Nexstar at Morgan Stanley Conference: Strategic Growth and Challenges

On Wednesday, 05 March 2025, Nexstar Media Group (NASDAQ: NXST) presented at the Morgan Stanley Technology, Media & Telecom Conference. The company highlighted record revenues and strategic initiatives amid evolving industry challenges. Nexstar’s leadership discussed both achievements and hurdles, including subscriber attrition and opportunities in new technologies.

Key Takeaways

• Nexstar reported record annual revenues of $5.4 billion and adjusted free cash flow of $1.2 billion in 2024.
• The company expanded its reach, covering 70% of the U.S. population, while addressing the decline in pay TV subscriptions.
• Nexstar emphasized growth in sports programming and the potential of NewsNation as a key contributor.
• The company is optimistic about moderating subscriber attrition and future opportunities in spectrum and ATSC 3.0 technology.
• Nexstar’s capital allocation strategy includes dividend increases, stock repurchases, and debt reduction.

Financial Results

• Record annual revenues of $5.4 billion in 2024.
• Adjusted free cash flow reached $1.2 billion.
• Leverage reduced to an all-time low of 2.91 times total leverage by the end of 2024.
• Distribution revenue is expected to remain stable in 2025.
• Nexstar repurchased about 9% of its stock in 2024 and offers a nearly 5% dividend yield.

Operational Updates

• CW Network: Nexstar increased programming hours by 40% while cutting costs to less than half compared to pre-acquisition levels. The network now features a significant sports lineup.
• NewsNation: The network’s awareness grew from 11% to 37% in four years, with facilities built in Chicago, New York, and Washington, DC.
• Political Advertising: Achieved a low teens percentage of total television political spending, with CTV capturing the majority of the increase.

Future Outlook

• Subscriber attrition is expected to moderate in 2025 and 2026.
• Non-political advertising is projected to improve slightly for the year.
• Nexstar is hopeful that deregulation will lead to expansion opportunities and potential mergers and acquisitions.
• Spectrum and ATSC 3.0 are seen as significant future revenue drivers.

Q&A Highlights

• Nexstar’s scale and asset composition allow it to "bend the curve" compared to other broadcasters.
• The company sees big tech as the main existential threat rather than traditional competitors.
• There is excitement about NewsNation’s growth and its contribution to the business.
• Discussions on capital allocation emphasized the importance of dividend increases, stock repurchases, and debt reduction.

For further details, readers are encouraged to refer to the full conference call transcript.

Full transcript - Morgan Stanley Technology, Media & Telecom Conference:

Sid Garg, Managing Director, Morgan Stanley: Great. Good afternoon, everyone. My name is Sid Garg. I’m a Managing Director within Media Investment Banking at Morgan Stanley. Very excited to have Nexstar Media Group back at our conference.

We’re joined by Perry Silk, Founder, Chairman and CEO of Nexstar and Leanne Glia, the CFO. Great to have you both here.

Perry Silk, Founder, Chairman and CEO, Nexstar Media Group: Thanks for having us.

Sid Garg, Managing Director, Morgan Stanley: Great. So Nexstar reported record annual revenues of $5,400,000,000 adjusted free cash flow of $1,200,000,000 in 2024, differentiating itself from other media companies that have more exposure to cable nets. As a strong advocate of the broadcast model, what sets broadcast apart from cable networks and streaming services in terms of value and growth potential?

Perry Silk, Founder, Chairman and CEO, Nexstar Media Group: I think first and foremost, it’s our superior reach, our ubiquitous reach in the communities that we serve with our local broadcast signals. We are not constrained by the pay TV universe, even though that’s an important part of our financial profile and our success. But we reach that 20% of the marketplace that doesn’t take a pay service. And I think that is becoming increasingly important to sports leagues who value the additional distribution and the additional opportunity to raise awareness in the local marketplace. And so I start with Superior Reefs, and I also start with the fact that we are a trusted local brand.

People are loyal to our TV stations, to our local news product, which we produce more than anybody else in the country, three forty some odd thousand hours of local TV news, and that we’re a trusted fiduciary in the business community. So you’re not dealing with a call center to if your ad doesn’t run right, you’re dealing with somebody that you may go to the Kiwanis Club or see at a church or a synagogue on the weekends. So it’s that local connection, that last mile connection, I think that uniquely positions us in the media ecosystem. And we think it’s the strongest part of the media ecosystem, which is why we’ve chosen to concentrate on it.

Sid Garg, Managing Director, Morgan Stanley: Great. You talked on your earnings call about your scale and composition of assets that enable Nexstar to bend the curve, if you will, relative to what other broadcasters might not be able to. Can you explain what you mean by that?

Leanne Glia, CFO, Nexstar Media Group: I’ll take that one. I think the key there is just that we are so scaled, right? We are the largest local television broadcaster that’s out there. We’re 50% bigger than the next largest competitor. When you look at the profile of our assets, we cover 70% of the country in terms of the total population.

When you look at the programming that we have on our stations, it’s really all of the programming that everybody wants to watch, right? We are the number one, number two or number three affiliate of each of the major broadcast networks. We own our own broadcast network in CW. We have highly watched local news programming. And because of our scale and our presence and our market share within the network, that enables us to really utilize that when we go to market, when we have these negotiations that enables us to do some things that maybe some of the smaller companies in our sector can’t do.

The other thing that has benefited us with is generating a significant amount of cash flow. And that has enabled us to create a balance sheet that is very clean. We are at an all time low for leverage as of the end of the year at 2.91 times total leverage, which then affords us the ability to potentially take action on some of the deregulation that could be coming towards us.

Sid Garg, Managing Director, Morgan Stanley: Great. Look, there’s been a lot of focus on sports moving potentially to the streaming services, the Netflixes, the Amazons of the world, even Peacock. There’s speculation of live sports on linear TV. Where do you come out of that? What is the future of live sports in your mind?

Perry Silk, Founder, Chairman and CEO, Nexstar Media Group: Well, look, we’ve been active vis a vis the CW and in our local markets with local franchise, sporting rights, mostly for hockey, baseball and some basketball. And we think that again, the sports team owners and the league owners appreciate the superior reach of broadcast. And we’re saying this is in no team owners or league owners mind is a binary one versus the other. I think a proper media plan for any sports team or league includes a broadcast component for that additional exposure, not only of the product, but an opportunity to sell tickets or merchandise and raise awareness. And so, I think that there’ll be a streaming component.

There may be a super fan component. I’ll call that the RSN RSN piece where you get to watch every game and for whatever team that you’re passionate about. It comes at a price. It’s probably on a tier, not widely distributed, but it’s for a super fan. There’ll be a direct to consumer piece as well.

But we think that a well thought out media plan will include a broadcast component that distributes beyond the traditional pay TV ecosystem.

Sid Garg, Managing Director, Morgan Stanley: Got it. Great. I guess switching to kind of the same theme of you’ve seen three of the big four networks develop their own direct to consumer distribution strategies. Fox was here, Lachlan was here. He said he’s got plans to join the pack, if you will.

As a leading affiliate for each of these big four networks, how do you see these direct to consumer initiatives and the pressure that these linear networks are facing? How does that impact your relationship with them?

Perry Silk, Founder, Chairman and CEO, Nexstar Media Group: Well, listen, they’re free to develop whatever strategies and businesses that they see fit for their companies and their shareholders. Our conversations go along the lines of we pay you network operator for programming. We also pay you and have historically for exclusivity, geographic exclusivity for that product in the marketplace where we have an affiliation. And to the extent that that programming is less and less exclusive, then it has less and less value to us. And so, we’ve been making that point in our negotiations with the networks, and I think it’s being heard.

And I think that you’ll continue to see the economics of those relationships evolve as they’ve chosen to put their programming in places that may compete with us. And like I say, we pay for exclusivity or have historically and if it’s not exclusive, then we necessarily will be interested in paying less.

Sid Garg, Managing Director, Morgan Stanley: Got it. We’ve seen a significant amount of re bundling at the DTC level. There’s an introduction of skinny value price bundles. Charter indicated that they’re starting to see some early signs of improving subscriber trends. What is your expectation for subscriber attrition going forward?

Perry Silk, Founder, Chairman and CEO, Nexstar Media Group: We believe that subscriber attrition will moderate, meaning the rate of decline will become less and less over time. And we have some of that factored into our projections for ’twenty five and ’twenty six. Not that it will completely disseminate, but that the rate of decline will be less. And the reason is simple is that now offering we’re rebundling the bundle, right? So the streaming services used to have to go outside another device click through to get to where you want to get to.

If that can now be done seamlessly through Charter, which I’m a subscriber of in both New York and in Dallas. And by the way, just got a note from them a week ago saying, by the way, did you know that Paramount plus is included with your subscription? And so I think that as that becomes more widely known, people will see the value of the bundle, which now includes seamless navigation, which includes broadband. It may include telephony, home security or whatever. You get a discount on the broadband if you bundle it with the video.

And so I think we have, I’d say in effect, we’ve gone, we’ve flown around the world basically to cross the street and we’re kind of back to where we started in terms of putting the bundle back together as one bill seamless navigation, which I think is important to the consumer experience.

Sid Garg, Managing Director, Morgan Stanley: That’s great. You guys delivered record annual distribution revenue in 2024, offsetting the continued rate of decline on the subscriber front. How have you managed this? And do you believe this growth is sustainable? And then related to that, what are your expectations for 2025?

Leanne Glia, CFO, Nexstar Media Group: Yes. So look, I think the way we’ve managed that is what I was saying earlier about our scale and our ability to utilize that scale to benefit us in the negotiations that we have with respect to our retrans contracts and our ability to kind of get the best in class rates that are out there. So that’s really been you can just see it in action in terms of our ability to bend the curve in our favor versus what else you are seeing out there in the industry. Our expectation for 2025 is dependent upon how many subscribers we actually have up for renewal. So last year, we had very few, it was like less than 10% of our subscriber base.

So there’s really very little that will impact 2025 in terms of renewals. We’ll just be surviving on kind of the escalators that we have in our existing contracts. And so but having said all of that, we still expect that our distribution revenue will be flattish for the year. So we think that that’s very positive that we’re able to effectively kind of offset the rate of subscriber attrition with what’s in our contracts today.

Sid Garg, Managing Director, Morgan Stanley: Great. I want to dig down, I think you mentioned, started with CW. Can we maybe the next few questions I want to ask about CW. You’ve been very aggressive in expanding the sports programming at CW. Can you give us a summary of whatever you accomplished so far?

And then importantly, does CW have potential to compete with big four networks?

Perry Silk, Founder, Chairman and CEO, Nexstar Media Group: Sure. Well, we have the CW as it sits today, we program 40% more hours for our affiliated stations than the CW did at the time of acquisition. It was purely a prime time, two hours a night, seven nights a week network, and now we produce four hundred more hours of programming that is primarily sports and primarily on the weekends. So the value proposition to our stations in the local communities and the value proposition of the network to advertisers and to the affiliates which we serve has grown through that investment that we’ve made. Interestingly enough, we program about 40% more hours than we did at the time of acquisition.

Most of that is sports and we’re doing it at less than half the cost of the programming budget that we inherited at the time of acquisition. So programming expenses are less than half and we’re producing 40% more hours and 40% of our entire program lineup is sports related. So I think that was the perfect pivot at the perfect time because sports and news and live events are what distributors and advertisers are increasingly willing to play for and pay for. Scripted entertainment has become a much more of an on demand product than a has fed linearly by the network product. So I think we were fortunate in making the right pivot at the right time and creating value for our distribution partners through our increased investments in sports.

Now, I look at WWE, which we air on Tuesday nights, WWE is doing twice the audience that the network did a year ago with other programming in that time period. We have had three weeks now of NASCAR under our contract, under our production on the network. And each of the three weeks have set record audiences for the last five, eight or twelve years, depending on which race it is. We’re doing anywhere between one point two million and one point eight million viewers for a race now, and we’ve peaked as high as 2,100,000 for the Saturday race in Daytona. Again, huge value.

Every NASCAR Xfinity race will be on a a broadcast network on the same day, on the same channel every Saturday. And we think that viewers have already found that and the ease of finding it and coming back to it again and again. And so it’s a proof point that a broadcast is beat front property, it’s valuable, and increasingly, we’re able to demonstrate the value of that, not only for viewers and advertisers. Since November, between NewsNation and The CW, we’ve added something along the lines of 140 new advertisers to our Networks division, just because we’re again selling growth in an environment where others can’t make that same claim. So NewsNation’s ratings are growing.

We’re beating MSNBC on a regular basis now and the demographics on certain dayparts. We beat CNN a few times and they’ve got almost a fifty year head start on us. And the CW is generating audiences that they had not seen with NASCAR races or Nexstar WW, never saw them on cable. And the last time we were at these kinds of levels for Nexstar Xfinity races when it was on Fox on the broadcast network, not the cable network. So proof point of what we’re doing, we’re still playing money ball with the sports that we have put on the air, and we’re growing the franchise that way.

We’re looking at what part of what sport has the highest growth potential. Is there an actionable transaction that we can afford that makes financial sense for the network, the company and our shareholders? If so, those are the things we’ve been able to execute on. And we would love to add more sports and differentiated content to the network to continue to grow its fan base and its viewership base.

Sid Garg, Managing Director, Morgan Stanley: You moved 17 CW affiliations into your portfolio covering 45% of the households. Can you describe what’s driving that strategy and why is that important?

Leanne Glia, CFO, Nexstar Media Group: Yes. I mean, look, this was a cool part of the deal, right, which is, we as a company, again, back to the how we can bend the curve, have been able to really successfully monetize CW affiliation. And so as part of our strategy as the owner of the network, it’s also important to be the owner of the stations, to be the owner operator, have that sort of consolidated vertical integration. And so we’ve been able to, as we move forward through the renegotiations with various affiliates, to the extent that we see an opportunity to bring one of those affiliations back to our station group, we can do that. Really, at the end of the day, it’s an economic decision, and it’s been very effective for us.

We’ve been able to really drive a significant amount of incremental profit at our on the station side of the ledger. We haven’t really fully disclosed all that because everyone’s focused on the network side of the ledger. But let me tell you, it’s been very nice on the station side of the ledger.

Sid Garg, Managing Director, Morgan Stanley: I guess talking about the network side of the ledger, when you acquired The CW, you said your plan was to get to breakeven. You’ve made substantial progress towards that goal, reducing losses in 24% by 50% and an expectation to reduce by another 25% in 2025. What do you need to get to that breakeven point and where do you go from there?

Leanne Glia, CFO, Nexstar Media Group: Yes. I mean, look, I think from a cost side of things, we’ve done a lot of those cost initiatives, right? When we first bought the state bought the network, we did a bunch of cost actions. We’ve also then redone the programming slate and have reduced our costs significantly on the programming side, as Perry mentioned before. So now really, the cost side is, for the most part, kind of done.

And so now it’s a question of how do we grow revenue. And there’s two components to that. It’s driving our ratings with the new programming that we have and then monetizing it in the advertising market and then also driving our distribution revenue at the network by also monetizing the good new programming and ratings and profitability that we provide to our station partners on the distribution side of things. And so in 2025, we have, I think, a little over two thirds of our subscribers up for renewal from a CW affiliation perspective that ends up being towards the last part of the year. So we should have some positive impact in the fourth quarter and then into 2026 on the distribution side.

Sid Garg, Managing Director, Morgan Stanley: Great. You mentioned NewsNation. You’ve had significant wins at NewsNation. The network hosted the Republican the final Republican presidential primary debate was the first to call the election for President Trump. How big of a contributor could NewsNation be to your business?

And how are you what are you most excited about at NewsNation?

Perry Silk, Founder, Chairman and CEO, Nexstar Media Group: Sure. Well, I think the most exciting thing about NewsNation is there was no acquisition cost to develop the network. It was just capital cost to build out facilities in Chicago, New York and Washington, DC. And then as our program contracts for syndicated programming expired. We just plowed that money into journalism.

So we were able to build the network organically, if you will. And it’s worked us at today’s multiple of EBITDA is probably something in the high three digit $100,000,000 range, not 100,000,000 but in the high hundreds of millions of dollars as an operating entity. And I look at CNN, that’s probably worth $3,000,000,000 to $4,000,000,000 and Fox News, that’s probably worth $8,000,000,000 to $9,000,000,000 So success for us is anywhere between where we are today and where those networks are as operating enterprises and what they’re worth. And again, the good news is, is the growth is all organic. It’s all through putting we’re now 20 fourseven with local news content, growing the awareness of that product, growing and when we launched, we had 11% awareness in The United States.

Four Years later, we’re up to 37%, but that still means that six and ten homes in America, we need to knock on the door and introduce ourselves. And so, that’s the real drive of the network. We also, I think, have a very good stable of talent. The network itself is being true to its brand, which is unbiased objective opinion clearly labeled as such. And just green shoots, like I said, we have outrated MSNBC on a dozen occasions since the first of the year in the twenty five to fifty four demographic, our sales demographic.

We’ve done we beat CNN a couple of times in the same thing. And those are incumbent networks. We were an entertainment network that pivoted to news, again, to preserve and grow distribution revenue, which I think would have gone the other way if we just remained entertainment. We were dispensable according to the distributors. So we created real value and obviously now is how far can that value go.

Obviously, our goal is to get to 40% awareness and then 50% awareness and then get up into the 70s and 80s where the other incumbent cable networks are in terms of national awareness. And with that grows the advertisers and the audience. And so it’s a long term development process that started as a counter programming strategy that now is a passion project for the company. Our board is invested, our board watches, we get notes from our board, viewers. Sean Compton was on a rental car bus today and he had on his NewsNation jacket, Sean runs the network and the bus driver would not let him go because he wanted to talk about how much he watched NewsNation, how good it was.

And so those kinds of green shoots are encouraging. The proof is in the pudding of continuing to grow the awareness of the network. But we’re very proud of how far we’ve come in four years, but completely eyes wide open as to how far we have to go before we call it a true success.

Sid Garg, Managing Director, Morgan Stanley: That’s very exciting. Shifting to advertising and political, political advertising in 24% set a record with growth over 2020 if you exclude the Georgia runoffs. CTV became a big sort of player in the election cycle. How did Nexstar perform and what role did broadcast play in the political campaigns?

Leanne Glia, CFO, Nexstar Media Group: Yes. I mean, we felt like we achieved what we more or less set out to do. Generally speaking, Nexstar receives a low teens percentage of the total television spend and broadcast or in political, and we achieved that again this year. Television still continues to be the number one by a wide margin in terms of the where the dollars are spent for each campaign. And really, if you kind of talk to anybody that does the spending, it is the number one place they want to continue to make that spend.

I think CTV, this is the first year that really that was an opportunity for political campaigns to kind of invest in. And so you saw pretty much the lion’s share of the increase from the last political election in terms of political spending go to CTV. We’ll see how that plays out in the next election. I think there’s been some after action reports talking about who spent more, where, and I think the Republicans tend to have spent a little bit more on the broadcast side of things and they obviously won. So we’ll see how that sort of sorts out itself for the next election, but we feel confident about our ability to deliver and really create if you want to win, you’re going to spend in television.

Sid Garg, Managing Director, Morgan Stanley: And then I guess based on 2024, your performance results, what are your expectations for political advertising in the future election year?

Leanne Glia, CFO, Nexstar Media Group: Yes. I mean, look, we really we expect to continue to see the trajectory of what we’ve seen in the past continue in terms of our ability to sustain our market share of the total spending on television for political.

Sid Garg, Managing Director, Morgan Stanley: Great. On your earnings call, you said first quarter non political advertising is expected to improve sequentially from Q4, which was representing a year over year decline in low to mid single digit range. And now you’re expecting the non political advertising to be slightly up for the year. What do you think are the key drivers and what risks and upside do you see to achieving those outcomes?

Leanne Glia, CFO, Nexstar Media Group: Yes. Look, I mean, I think we continue to see our core local and national revenue to be slightly challenged, but some of the things that we think are going to offset that are, number one is the CW. Perry just spent some time talking about all the great new programming we have on the CW. Now is the time where we’re going to start to monetize that. An example we gave on the earnings call was like if you look at the WWE NXT, which we have two hours a night in prime time or sorry, two hours a week in prime time, that rating is doing over 100% better than what it was doing last year.

So that we feel like the CW should have a positive impact on our overall guide for the year. The second thing is our local digital. So our local digital is something that we’re incredibly focused on as a company. We’ve seen sort of low teens rate of increase in the first quarter so far, and that’s something that we are completely focused on. And really what that is, is that’s our local sales force selling not only our own local inventory, so our video and our website and our CTV apps, but also selling third party CTV content, audience extension, other types of products.

So that’s a complete focus for us. And then obviously, the last piece of it really being just the benefit of reducing displacement, right, because we don’t have displacement from a political perspective.

Sid Garg, Managing Director, Morgan Stanley: Makes sense. Switching to the deregulation topic, you mentioned on your earnings call there’s significant excitement around the prospect of deregulation, particularly related to the outdated broadcast ownership restrictions, which limit as everybody knows to 39% of the country. What is the latest you’re hearing from Washington? Are you what’s your level of confidence the rules can change? And then from a timing standpoint, how long does that take?

Perry Silk, Founder, Chairman and CEO, Nexstar Media Group: Well, Chairman Carr at the SEC has called this a break glass moment for local television, local broadcasting, meaning that the existential threat is not the cable companies, the satellite companies, other broadcasters. The networks, the existential threat is big tech, right, that has access to the same viewers, the same advertisers, our content and oftentimes appropriates those without any compensation, let alone fair compensation. So the debate has been framed of local journalism versus big tech. And do you really want your local news delivered by a chatbot in the future? And is there a national interest in maintaining a free and independent press at the local level?

I would argue that newspaper and radio are struggling to stay in that business. The last bastion is local broadcast. So that has bipartisan support in both the House and the Senate. And no one can defend the current rules and regulations with a straight face and look at you and say, yes, broadcasting television is a discrete market and we should look at market share of broadcasting as a determinant as to whether there’s too much concentration or YouTube or any other big tech company can reach every screen in America with their content with no restrictions. But we somehow should be held as an industry to only reaching 39% of the households in America with our broadcast signals.

So there is, as I said, bipartisan support on the Hill. Also, I think there’s a lot that can be done at the FCC and the DOJ from a regulatory perspective to eliminate these outmoded regulations. And I think that Chairman Carr has been very plain with me that when there is a three to two Republican majority, meaning the third Republican commissioner is confirmed, which we think probably happens in maybe April or May, that he’ll be able to move forward with some degree of alacrity in terms of implementing a deregulatory agenda, which I think would be good for Nexstar, good for the industry and should lead to multiple expansion with the prospect of additional M and A.

Sid Garg, Managing Director, Morgan Stanley: I It’s outside of the ownership cap. What other restrictions are you focused on with this deregulation?

Perry Silk, Founder, Chairman and CEO, Nexstar Media Group: The outmoded regulations that for summary in San Francisco, I can’t own two of the big four television stations, top four in terms of ratings because somehow that would be concentration of power, even though there are 30 television stations in San Francisco. And so eliminating this duopoly and prohibitioning its own two of the big four, allowing companies to combine resources like we’ve done with Mission, with JSAs and SSAs. I think all of those are coping mechanisms to deal with the current outdated regulatory schema. And so, if we can eliminate the end market ownership restrictions, I think it again, it comes back to it’s in the national interest to have a strong local journalism presence in markets across the country. And the way to do that is to allow strong companies to become bigger and remain strong.

But if you look at the market cap of the entire television industry and compare it to Alphabet, Apple, Amazon, it looks like three suns and a bunch of Pluto in the solar system. And so not that this is all just about market cap, but that is the existential threat is that big tech appropriates all that we do locally, but doesn’t provide local service, doesn’t provide anchors that can emcee charitable events. In addition to doing new sports and weather and weather alerts and telephones for hurricane or wildfire or flooding victims that we do every day. So there’s a certain fiduciary responsibility that we feel as local broadcasters that’s been ingrained in this industry as it developed over the last sixty, seventy years that I’m not sure big tech feels that same compulsion or compunction to serve. And so there’s a lot of ingredients that go into this trusted relationship that we have.

And I think that again, we would like to continue to build our company, good companies get bigger and prosper. And I think that’s the best way to preserve the local journalism in our communities that we have today.

Sid Garg, Managing Director, Morgan Stanley: Any of these deregulation, do these require an act of Congress or you spoke a lot about Brendan Carr, could the FCC move unilaterally to change the restrictions?

Perry Silk, Founder, Chairman and CEO, Nexstar Media Group: Well, I think that the FCC can move unilaterally to make changes to the ownership rules, both locally and nationally. I think that that is subject to judicial review. It could always be challenged in court. If Congress passes a law that eliminates national ownership cap, that is not subject to judicial review. So if anything, that would be the belt and suspenders that would kind of tie a bow around deregulation and make it permanent as opposed to subject to the next administration deciding they wanted to change the rules yet again.

Sid Garg, Managing Director, Morgan Stanley: And in the event deregulation happens, Nexstar with your scale, your balance sheet seems to be a logical acquirer of broadcast assets. Where do you expect Nexstar to focus its M and A efforts?

Leanne Glia, CFO, Nexstar Media Group: Yes. I mean, look, we if you go back in the history of the company, we’ve generated a lot of shareholder value from making acquisitions. Obviously, we did the doubled the size of the company in 2017 with Media General, did it again in 2019 with Tribune. I think those deals were 4060% accretive. We will look at deals that are out there and try to measure that against buying our own assets, effectively buying back our own stock and that we can get a 20% return on that.

So we’re going to look to try to find deals that are more accretive than that. We’ll look for acquisitions that are going to be synergistic to us. So areas where we can find places to put more CW affiliation, bigger markets, in market transactions where we can create some synergy from that perspective. But we’ve got a playbook that we’ve run a number of times. We’ve got a very clean balance sheet that enables us to execute.

So we feel like we’re primed to take care of this opportunity should it come to us.

Sid Garg, Managing Director, Morgan Stanley: Great. We’ve got a few minutes left. So let’s get to capital allocation. You have been a strong allocator of capital offering a nearly 5% dividend yield following your twelfth consecutive annual dividend increase in Jan. You’ve repurchased about 9% of your stock back in 2024 while also reducing debt resulting in, I think you mentioned, 2.91 times net leverage.

Why do you believe this is the right strategy for capital allocation? And then how does this impact all the M and A discussions?

Leanne Glia, CFO, Nexstar Media Group: Yes. I mean, look, I think just taking that last piece first, I mean, like I said, the place where we’ve created the most shareholder value in the past has been through M M and A. And so we will really look to accelerate that, make that the first place we’re putting our capital to work because we think that may be the best place to create shareholder return. Absent that, then we really look at where can we be creating value for our shareholders. And that really is looking at debt pay down and share repurchases.

Some shareholders will value us on a total enterprise value to EBITDA basis on a multiple. And when you pay down a dollar debt, you create a dollar of equity value in that regard. So that’s beneficial. But if you also look at any sort of discounted cash flow analysis or any sort of free cash flow accretion dilution, the single best place to be creating value is by buying back stock. And so that’s where we have been allocating for the past few years the lion share of our free cash flow has been to repurchasing stock.

I made some comments on the last earnings call. It really is, if you even just look at how the Warner Brothers and Paramount have valued their cable networks in their last couple of ten Qs, we just apply those same metrics for the cable network, which is like a negative 3% perpetuity growth and a 10.5% discount rate, and you apply that to Nexstar’s stock, our stock price should be $210 a share. So where we are today, it makes a lot of sense to be buying back stock. So that’s why we prioritize that, but we look at it every quarter. We relook at it every year.

We look at it with the board. We report to the board on a quarterly basis on that and make those decisions real time as we move forward.

Sid Garg, Managing Director, Morgan Stanley: Great. Maybe I can squeeze in one more. You’ve been very vocal about the potential of spectrum and ATSC three point zero. You recently formed a joint venture Edge Beam Wireless to provide high speed data and transmission services. I guess how big is this market opportunity and where do you expect to see meaningful revenues for Nexstar in the future?

Perry Silk, Founder, Chairman and CEO, Nexstar Media Group: Well, if you look at the size of the spectrum footprint that the four parties contribute, It’s 97 plus percent of The U. S. Population is covered by our spectrum footprint. The per pop

Leanne Glia, CFO, Nexstar Media Group: the total 1,000,000,000 megahertz.

Perry Silk, Founder, Chairman and CEO, Nexstar Media Group: Billion megahertz. I mean, it’s so you put a spectrum valuation on that or a wireless valuation on that. You can see what the value could be there in terms of what’s created. And again, we see the opportunity of doing data offload, doing connected car video, navigation updates. We see the opportunity to do precision GPS, lower cost five gs replacement or alternatives.

All of those things are mineral rights and the NAB has put together a petition for rulemaking asking the FCC to sanction this transaction to move it along further faster. And we think if that gets traction that there could be real development on this in the not too distant

Sid Garg, Managing Director, Morgan Stanley: future. That’s great. We’re out of time. So thank you again for joining us. Great presentation.

Thank you, Sid. Appreciate it.

Leanne Glia, CFO, Nexstar Media Group: Yes. Thank you for having us.

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