Earnings call transcript: Nexstar Media Group Q2 2025 beats EPS forecasts, stock rises

Nexstar Media Group Inc. (NASDAQ:NXST) reported Q2 2025 earnings that surpassed analyst expectations, leading to a positive market response. The company posted an earnings per share (EPS) of $3.06, exceeding the forecasted $2.81, representing an 8.9% surprise. Revenue reached $1.23 billion, slightly above the anticipated $1.21 billion. Following the announcement, Nexstar’s stock rose by 2.68% in pre-market trading, reflecting investor confidence in the company’s performance and outlook. According to InvestingPro data, the company maintains strong financial health with an overall score of 3.08 out of 4, labeled as "GREAT," supported by robust profitability and momentum metrics.

Key Takeaways

• Nexstar’s Q2 2025 EPS of $3.06 surpassed the forecast by 8.9%.
• Revenue for the quarter was $1.23 billion, a slight increase over expectations.
• The stock price increased by 2.68% in pre-market trading following the earnings release.
• Strategic expansions in sports programming and refinancing of debt were highlighted.
• Nexstar remains optimistic about future regulatory changes and market positioning.

Company Performance

Nexstar Media Group demonstrated resilience in Q2 2025, achieving revenue of $1.23 billion despite a 3.2% year-over-year decline. The company has focused on expanding its sports programming and maintaining its position as a trusted news source. Key operational updates, such as the refinancing of credit facilities and the extension of debt maturities, have strengthened its financial footing. InvestingPro analysis reveals the company’s impressive gross profit margin of 59% and a healthy current ratio of 1.74, indicating strong operational efficiency and solid liquidity position.

Financial Highlights

• Revenue: $1.23 billion, a 3.2% decrease year-over-year.
• Distribution revenue: $733 million, flat year-over-year.
• Advertising revenue: $475 million, a 9% decrease year-over-year.
• Adjusted EBITDA: $770 million.
• Adjusted free cash flow: Nearly $450 million.

Earnings vs. Forecast

Nexstar’s actual EPS of $3.06 exceeded the forecast of $2.81, marking an 8.9% surprise. This performance indicates a positive trend compared to previous quarters, where the company has consistently met or slightly exceeded earnings expectations. The revenue of $1.23 billion also surpassed the forecast by 1.65%.

Market Reaction

Following the earnings announcement, Nexstar’s stock price increased by 2.68% in pre-market trading, reaching $192. This movement positions the stock near its 52-week high of $193.21, signaling strong investor sentiment. The increase is attributed to the company’s robust earnings performance and strategic initiatives. InvestingPro analysis indicates the stock is currently undervalued, trading at an attractive P/E ratio of 9.37 with a strong free cash flow yield of 21%. The company has also maintained dividend payments for 13 consecutive years, demonstrating consistent shareholder returns.

Outlook & Guidance

Nexstar has projected an EPS of $1.89 for Q3 2025 and $3.81 for Q4 2025. The company remains focused on expanding its sports programming and anticipates profitability for the CW Network by 2026. Nexstar is also optimistic about potential regulatory changes that could benefit its core businesses. Investors seeking deeper insights can access comprehensive analysis and 15 additional ProTips through InvestingPro, including detailed metrics on the company’s growth trajectory and market positioning.

Executive Commentary

CEO Perry Sook expressed enthusiasm about potential regulatory reforms, stating, "We are energized by the prospects of regulatory reform." COO Mike Baird highlighted the company’s strategic focus, saying, "We believe the momentum is shifting in favor of our core businesses."

Risks and Challenges

• Decline in advertising revenue, particularly in the automotive sector.
• Economic uncertainties impacting consumer spending and advertising budgets.
• Potential regulatory changes that could affect broadcasting operations.
• Increasing competition in digital and streaming services.
• Dependence on sports programming expansions for future growth.

Q&A

During the earnings call, analysts inquired about Nexstar’s potential mergers and acquisitions strategy, focusing on national footprint expansion. The company also addressed its positive outlook on virtual MVPD and streaming services, indicating no immediate plans for leadership transitions.

Full transcript - Nexstar Media Group Inc (NXST) Q2 2025:

Conference Operator: Good day, and welcome to the Nexstar Media Group’s Second Quarter twenty twenty five Conference Call. Today’s call is being recorded. Now turn the conference over to Joe D’Affoni, Investor Relations. Please go ahead, sir.

Joe D’Affoni, Investor Relations, Nexstar Media Group: Thank you, Melissa, and good morning, everyone. I’ll start by reading the Safe Harbor language, and then we’ll get right into the call. All statements and comments made by management during this conference call other than statements of historical fact may be deemed forward looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Nexstar cautions that these forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those reflected by the forward looking statements made during this call. For additional details on these risks and uncertainties, please see Nexstar’s annual report on Form 10 ks for the year ended 12/31/2024, as filed with the Securities and Exchange Commission and Nexstar’s subsequent public filings with the SEC.

Nexstar undertakes no obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. It’s now my pleasure to turn the conference over to your host, Nexstar Founder, Chairman and Chief Executive Officer, Perry Sook. Perry, please go ahead.

Perry Sook, Founder, Chairman and Chief Executive Officer, Nexstar Media Group: Thank you, Joe, and good morning, everyone. We appreciate you all joining us today. Mike Baird, our Chief Operating Officer and Leanne Gliha, our Chief Financial Officer are with me here this morning. Nexstar delivered another solid quarter of financial results with our second quarter net revenue, adjusted EBITDA and adjusted free cash flow benefiting from better than expected advertising revenue, stable distribution revenue and strong expense management. Overall, our core advertising business remains resilient while the pay TV landscape continues to evolve as we had anticipated.

Though we have yet to see a definitive turnaround in video subscriber trends, we are encouraged by consistent early signs of improvement with good reports in recent weeks from two of our largest MVPDs. For the 2025, Nexstar generated adjusted EBITDA of $770,000,000 and adjusted free cash flow of nearly $450,000,000 We returned $238,000,000 or 53% of adjusted free cash flow to shareholders through share repurchases and dividends, reducing our shares outstanding by about 1% while also allocating $132,000,000 to debt repayment. Near the end of the quarter, we refinanced the company’s credit facilities and term loans, further strengthening our capital structure and our financial flexibility by extending maturities, which positions our balance sheet well in anticipation of expected regulatory relief on the ownership front. The case for local broadcast ownership deregulation remains strong and extends far beyond competitive fairness. It is becoming increasingly clear that bias acknowledged and now admitted in editorial coverage by legacy national networks, false information provided by AI and social media disinformation are making it almost impossible for Americans to distinguish between fact, opinion and fiction.

We firmly believe that Nexstar and the local broadcast industry at large are a solution to these threats. Every day, our local and national news teams bring the public unbiased, fact based news reporting and information from 113 newsrooms in markets across the country and nationally on News Nation. We employ almost 6,000 journalists in total, which is more than any other media company in The United States. Our news teams all adhere to a strict journalistic code of ethics and are dedicated to bringing communities trusted information and local stories that matter to them. For example, in Central Texas during the immediate aftermath of the devastating Guadalupe River flooding, our local reporters were on the ground providing essential news coverage and safety information to our local communities as well as national audiences via News Nation.

In addition to covering those events, Nexstar’s station teams in Abilene, San Angelo and Austin came together to raise nearly $1,400,000 for flood victims during a one hour telethon. Many also volunteered at local relief organizations to help gather and distribute supplies to those in need. Meanwhile on Big Tech’s social media platforms, charlatans chasing clicks circulated misleading videos, some AI generated and others recycled from unrelated disasters in different states or countries, falsely claiming to depict the Central Texas floods. Others exploited the tragedy by creating fake fundraising pages to scam well meaning donors. This kind of misinformation and malfeasance undermines search and rescue efforts, erodes public trust and diverts critical resources from legitimate relief organizations.

Unfortunately, this is just another clear example of how Big Tech’s unchecked reach and prioritization of engagement over accuracy fuels the rapid spread of fake news. Nexstar’s commitment to high quality, trustworthy journalism continues to deliver strong viewership earning trust along with local and national aficionados. Ad Fontes, the respected third party media watchdog has rated virtually all news programming provided by Nexstar local stations as well as News Nation as politically neutral with a reliable rating of reliable for both analysis as well as reporting. In the second quarter, our local journalists earned 52 regional Edward R. Murrow awards for our outstanding journalism and exceptional locally produced news programming.

Public trust in local broadcast journalism remains strong with Americans citing local television news as the number one most trusted news source according to a 2024 TBB survey. Audiences of all ages and demos are turning into our local news and to other programming with nearly half of Nexstar’s twenty twenty four station viewership coming from non network programming. That last point is important. We have seen the number of publications misrepresent data from the latest Nielsen Gauge reports by stating that streaming accounts for over 50% of total viewership. The data reflected in that report only includes information from Nielsen’s national panel.

It completely excludes local station viewership of local content, which we know to be substantial. If you look exclusively at national viewership of long form ad supported programming, the metric that matters most to advertisers, broadcasting and cable together account for 70% of total ad impressions. We believe that the continued strength of our broadcast and cable news assets is a direct result of our long term strategic focus on high impact news and sports programming. We began in 2019 by converting WGN America, the entertainment network we acquired in the Tribune acquisition, into News Nation. We made a similar strategic decision with our acquisition of the majority stake in the CW broadcast network in 2022, shifting its focus from scripted series to more broad based and audience expanding programming, including a full slate of live sports.

I am proud to share that we have achieved several operational milestones during the quarter, highlighting the continued success of our strategies. In April, we celebrated News Nation’s one year anniversary of expanding its news programming to become a 20 fourseven cable news network. In June, News Nation was ranked the number one basic cable network for year over year growth with overall viewership increasing by nearly 50% and by 67 in the adults aged to twenty five-fifty four demographic according to Nielsen. We believe NewsNation’s programming and unique fact based reporting is resonating with viewers who are looking for a refreshingly balanced and impartial take on the news. And at the CW, we have now achieved five consecutive quarters of audience growth and the CW was the number eight ranked network in total audience for the 2025.

This is a direct result of the success of our programming strategy including the introduction of sports which now accounts for over 40% of our total programming hours. Turning to regulatory reform, there have been significant positive developments since our last earnings call. In mid July, the FCC moved to refresh the record on the national ownership cap opening the door for a new order from the FCC to modify or eliminate the cap perhaps by the end of this year. We filed our comments on Monday in that proceeding. And on July 23, the Eighth Circuit vacated a top four rule which prohibits the owner of television broadcast stations from owning two of the top four rated stations in the local market, finding that the FCC’s historical justification for retaining the rule was arbitrary and capricious.

We applaud Chairman Carr’s vocal support of the court’s decision, describing the FCC’s prior retention of the top four prohibition as a decision to retain a regulation that does not match marketplace realities. In summary, the continued success and consistency of Nexstar’s financial performance reflects our stable diversified revenue base, disciplined operations and continued execution across our portfolio. With our unmatched scale, robust free cash flow and consistent track record of delivering value, we remain well positioned to seize the significant opportunities that lie ahead. We are energized by the prospects of regulatory reform and we remain laser focused on executing on our 2025 objectives, which include renewing upcoming distribution agreements, continuing the CW’s path to profitability next year and preparing for significant midterm election activity again in 2026. With that said, let me turn the call now over to Mike Baird.

Mike?

Mike Baird, Chief Operating Officer, Nexstar Media Group: Thanks, Perry, and good morning, everyone. Nexstar delivered second quarter net revenue of $1,230,000,000 a decline of 3.2% compared to the prior year, primarily reflecting the year over year reduction in political advertising. Second quarter distribution revenue of $733,000,000 was essentially flat compared to the prior year quarter, primarily reflecting the modest number of subscribers renewed in 2024 compared to 2023 and MVPD subscriber attrition, partially offset by contractual rate escalators, growth in vMVP subscribers, and the addition of CW affiliations on certain of our stations. Although the industry continues to see subscriber attrition, we note recent earnings reports from our distribution partners suggest marginal improvements in subscriber trends. Several industry observers have noted Charter’s trending video performance, with at least one highlighting video as a significant opportunity in the context of the Cox transaction.

We’re encouraged by those trends and continue to monitor the space closely as we work to secure agreements that are better aligned with the value Nexstar delivers to our partners and their customers. Advertising revenue of $475,000,000 decreased $47,000,000 or 9% over the comparable prior year quarter, primarily reflecting a $36,000,000 year over year decrease in political advertising. Non political advertising declined by 2.5% year over year, slightly better than our expectations. Non political advertising was impacted by a high single digit decline in goods based advertising, of which more than half was attributable to the automotive category, and a slight reduction in services based advertising, though this segment remains much more stable and resilient overall. Contributing positively to the quarter, we saw growth in key categories including attorneys and home repair, along with improved performance from some of our national digital businesses, including BestReviews.

We generated approximately $9,000,000 in political advertising revenue during the quarter, primarily driven by issue spending related to the One Big Beautiful Bill, the New York City Mayoral Primary, and the Virginia primaries. Looking ahead to the third quarter, nonpolitical advertising is currently forecast to be down in the low single digits on a year over year basis. This is despite the comp of 2024 Olympic related advertising and the benefit in part from the lack of political crowd out in the quarter. Although some broader economic headlines may suggest caution, our view of the advertising outlook remains stable for now. As we noted on last quarter’s call, approximately 15% of our total revenue is tied to goods based businesses that could be impacted by tariffs.

Turning to the CW. As Perry mentioned earlier, we continue to see favorable returns on our programming investments, with sports now accounting for more than 40% of the CW’s programming hours. And we continue to build the CW sports portfolio. During the second quarter, we renewed our agreement with the PAC-twelve Conference to nationally broadcast nine college football games this fall, including a new Pac-twelve double feature on Saturday, September 6, showcasing two of the key schools that will anchor the expanded Pac-twelve Conference next year. We also announced a multi year partnership with Professional Bowlers Association to air 10 live events on Sunday afternoons beginning in 2026.

And in July, we announced a multi year agreement with the Professional Bowl Riders to be the exclusive live broadcast partner of the PBR Teams series on Saturdays and Sundays. The CW will air the first of 11 PBR events this year, this coming Saturday, August 9. Our sports programming continues to perform well, demonstrating both the power of broadcast television and the CW network specifically. Both WWE NXT and NASCAR Xfinity racing ratings are up 716%, respectively, versus second quarter of last year when those events were primarily on cable. Moreover, our entire CW programming strategy is working.

As mentioned, we’ve seen five consecutive quarters of prime time ratings growth, elevating the CW into position as the eighth most watched network overall for the first half of this year. On any given night, CW is now beating the big four networks with regularity, with 126 instances since the beginning of this broadcast season in October 2024 versus 53 in the entire prior season, firmly establishing the CW as a major broadcast network. In the second quarter, as expected, the CW’s profitability improved by $21,000,000 year over year, driven by reduced amortization of broadcast rights and lower operating expenses following our Q4 restructuring. Our outlook for the year remains unchanged, and we continue to project improved profitability of about 25% in 2025 over 2024, with our continued expectation of achieving profitability in 2026. In addition, the company continues to benefit from moving CW affiliations to our owned and operated stations.

During the quarter, we finalized agreements to move three additional CW affiliations next month to Nexstar stations in Charlotte, North Carolina Erie, Pennsylvania and Elmira, New York. To close, let me reiterate confidence in Nexstar’s long term outlook and the enduring strength of our broadcast business model. Our news and sports focused programming strategies continue to deliver demonstrable results for the CW and News Nation, and we remain committed to unlocking greater value from these valuable assets as our audiences continue to expand. As the industry continues to evolve, we believe the momentum shifting in favor of our core businesses, and we remain committed to pursuing opportunities that drive long term value for our shareholders. With that, it’s my pleasure to turn the call over to Leanne for the remainder of the financial review.

Leanne?

Leanne Gliha, Chief Financial Officer, Nexstar Media Group: Thank you, Mike, and good morning, everyone. Mike gave you most of the details on the revenue side and on the CW, so I’ll provide a review of expenses, adjusted EBITDA and adjusted free cash flow, along with a review of our capital allocation activities. Together, second quarter direct operating and SG and A expenses, excluding D and A and corporate expenses, declined by $13,000,000 or 2%, primarily driven by our operational restructuring initiatives undertaken in the fourth quarter, offset in part by increased variable expenses related to our growth in digital revenue. Q2 twenty twenty five total corporate expense was $64,000,000 including non cash compensation expense of $21,000,000 compared to $54,000,000 including non cash compensation expense of $20,000,000 in the 2024. The $10,000,000 increase is primarily due to one time expenses associated with the refinancing we completed in the quarter.

Q2 twenty twenty five depreciation and amortization was $197,000,000 versus $2.00 $8,000,000 in the comparable prior year quarter, a decrease of $11,000,000 Of these amounts included in our definition of adjusted EBITDA is $79,000,000 related to the amortization of broadcast rights for 2025 compared to $87,000,000 for Q2 twenty twenty four. The decrease in amortization of broadcast rights by $8,000,000 was primarily due to lower programming costs at the CW versus the comparable prior year quarter. Q2 twenty twenty five income from equity method investments, which primarily reflects our 31% ownership in TV Food Network declined by $5,000,000 versus the comparable prior year quarter primarily related to TV Food Network’s lower revenue. Putting it all together, on a consolidated basis, second quarter adjusted EBITDA was $389,000,000 representing a 31.7% margin and a decrease of $25,000,000 from the second quarter twenty twenty four of $414,000,000 Moving to the components of free cash flow and adjusted free cash flow. Second quarter CapEx was $29,000,000 a decrease from $37,000,000 in the second quarter of last year due primarily to timing of CapEx projects and lower total amount of CapEx in non election years.

Second quarter net interest expense was $97,000,000 a reduction of $16,000,000 from the 2024. On a cash basis, this compares to ninety four million dollars in Q2 twenty twenty five versus $110,000,000 in Q2 twenty twenty four. The reduction in interest expense was primarily related to a reduction in SOFR and Nexstar’s reduced debt balances. Second quarter operating cash taxes were $140,000,000 compared to $164,000,000 last year. Payments for capitalized software obligations and pension credits, net of proceeds from disposal of assets and insurance recoveries, $14,000,000 versus $16,000,000 in last year’s Q2.

Cash distributions from the Food Network were $11,000,000 in the second quarter, which amount is captured in our free cash flow and adjusted free cash flow definition. This amount reflects our pro rata share of distributions to cover tax from our proportionate share in the income of the JV. Included in the second quarter’s adjusted EBITDA, but excluded from adjusted free cash flow is $11,000,000 of income for amortization from equity method investments, which is primarily our pro rata share of Food Network net income in the 2025. In Q2, programming amortization costs were lower than cash payments by $2,000,000 compared to Q2 twenty twenty four as certain deferred programming payments were paid. Putting this all together, consolidated second quarter twenty twenty five adjusted free cash flow was $101,000,000 as compared to $77,000,000 in last year’s Q2.

A few additional points of guidance with respect to adjusted free cash flow. We are currently projecting CapEx of 25,000,000 to $30,000,000 in Q3. Based on the current yield curve and our mandatory amortization payments, Q3 interest expense is expected to be in the $93,000,000 range. Q3 twenty twenty five cash taxes are expected to be in the 35,000,000 to $40,000,000 range. And in Q3 twenty five, cash distributions from the Food Network are expected to be in the low to mid single digit million dollar range.

And payments for programming are expected to be in excess of amortization by about 25,000,000 due primarily to prepayment of future programming payments and payment of deferred programming. Turning to capital allocation and our balance sheet. Together with the cash from operations generated in the quarter and cash on hand, we returned $106,000,000 to shareholders comprised of $56,000,000 in dividends and the repurchase of $50,000,000 of stock at an average price of $159.71 per share, reducing our shares outstanding. During the quarter, we completed the refinancing of our revolver, Term Loan A and Term Loan B, and Mission completed the refinancing of its revolver. In connection with the refinancing, we extended our maturities on our revolvers and Term Loan A to June 2030 and extended the maturity on our term loan B to June 2032.

In addition, we increased the size of our revolver to $750,000,000 and eliminated the 10 to 11 basis point credit spread adjustment across all the facilities we’ve rescanned. In addition, we converted our covenant calculation to reflect a last eight quarters annualized EBITDA calculation for the denominator to better align with broadcast industry practice and better reflect our leverage across an election year where we generate additional political advertising revenue and a non election year when we do not. We closed the refinancing on June 7 and Nexstar’s outstanding debt at 06/30/2025 was $6,400,000,000 a reduction of 100,000,000 $101,000,000 for the quarter as we made optional repayments on our debt balances. Our cash balance at quarter end was $234,000,000, including $23,000,000 of cash related to the CW. Because we designated the CW as an unrestricted subsidiary, the losses associated with the CW are not included in our calculation of leverage for purposes of our credit agreement.

As such, our net first lien covenant ratio for Nexstar at 06/30/2025, which is now calculated on a last eight quarter annualized basis, was 1.81 times, which is well below our first lien and only covenant of 4.25 times. Total net leverage for Nexstar was 3.19 times at quarter end. These leverage statistics are calculated pursuant to the description in our credit agreement. With that, I will open up the call for questions. Operator, can you go to our first question?

Conference Operator: Thank A confirmation tone will indicate your line is in the question queue. You may press star, 2, if you’d like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Dan Kurnos with The Benchmark Company. Please proceed with your question.

Dan Kurnos, Analyst, The Benchmark Company: Great. Thanks. Good morning. Obviously, print, guys. Perry, just any quick thoughts on Chairman Carr continuing to write letters to the networks and if there might be any changes coming in the way the affiliate relationships are handled?

And then from an M and A perspective, how do you think about the in market opportunity versus cap expansion if the cap does get raised? You’ve obviously got JSAs to go after. You have a very enviable balance sheet position. So if there’s any way to frame broadly sort of what you might be looking at or any size parameters to consider, that would be super helpful. Thank you.

Perry Sook, Founder, Chairman and Chief Executive Officer, Nexstar Media Group: We will start working backwards on that. I would say that as far as acquisition opportunity, growing our national footprint probably has more strategic importance to the company than simply doubling up in markets where we have a single station, which is we are already kind of doubled up in about half of our markets. But again, what will govern our M and A activity is what has always governed what is the highest and best use of our cash and balance sheet in the interest of growing shareholder value. And so I don’t know that I can make a blanket statement about that. I think that from our perspective, there are a number of conversations going on and I would say just broadly that everybody is talking to everybody.

Out of that, we hope to find a love connection that would allow us to create shareholder value well beyond what would be created by simply buying back our own stock. So that is kind of a broad brush of the M and A landscape. Obviously, with the balance sheet, would be willing to increase our leverage profile slightly for the right acquisition and then leveraging the free cash flow of the target. I mean, you can do your own math to determine what the upside of those could be. As it relates to Chairman and sending letters to the networks, from our perspective, that is at this point between Chairman Carr and the networks And we obviously have a we will have a vested interest in the outcome.

But I think that the administration and Chairman Carr wants to make sure that the relationships are in some semblance of balance. It is a symbiotic relationship. The networks need us to distribute their programming and their advertising. We rely on the networks for programming. Although to the extent that network by network, one of the things we buy from the network is exclusivity in addition to programming.

To the extent the programming is less and less exclusive, it is less and less valuable to us. So we will make our case with the networks in private negotiations. And I think it is certainly proper for Chairman Carr to take a look at the relationship and determine if things are in balance or if things have swung too far one way or the other. We certainly applaud him for asking the questions.

Dan Kurnos, Analyst, The Benchmark Company: Thank you, Perry.

Conference Operator: Thank you. Our next question comes from the line of Jason Bazinet with Citi. Please proceed with your question.

Jason Bazinet, Analyst, Citi: Can I just ask a two parter on M and A, if that’s okay? Point number one is, would you say it’s important to you to increase O and Os and the CW as you think through M and A scenarios? Or is that sort of something that you can continue to do organically as you’ve been doing since you got control of the CW? And my and my second one is, do you mind I I think you’ve you’ve indicated on the last call that you don’t feel like you need all of these rules to be solidified before you might announce a transaction. And do you mind just elaborating on what ends up happening if you have a transaction that’s announced and let’s say a broadcaster or a pay TV firm, challenges whatever the FCC decides in court.

It seems very complicated to me. So anything you can add would be helpful.

Perry Sook, Founder, Chairman and Chief Executive Officer, Nexstar Media Group: Sure. As it relates to the rules and regulations as promulgated currently by the FCC, I mean, there are waiver processes in place to get the waiver to own two of the top four rated stations in a marketplace. So perhaps what I was referring to, that rule does not have to change for those kinds of transactions to happen. You see some folks have proposed transactions like that that will go through the regulatory process. I think it is important to understand that the FCC has a regulatory process when you file an application and then it gets put on public notice.

People can comment and then they will reply comments and the FCC will do its work. And so that all takes time. And I think what I was referring to is other things can happen during that time as well. For example, that the FCC could choose to rule on this refresh the record proceeding and could choose to, based on the Eighth Circuit ruling, choose to make changes or at least develop a proceeding that could lead to changes in the in market regulations. So nothing happens in a vacuum.

And any transaction we propose would provide regulatory remedies under the current rules, but realizing those rules could change and some of those former regulations could become moot during dependency of a transaction. So I think that all of that would have to be taken into account by the parties and the counterparties before going down that road. But we think it is entirely possible that two things can happen at the same time.

Jason Bazinet, Analyst, Citi: That makes sense. And on the CWO and Os, is Well, that a strategic

Steven Cahall, Analyst, Wells Fargo: listen,

Perry Sook, Founder, Chairman and Chief Executive Officer, Nexstar Media Group: it is a positive outcome to certain M and A activity if we can increase the footprint of our own stations at the CW. Obviously, that provides a financial benefit to the CW, but also to the local station that may or may not be earning distribution revenue at the level that we earn for our CW stations. So, it is not the number one strategic priority, but it is certainly something we look at when looking at transactions. If that is a byproduct, tends to benefit the company more than one way.

Jason Bazinet, Analyst, Citi: That is great. Thank you.

Conference Operator: Thank you. Our next question comes from the line of Steven Cahall with Wells Fargo. Please proceed with your question.

Steven Cahall, Analyst, Wells Fargo: Thank you. On the you talked about I think 40% of time is now aired with sports. I was wondering what additional sports opportunities you see out there in terms of leagues or parts of leagues that you think could continue to grow that, assuming that that is in fact the strategy of the CW to continue to add more sports as a percentage? And then the second question, I was just wondering if you could go a little bit deeper on the ad market. So it sounds like things are performing about as expected, maybe even a little bit better.

I was wondering if you could talk about maybe how much digital is growing? And then any trends between what you’re seeing at local stations versus your your national revenue, which I think is a little bit bigger for you than it is for a lot of your peers? Thanks.

Perry Sook, Founder, Chairman and Chief Executive Officer, Nexstar Media Group: I will speak to the second part of that question, Stephen, and then ask Michael to speak to the first part. But the bright spot in our ad support in the second quarter was at the national network level. And part of that is News Nation being the number one basic cable network for year over year growth in the month of as of the month in June and the CW moving into the eighth ranked network in terms of total audience for the 2025. So dollars are following the eyeballs, which are leading to increased revenues at our national networks business. So that certainly is a positive performing better than our internal expectations in the quarter and certainly year to date.

And Michael, I will turn it over to you to respond more to the sports question.

Mike Baird, Chief Operating Officer, Nexstar Media Group: Yeah, it’s a good segue. I mean, part of what we’re seeing in the performance of the CW is driven by the addition of sports. We now have, you know, a little bit of a track record under our belt. Certainly the advertising community is responding to the consistent ratings that we’ve delivered. I talked about in my opening remarks, the consistent performance year on year that we’ve seen, particularly at Xfinity.

I think we’re 20 plus races into the year. We’ve seen consistent week after week growth. Certainly the industry was responding to it. If you look at motorsports as a whole, the industry is starting talk about the Xfinity performance and particularly the smart decision that NASCAR made to vest its rights with the CW for the long term. So I think in terms of looking forward, yeah, there are other opportunities out there and we absolutely are interested in pursuing them.

I think if you look broadly at categories, college sports is one that we’re interested in. We certainly had some success with the ACC and the Pac-twelve. We have ongoing discussions with some others in that space right now, but nothing I can announce today.

Steven Cahall, Analyst, Wells Fargo: Great. Thank you.

Mike Baird, Chief Operating Officer, Nexstar Media Group: Thank you.

Conference Operator: Thank you. Our next question comes from the line of Benjamin Soff with Deutsche Bank. Please proceed with your question.

Benjamin Soff, Analyst, Deutsche Bank: Good morning. Thanks for the question. I wanted to first ask about virtual MVPDs. It sounds like this is one area the FCC could look into. So can you remind us where the economics for these services stand today compared to the traditional ecosystem, And what’s your level of optimism these rules could get changed?

And then there’s some new sports centric streaming services launching soon. I’m curious if you think these products might impact the broader pay TV ecosystem or not. Thank you.

Leanne Gliha, Chief Financial Officer, Nexstar Media Group: Maybe I’ll just start with just on the on the economics in terms of I think your question was just around the vMVPDs versus the MVPDs. Those are really, you know, sort of the same same no change in terms of what we’ve been talking about historically there. Obviously, MVPDs, have the ability to negotiate directly, so we get paid on a gross basis. The virtual MVPDs, we work through the networks, and we get paid on a net basis. And, you know, we’re, you know, looking to kind of grow both revenue streams over time as renegotiate these contracts.

I’ll turn it to Mike to talk about some of the stuff that was launched recently or is going to be launched.

Mike Baird, Chief Operating Officer, Nexstar Media Group: Yeah, I think it’s going be launched later this month. I think the question is really around Fox One and the ESPN D2C app. I think the headline is we’re optimistic that we’ll be neutral and potentially a net positive for the pay TV business. And I’ll start with the fact that both companies, both Disney and Fox, remain highly invested in the success of pay TV. And they’ve both been expressive about intentionally designing their respective DTC products and business models to make them complementary to pay TV rather than cannibalistic.

And that fact is pretty clear in the pricing of each, which is respectful of their wholesale pricing with pay TV distributors. Specifically, $50 combined for Fox and ESPN, most folks would agree that pay TV is an attractive alternative given the relatively modest incremental cost for a significantly more robust set of programming, especially sports. And by the way, a good chunk of that incremental programming is owned by Disney, who will have a broad slate of networks not available through ESPN, Right? Disney Network, FX, Nat Geo, for instance. Fox’s product will be a little different in that regard, but they’ve been clear about their intentions, repeatedly saying that their product is narrowly targeted at the cordless cordless audience.

Further, both have bundled these products with their pay TV deals, making them an added feature for pay TV subs. And that model goes back to the Disney Charter deal in the ’23. And at the time, may recall, we were on record that we believe that would ultimately be a good thing for the health and viability of pay TV, including our business. And as I mentioned in my prepared remarks, Charter’s pursuit of that model seems to be proving that out in the positive video subtrends that we’ve seen. Incidentally, I see Disney deal with the NFL as a further investment in pay TV given that they did not acquire ownership of or the digital rights to Red Zone, which remained with the league.

So I think all the value from Red Zone for Disney will be derived in distributing it together with the balance of their linear portfolio inside pay TV. And finally, I want to add that we hope Fox is successful in targeting the cordless audience because the 20 fourseven feeds of our Fox stations, the largest group of Fox affiliates, will be included in Fox One. And subscribers of that product in all of our Fox markets will enjoy Fox just as pay c PayTV subscribers do today, that is via our stations.

Benjamin Soff, Analyst, Deutsche Bank: That’s helpful. Thank you both.

Mike Baird, Chief Operating Officer, Nexstar Media Group: Sure.

Conference Operator: Thank you. Our next question comes from the line of Craig Huber with Huber Research Partners. Please proceed with your question.

Craig Huber, Analyst, Huber Research Partners: Great. Thank you. Perry, I wanted to ask you if you could, what is your updated thoughts on the business environment, the economic environment here in The U. S? How are feeling about that right now, say, where your head was at coming into this calendar year?

And then, Leigh Ann, I do want to ask you just some housekeeping questions. Maybe I missed this. What were the CW losses in the quarter? Were they materially different than I think you had about $41,000,000 loss a year ago? And do you still think you’re on track to have CW losses for the year down about 25%?

Thanks, both of you.

Leanne Gliha, Chief Financial Officer, Nexstar Media Group: Maybe I’ll just take that one first. We did in Mike’s comments, did talk about the CW losses in the quarter were better by about $21,000,000 We do still expect to improve the total losses by about 25% over the course of the year and achieve profitability sometime in ’26.

Perry Sook, Founder, Chairman and Chief Executive Officer, Nexstar Media Group: I would say, Craig, in terms of the ad environment, in terms of our forecast for the year and our internal budgeting and metrics, I think it is performing about as expected. There are puts and takes, as you can imagine. As we look at our forward pace, we are pleased at the forecast and we certainly don’t see any denigration in our forward looking pace numbers versus what we have delivered in the first half of the year. Obviously, the back half of the year has a lot more political revenue impact, which means more crowd out, which means more inventory available back for general market advertising. So that’s something we experience in the back half of every odd year.

But at this point, have, things are unfolding we think pretty much as expected and everybody keeps waiting for the shoe to drop. And quite frankly, we haven’t seen it. We think that the ad trends and the economy are what they are. And I think tariff uncertainty may lead to uncertainty, but it hasn’t led to a freezing up of people’s either spending or intentions to spend. And I take all of that at this point in time as a net positive.

Conference Operator: Thank you. Our next question comes from the line of Alan Gould with Loop Capital Markets. Please proceed with your question.

Steven Cahall, Analyst, Wells Fargo: Thank you. I’ve got two, please. First, can you give us a comment on the pacings or what you’re seeing the trends in digital advertising? And secondly, any surprise in the comment letters in the refresh proceeding? And what are the next steps?

I think there’s a reply comment. And then what has to happen next before the FCC could make some changes? Thank you.

Leanne Gliha, Chief Financial Officer, Nexstar Media Group: Maybe I’ll just take the first on digital. Digital continues to be an area of focus for us and an area of strength in terms of growth. We’re seeing that grow overall kind of in the mid single digits and then at a higher rate at our local business.

Benjamin Soff, Analyst, Deutsche Bank: So that’s digital.

Perry Sook, Founder, Chairman and Chief Executive Officer, Nexstar Media Group: In the refresh proceeding, obviously our comments we feel stand for themselves. I think in terms of everything else that I have read thus far, and I haven’t read all of them, I think everybody is pretty much talking their own book. I I won’t say I was shocked to see that the pay TV industry is does not want to see the national ownership cap go away. That has been their predictable response to any deregulation in our space for quite some time now. So I think at this point, the comment period has ended.

There will be a reply comment deadline later this month, I believe it is August 22. And at that point, it will go under advisement to the chairman and his staff and others at the commission. And we will see what comes of it after that point. But I certainly think that the chairman initiating the refresh proceeding indicates he feels there are lots of rules on the books, some of which have nothing to do with us. Some of us, some things have to do with telegraph regulations that are still on the books.

And I think that his goal is to eliminate unnecessary regulation, whether it affects the telegraph industry or the broadcast industry. And we applaud that effort to do that and we want to participate via our comments and suggestions as part of that process. But as to the timing of an outcome, I really can’t predict that. That is up to the chairman and his staff.

Steven Cahall, Analyst, Wells Fargo: Thank you, Perry.

Conference Operator: Thank you. Our next question comes from the line of Patrick Scholl with Barrington Research. Please proceed with your question.

Benjamin Soff, Analyst, Deutsche Bank: Hi. I just had a couple more questions just on the ad market. Just as you’ve been adding sports programming to the CW, can you just talk about like where your ad rates stand relative to some of your broadcast peers that you’re getting, you know, much higher up in terms of like the viewership level for CW?

Mike Baird, Chief Operating Officer, Nexstar Media Group: Yeah, sure. I think we have a pretty good handle in the marketplace for like to like programming. So we know what Xfinity NASCAR rates were last year. We feel good about that. We’ve actually seen pretty sizable growth in rates year on year, so both volume and rates.

Same with the college sports. So each category sort of has its own marketplace. We have a pretty good handle on that, as I said, and we feel we’re doing on par or better really in each case.

Benjamin Soff, Analyst, Deutsche Bank: Okay. And then just on the terms of, like, the broader ad market, I guess you addressed this a little bit. But can you just maybe talk about, like, just within the the categories, how the if there’s been any sort of adjustment and how they’ve been shifting their spending between q two and q three? Just I I know you’ve cited, like, the overall trajectory or your overall pacing for Q3. Just kind of just a little bit more detail on some of the dynamics there.

Leanne Gliha, Chief Financial Officer, Nexstar Media Group: Yes. I would say not from a category perspective, there’s not a whole heck of a lot of difference in terms the categories that are up and the categories that are down. We continue to see strength in attorneys and home repair and manufacturing. Those continue to be good performers for us. And then on the negative side, we continue to see auto be a problem area for us on that end.

So I think there’s not like a there’s various things that come in and come out, but nothing worth noting.

Benjamin Soff, Analyst, Deutsche Bank: Okay, thank you.

Conference Operator: Thank you. Our final question this morning comes from the line of Kadir Rishi with Rishi Capital Group. Please proceed with your question.

Joe D’Affoni, Investor Relations, Nexstar Media Group0: Hi, good morning. Thanks for taking my question. Just had a quick one. The potential for the opportunities on the for M and A on the horizon and the success you had in the past, does the attractiveness of these potential opportunities, has it led to any internal adjustments of the previously announced timelines for leadership transition?

Perry Sook, Founder, Chairman and Chief Executive Officer, Nexstar Media Group: I’m not sure. Are you speaking about me?

Steven Cahall, Analyst, Wells Fargo: Yeah. Yeah. Just saying

Joe D’Affoni, Investor Relations, Nexstar Media Group0: if the attractiveness of any kind of consolidation has led you to rethink your planned

Jason Bazinet, Analyst, Citi: retirement?

Perry Sook, Founder, Chairman and Chief Executive Officer, Nexstar Media Group: I have no plans to retire. I’m not going anywhere anytime soon. And typically in terms of any announcement regarding an employment agreement, that comes toward the end of the current employment agreement and there are quite honestly a lot of things going on here right now and is not at the top of the list yet. But I don’t think you have to worry too much about my engagement here being the third largest shareholder. I am very engaged every day, all day and have a best interest in the outcome of everything we do.

Joe D’Affoni, Investor Relations, Nexstar Media Group0: Okay, great. I appreciate that. I must have misunderstood some comments from a call about a year ago. Thank you for that.

Conference Operator: Thank you. Ladies and gentlemen, this concludes our question and answer session. I will turn the floor back to Mr. Sick for any final comments.

Perry Sook, Founder, Chairman and Chief Executive Officer, Nexstar Media Group: Thank you very much, operator, and thank you all for joining us here today. We appreciate your time and we look forward to reporting on our third quarter results in early November. And with that, we will bid you a good day and we will ask you all to disconnect. Thank you very much. Bye now.

Conference Operator: Thank you. This concludes today’s conference call. You may disconnect your lines at this time.

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