Core Thesis - Nexstar Media Group, Inc. is positioned as a resilient player in the broadcasting industry, leveraging its scale and recurring revenue streams to navigate challenges such as cord-cutting and changing advertising dynamics [2][3][5]. Financial Performance - In 2024, Nexstar generated approximately $5.3 billion in revenue and $1.2 billion in mid-cycle free cash flow, supported by a robust EBITDA margin of 35%, one of the highest in U.S. broadcasting [4]. - Political advertising spending exceeded $600 million in 2022, serving as a cyclical catalyst for revenue growth, while retransmission and distribution fees now account for over half of total revenue, providing stability [4]. Business Model and Strategy - The company operates a diversified model that includes local audience aggregation, advertising, and retransmission fees, which collectively form a stable backbone against industry headwinds [3][4]. - Nexstar's participation in the CW network and NextGen TV (ATSC 3.0) enhances its capabilities for targeted advertising and data-driven services, offering additional growth opportunities [3]. Shareholder Returns - Nexstar adopts a disciplined capital allocation strategy, returning around 70% of free cash flow through dividends and buybacks, reflecting a shareholder-first approach [5]. - The company offers a 4% dividend yield and maintains a conservative net leverage of 3x, balancing growth and risk management effectively [5]. Market Position - Despite being categorized as a "traditional" broadcaster, Nexstar's operational model and financial discipline position it as a steady compounding engine in the media landscape, converting airtime into lasting shareholder value [5][6].

Please call five minutes in advance to ensure that you are connected. Questions will be taken only from participants on the conference call. For the webcast, please allow 15 minutes to register, download and install any necessary software. About Nexstar Media Group, Inc. Nexstar Media Group, Inc. (NASDAQ: NXST) is a leading diversified media company that produces and distributes engaging local and national news, sports and entertainment content across its television and digital platforms, including more tha ...

Core Insights - The company is focused on closing a pending acquisition in 2026, with significant efforts being made in due diligence and negotiations in Washington D.C. [1] - A dedicated team has been established to sell assembled assets and explore cross-platform opportunities, which is beginning to generate meaningful revenue and an uplift in advertising support [1] - The company is actively engaged in negotiations for distribution deals with traditional MVPDs (Multichannel Video Programming Distributors) before the end of the year [1]

Nexstar Media Group 2025 Conference Summary Company Overview - **Company**: Nexstar Media Group (NasdaqGS:NXST) - **Event**: 2025 Conference held on December 08, 2025 Key Highlights Acquisition and Regulatory Process - **Pending Acquisition**: Nexstar is focused on closing the pending acquisition of Tegna, with significant efforts in due diligence and regulatory compliance [4][6][59] - **FCC Process**: The FCC has put the transaction on public notice, indicating a positive regulatory process. The public comment phase is ongoing, expected to conclude by the end of January [6][59] - **DOJ Engagement**: Meetings with the DOJ are scheduled to discuss the transaction, with a focus on data-driven arguments to support the acquisition [16][17][59] Financial Expectations and Synergies - **EBITDA Synergies**: Nexstar anticipates $300 million in EBITDA synergies from the acquisition, with 45% from net retransmission and 55% from operating expense reductions. Most synergies are expected to be realized within the first 12 months [19][20] - **Leverage Post-Acquisition**: Pre-acquisition leverage is around 3.2 times, expected to rise to approximately 4 times post-acquisition, with plans to deleverage back to previous levels by 2028 [22] Advertising Market Outlook - **Positive Momentum**: The advertising market is showing positive signs, with expectations for slight growth in non-political advertising in Q4 2025. Political advertising is anticipated to increase significantly due to upcoming events like the FIFA World Cup and the Olympics [26][27][28] - **Political Advertising Revenue**: Nexstar has historically generated about $500 million from political advertising during election cycles, with expectations for continued growth in competitive markets [28][29] Local and Streaming Advertising - **Local Advertising Strategy**: Nexstar is already capturing local advertising through CTV and digital platforms, leveraging a strong local sales force to connect with small and medium businesses [31] - **Streaming Initiatives**: Nexstar is rolling out CTV apps for local stations and is engaged in partnerships to enhance streaming capabilities [32][33] Spectrum Transition and Monetization - **ATSC 3.0 Transition**: Nexstar is focused on transitioning to ATSC 3.0 for more efficient spectrum use, which could lead to significant revenue opportunities from non-video uses of the spectrum [51][52][54] - **Revenue Potential**: The company estimates that non-video uses could generate revenue comparable to current distribution revenue, potentially adding substantial value [54][58] Future M&A and Market Position - **Interest in Further M&A**: Nexstar remains open to follow-on acquisitions, particularly in local markets, to enhance its competitive position [24][25] - **Market Dynamics**: The company believes that the current media landscape will continue to evolve, providing opportunities for growth and consolidation in the broadcast industry [24][39] Additional Insights - **NASCAR Performance**: Improved viewership in NASCAR is attributed to consistent broadcasting on the same network, enhancing audience accessibility [48][49] - **CW Network Profitability**: The CW network is on track to achieve profitability, with significant improvements in programming costs and content strategy [43][44] Conclusion Nexstar Media Group is strategically positioned for growth through its pending acquisition of Tegna, with a focus on regulatory compliance, financial synergies, and leveraging opportunities in the evolving advertising and media landscape. The company is optimistic about its future prospects, particularly in political advertising and the transition to ATSC 3.0.

Core Viewpoint - The broadcast television industry is facing pressure to consolidate due to declining pay-TV subscriptions and the rise of streaming services, with companies like Sinclair and Nexstar actively pursuing mergers to enhance profitability and negotiating power [1][5][6]. Group 1: Industry Dynamics - Nexstar Media Group announced a proposed $6.2 billion acquisition of Tegna, which would combine over 260 broadcast stations across the U.S. [1] - Sinclair Broadcast Group made a hostile offer to acquire E.W. Scripps after acquiring nearly 10% of the company [2][11]. - Broadcast station owners are experiencing profitability challenges as the number of traditional pay-TV subscribers decreases, with retransmission fees accounting for 33% to 50% of their annual revenue [4][5]. Group 2: Consolidation Efforts - The need for consolidation among broadcast station owners is driven by the desire to cut duplicate costs and increase scale, especially as major media companies plan their own mergers [6][21]. - Sinclair has been seeking acquisition targets for nearly a year and has engaged in discussions with potential partners, including Gray Media and Scripps [8][9][11]. - Sinclair's acquisition discussions with Scripps faced complications due to governance and cultural issues, particularly regarding the conservative politics of Sinclair's controlling family [14][15]. Group 3: Regulatory Environment - The FCC currently restricts any one company from owning broadcast stations that reach more than 39% of U.S. TV households, which poses a challenge for Nexstar's acquisition of Tegna [21][22]. - Sinclair believes its proposed merger with Scripps would easily gain regulatory approval, while Nexstar's deal may require lifting or waivers of existing FCC rules [22][23]. - The Department of Justice has been slow in approving deals in the industry, adding another layer of complexity to potential mergers [25]. Group 4: Market Reactions - Scripps adopted a shareholder rights plan, or "poison pill," in response to Sinclair's acquisition proposal, aiming to protect shareholder value [16][17]. - Concerns have been raised about potential insider trading related to Sinclair's stock purchases of Scripps, given the nondisclosure agreement signed during early deal discussions [18][20]. - Industry advocates argue that lifting ownership caps would allow local broadcasters to invest in journalism and compete effectively in the evolving media landscape [30].

Industry Overview - Traditional TV advertising spending in the U.S. is projected to reach $56.00 billion by 2025, but is expected to decline at a rate of approximately 3.81% annually through 2030 as advertising budgets shift towards digital platforms [1] Company Focus: Nexstar Media Group - Nexstar Media Group is highlighted as the largest local television and media company in the U.S., recognized for strong dividend growth and solid cash generation, with a robust balance sheet that supports ongoing dividend increases despite industry challenges [3][4] - The company offers an annual dividend yield of 3.9%, which is significantly higher than the sector average of 2.62%, making it attractive for income-focused investors [6] Financial Performance - Over the past 52 weeks, Nexstar's stock has increased by 10.4%, and year-to-date, it has risen by 19.3%, indicating strong investor interest in its cash generation capabilities [5] - In Q3, Nexstar reported net revenue of $1.2 billion, a decrease of 12.3% year-over-year, primarily due to the absence of political advertising that had surged in the previous election cycle [7] - The company's net quarterly income fell to $65 million, a 63.9% decline, impacted by weaker political advertising and one-time corporate costs related to the pending TEGNA deal [8] - Adjusted EBITDA was reported at $358 million, down approximately 29.8%, and adjusted free cash flow was $166 million, nearly 50% lower year-over-year, reflecting cyclical factors rather than a fundamental shift in the business model [9] - Despite these declines, with an annual net income of $722 million and ongoing free cash flow generation, Nexstar remains well-positioned to sustain its dividend and reward long-term shareholders [9]

Core Viewpoint - Nexstar and Sinclair's stock prices declined following President Trump's opposition to the FCC chairman's proposal to eliminate the cap on TV-station ownership, which Trump argued would negatively impact Republicans [1] Company Impact - Nexstar and Sinclair experienced a drop in their stock values as a direct response to the political commentary from President Trump regarding FCC regulations [1] Industry Context - The potential removal of the cap on TV-station ownership is a significant regulatory issue that could reshape the broadcasting landscape, with implications for media consolidation and political influence [1]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Company Summaries Iridium Communications Inc (NASDAQ:IRDM) - Dividend Yield: 3.74% [7] - Analyst Ratings: - BWS Financial analyst Hamed Khorsand maintained a Sell rating with a price target of $16 [7] - Oppenheimer analyst Timothy Horan initiated coverage with an Outperform rating and a price target of $34 [7] - Recent Performance: Posted upbeat quarterly results on Oct. 23 [7] Omnicom Group Inc (NYSE:OMC) - Dividend Yield: 3.74% [7] - Analyst Ratings: - Wells Fargo analyst Steven Cahall upgraded the stock from Equal-Weight to Overweight, raising the price target from $78 to $91 [7] - JP Morgan analyst David Karnovsky maintained an Overweight rating, reducing the price target from $104 to $96 [7] - Recent Performance: Reported better-than-expected third-quarter results on Oct. 21 [7] Nexstar Media Group Inc (NASDAQ:NXST) - Dividend Yield: 3.93% [7] - Analyst Ratings: - Guggenheim analyst Curry Baker maintained a Buy rating and raised the price target from $220 to $250 [7] - Wells Fargo analyst Steven Cahall maintained an Overweight rating and increased the price target from $206 to $250 [7] - Recent Performance: Reported weaker-than-expected quarterly results on Nov. 6 [7]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Company Ratings and Performance - **Iridium Communications Inc (NASDAQ:IRDM)**: - Dividend Yield: 3.74% - BWS Financial analyst Hamed Khorsand maintained a Sell rating with a price target of $16 [7] - Oppenheimer analyst Timothy Horan initiated coverage with an Outperform rating and a price target of $34 [7] - Recent quarterly results were positive, as reported on Oct. 23 [7] - **Omnicom Group Inc (NYSE:OMC)**: - Dividend Yield: 3.74% - Wells Fargo analyst Steven Cahall upgraded the stock from Equal-Weight to Overweight, raising the price target from $78 to $91 [7] - JP Morgan analyst David Karnovsky maintained an Overweight rating but reduced the price target from $104 to $96 [7] - The company reported better-than-expected third-quarter results on Oct. 21 [7] - **Nexstar Media Group Inc (NASDAQ:NXST)**: - Dividend Yield: 3.93% - Guggenheim analyst Curry Baker maintained a Buy rating and increased the price target from $220 to $250 [7] - Wells Fargo analyst Steven Cahall maintained an Overweight rating and raised the price target from $206 to $250 [7] - The company reported weaker-than-expected quarterly results on Nov. 6 [7]

Core Viewpoint - NextStar Media Group is set to acquire Tegna's broadcasting license for over $6 billion, with the transaction expected to close in the second half of 2026, pending regulatory approval [2][29]. Company Overview - NextStar operates more than 200 stations across 116 local markets, while Tegna has 64 stations in 51 markets, indicating a significant expansion opportunity for NextStar [2][3]. - The merger is anticipated to create synergies exceeding the initially estimated $300 million, with potential for further growth as the companies undergo a second level of diligence [11][22]. Regulatory Environment - The acquisition application has been filed with the FCC, which is considering waiving its 39% ownership cap rule for local broadcasters, a move that reflects a shift in regulatory attitudes under the current administration [2][6]. - NextStar's CEO expressed confidence in navigating the regulatory process, having previously dealt with DOJ scrutiny in other transactions [5][16]. Market Dynamics - The FCC aims to empower local TV stations to better serve their communities, countering the influence of national programmers who lack public interest obligations [9][10]. - The merger is seen as beneficial for local journalism, which faces challenges from big tech and misinformation, emphasizing the need for strong companies to support local news [14][20]. Financial Outlook - NextStar expects political advertising revenue to increase by approximately 20% in the upcoming election cycle, which will contribute to free cash flow and debt reduction post-acquisition [28][29]. - The company has a history of increasing local news production by about 30% following acquisitions, indicating a focus on organic growth alongside the merger [22][23].