecting talk is peers quarter in more than and yourself perspective? on shifting And then overall than originally about people start And a in -- third mean little Okay. markets, exactly to lighter people other were fundraising political your there political going about for what perhaps the you're lower generally bit is it's your Political like looking thinking? have lower quarter come come advertising you did talked see when expected? from than maybe to maybe you I fourth

Perry Sook

I I day gave our speak to on the the had tell move you. a presidential competitive around year, of we of that nature. the speak at have that as numbers books the out you PAC And races XXXX. peers. to in on XXX% a we will based can or presidential election falling can't I will Well, money particularly what in we of money

But money as more XXXX. got books XXXX than we for for we've time on did we sit right the this at now,

either election we in not talk after on be actually election will in to, And had in or depending you Now, a there two-month of Georgia XXXX. a be runoff Georgia runoff them two who -- tonight.

money and will again for million runoff state. caused our embedded are ahead in political gave come become our of we again $XXX guidance political our money year been But races know us the follow guide. we shifted slightly closely So, our of to we've we again that activity. particular short that -- some and money beneficiary number. over but when of this a in And other overall to non-competitive and It's absent And any you slightly other at be up in that markets. and expectations it's PAC we

Craig Huber

be. you're earlier assuming comment it does be show LA assume what Angeles you station NBA goes your TV Are as guess well going came to games and guys question to to that that the about sports networks? on set will do Is KTLA other where games I for there Clippers elsewhere? hoping that Los your XX in those from? regional My mean sort or able And of that

Perry Sook

These with the from games. was Steve these and RSN is these The are a you may have might that not that have it that And call came right introduce It an owners -- guess, two NBA mat of type is will in will or receive package. could kind the a package a had perhaps to we ticket in consent not exclusive subsequent ultimately where Balmer over-the-air the welcome games a receive well-respected the are perhaps and an of, And I XX creating be of in interest these RSN package other games owner about games package does have not an similar over-the-air. simulcast; that the would that over-the-air. conversations the in done with will of this I in NBA and rest think consultation with RSN. exclusive be RSN, audience

goes have as think of I markets in discussions on we stations have the a some this or time accommodate and teams other bandwidth with engaged early where you'll have we see slate So, MyNetwork, do to independent of more been in that CW, games. could

Craig Huber

and do pulling that potentially press be whole the hour trade means what guys development And their view you would programming that is Overall, bad? you for How final local that your happen stuff. the this that do then stuff If about talk turn think my and NBC over it good to potentially? affiliates in P.M. does XX:XX neutral entertainment question financials?

Perry Sook

of -- I XX that we network than week good. all hours hour at of time XX with we or It hour would network and would goes a paid an of We'll network expect with make the have A, if where more less. to do NBC B, programming money them a inventory XX time program from of be week news we program programmed an XX hours

listen, program is that of profitable. they So, that last are FOX stations prime and hour CW news -- around, extremely we and in of MyNetwork all and a number have but

Craig Huber

Very good. you. Thank

Operator

to move Barrington question will we with Now a from Goss Jim Research.

Jim Goss

Okay. to could Thanks. end couple timeframe things, game? from WBD your big you A was might the of they the the shift I And get if on program you and of away wondering Paramount the first content. have, and how share a when characterize CW,

Lee Ann Gliha

so is through end of Ann. broadcast of year. the this place of So CW next XXXX August for sort in September Lee the is that programming the season, for XXXX, timeframe The extends

air, the that that historically timeframe. see what consistent we the programming that's on with through spent program You'll

online we're working come of next the During will in course our this then -- really XXXX, slates the which XXXX develop year, to over the broadcast season.

the point. in that but have WBD will it's some at carryover year, programming for that CBS minimal and We commitment

Perry Sook

Yeah. programming. over precluded this have roll themselves from next into a that year. to be shows to of want there And financial us selling we Paramount Warner's that year going to and are not just a It's like. that we deal may distinguish be couple

Dennis couple a shape at that felt a can Schwartz develop CW budget, was show CW. a find and Schwartz Schitt's be hired those we've is which given at able on Miller than just much a gifted executive tell in Creek is we smaller program fine go very the and you I to find your Brad Brad and the easy, -- of more job called we'll the them

a eye making mind, for deal has very very creative sharp he talent. But creative and has a

scripted we a the a more like the we're I early days. at of shows But progress excited today. mix headed. the And very have will we direction in So think think broader like to that unscripted that of I'm audience, and I you'll the than appeal

Jim Goss

on go All into think NewsNation have is cycle, And of get political ask through you end to the you of to years? competitive benefit going still will a the thing season, post-election about right. you the important Thanks. as I or to the we sort was an a moving NewsNation other this do as one role political

Perry Sook

saw news are Well, here. certainly obviously big cable mode and a that seeing of still build news in that. cycle in benefit. But a And all network’s we we're times

and of we audience gaining share here. share revenues out we're So as build gaining of

network to our in is the job to likable, we as new cases our introduce well-known and many schedule. watchable program So expand talent

you the political as these us ability debates the channel to I nationwide of huge and Georgia in arena. as gave our cable linear will division But on tell take well developed the Texas them being broadcast and those stream NewsNation and to three what that and on Pennsylvania app broadcast able Illinois and Ohio the in credibility in

We can come did to No a across that. that's debates the company. as country. broadcaster close even XX And other

committed airing So what these think. and we're you out I we And Washington what going that people in I to think going there not we're tell unvarnished, political put see think determine debates them to to you let want process. the you to are

been have and will be this they cycle. think I election in impactful And

I they place as and people -- to is show opinion my on out elevate determine hope let both our for both that of that an sides, a So sides an unvarnished fair as that go with broker to will honest think what continue will be information it. stature to

Jim Goss

was I to think way that end [ph] very smart the discussion.

all I have. Thank that’s much. very So you

Operator

Now, we'll hear from Deutsche Aaron with Watts Bank.

Aaron Watts

questions. me on. Thanks of having couple for A Hi, everyone.

First, nice territory to auto and again. positive see

As cetera? continued crowd would best quarter. out momentum political dealer there it with Any tell fourth helpful. the is the you from coming the OEMs, level, be can in color that And has the et

Perry Sook

much seeing Well, it's with across year. We're all being both individual pretty three dealer of ahead and manufacturers broad-based. it tiers prior spending the

all it's is as sell still more there to So based supply have demand. vehicles chain they pent-up

in think us that's more think. be pattern of core X% I units being in terms And this ultimately XXXX I great as dealers could so delivered for gains momentum And our tailwind as up a advertising. a to automotive are it

Aaron Watts

just wrong. you. you're once with it place? the X% cap And duration? able finally correct your the most restricted to of then I'm do now, sustaining more for TV -- plan two CW, stack be And remain to But would Lee hedges to good. the separate Okay, is is me believe in have the then there portfolio, or XX% versus likely quick I ones sold rate station you for group the about But if floating Ann as around think achieve any into you breakeven

Lee Ann Gliha

Yeah.

floating. than in than more positively history has any interest rate low point, more have really don't we're the impacted yeah, So fixed. first hedges business The on We place. being about XX%, XX% floating the little

So we that forward. in for have don't -- place from place this

future the unrestricted in get we'll that some I thing subsidiary bring look think other profitability. on it The to at CW the back to in in we point an probably once

Aaron Watts

very Thanks great. much. Okay,

Operator

a from with Cahall Fargo. We'll now take Wells Steven question

Steven Cahall

Thanks.

I most little memory there. you So quarters. a to give I unclear just was flow guidance back my to wanted typically guidance. go numerical cash free In

quarter every much pretty think COVID. except I

guidance be clear at CW. So think XXXX. the that you've are just before retrans retrans, guidance moment, you reiterating to given excluding on given because you've free the mid-teens same quantitative a question for cash I the And flow

assume is as that reiterated So should well? we Thank you.

Lee Ann Gliha

in track cash free that to for had the with free say you So overachieve think heard I guidance the cash XXXX I on respect think guidance, we're XXXX Perry XXXX, to the flow our what that we period. flow

today. what that's we stating here So are

Tom Carter

as for more regard We'll subscriber XXXX with more time. now be guidance information change information And at information our there these no year-end between this retrans, we is contract to that and on to trends. and get on more renewals reevaluating in-depth

Steven Cahall

the of, flat And down is sense with sense trending? quarter, you you. up just crowd based kind year, how your between right that's down on Tom Got then, in any that think including local core X% next out, the now

Perry Sook

me stab at Let take a that.

we're think what I seeing…

Steven Cahall

Sure.

Perry Sook

broadcast are and cable caution the anticipation pretty demonstrating it's weakness. and some well advertisers in as across as pullback consumer and response. direct in much board And National national some networks national spot of digital

consumer the seeing is spending. resilient business customer the has not in the still we where been local weakness. because locally much owners counter at However, consumer look checkout more the are eye The

what that fourth with think quarter you'll I see record level So obviously of advertising. a political

-- huge interest information think we'll XXXX that share. delivering in we've operationally, confident weeks when I we quarter rates. And of of don't eight quarter we again, in from weeks to right and there. all and information crowd there doing first or together in are And middle what of see have is that stuff. we dive more a have been more six the be biggest of deep the of budgets we'll some categories kind the XXXX. putting on share The in the we're our But will change good our But out question

Steven Cahall

work on decade. with love Thanks, as maybe any business-to-business on big going be just end talked you by an test you or And of being any point beta cases at this Perry. would I data ATSC update like casting? a what have about it Thanks. of in trials there? terms as Do on last the could the X.X one

Perry Sook

on expect see from sometime that. announcement I end now and first between the an think the you of can quarter to us

Steven Cahall

you. Thank

Operator

to a Crockett on from might you Rosenblatt Securities. Barton, muted. with And Moving is question open, line Barton your be

Barton Crockett

Okay.

me hear you can Sorry, now?

Operator

Yes.

Barton Crockett

Okay.

couple a seeing you're ask what make near-term to about of, and wanted saying. to you're I questions that. I understand the, of kind about Sorry, what numbers sure

additional In in decline you terms churn, of assume subscriber said talking kind point, subs. kind I one of were to I percentage deceleration. think X% around And you the a of

I So to about that's going think X%.

the of in want confirm to I numbers hearing correct. that those ballpark I'm So

that's So one.

And then secondarily on ad pacing.

I You after just could about December the wondering core in you what the in of -- talked trends terms core in you're here you're here in November, what I'm if the quarter December in the particularly political through pacing? you're talk seeing mean about seeing September quarter. the maybe what seeing

Tom Carter

the streamers. again, for, on first take virtual the subscribers that all I'll MVPDs rate second are the points. we I'll approximately areas said for Perry call August amount we low What then that Diginet attrition MVPDs, was and let we're in increased had the second. being basis one paid quarter single-digit that the that's handle a all has and XXX NewsNation And by

as lines along digits. the to to that helpful? low low single mid-single-digits more Is opposed be would of it So

Barton Crockett

That's for it. It's Care that. splitting appreciate right now. I helpful. important that. Thanks

Perry Sook

have doubled Yeah. third in I we the the morning, than on quarter. in the we fourth to books quarter with that we just we would say, political the start this fact have the revenue did announced

revenue in much than than fourth – expect advertising. don't we there comparisons with level third down. core will we revenue political should greater in the that third quarter to think But quarter. that categories the up core in slightly the what obviously, much we had with in same will will to given see of the for books morning quarter. be political we pretty fourth quarter. that magnitude thematically, in on a reported It's the year be reported order story lower the And of that So displacement did prior are Tom I this But cause on twice the the you and it difference that that be

Barton Crockett

the But here terms political any of the pacings from track same? are after of you sense still forward, so they in do still on

Perry Sook

than better give core. pacing don't month-by-month basis, usually in on absolutely yeah, December We October but a pacing

Barton Crockett

right. All Okay. you. Thank Great.

Operator

have we Nick Stephens. up, with Next Zangler

Nick Zangler

Yes. Congrats the Hey, on quarter here. guys.

And And results for some political You and commentary there commentary from call, $X total relative were spend suggested is prior the ad result that, and that or just billion XXXX. ad some growth suggest political agree I did they matched and experienced states. what pretty had then some that imply off that in year. to source, pretty know weak a in results material disagree the versus if true, able again, you states just the above strong it election and others result, with a were from the market. suggest obviously, ad post maybe the overall XXXX decline spend flat guys would around the or given they ad or Scripps coming But coming would revenue in beyond the just the spend for don't given because you to relatedly, but F your statement, it obviously your curious, if would that it results

So just well? saw wondering, that if you as

Perry Sook

our than I mean other yeah, macro macro. don't we look at Well, the

Ohio, California all particularly house the governor's South red stations. opine – and we us billing the have have for point, tell because right were purple races our political, heard going than Texas and up of at state Senate we sports there. a I there that's or states there. and of company. any turning in there in single things candidate Nevada, is well station Texas on, build But I dial. a think of a the betting had because Arizona And that race states station we revenue station the referendum we this given think very on for races a anticipated some the than as down had Tom California in will will Nevada, political of So good contested us, state kinds number in Pennsylvania, cannot more I that other obviously don't say, political you where race blue and that in one number more – We as you are to I now

right? will to around go out competitive when When happens, that of support of money of So else. margin or competitive. races will that air, a they this being become race move money somewhere So fall candidates outside the

drive in will same the -- being will for money thing move If that You'll candidates the competitive competitive the they party see presidential state are money out XXXX each that that -- chosen of up once the immediately. states. will follow falls

our So the XX% and over country that of we literally races. broadcast have all with reach it's competitive signals the XX% of fact

we of is. I our a one do the updating performance dive reasons think and see the forecasting why deep forecast, fact where our political and I that's think, really it into that that's you

and interesting. so it's And --

XXXX We than had day have XXXX. today, the more as on day, earlier, money this election for in books on we I books the said

there, We're had will We are in races Georgia it stations on be not very for for our a determine one that is the there two If months. Atlanta. going on -- important two month. as runoff And to was in Augusta two control as Columbus. and runoff of went Georgia well Senate, And a runoffs going Savannah, there. in in they we

station management mid-year opportunity. team heroic, again will be sales broadcast year would race. well to literally performance. of my I terms if of our race and in is on, So managers or maximizing And But million impact to runoff there as call is off for cycle, a our $XX within total have it XXXX incremental think, something compliments we election coming as the another an for this

Nick Zangler

out media a I you channels was or you and search broadcast, outside feel was maybe any into in think of potential totally like do totality -- that? diverted beneficiary No, social spend that can from and agree. Yes. broadcast think that Do shifts see ad you

Perry Sook

every but boat No. and get mechanism. continues primarily effective get $XX been necessarily platforms the the take a not do, all digital our year gets spent. that's a -- than that lion's has less revenue of and all fairly out broadcast story I will fundraising. Internet across that think as We'll great be It's not dollars the to fundraising million It's mechanism, seen every it political -- probably share year the sold political in

the that and you the system prove time And politicians, spend if that TV kind again, and close works. it's direct and the that's you So local get if of elected response, works. an affirmation -- as a money to

Nick Zangler

have to conversion Obviously, unchanged negative from so there a profitability you one though that headwind to a I Last I just of X% - because the the should fallout negative you negative in fees get if in unchanged, the for and I on it. results think vMVPDs. that that transition impact like there embedded there understand -- even just your Is Again, understand top like into forward the push or is just vMVPDs. growth retrans is the that. but X% MVPDs continue you linear retrans Thanks. impact? impact line profitability that. or That about wondering we retrans we revenue Got me. within fees, of But a as how the I'm talked from about this is retrans embedded

Tom Carter

from done haven't I will or specific -- revenue. are contribution position it you I'm will of on retrans our from not We the to to comment that detail not but revenue, the level But perspective. math ecosystem that retrans with correct, distribution in a affect affect regard

Lee Ann Gliha

XX% point finer a put source. on to is that less coming just And I it, from retrans it's our than Yes. mean, of revenue

it's a So number. small

Nick Zangler

right. All Very Thanks helpful. it. guys. Got

Operator

turn I'll your remarks. over to Ladies Perry session. back call and for question-and-answer closing conclude the gentlemen, this will

Perry Sook

of quarter you to every strong Thank financial and has of all performance for you the quarter cash-generative flow. us deliver our consistently is which cash levels prodigious this framework Underpinning very much joining our and Nexstar business, our and thank free nature today. enabled

execute making returns to future ahead, shareholders. to actions long-term the long-term outsized while we delivering taking Looking growth and investments required necessary of to Nexstar, continue the and the our against our shape strategies

today. We fourth great a we Have Thanks again results. again to us you our for February, afternoon. forward when look report next joining speaking on to quarter

Operator

gentlemen, and this your today. you participation. conclude does conference for your Ladies for Thank

You now disconnect. may

Nexstar Media (NXST) 8 Nov 222022 Q3 Earnings call transcript