Earnings call transcript Q1 2023

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Operator

Good day, and welcome to Nexstar Media Group's First Quarter 2023 Conference Call. Today's call is being recorded.

And now I'll turn the conference over to Joe Jaffoni, Investor Relations. Please go ahead, sir.

Joe Jaffoni

Thank you, Kyle, and good morning, everyone.

safe call and answers. and the right we'll read the into your me harbor then language, get Let questions and statements of historical by other made of the forward-looking and this Litigation purposes All call Reform Securities conference Act statements management for than may fact, during of Private be XXXX. deemed statements comments during materially and this forward cause actual may Nexstar these statements forward-looking that the cautions by are to call. uncertainties from differ that statements reflected made subject to risks those results

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

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

Perry Sook

COO; our morning, Joe. start our is first Lee Nexstar's Lee a joining all today review us financial me you, appreciate highlights President you recent Gliha, will developments, summary everyone. and discuss Ann's Thank results. our and Carter, Tom's and the Ann operations call to With Tom CFO. on today by I quarter We of and with Good followed review.

free flow of adjusted and the start in all EBITDA for benefit came financial offset to extending decline the quarterly and long-term Nexstar's company. consensus year than of CW our revenue estimates, high a political more driven first strong ahead the acquisition, record Olympic the revenues distribution first quarter of were exceeding quarter all-time advertising. by which results year-over-year very in Net mark Record revenue, cash the expectations. net attributable and cyclical

repurchases free the our in approximately of dividends cash nearly flow shareholders share in $X.XX and returned form to share, attributable our XX% or the of quarter. We per

scale financial While to rapidly and model the drove and the of shareholder and our execution in strength monetary expectations are focus on operating markets, changing and diversified uncertainty quarter. regarding results policy strong success returns and profitable contributing with combined highly economic the the turbulent excellent our

remain two-thirds well recurring in the advertising net of we revenue core to XX% of with from margin and positioned of ahead, our over Looking distribution more environment, perform derived and revenue, current revenue local contractual high advertising. resilient comprised our

TV with to subsequent reached of and Nexstar quarter and Hulu. agreements multiyear the new quarter the MVPDs, virtual During two successfully YouTube end, largest

of for In our addition independent operators big extending were stations now stations, carriage well. Nexstar's network four up and are which to carrying as renewal, MyNetwork both

what TV will validate In local These content. and this CW agreements to operated initiate again addition, know carriage and and value to be our stations already will continue true, consumers Nexstar's CW year. Hulu owned carry affiliates YouTube distributors of we Nexstar's

largest company XXX and the America's our reach content, national broadcasting news, and and producers assets million television entertainment local and nation's distributors As local largest over of Americans. sports one of

value proposition attractive networks virtual video enhance competitiveness their offerings to the an of As continue to such, seeking stations our MVPDs cable represent and to offerings.

and in it's the Given negotiations, back important misplaced some to volatility agreement distribution from recent and a for share driven speculation noise. price performance, surrounding our moment step the by separate reality

up our double-digits CW. the behind the benefit for First in revenue low to excluding high of stand XXXX, guidance be we foremost, and distribution single the growth to of

removal the on MVPDs our quarter, over partner first related of of ongoing year certain stations the our last the X% to impact increased In contract revenue distribution despite negotiations.

or distribution negotiations hard until several almost negotiations have both Nexstar dark first have the private cases we been reach out when a partner go XX have always or years since to retrans fair been dollar our been agreement. past that in publicly, parties. revenue forced typically generated Second, of by the fought stations ago, we are There played

as usual, our approximately in partners negotiating indirectly expect year, subscribers and we this is continued value network XX% is bring For whether directly for this the us, with Nexstar distribution affiliation business that of and growth we throughout We boards. to or renewal through beyond. our up remain confident our XXXX

monetization addition assets to linear, across our and and of strategy in strong portfolio. We're financial also our drive posting to initiatives. driving continue mobile new momentum In on our across another ways we strong streaming organic and leveraging results, quarter digital execute to focused increased our growth growth

CW, executed quarter. on operating key our all for of our ML of corporate share lion's personal and First, plan overhead end first savings our appointments having by we're progress the the significant the the making making

new launched despite Golf also aired teams on and for completely Golf docuseries including new sports the the date previously leading partnership LIV the sports on first programming XXX on following league and motor results Indy, performance time CW and our with programming, up the sports to Days the We're stations extremely time LIV ratings drivers during the and from pleased been XXX. racing CW, our a to We a exceeding early sports sports-related significantly being IndyCar Indy those to of has period. the

Golf Golf engaging app. the LIV also CW on are Live audiences increasingly with

day, three-day in for over the the Golf the For XX event app on on hours watched the over Singapore, watched CW And LIV minutes the event. most final two they on app. for recent average audiences weekend

track CW a on revenue, affiliates revenue increased and On benefiting and grow air expect we record. as more from front, already over are national our network local to time we the establish the ratings advertising events

approaching, quickly anticipate the can a our will lineup feature for season. shows, XXXX-XXXX With plan, our programming a mix announcements diversified which unscripted scripted have growth. will CW's programming see of new Consistent drive we the variety to of with expect more and seen and ratings upfronts you

by therefore, current series Several been of summer our the affected highly already strike. and and included schedules not new and acclaimed produced the have in fall scripted writer written are,

the build date. delivery to quarter Second, the and audience highest continues to NewsNation grow achieving first with

we journalists roster our television quarter, contributors. NewsNation new connected of and national We variety political, a launched legal, of expanded medical the OTT all major and apps on security added and CTV platforms. During key

In networks with launch April, a network the milestone news programming expanded as Vargas new political the the program daytime major Reports. of cable a ensemble show, well debut of evening by becoming NewsNation Hill, Elizabeth XX/X marked as news news The and

the valuable Overall, that with in continues cable the We watched to cable profitable, competency most results. news differentiated network our our fastest-growing taking network delivering and audience a place at We've and that by strategy incumbents strengthens are and as we core major changes ability be in to unbiased watchdog to remain rated seen this content trustworthy cable groups. profits. leverage space, that national news to is television, the and awareness, news build and the the only of genre this highly build NewsNation's activity leading all believe

X.X. to on of launched as the or NextGen stations of are of the covering XX% transition And QX, we've ATSC In make progress country. way additional Finally, deployment three our the well markets, U.S. and population. reaching of XX.X% our near-term of TV goal achieving we our continue we we of today, completed to on

reach with power over of partnered Nexstar combined Scripps together station the leverage which portfolios, our previously, country. to XX% discussed of the As

variety new, with cases businesses, and our and responders. with create ATSC scale why is planning nationwide our partnership ever for of combined to vehicles data now As use than Hewlett-Packard more demonstrates utilized first X.X companies coverage part by The agricultural the and logistic opportunity actionable of Sony we're are collaborating simulations powerful partnership, Enterprise applications a and speed businesses solutions high of that for before.

working ensure as the to position expedite forward NAB operators. would of Jessica partnership and a step Rosenworcel, have view important consolidation for a as aiding broadcast new as for this public-private majority our operators public. designed X.X industry helps last industries Thanks last effort to at ATSC of a over FCC we're regulatory announced decade, smooth the of support now broadcasters, the And effort the time can the required market. to month collaboration households, initiative U.S. before television associated together in initiative, cover future just transition Chair, the a while We an our the transition the to show, two where television many it

in X.X local affiliate in on be transition KUSI, and recapturing acquisition a information other than becomes Diego FOX is affiliate station a nation's organization. more happy market. station already And acquisition the also economically expediting will to the television yesterday the San affiliation The the We're The and XXth our together primary market, in independent KSWB-TV, announced news combined. largest stations local programming we'll the of in signal to offer in the powerhouse have Diego, San all CW station ATSC instrumental when available with an the we market. news O&O our local the from market in will benefit

once We reprogram expect the later be this asset the the we're and to to transition to program. able CW year with close accretive

of strategy In per enhancing substantially value, annual and by per to generate priorities focus rate our quarterly continue to summary, XX%. dividend and in free significant on dividend with allocation we cash share the increased cash flow. Nexstar's ability compound January, capital our of increasing shareholder growth Consistent remain confident Directors Board XX% in $X.XX to our quarter, historical

our opportunities debt not other dividends, free to enables capital only enhance to as shareholders shareholders. to the opportunistically reduce of repurchase value the in continue returned strong as percentage shares to flow us for to also cash Our further increase pursue but of form strategic well and

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

Tom Carter

billion, advertising, We in political continued ad due of offset were strong national, the as as first revenue revenues, distribution mix. quarter acquisition driven $X.XX of primarily of smaller with good quarterly from year. all-time partially and the of and Olympic our Perry, primarily in a record benefit softness, net prior which of another decline part to is advertising, Results generated the everyone. a absence television morning, well the revenue advertising X.X% a increase midterm by Thanks, CW high quarter performance, and operating by

X.X% was of quarter. flat decreased Excluding revenue essentially Core the year results CW, the television advertising net from the year-over-year. prior

accounts approximately XX% performance ad call. consistent total meaningfully with television guidance driven national, provided of revenues, last core of TV ad single-digits. advertising, our on declining Nexstar's This advertising was of to is television low CW, double-digit X.X% our core the Excluding in core approximately nearly by local ad the XX% represents down decline CW, outperform revenues. which excluding spot national revenue, rates we primarily which our our for continues

of So far modestly unique the driven similar markets. markets advertising market, automotive top the New quarter, Los and XX in a seeing markets saw market by where softening XXXX, growth Angeles, part like the national Tampa, exposure a Chicago local DMAs, national York, to results in rate first local and notably to what by QX more in in we in our are with in local behave we slowing

the in repair, manufacturing, categories were performing Excluding the top CW, quarter and automotive, travel. our attorneys, entertainment home

automotive, QX increasing of pleased XXXX. in largest extremely maintain category for trajectory to XX% We're our its consecutive of see the over advertising growth terms quarter, dollars third spent,

levels, While in spending encouraged and betting, the overall healthcare, were betting the TV, markets. radio, remains category. in gaming, XXXX was telecom. responsible established revenue category quarter automotive newspaper, primarily The this reduced we're and due advertising continued for cable, sports core below in categories to decline sports fewer The softness launching spending by insurance more and gambling rebound medical, states

Biden experienced in history Turning Trump, the spending revenue April, presidential bookings of generated year-over-year in a company’s for reflecting and decline we In the earliest first advertising with year from quarter Nexstar spending. DeSantis election early the $X political to political. race cyclical Pax. million, the

a the result, XXXX, revenue about political XXXX very growth advertising As our cycle. for in election remain prospects we optimistic

CW. distribution Nexstar increase was growth XXXX approximately growth by on escalators, in Revenue $XXX annual improved agreements prior and of the driven million, the over MVPD a X% delivered well revenue of the the inclusion the as year. quarterly distribution of record revenues rate in as and virtual renewal terms marking

stations independent and due mid-single Our of increased attrition the subscriber impact improved quarter our partner removal to our the continued positive YouTube of the certain MyNetwork of digits, was MVPDs. which negotiations during the attrition growth impact last low with in of on was achieved of despite ongoing CW, the MVPD TV. carriage related some to and stations carriage to subscriber year-over-year Estimated

Excluding the up CW, X.X%. our was distribution revenue

on end contract on up of resets, have the mentioned, Perry XXXX slight we MVPDs the MVPD lap rates outcome including to for XXXX. negotiations our our trends the ongoing continue we Depending the dark contracts at with of CW currently subscriber couple the of the year-over-year of As and attrition. the a to the outcome distribution date acquisition expect distribution which positive on will fees as to renewal, our affiliation low-double-digits have distribution they’re revenue benefit third CW up partners impact overall in growth for a of quarter. we high-single-digit be fees given

will the XX.X% of in to digital to inclusion – million. Record mid-single-digit weakness e-commerce growth the of $XX our affiliation These year-over-year services year, quarter expect distribution advertising and expenses a continue rate offset We giving than CW approximately net agency Nexstar’s for increase rate XXXX. increased in retran digital net more revenue and increase driven revenue of first double-digit by this increases Revenue in overall. some business. was of were

the digital quarter margin, cash quarter basis, down representing million. revenue million, a flow Including adjusted consolidated was was $XXX XX.X% $XXX CW, and first EBITDA On a was attributable low-single-digits. first the free

to million, a margin, quarter CW, and million, the quarter the of XX.X% adjusted Excluding amounting EBITDA. $XXX $XXX was cash the first representing first free adjusted was XX% flow EBITDA

outreach for the of candid summary efforts the XXXX and Nexstar’s outreach and your on for XXXX recent Proxy first solicit to feedback we consideration, to company top shareholders earnings update initiative to during engage thank the shareholders for which in our with last to these shareholders again recommendations the like who was end annual Meeting, Annual call once an and elected ESG the the included and these we company’s and matters. input our our The outlined presented our our to Directors at in of April. in conducted their our for them extensive participating We’d were of proxy In filed quarter initiatives, Board preparation on of shareholder feedback.

we employees goals published communicates focused everyone first evolving a during on In our goals for It’s website policies thoughtful our communities on company’s available ESG. supports remained efforts, well performance and document in as value. enhancement Nexstar’s that of in our a manner disclosures report, ESG and access. this QX, in ESG to growth regard, that our as We for the and the shareholder

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

Lee Ann Gliha

Thank you, Tom, and good morning, everyone.

discussion the and As most I’ll by some results, on revenue guidance. color side, and to you our Network TV gave followed – always, Perry Food then Tom details expenses the the our jump CW so a little financial of on discussion further on provide distribution,

comprised $X of In which $XX generated projections first our was loss $XX million and one-time of the of of with charges, line the and restructuring EBITDA million quarter, revenue from of million expenses expectations. CW adjusted primarily all in

to as revenue the generates television primarily reminder, periodic national as the player. only advertising, quarter fourth revenue the to broadcast Since from CW seasons, licensing an playbook XXXX, CW start is some the in locked affiliates and continuing digital a XXXX fees be As from see this you’ll content programming able fold distribution and well from SVOD to the virtual of Nexstar for short-term year. in schedule MVPDs,

one-time expenses the the including increased expenses the million restructuring consolidated our inclusion for quarter I which and Moving difference. primarily the approximately SG&A $X ago, accounted to million due mentioned back $XX of minute to expenses. Together, of $XX a operating CW, direct first million, of

increased to Washington, increased With the local amount due news as D.C. as local due markets, and affiliation and at distribution other to the revenues, expansion remaining well Bureau fees, the our syndicated reduced of news our flow our to EBITDA reduced content. partially offset by reliance at expansion which on NewsNation programming NewsNation, cash at adjusted costs related and was free programming calculations in of

compensation million and $XXX XXXX XXXX. to expense including XXXX $XX was of million, million the quarter compensation $XX expense of corporate QX expense in approximately versus first million amortization in non-cash including million, compared QX was acquisition are in primarily included free $XX $XX depreciation $XXX of non-cash and million the item definitions CW’s EBITDA CW. year programming amortization of rights. note are to adjusted this which the Please broadcast prior our cash in of due costs, for that the accounted flow the quarter as line of

For amount, more to our this earnings on please schedules in information the release. refer

carryover the $XX that QX Last supply first CapEx compared low the XXXX and CapEx constraints million million increase artificially the quarter. CapEx to given XXXX in year. from and year’s in CapEx in was reflects first chain also quarter paid First was line was QX expectations with some our quarter quarter last $XX

First of for million rate prior our to the $XXX expense our interest to to $XX quarter the estimated increased Cash rates floating from due versus actual million the expense increasing quarter, impact applicable rates $XXX million net interest interest due and LIBOR in debt. income. was quarter SOFR slightly than lower year expectations and interest

tax primarily related the Network, million a prior the few in were We the taxes from $X a year which quarter quarter. over increase quarter. state XX% XX% investments equity only in have received QX Food ownership to First million operating we $XXX TV in our payments represents distributions as

Food our at attributable Warner share Bros. included net $XX Network accounts from program of TV million Discovery. distribution Our an securitization receivable the related proceeds to

our one-time free attributable this to up chooses nature, TV time, amount the program. flow. distribution securitization cash If EBITDA free or cash have flow, Network we in reduce excluded Because securitization back cash and securitization the balance, Over is in and may from accordingly. EBITDA, will and definitions we proportional decrease program this adjusted these the increase of cash its amortize receivables proceeds Food free into build back it flow future its adjusted of

versus investment the national to weakness by from securitization remaining last and of investments distributions related a lower working capital Food approximately were distribution, year, in TV was to in or the XX% equity at market was XX% $XX in XX% our the advertising which Excluding million the content. quarter due Network,

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

our use we and one-time other XX.X% adjustments. taxes, cash a taxes For rate when calculating before tax estimated

includes quarter income two tax second The payments.

We million last million of are in the including currently carryover projecting net $XX of CapEx a from full year, and CapEx year. $XXX for the second cash quarter portion

We expect current full thereafter. expectations approximate interest Nexstar’s $XXX reflecting peaking for forward rates forward interest and the million debt and curve cash curve and quarter expense second for The the shows repayments. for our year, currently following the to $XXX June in million

at mandatory March Nexstar’s designated $XX quarter for billion, with our we Turning we unrestricted CW debt of CW credit are for amortization payments purposes quarterly leverage calculation to the of the the made million. $X.XX was our Because associated balance sheet. XX, losses XXXX down as the an of outstanding as for the slightly in accounted have not subsidiary, agreement.

our CW covenant such, covenant XXXX X.XXx. our Nexstar, well excluding net XX, first-lien of March and at first-lien which As below X.XXx, ratio only is for was

total leverage Our was quarter net excluding CW X.XXx. for Nexstar, at end

which fall As we months up indebtedness, last reduce is to slightly free debt non-political two in allocate years, our cash In year. we of our versus XXXX on year but from average, typical to calculate leverage, portion a XXXX, a expect to in our primarily not flow in XX but to political again we of basis XXXX, amortization tick quantum plan payment. mandatory

working million timing a balance of the and level was CW. $XXX high cash capital requirements, includes Our related to inflows cash of $XX seasonally given and million, cash

of and over first repurchasing attributable returned flow of stock, a in $XXX to free million flow. the shareholders which of in of together For XX% free $XXX the dividends million $XXX cash or cash increase this million quarter paying quarter We XXXX. we attributable levels XX% mark $XX generated million

see our creating continue for is issued guidance to with strategically value. will move cash to we our that in manner forward, a highest deploy As prior call, consistent the shareholder we On our annual commitment the need we XXXX our we either to down the cash comment a on average that for future, time. free period. flow XXXX, change we this the will that up at or attributable If in

shareholder powerful flow differentiators strong creation. our one free consistently and remains mechanisms Nexstar’s value for cash of most generation

stock Nexstar’s probably price, While you this, saying are we’re our think significantly undervalued. current broken shares record at

free price dividend current flow and yield. over cash a Our XX% over implies stock a yield X%

in flows, CW, belief multiple our in and to NewsNation over the consistency cash XX% Meaning do we this cap. will XXXX attributable entire we growth of us free we at equivalent cash current cap our outer only XXXX organic Our that flow the core ATSC our Not have mid-XXXX. drivers years, of help and to cash the have by generate X.X. market flow rate, equates market

more, So I’m if to to you want learn get up speed. available to you

please for concludes financial for This line the the you questions? review open can call. Operator, the

Operator

Thank question Our you. with ahead. first [Operator Benchmark. comes Dan from Kurnos Please Instructions] go

Dan Kurnos

level, start peer Good as of guys. the some Perry you think sports names. morning. to group Maybe strong results, the Great. just Super we’ve some just about seen high add also kind Thanks. of landscape,

with way the led on focus guys acquisition You LIV, TV independence.

you opportunity synergies time. of you do for to you think Just the thus we far contribution incremental think about just And over do here? broader how how alluded revenue about some also kind the

Perry Sook

the my in we’ve you good I And And for are portion reach old, the and started in superior country. sports television across the team commissioners, distributed ‘XXs, broadcast business Sure. of only of missing is guess everything the the the interesting television had was you’re the first is of if is comment via obviously in cable, I would into a When with home primarily because broadcast throughout belle ‘XXs its again independent the again. ball. league owners, and marketplace. once it’s the the conversations new ‘XXs be late

for that So Nexstar, the time. additional steady been to have conversations results continue results will believe they and yield over we

So as see to are it’s LIV say recognizing it Golf the vehicle. would addition television as I that to reach to of CW. kind broadcast the superior heartening relates people the

network CW margin scatter selling in amount, out point. advertising And this there’s not the stations substantial local of a are a selling affiliates billing Our terms by market, network the but out a modest heck are the is sales of network it. at because the really

and so grow net that think that company over to it’s affiliates CW for time. this will positive programming or and for them, incremental – a the revenue paid is we new that’s movies So, so we’re or programming, all syndication

Dan Kurnos

of QX Got then, just the sort from mid-single-digits distribution, sort of you Tom, higher be start little agreements with I included a would original that helpful. the it. you guidance. if incremental That’s front know And that on virtuals had than there I the and accelerating bit then year. half guided you And mid-single-digits don’t signed previously think to had carriage the and

maybe one just housekeeping the So of how think that the question year initial outperformance. we and of over of QX balance pace the kind given the sort about

Tom Carter

and was Well, I yes, say, would a was budget our entire that year’s so include did good QX baked quarter renewals of vMVPD, the there. in

our though We’re outcomes with in regard in this potential to point at gave we still a range, over a first overall of that believe because the we retransmission that was performance. slight not changing guidance even range quarter revenue cards the that and is

So but guidance so at we prepared exuberant this that we’re are, where change are our not we point. pleased with to

Dan Kurnos

All to right. the Good enough. Thank start Fair year, you. guys.

Operator

ahead. Our next Partners. Research with go question Huber Huber Please comes from Craig

Craig Huber

on think do so the peers up do So potentially on potentially window be? contracts that? you big when contracts. When of yourselves. that that this like Good your controversy seems could contracts being MVPDs to want come actually to Trade morning. Press to for how you maybe yourself, for sort the And picked switch do out there those your years many and you up mean, I a the question could the would by could maybe you be preference that MVPDs. done you broadcast you contracts picture for virtual All renewals, as networks, preference out legacy them open that is the have know. I do those and

Perry Sook

three Virtual generally MVPD contract tenor two contract renewals a have years. or of

the number that’s extent were to process. a act of the a that I absent accelerate going think probably or to renewed, be just legislative So them something might that the window

that’s revisit a issue think time I of meaningful the expiration. time the contract to at

Craig Huber

Okay. And all the mid-single digits about you in, help quarter? the or… year-over-year Was me sub with retran in it down also, can then declines

Tom Carter

some new we our think mid-single CW, addition but the I and low of virtual independent MVPDs. some carriage is by that of of overall MyNetwork decline digits, stations includes Well, to gave

from the contributing went why that’s our factor that actually the So slightly quarter attrition as to reported. we last down

Craig Huber

down an reasonable us organic mid-single sort for of Sort expect? digits basis, of to

Tom Carter

We for – obviously you it’s to think legacy if haven’t overall that, low attrition the but that on lower would than slightly same station, or commented be mid-single group. it about

Craig Huber

Okay. you core saw pacings second of talk first you if give the about a some CW, the better just quarter? would sort what changing or excluding Thanks And your advertising how for us you. the worse that’s Thank little here, bit in that. the you Can categories on be tracking? more of detail, for quarter might versus

Perry Sook

like advertising I that looks core first quarter pacing would second say quarter. a lot

of that be or quarter think day we’re I point the the in might ninth May, Granted, this in first national or slower at day a of than point two eighth only behind time. May.

similar. So optimistic we are be – to I think that going our are results

a the Procter got pace scatter digital Gamble. The in mid-six past week digit revenue, network from just by revenue & Our positive. to we continues

than no probably there, So that an is advertising revenue results. I but core worse is pacing on basis, quarter all-in economic there think the first the there question out are that headwinds marginally

Won’t Although up there it, make advertising expectations. all of puts but vis-à-vis uptick of for think see an you’ll in and lots are revenue political I takes.

Craig Huber

Great. Thank you.

Operator

Goss Barrington Research. question with from ahead. next Our Please comes go Jim

Jim Goss

All wondering of most the a network time the probably CW right. which than Thank would’ve with was in terms couple it’s But you. Golf I hours the part. surprising. for programming, prime doing isn’t typically of prior night limited pretty I’m – each too of LIV relationships mentioned you better

about could in you wondering was sort so programming of what normal? newer the this with is I a if relationship that And from talk different timeframe

Perry Sook

Miller our as And efforts that executives think to programming as in surprises heading one who the doors CW was of talk are Brad and The more is are when let’s say following open, scripted of well unscripted, our hey, takeover all are responded, new in would I doing about Schwartz, everybody talking the up I and we that responded. Hollywood. business. very pleasant are Dennis Well, community which that, and talented the their

network competitor fifth interest out it’s in that there viable I everybody’s there. a think best is

And so our goal to the the the broaden And appeal network. responded. of community’s again, is

everything the a see primary FBOY called Son yesterday, announced a you’ll series Island that of of to McDowell So as on with comedy leads. the Malcolm Critch one network was from a

So, we’re well. of trying programming the to broaden slate we’re broaden the trying and appeal to as

announced XXth strike. full place. on pieces schedule any that that from will with nine shows good May the really there’s the days on writers’ have the on And be news effect only the in today the schedule, from And all two is will

off pretty give we’ll reign able which easily. scripted. us those competitive dependent of the are a schedule should that So will to be a advantage cover And intact, more on our over bit that of bulk

Jim Goss

other net from with wondering might have Okay. streaming thing, you if increase broadcasting, outlook Thank own distribution the MVPDs assume one offset other with is conservative revenues you. in big terms of take your they painted in in I more there’s I’m pretty your terms power expenditures? a the outlook offset. the the that toward companies a happy from any you’ve better of the as picture experience. retrans value any their And bargaining programming

Perry Sook

low-double digit any comment revenue of distribution a our total I’ll then The streaming details. can percentage amount. in and Tom Well, revenue add is as a

least the even needle subscriber at that So move those this less internally has attrition that contractual resets, than as increases, far as projected though that been are doesn’t much so year.

– our puts history. providers, year increase the compared end XX% of that the not and and Mission we the the those advertising in the X% on which economic deduct of was White the carried are reset to from partner driving is being our station’s Knight the fact the our and inconsequential not an when light revenue relationship two satellite at that primary providing increase, of with So the subscribers and takes,

Tom Carter

the added And we’re at the XXXX. think majority with this of renewal, just that as the expect the we our the and we to for to going change And is a appropriate them value also affiliation the to so fees CW The the to in that of reflected benefit those at for and but year. all additions And to we And to network additional we such given agreements the opportunity of to increased have do in keep be growth local hope of going mentioned, year, CW Golf, conversation have going mind affiliates. Perry making of subscribers with that add the is affiliates CW LIV forward. XX% programming in that, that the as up meaningfully bring we’ll end the come an CW able what value forward, the CW CW for programming to that changes affiliation in with far. see we’re up regard see as as to

Jim Goss

Thanks right. All much. very

Operator

go Please from with next Our ahead. Bank. Deutsche comes question Benjamin Soff

Benjamin Soff

XX% question. for about fees. the guys, that fact past, total receives so of of XX% the viewership, Hey pay broadcast you’ve accounts or only spoken about thanks the for TV but the In the

Thanks. close. really wondering about see tailwind we to just big you time. over kind latest if a an there’s to following update I’m better gap think when pricing start on renewals that’s and obviously timeframe what that So we’ll to breakdown your this ability start get of round that think of

Perry Sook

high gets Yes, I We’ve broadcast a WACC. to of think of out taken percentage of a of the percentages said distribution has your teens viewing third aggregate little a and revenue. historically kind XX% are

so So I that’s and that and that where trying renewals the bid we’re to and obviously results, have everybody close. just say we’re with the for about optimistic ahead of us can else’s in XXXX. very we the information ask I we’ve renewals on – pleased are know the that’s gap the you an give what update the I don’t industry I that can’t mean, the contemplated industry.

Benjamin Soff

Thanks. Okay.

Operator

question comes from Please Wells Fargo. with next ahead. Our go Steven Cahall

Steven Cahall

was about strategy. could your Thanks. just overall Maybe first, a if you advertising more bit Tom, talk wondering I

CW schedule NewsNation, advertising you’ve bigger think more lot senior in for in and the there’s between just BestReviews now announced the portfolio. this and a some the I year, leaders advertising new

So maybe to different hold to you And of can go components you’re gains? how the talk back local about growth the on when from you at using upfront? you’re looking to how share much more and focus kind these level, market

deals you’ve said completed Ann, effectively the have think distribution it. Lee then that And I paid you on CW, for

contributor? XXXX when reprogramming, about XXXX, what cash we’re the you’ve in season? think convert of for expect And we as the you maybe wondering, discussed do the we feel after Thanks. CW Just a to flow kind what can to like inning

Tom Carter

NewsNation, months three last become own has and case to Steve. by XX The added much national you first it quite We old team. if sales the case with sales. a over had really Yes, is a a its Hill, we take our CW. the we’ve national had bit was perspective year on which from regard very the entity Nexstar, back I’ll into Well, or so, we now And question, think have

marketing advertisers. those all those together So a for we’re of as national and package putting

stations XX% In addition fact we that can – the reach the of population. have to we that

Nexstar put have it together to there we if you from station to way perspective. want a think about So that a opportunity an network,

we So advertisers are the additional haven’t have we’re together to to we the driver that’s assets don’t avenue primary put market make and inroads package growth a really that’s that we historically trying didn’t national really that the – because we and for attacking. the where

with ongoing. – inventory cetera, middle the right now, the and of to in the upfront regard allocation, I and We’re decisions are et those think sales

that be XX in I days the we’ll buys continues and for I to as exhibited to a local funnel national sectional looking are local And at deals multi-market to feel regional buys national with products from think the regard advertisers with do we that how a force our next in or the up better strength we obviously, to well perspective. products. results look that then putting And to our sales up use a that So so, have. have regard exactly the as we’re to of regard that think with

of Ann more to talk trajectory over the turn So about bit it a Lee with I'll little things. to that,

Lee Ann Gliha

Yes.

we – thanks, we've we a as CW, think XXXX-XXXX So Tom. when The times, had said bought already few broadcast the company, the the programmed. season I

programming was that that all is of – the those the So currently generating losses.

And be this those we unfortunately, third transition, is program year of of quarter And so the really going this of fourth will the broadcast quarter stay The that – XXXX – place right. XXXX, kind first can it's in to where end be that of first really the until, – a will the period really season. own, year. will that on our

of slate. but XXXX. see on we'll All really happy distribution We're ever broadcast still things And we'll the unfold. about of a to to carryover achieve our we're helps So additional But by than current way pay next season, we commitment, really the earlier be kind those period have transition got American, things. Nexstar one have it. coming couple plan, – we're sort in we broadcast which it's we have, We anticipating that doing moving just of of able to putting That's – the of profitability revenues how would for the new put and we'll our still that really into thought really kind of investment.

Steven Cahall

maybe then follow-up. quick And Thanks. just a

Just on been the lowest about your level leverage allocation, a it's is in while.

accelerated and in buyback we about holding back how Would the in years Or is. stock nonpolitical political? odd and underpriced years cash of the through is, where to buy expect the should of a you You've with talked smooth sort to obviously the you i.e., more ever think leverage stock track buyback steady then years flow out? consider free even the more less little sort it

Lee Ann Gliha

just as cash either paying dividends, Look, doing spend now, means our that we think buying by flow it. to debt, is plan the investments. free making for or get stock our back strategic Yes. that paying And down I

best delever I as plan any look what of to cash revisit always so we think obviously to the right execute is flow is the as in do But we kind thoughts for the on now, for the shareholders, comes. those spending future. and of the it evolve free can more, we'll and

Steven Cahall

you. Thank

Operator

ahead. Barton with Please Securities. from Rosenblatt comes question next Our go Crockett

Barton Crockett

CW evolving. the Okay. to and transition. talking are obviously, guys the you – for was question. about understand buying San I a taking sure that's station curious footprint There the Thanks Diego wanting we about make and how

I news I off major CW the think to transition was some which stations, of with for that their in in some are of the CBS plans markets. think

So in CW transition on you that reach over could you expect how and the from give us others of time? and what plays stations out CBS and the of maybe update an terms

Perry Sook

all the do, and CBS let's start Sure. million we fact television the reach Well, that the with same I NBC has XXX-plus ABC, FOX, that households. reach mean, population CW

knew and when obviously affiliates and timetable So was everyone week. CBS distribution we is intend public of that make which at the for there of owned wanted at the season, to their externally, not is on this to renew end went they parity CW with time this internally affiliation acquisition perspective. the from a We did a CW announcement past their

CW have of stations is expressions is, news easily has affiliates to of we be market, multiple for good interest those three could virtually affiliations every the in converted Nexstar that in So markets.

war versus anticipate interest. but we too would the in discussions not markets, the of of issue. a CW And I People no fact, in because strong having any we So haven't a recognize far, having to – affiliation value have do affiliation. of call – it's couple it multiple progressed expressions bidding that the

will help so that to drive and pricing affiliation new ultimately us terms And agreements.

as group, see the relates well this to opportunity improve as station the network. to both an upgrade we it So as as financials its

Barton Crockett

requirement you like broadcasting antenna does for – with when to legacy, I that hoping kind of FCC progress give the And to legacy material be Okay. ATSC commercialization what expected work one of was broadcasting And view could an go does on I would need think timing likely purely you dual of off mandate? X.X. thing. be the then Thank the kind the us How or is you the kind able for guess, there the just subsidy And that. you X.X? moving other for happen? of And updated X.X. an an of road for

Perry Sook

road you transition, advance And public-private discussed to advancement, in Chairperson, this that partnership to Well, to activate like FCC will, those Obviously, advance very partnership I industry to us ATSC way. committing for and X.X. have to the analog of these which things and think the important an happen to in was define the Rosenworcel all spectrum digital that. this to able a if basically of are partnership the be things will are be material rules much that

signal. which the receive be ultimately requirement, X.X have X.X means will there ability an away a to We to has do with to simulcast

receive a the them. of manufactured, all sets, being TV Many sets Sony in capability new have X.X

who sets universe older sort so people have not of can of receive current For there programming. be MVPD to an solutions, commercial are their will some part that

would But things sunset are manufacturers of to there these standard – solve that the period, all there's fact set opportunities be new think simple to to establishing to I The opposed later. build are X.X of that. incent a need to commercial as sooner considered.

from And go so things to into these of X.X transition discussion how we of all X.X. the

use everything else that. we And that sort still this case, be And proof X.X it I of and optimistic of will test the not of some than We're will kind It we contributor, a will verticals do be our maybe spectrum. will think a case consumer huge we behind to year, and financial pretty applications put have but concept that, of one. place commercial sign certain first. into more rapidly for a for certain of fall more

X.X when by So ATSC and to meaningfully the of we decade we our year pick end this And think that things to will profile. roll begin is said contribute momentum. we've up financial spectrum expect the to

Barton Crockett

Okay, great. you. Thank

Operator

Our next Please go ahead. with Zangler Nick question comes Stephens. from

Nick Zangler

Hey, guys.

would is generate to revenues advertising priority really lucrative Like say that Just attractive shoulder it against a shows, profit? the you? content arrangements, there is these – one? characterize an as number the guess, partnerships? and opportunity you sports Or opportunity that the the is about the recent the this you premium really programming, that those might to announcements, be pregame how I given like the games aspect And you strategic think really then most to opportunity is some postgame you themselves arranged. when there of back would generate sports Just potential curious for represents, how

Perry Sook

for And primary retrans years, that sports. drives thing and live contribute, but the are things are the and other XX live that done negotiations having there news are retrans listen, economics drivers. those Well, over

over you're having So advantaged them. if not you them, think have I

money that would not deals that find to we way take do would advertising we over of other life we contract will get-go. would a won't the probably would to deal. programming would a mean sports the position do Shoulder loss be and but the leader we the goals. or to the way accomplish – to so be the a that And make value, I from a on be money make enhance

the good at at basically the local it's station our enhances level, network think offerings table level, news community. But the greatly the And it stakes. local in I is,

a again, And so of out and streaming in distribution vogue see opportunities, reach relationships. national achieve never the MVPD I us to think for is both at some continue mechanism us explore in local it's in of but vogue it those you'll terms once and traditional the level, to and to superior as vogue, broadcast of a fell way

Nick Zangler

specifically I do one. I But mean, opportunity Nexstar obviously, is for But when your I if significant most likely I go geographic across imagine would given having win these broadcast that deals, sports CW's actually then footprint, just the you yourself, relative the number would sports group, pretty are agree. you wondering content I'm these you to strong you mean, just to these national market you're when market provide a somehow presence does advantage as occurring? to to group? how And the do the and guess, conversations peer conversations

Perry Sook

each are individual. the I Well, conversations, of think,

markets basketball inventory with affiliate of big amount in a It's or of is two, the do in stations affiliate, we affiliates even stations top with space. three think of our have that markets, given the claimed fact a location sports XX agreements. teams major we've right, deal plus. Big that a got already I with shelf kind affiliates the X the is of in exception you're CW to more independent MyNetwork The geographic those or affiliation or hard maybe because of baseball

it a did clear shot Angeles. discussions tell like I speak. and Los a much for at would XX CW were we Clippers renewal we you to affiliate, have in with can I on That's we games, success as financial in and, was these, able but KTLA think that that activating good the we're a we

Nick Zangler

guys. appreciate great. Okay, it. Much Thanks

Operator

go Gould next question Please with ahead. from Loop Capital. Our comes Alan

Alan Gould

RSNs, unsustainable. contract just sports to is Hi, used in tone a sports question. to the thanks on pricing negotiations? the drill the high be fees of to team's which the out more taking Perry, pretty rights for from down and What the these turned got the little some rights, obviously like the

Perry Sook

paid they Well, of they've money else want they for. been and reach ask superior can the course, and anything

the sustainable. in because commissioner the that But to transfer but going is might sports be business that step-down likely this every and are going will listen, better other things real-time. reach bankruptcy, every to is may real think through reality I reason entice in into increased is the is of time there model go I economics, terms at There's in in RSNs in a that gate. attendance think this go not a owner through league

what So It's world broadcast. order, I think think new is I includes now it. the everybody which gets just

smaller I of in have still think a programming amount none but be I there'll of particular team the be much still is think league. from There'll cable. But that zero terms RSNs, or they of think be I this they'll sum.

both national even is I think is, that we trying and The where of level approach potentially customer broadcast meet you'll traditional see at news see with at local level. the streaming the a broadcast and part the to perhaps that, they are. being good and a

Alan Gould

you're this big a the an fees have station? bring independent station close And four affiliate side, could that revenue CW from How highest network some of retrans kind a fees. the or on cable to RSNs getting the Perry, of

Perry Sook

it? Well, it won't help, will certainly

Alan Gould

once decline obviously change losses the for you on should year CW one and programming? And improving start of the the sequentially based Okay. Lee Nexstar's assume for rest we management, Ann, then XQ

Lee Ann Gliha

quarter Fourth year. the other be Yes. in better quarters should than the

Alan Gould

reported? $XX we the that XQ, sequentially XQ losses you should million from to assume But decline XQ, just

Lee Ann Gliha

Yes, place season. the of related end that of have in sequentially. I expense through broadcast the still all we programming mean that is – programming will of the to the

So mean QX more Maybe on little get not be sequential. you're you looking we by will can still sure QX can chat and that, should But better. see a I'm QX, we we what in color losses what offline, for.

Alan Gould

Okay, thanks Lee Ann.

Operator

time. at for I now questions Executive Sook, over floor further back to and to Officer, would Chairman this no are There the Perry Chief like closing comments. turn

Perry Sook

us joining for much very you thank today. Well,

making and investments to outperformance. higher the shape and to and Nexstar industry future execute long-term attractive factors, deliver at report stable earnings, our face an generation, us the actions continue the valuation. to second free cash We forward capital investment a reasonable required of today. again credit shareholders quarter days. joining to continue we you quality We look of and In taking flow growth in about Nexstar Thanks, results remains the uncertainty, necessary with economic including believe higher plan, to against robust we with everyone, to XX that of quality when for our speaking return

Operator

concludes This today's teleconference.

You may Thank participation. disconnect lines time. you your at your for this

Nexstar Media (NXST) 9 May 232023 Q1 Earnings call transcript