Q2 2023 Nexstar Media Group Inc Earnings Call

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Speaker 2: Good day and welcome to Nexstar Media Group second quarter 2023 conference call. Today's call is being recorded. I will now turn the conference over to Joe Giuffone Investor Relations. Please go ahead, sir.

Good day and welcome to Nexstar Media group's second quarter 2023 Conference call. Today's call is being recorded I will now turn the conference over to Joe just on the Investor Relations. Please go ahead Sir.

Speaker 3: Thank you, Maria, and good morning, everyone. Let me just read 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.

Thank you Maria and good morning, everyone. Let me just read 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.

Speaker 3: Next, our caution is 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 the call.

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 the call.

Speaker 3: For additional details on these risks and uncertainties, please see Nexstar's annual report on Form 10-K for the year-end of December 31, 2022, as filed with the Securities and Exchange Commission, and Nexstar's subsequent public filings with the SEC.

For additional details on these risks and uncertainties. Please see next year's annual report on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission and Nexstar subsequent public filings with the SEC next.

Speaker 3: Nextdoor undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Nexstar undertakes no obligation to update or revise any forward looking statements, whether as a result of new information future events or otherwise.

Speaker 3: With that, it's now my pleasure to turn the conference over to your host, next door Chairman and CEO , Perry Suk. Perry, please go ahead.

With that it's now my pleasure to turn the conference over to your House, Nexstar, Chairman and CEO Perry Sook Perry. Please go ahead.

Speaker 4: Thank you, Joseph and good morning everyone. We appreciate you joining us today to discuss next to our second quarter results. With me on the call today are Tom Carter, our President and Chief Operating Officer, and Leanne Gleeha, our CFO . I'll start with a summary of recent highlights and developments, followed by Tom's operational review and Leanne's financial review.

Thank you Joseph and good morning, everyone. We appreciate you joining us today to discuss next our second quarter results with me on the call today are Tom Carter, our President and Chief operating Officer, and Lee <unk>, Our CFO I'll start with a summary of recent highlights and developments followed by Tom's operational review and Lee and his financial review.

Speaker 4: Recently some media executives have made public comments calling into question the future of linear broadcasts. We respectfully disagree

Recently, some media executives have made public comments, calling into question the future of linear broadcast we respectfully disagree.

Speaker 4: What can't be questioned is that literally all of the video profit and 80% of the video revenue of the major integrated media companies are generated by the linear model today.

What can't be questioned is that literally all of the video profit and 80% of video revenue of the major integrated media companies are generated by the linear model today.

Speaker 4: Said another way, DTC strategies are reliant on the profits of the linear model to exist.

Another way DTC strategies are reliant on the profits of the linear model to exist. We don't expect the D. T V business to go away, we expect to coexist with them and for broadcast to continue to thrive linear is not going anywhere right.

Speaker 4: We don't expect the DTV business to go away. We expect to coexist with them and for broadcast to continue to thrive. Linear is not going anywhere.

Speaker 4: Broadcast television continues to reach the largest audience with the highest amount of daily time spent of any video media and remains the most influential media for consumers purchasing and voting decisions. Our proprietary news content is widely consumed and valued by our audiences and our content partners, particularly those in live sports and our advertisers, understand the power of the reach of the broadcast media.

Broadcast television continues to reach the largest audience with the highest amount of daily time spent of any video media and remains the most influential media for consumers purchasing and voting decisions are proprietary news content is widely consumed and valued by our audiences and our content partners, particularly those in live sports and our advertisers understand.

The power of the reach of the broadcast media.

Speaker 4: Our confidence that the broadcast model will continue to thrive is supported by our financial results. In Q2, we further extend our record of outperforming consensus expectations across all key financial metrics including net revenue, adjusted EBITDA, and attributable free cash flow.

Our confidence that the broadcast model will continue to thrive as supported by our financial results. In Q2, we further extend our record of outperforming consensus expectations across all key financial metrics, including net revenue adjusted EBITDA and attributable free cash flow.

Speaker 4: Our strong performance reflects the combination of the benefits of scale and our company-wide business relationships and our decentralized local and business unit management model, which focuses on delivering exceptional news, sports and entertainment for our viewers and proven marketing solutions for advertisers at Attractive Operating Markets.

Our strong performance reflects the combination of the benefits of scale in our company wide business relationships and our decentralized local and business unit management model, which focuses on delivering exceptional news sports and entertainment for our viewers and proven marketing solutions for advertisers and attractive operating margins.

Speaker 4: Our consistent free cash flow generation provides us with the financial flexibility to invest in our future while continuing to return capital to shareholders. In the first half of this year, we returned $414 million to shareholders, or approximately $11.70 per share, in the form of dividends and share repurchases representing 86% of our first half attributable free cash flow.

Our consistent free cash flow generation provides us with the financial flexibility to invest in our future while continuing to return capital to shareholders in the first half of this year, we returned $414 million to shareholders or approximately $11.70 per share in the form of dividends and share repurchases representing ATC.

6% of our first half attributable free cash flow.

Speaker 4: We are enthusiastic about our future with a number of organic growth initiatives, including our new in-house sales initiative that will leverage all of the assets of our platforms, the growth of the CW and NewsNation, and ATSC 3.0's broad potential for future monetization.

We are enthusiastic about our future with a number of organic growth initiatives, including our new in house sales initiative that leverage all of the assets of our platforms. The growth of the CW and news nation and a T. S. E. Three pointed out has broad potential for future monetization.

Speaker 4: My optimism for Nexstar's continued growth is reflected by my position as a top 10 shareholder of the company and the company's largest individual shareholder and my recent contract extension which goes into 2020.

My optimism for next doors continued growth as reflected by my position as a top 10 shareholder of the company and the company's largest individual shareholder and my recent contract extension, which goes into 2020 six.

Speaker 4: But as we look to the future, I'd like to take this opportunity to honor Tom Carter, who a few weeks ago announced his retirement at the end of the year after 14 years at Nexstar.

But as we look to the future I'd like to take this opportunity to arm honor, Tom Carter, who a few weeks ago announced his retirement at the end of the year after 14 years at Nexstar.

Speaker 4: The day before Tom started back in 2009, our stock was at 82 cents per share. And look where we are today.

The day before Tom started back in 2009, our stock was at 82 per share and look where we are today. Tom has been and is and will continue to be a tremendous partner and friend and during his tenure he oversaw a period of unprecedented growth and expansion for the company, including the successful structuring.

Speaker 4: Tom has been and is and will continue to be a tremendous partner and friend. And during his tenure, he oversaw a period of unprecedented growth and expansion for the company, including the successful structuring completion and synergy realization of highly free cash flow accretive transactions, including Tribune Media and Media General, which cemented Nexstar's position as the nation's largest local television broadcast.

<unk> and synergy realization of highly free cash flow accretive transactions, including Tribune media and media general, which cemented <unk> position as the nation's largest local television broadcaster.

Speaker 4: Since many of you know Tom first hand, it goes without saying that he will be missed tremendous.

Since many of you know Tom firsthand it goes without saying that he will be missed tremendously.

Speaker 4: Always a team player, Tom has already contributed to the one seamless transition we've had so far with our appointments two years ago of Leeann as our CFO , and he will continue to support our growth and transition in his capacity as Senior Advisor to me through the end of this year.

Always a team player Tom has already contributed to the one seamless transition we've had so far with our appointment two years ago of Lyanne as our CFO and he will continue to support our growth and transition is it in his capacity as senior advisor to me through the end of this year.

Speaker 4: With Tom previously signaling his intention to retire at the conclusion of his contract, the board and I had ample time to identify a successor. Last month we announced that Mike Baird, former president of operations and distribution at Fox Corporation, will join us as president and chief operating officer later this month.

With Tom previously signaling his intention to retire at the conclusion of his contract the board and I had ample time to identify a successor last month, we announced that Mike Baird former president of operations and distribution that Fox Corporation will join Us as President and Chief operating Officer later this month.

Speaker 4: Mike's experience over Fox multi-platform content distribution strategy, affiliate relations and business affairs for Fox Sports, Fox Entertainment and Fox News brings the perfect complement of capabilities for Nexstar's forward direction and growth. I and many of my Nexstar colleagues have previously known Mike for a good portion of his 23 years that he spent at Fox in Nexstar's role as the largest Fox affiliate group. Mike's experience, knowledge and energy are a great match for our team as we look to take Nexstar to the next level.

Mike's experience over a Fox multi platform content distribution strategy affiliate relations and business Affairs for Fox Sports Fox Entertainment and Fox News brings the perfect complement of capabilities for Nexstar as forward direction and growth.

I and many of my next our colleagues at previously known Mike for a good portion of his 23 years that he spent at Fox and Nexstar as well as the largest Fox affiliate group.

Mike's experience knowledge and energy are a great match for our team as we look to take Nexstar to the next level.

Speaker 4: At the board level, part of our ongoing initiative regarding board refreshment, shareholders approved this year our proposal to declassify our board of directors. Going forward, each board member will be elected annually beginning in 2024.

At the board level part of our ongoing initiative regarding board refreshment shareholders approve this year our proposal to declassify our board of directors going forward. Each board member will be elected annually beginning in 2024.

Speaker 4: and standing for election with the rest of the board next year will be our newly appointed board member Tony Wells.

And standing for election with the rest of the board next year will be our newly appointed Board member Tony Wells, Tony feels the board position vacated by Dennis Miller, who stepped down in October to become president of the CW network.

Speaker 4: Tony fills the board position vacated by Dennis Miller, who stepped down in October to become president of the CW.

Speaker 4: Tony is a great addition for us. He was the former chief media officer at Verizon and chief brand officer at USAA. And he brings a deep knowledge of the national and local advertising landscape and experience and insights working within large enterprise.

He is a great addition.

Excuse me a great addition for US he was the former Chief Media Officer at Verizon and Chief brand Officer at U S. A a and he brings a deep knowledge of the national and local advertising landscape and experience and insights working within large enterprises.

Speaker 4: During Tony's career, he deployed billions of marketing dollars for some of the country's most high-profile brands. His experience and first-hand knowledge, which will benefit Nexstar as we grow our national assets of the CW, NewsNation and The Hill, and further leverage our local broadcasting footprint, which is the largest in the industry.

Drank Tony's career, he deployed billions of marketing dollars for some of the country's most high profile brands is experiencing firsthand knowledge, which will that benefit nexstar as we grow our national assets at the CW News nation, and the Hill and further leverage our local broadcasting footprint, which is the largest in the industry.

Speaker 4: Let's move on to the CW as our excitement about that opportunity we see is even greater than when we acquired it. As you may know, our CW affiliates are our most profitable in terms of margin.

Let's move on to the CW is our excitement about that opportunity. We see is even greater than when we acquired it as when you as you may know our CW affiliates are our most profitable in terms of margins next our CW stations have already benefited from our acquisition through our distribution renewals last year and so far this year.

Speaker 4: Next, our CW stations have already benefited from our acquisition through our distribution renewals last year and so far this year, but we also see further opportunities to grow distribution revenue not only at our stations, but on the affiliate side. Our thesis is straightforward. We believe that as a broadcaster-run broadcast network, the CW represents a better alternative and operator for station operators just as it has for us.

But we also see further opportunities to grow distribution revenue not only at our stations, but on the affiliate side. Our thesis is straightforward, we believe that as a broadcaster run broadcast network. The CW represents a better alternative and operator for station operators just as it has for us.

Speaker 4: In June , we announced that our stations in San Francisco, Philadelphia, and Tampa will affiliate with the CW beginning in September . And last week, the CW announced that it had expanded and extended its network affiliation agreement with Hearst Television, which will also launch the CW on Hearst KQCA in Sacramento, California.

In June we announced that our stations in San Francisco, Philadelphia, and Tampa will affiliate with the CW beginning in September and last week, the CW announced that it had expanded and extended its network affiliation agreement with Hearst television, which will also launch the CW on Hearst cake, you see a in Sacramento, California.

Speaker 4: This is but one example of the interest by leading broadcasters in aligning with the new CW.

This is but one example of the interest by leading broadcasters and aligning with the new CW.

Speaker 4: To drive the growth of the network, we are making Moneyball-inspired investments in content that matters to the broadcast viewer, including live sports, in order to grow our distribution and advertising revenue.

To drive the growth of the network, we are making quote moneyball inspired investments in content that matters to the broadcast viewer, including live sports in order to grow our distribution and advertising revenues.

Speaker 4: In less than one year of ownership, we've already secured the rights to a variety of sports properties, including live golf, ACC football and basketball coming to the CW this September . The NASCAR Xfinity Series starting its engine on the CW in February of 25 and sports related programming such as Inside the NFL, which will premiere at 8 p.m. on September the 5th. And our Sports Documentary Series, 100 Days to Indy, all of which are expected to accelerate the viewership and revenue growth for the CW ecosystem.

Less than one year of ownership, we've already secured the rights to a variety of sports properties, including live golf ACC football and basketball coming to the CW. This September the NASCAR Xfinity series, starting its engine on the CW in February of 25, and sports related programming such as inside the NFL, which will premiere at eight P. M on September the fifth and our Spa.

Warts documentary series 100 days to Indy all of which are expected to accelerate the viewership and revenue growth for the CW ecosystem.

Speaker 4: In fact, with just these three agreements beginning in 2025, the CW will have 48 weekends per year of live sports programs.

In fact with just these three agreements beginning in 2020 five the CW will have 48 weekends per year of live sports programming.

Speaker 4: As our sports partners will tell you, broadcast television is the best medium for live sports as it delivers the highest ratings and widest distribution to their fan bases while providing promotion and engagement at the local level to drive attendance and ancillary revenues.

As our sports partners will tell you broadcast television as the best medium for live sports as it delivers the highest ratings and widest distribution to their fan bases, while providing promotion and engagement at the local level to drive attendance and ancillary revenue streams. One of the reasons NASCAR was attracted to US was that they know that they generate 40 per se.

Speaker 4: One of the reasons NASCAR was attracted to us was that they know that they generate 40% greater audiences when their races are on broadcast.

Greater audiences when their races are on broadcast.

Speaker 4: As we know, first handed our station in Los Angeles with the Clippers, where we deliver audiences on average 100% greater in the demo than the incumbent RSN.

As we know firsthand at our station in Los Angeles, with the Clippers, where we deliver audiences on average 100% greater in the demo than the incumbent or S. N.

Speaker 4: Importantly, and reflecting our disciplined approach to content acquisitions, these new growth opportunities should increase our revenue without impeding our path to reach breakeven in 2025. If you think about it, over time, the CW is increasingly looking like Fox, with the same number of hours of weekday programming and its growing live sports portfolio. And with Mike Baird now on board, we have the team to get us where we want to go.

Importantly, and reflecting our disciplined approach to content acquisitions. These new growth opportunities should increase our revenue without impeding our path to reach breakeven in 2025.

If you think about it over time, the CW is increasingly looking like box with the same number of hours a week day programming and its growing live sports portfolio and with Mike Baird now onboard we have the team to get us where we want to go.

Speaker 4: Finally, touching on the writers strike, while we are confident that it will not hurt our forward progress with the CW, the majority of our false slate was content that was already developed and or unscripted.

Finally, touching on the writer's strike, while we're confident that it will not hurt our forward progress with the CW. The major the majority of our fall slate was content, there was already developed and or unscripted.

Speaker 4: In May, Nexstar International Properties, the CW, NewsNation, Antenna TV, Rewind TV, and The Hill had a productive upfront, with the standout being NewsNation, with a 25% growth in volume, driven by its position as the fastest growing cable news network in prime time.

And May Nexstar International properties, the CW news nation antenna TV Rewind T V and the hill had a productive upfront with the standout being news nation with a 25% growth in volume driven by its position as the fastest growing cable news network in Prime time, we're very proud of news nation and during the quarter, we marked a major milestone with new.

Speaker 4: We're very proud of NewsNation and during the quarter we marked a major milestone with NewsNation, becoming a 24-5 news network with the debut of expanded daytime programming, the launch of the network's first political ensemble program, The Hill, and the addition of a new evening program called Elizabeth Vargas Report.

News nation become a 24 five news network with the debut of extended expanded daytime programming. The launch of the network's first political ensemble program the Hill.

And the addition of a new evening program called Elizabeth Vargas reports.

Speaker 4: NewsNation recently broke the whistleblower story about UFOs, with our news interviews on the UFO topic being entered into the congressional record, driving strong viewership of the hearings and afterwards.

News Nation recently broke the whistleblower story about U F O's with our news interviews on the U F O topic being entered into the congressional record driving strong viewership of the hearings and afterward.

Speaker 4: Supporting our large portfolio of assets, we're laser focused on ad sales and measurement that better quantifies the research and the consumption of our content. On the ad side, we're working under the leadership of Chief Revenue Officer Michael Strober, building an integrated national and local sales force that is capable of leveraging the breadth of the assets that Nexstar brings to bear both locally and nationally, and including linear, digital, and OTT.

Supporting our large portfolio of assets, we're laser focused on AD sales and measurement that better quantify the research and the consumption of our content on the AD side, we're working under the leadership of Chief revenue Officer, Michael Scrubber building, an integrated national and local sales force that is capable of leveraging the breadth of the assets that nexstar brings to bear both locally and nationally and.

Including linear digital and OTT.

Speaker 4: We're already demonstrating through our sports rights agreements how our one-two punch of national reach and local activation is attracted to sports property owners and the same goes for advertisers and brands. But to better monetize our assets, we need to make sure they're being accurately measured. And right now we believe the current measurement tools under-measure our audiences. To that end, we recently issued an RFP for our next generation measurement company to help us better measure and better monitor.

We're already demonstrating through our sports rights agreements, how our one two punch of national reach and local activation is attracted to sports property owners and the same goes for advertisers and brands, but to better monetize our assets, we need to make sure they're being accurately measured and right now we believe the current measurement tools under measure our audiences to that and we.

Recently issued an RFP for a next generation measurement company to help us better measure and better monetize we hope through this process. We will identify a partner that can help us accurately measure and deliver value to our customers.

Speaker 4: We hope for this process we will identify a partner that can help us accurately measure and deliver value to our customers.

Speaker 4: In summary, we believe we're just at the beginning of the growth opportunities that we see for a scaled next star. We have a collection of local and national assets that are really unicorn in this industry that we believe will continue to generate differentiated growth and tremendous shareholder value.

In summary, we believe we're just at the beginning of the growth opportunities that we see for a scaled nexstar. We have a collection of local and national assets that are really unicorn in this industry that we believe will continue to generate differentiated growth and tremendous shareholder value.

Speaker 4: With all of that said, let me now turn the call over to Tom Carter. Tom? Thanks Perry and good morning everybody. Before I dig into the operations review for the quarter, I want to thank Perry and the XR Nation for allowing me to be part of the growth of this tremendous...

With all of that said, let me now turn the call over to Tom Carter, Tom Thanks, Perry and good morning, everybody before I dig into the operations review for the quarter I want to thank Perry and Nexstar nation for allowing me to be part of the growth of this tremendous company my time at Nexstar building the business in good times and in bad and developing lifelong friendship.

Speaker 5: My time at Nexstar, building the business in good times and in bad, and developing lifelong friendships has been the most rewarding professional experience ever to me.

<unk> has been the most rewarding professional experience in my life.

Speaker 5: I'm very excited. I'm very excited.

I'm very excited my third was joining nexstar and I know I leave the company in good hands.

Speaker 5: I will be here through the end of the year in my role as Senior Advisor working to make sure the transition is as smooth as possible.

I'll be here through the end of the year in my role as senior advisor working to make sure of the transition is as smooth as possible. After that you'll find me on the golf course or in Colorado sitting by the fire enjoying a nice cool mountain there.

Speaker 5: After that you'll find me on the golf course or in Colorado sitting by the fire enjoying a nice cool mountain air.

We haven't experienced in Dallas in quite a while.

Speaker 5: Now turn to the operating review. We generated another quarter of strong operating performance with net revenue of $1.24 billion, reflecting the benefit of the CW acquisition and strong quarterly distribution in digital revenues, offset by a decline in television advertising due to the absence of midterm political advertising, and continued advertising softness overall.

Now turning to the operating review, we generated another quarter of strong operating performance with net revenue of $1. Two 4 billion, reflecting the benefit of the CW acquisition and strong quarterly distribution and digital revenues offset by a decline in TV advertising due to the absence of midterm political advertising and continued adverse.

<unk> softness overall, the continued impact of the removal of some of our partners carriage related to continue negotiations with certain Mvpds also contributed to the quarter's decline.

Speaker 5: The continued impact or the removal of some of our partners' carriage related to continued negotiations with certain MVPDs also contributed to the quarter.

Speaker 5: For television advertising, which includes both our station group and our national network, but excludes any digital advertising revenue, decline 2.2 year over year. 2.2 perc—

For TV advertising, which includes both our station group and our National network, but excludes any digital advertising revenue declined 2.2 year over year to 2%, including the CW core advertising was down eight 4%.

Speaker 5: including the CW, core advertising was down 8.4%.

Speaker 5: driven by double digit rates of decline in national spot advertising which accounts for 27% of our core TV revenues and is responsible for approximately 63% of the decline and amid single digit rates of decline.

Driven by double digit rates of decline in national spot advertising, which accounts for 27% of our core TV revenues and <unk>.

Possible for approximately 63% of the decline and a mid single digit rates of decline in local advertising.

Speaker 5: This performance is consistent with the expectations we shared on our last earnings call. We continue to be impacted by our station presence in large markets, which tend to act more like national advertising.

Performance is consistent with the expectations, we shared on our last earnings call. We continue to be impacted by our station presence in large markets, which tend to act more like top more like national advertising market to illustrate this a bit better for you. If we were to exclude our top 10 markets and include digital advertising revenue.

Speaker 5: illustrate this a bit better for you. If we were to exclude our top 10 markets and include digital advertising revenue as many of our peers do, our station core television advertising revenue would have declined only 3.6% year over year.

As many of our peers do our station core TV advertising revenue would have declined only three 6% year over year in Q3 of 2023, we're seeing a slight improvement in the rate of decline of our overall core television advertising to what we saw in the second quarter due in part to the political display.

Speaker 5: In Q3 of 2023, we're seeing a slight improvement in the rate of decline of our overall core television advertising to what we saw the second quarter do in part to the political displacement in Q3 of 2023.

In Q3 of last year excluding.

Speaker 5: Excluding the CW for comparability purposes, our top performing categories in the quarter were auto, home repair and manufacturing, and the

Excluding the CW for comparability purposes, our top performing categories categories in the quarter were auto home repair and manufacturing.

Speaker 5: attorneys, air conditioning, heating, and telecom. We're extremely pleased to see Automotive, our largest advertising category in terms of dollars spent, maintain its growth trajectory for the fourth quarter, increasing 10% over Q2 of 2022.

Attorneys air conditioning heating and telecom were extremely pleased to see automotive our largest advertising category in terms of dollar spent maintained its growth trajectory for the fourth quarter, increasing 10% over Q2 of 2022.

Speaker 5: While overall automotive spend remains below 2019 levels, we're encouraged by the continued rebound of this category, and recent reports indicate that manufacturers now have millions of vehicles in inventory, which suggests that the category can continue to be reduced.

While overall over automotive spend remains below 2019 levels. We're encouraged by the continued rebound in this category and recent reports indicate that manufacturers now have millions of vehicles in inventory, which suggests that the category can continue to incur.

Speaker 5: The categories most responsible for the core advertising revenue decline were radio, TV, cable and newspaper, medical healthcare, gaming, sports betting, bank savings and investments, and fast food and restaurants, with about three-quarters of our categories declining on the server end Val Terisa.

The category is most responsible for the core advertising revenue decline, where radio TV cable and newspaper Medical Health care gaming sports betting bank savings and investments in fast food and restaurants with about three quarters of our cabin categories declining in the quarter turning to political nexstar generated second quarter political.

Speaker 5: Turning to political, Nexstar generated second quarter political revenue of $9 million, reflecting the cyclical year over year decline in election year.

Revenue of $9 million, reflecting the cyclical year over year decline in election year spending we remain highly optimistic about our growth prospects for political advertising in 2020 for election cycle with industry projections for $11 billion of spend in 2024 versus almost 9 billion in 2020.

Speaker 5: We remain highly optimistic about our growth prospects for political advertising in 2024 election cycle, with industry projections for $11 billion of spend in 2024 versus almost $9 billion in 2022. Again, we are extraordinarily well positioned to share in dollars both locally and nationally.

Two again, we are extraordinarily well positioned to take share and dollars both locally and nationally.

Speaker 5: Next I'll deliver another period of quarterly distribution revenue growth with approximately $696 million in the second quarter, marking a 7.7% increase over the prior year.

Nexstar delivered another period of quarterly distribution revenue growth was approximately $696 million in the second quarter, marking a seven 7% increase over the prior year revenue growth was driven by the renewal of our distribution agreements in 2022 on improved terms and annual rate escalators as well as <unk>.

Speaker 3: Revenue growth was driven by the renewal of our distribution agreements in 2022 on improved terms and annual rate escalators, as well as growth in virtual MBPD revenue and the inclusion of the CWA.

Growth in virtual Mvpds revenue and the inclusion of the CW.

Speaker 3: growth more than offset the MBPD subscriber attrition and the ongoing impact of the removal of some of our partner stations' carriage related to continued negotiations with certain MBPs.

Our growth more than offset Dnb, PD, I'm, sorry, mvpds subscriber attrition and the ongoing impact of the removal of some of our partner stations carriage related to continue negotiations with certain mvpds.

Speaker 3: Subscriber edition was in the mid single digits and benefited from the increased carriage of our CW my network and independent stations on YouTube TV Excluding the CW are...

Scriber addition was in the mid single digits and benefited from the increased carriage of our CW My network and independent stations on Youtube TV, excluding the CW our distribution revenue was up 6%.

Speaker 3: As you've probably seen, beginning on July 2nd, despite our efforts to peacefully enter into a new contract, we ceased providing our content to DirecTV in conjunction with our ongoing negotiations regarding a renewal of our distribution agreement with the United States.

As you've probably seen beginning in July beginning on July 2nd despite our efforts to peacefully enter into a new contract we ceased providing our current our content to Directv in conjunction with our ongoing negotiations regarding a renewal of our distribution distribution agreement with them. We will provide an update on our next.

Speaker 3: We will provide an update on our next quarterly conference call with regard to those negotiations.

Quarterly conference call with regard to those negotiations.

Speaker 3: Record second quarter digital revenue increased 11.4% to approximately 98 million. Revenue growth was driven by the inclusion of the CW and year-over-year increases in Nexstar's global digital advertising revenue and agency services business, which more than ever, has some weakness in our national digital advertising and revenues.

Record second quarter digital revenue increased 11, 4% to approximately $98 million revenue growth was driven by the inclusion of the CW and year over year increases in Nexstar as local digital advertising revenue and agency services business, which more than offset some weakness in our national digital advertising revenues and E Commerce.

Speaker 3: excluding the CW, digital revenue, and decreased five times.

Excluding the CW digital revenue decreased 5%.

Speaker 3: On a consolidated basis, second quarter adjusted EBITDA was $331 million, representing a 26.7% margin. And second quarter, a charitable free cash flow was $100 million.

On a consolidated basis second quarter, adjusted EBITDA was 331 million, representing a 26, 7% margin in second quarter attributable free cash flow was $100 million.

Speaker 3: Excluding the CW, second quarter adjusted EBITDA was $405 million, representing a 34.6% margin, and second quarter free cash flow was $131 million, amounting to 32% of adjusted Lean atWh sovereign terms er of dollar.

Excluding the CW second quarter, adjusted EBITDA was 405 million, representing a 34, 6% margin and second quarter free cash flow was $131 million amounting to 32% of adjusted EBITDA with that it's my pleasure to turn the call over to Leann for the remainder of the financial review and update.

Speaker 3: With that, it's my pleasure to turn the call over to Leeann for the remainder of the financial review.

Speaker 5: Thank you Tom and good morning everyone. As always Tom and Perry gave you most of the details on the revenue side so I'll provide a little color on the CW financial results and then...

Thank you Tom and good morning, everyone.

Commentary, Dave you most of the details on the revenue side. So I'll provide a little color on the CW financial results and then jumped to the expenses.

Speaker 5: In the second quarter, the CW generated $75 million of revenue and $74 million of adjusted EBITDA loss, exclusive of $3 million at one time.

In the second quarter, the CW generated $75 million of revenue and $74 million of adjusted EBITDA loss excludes about $3 million in one time expenses comprised primarily of restructuring charges all of which was in line with our expectation.

Speaker 5: comprised primarily restructuring charges, all of which was in line with our expectations.

Going back to our consolidated expenses together first quarter direct operating and SG&A expenses, excluding depreciation and amortization increased $32 million, primarily due to the inclusion of the CW increases in affiliation fees and the expansion of our local news at our Washington D. C Bureau, and other local market.

Speaker 5: first quarter direct operating and SG&A expenses...

Speaker 5: increased $32 million primarily due to the inclusion of the federal government.

Speaker 5: We've seen increases in affiliation fees and the expansion of the local news at our Washington, D.C. bureau and other local markets, as well as the expansion of our news programming at NewsNation. We're offset by reduced variable costs related to lower revenue, the gain on a depreciated asset for which we received insurance proceeds, and even further offset in our adjusted EBITDA and free casual calculations by reduced programming costs at NewsNation related to reduced reliance rates.

Well as the expansion of our news programming.

Yeah were offset by reduced variable costs related to lower revenue the gain on a depreciated asset for which we received insurance proceeds and even further off that in our adjusted EBITDA and free cash flow calculations by reduced programming costs at news nation related to reduced reliance on syndicated content.

Speaker 5: Q2 2023 total corporate expense was approximately $49 million.

Q2, 2023 total corporate expense was approximately $49 million, including noncash compensation expense of $13 million compared to $50 million, including noncash compensation expense of $13 million in the second quarter of 2022.

Speaker 5: $13 million compared to $50 million including non-cash compensation expense of $13 million.

Speaker 3: Q2 2023 depreciation and amortization was $262 million versus 143 million in the prior year quarter due primarily to the act.

Q2, 2023, depreciation and amortization was $262 million versus $143 million in the prior year quarter due primarily to the acquisition of the CW. Please note that the CW programming costs, which are included in our definition of adjusted EBITDA and free cash flow are accounted for in this line item is amortization.

Speaker 3: Please note that the CW's programming costs, which are included in our definitions of adjusted EBITDA and free cash flow, are accounted for in this line item as amortization of broadcast rights. For more information, please visit www.cctexas.gov

And broadcast right.

More information about this amount please refer to the schedules in our earnings release.

Second quarter, Capex was $41 million and in line with our expectation compared to $34 million in the second quarter last year last year's second quarter Capex levels were impacted by supply chain constraints.

Speaker 3: The second quarter CAPEX was $41 million and in line with our expectations, compared to $34 million in the second quarter last year.

Speaker 3: Second quarter net interest expense increased to $111 million from $76 million in the prior year quarter due to the impact of increasing LIBOR and SOFR rates applicable to our floating rate debt. Cash interest expense was $109 million for the quarter in line with our expectations. Second quarter operating cash taxes were $119 million.

Second quarter net interest expense increased to $111 million from $76 million in the prior year quarter due to the impact of increasing LIBOR and silver rate applicable to our floating rate debt cash interest expense was $109 million for the quarter in line with our expectation.

Second quarter operating cash taxes were $119 million.

We have two payments in the corner and reflects an estimated tax payment based on expected income for the year at the time the team that with me.

We received $25 million in Q2 distributions from equity investments related primarily to our 31% ownership in television.

Speaker 3: which represents a 19% decrease over the prior year quarter.

Network, which represents a 19% decrease over the prior year quarter.

Q2 through Q4 distributions from TV food network, our tax related distributions the reduced amount reflects lower income.

Speaker 3: The reduced amount reflects lower income at TB Food Network related primarily to lower oninf

Work related primarily to lower advertising revenue.

Looking ahead, we project corporate overhead exclusive of stock comp and transaction costs to be approximately $35 million in the quarter and we expect corporate overhead around 141 million for the year, given new executive hires and we can contract renewal.

Speaker 3: Looking ahead, we project corporate overhead exclusive of stock, comp, and transaction

Speaker 3: be approximately $35 million in the quarter, and we expect corporate overhead around $141 million for the year, given new executive October 26, 2020.

Speaker 3: Non-cash comp is expected to be approximately 19 million.

Noncash comp is expected to be approximately $19 million for the third quarter and then the $65 million area for the full year.

Speaker 3: $25 million area for the full year, but will vary based on stock price and actual grants. For cash taxes, we use a 26.5% increase in the total revenue.

They are based on stock pricing actual grants.

For cash taxes, we use a 26, 5% tax rate when calculating our estimated tax before one time another adjustment.

Third quarter include one income tax.

Speaker 3: Please note for calculating cash taxes, excluding the CW, only about 65% of Nexstar's book depreciation and amortization is deductible for...

Please note for calculating cash taxes, excluding the CW only about 65% of Nexstar and book depreciation and amortization is deductible for tax purposes.

We are currently projecting net cash capex of $35 million in the third quarter and $156 million for the full year, including a portion of carryover capex from last year approximately $9 million of Capex is funded by insurance proceeds.

Speaker 3: cap-acts of $35 million in the third quarter and $156 million for the full year, including a portion of carryover cap-acts from last year, approximately $9 million in the full quarter times more analysts said that this is an important factor in the environmental element of the Leigh Ole nation.

Speaker 3: We expect Nexstar's cash interest expense to approximate $110 million for the third

We expect Nexstar cash interest expense to approximate $110 million for the third quarter and $436 million for the full year, reflecting the current forward curve and our expectations for debt repayment. The forward curve now currently shows interest rate, peaking in October and following thereafter.

Speaker 3: $436 million for the full year, reflecting the current forward curve and our...

Speaker 3: The forward curve now currently shows interest rates peaking in October and falling thereafter.

Turning to the balance sheet that started outstanding debt at June 32023 was $6 $9 billion.

Speaker 3: stars outstanding that at

Speaker 3: down slightly for the quarter as we made mandatory quarterly amortization payments of 31.

Slightly for the quarter as we made mandatory quarterly amortization payment of $31 million.

Speaker 3: Because we have designated the CW as an unrestricted subsidiary, the losses associated with the CW are not accounted for in our calculations.

Cause we have designated the CW wasn't unrestricted subsidiary the losses associated with the CW are not accounted for in our calculation of leverage for purposes of our credit agreement.

Speaker 3: As such, our net first lean covenant ratio for Nexstar excluding CW at June 30th, 2023 was 1.79 times, which is well below our first lean and only covenant of four.

As such our net first lien covenant ratio for Nexstar, excluding Tw at June 32023 was 179 times, which is well below our first lien only covenant of 4.25 times our.

Our total net leverage for Nexstar, excluding CIB at quarter end was three three times.

Speaker 3: During the quarter, we in Mission amended our credit facilities in relation to our respective outstanding term loan bees in order to provide for the transition to SOFR from LIBOR.

During the quarter, we envision amended our credit facility in relation to our respective outstanding term loan B in order to provide for the transition to sofa from LIBOR an industry standard term.

Speaker 3: As is typical in nonpolitical years, we expect leverage, which we calculate on an LTM basis.

As is typical in non political years, we expect leverage which is calculated on an LTM basis versus the two year average, but not our total quantum of debt slightly pick up throughout the year, but to fall again in 'twenty 'twenty four is EBITDA would grow with the return of political advertising.

Speaker 3: take up throughout the year, but to fall again in 2024 as Ibadel will grow with the return of political advertising.

Our cash balance was $346 million, including $75 million of cash related to the CW.

Speaker 3: Before the quarter, we generated $100 million of attributable cash flow.

For the quarter, we generated $100 million of attributable cash flow, we returned $189 million to shareholders paying $48 million in dividends and repurchasing $141 million of stock, which together with first quarter dividends and share repurchase first quarter dividends and share repurchases totaled 414 million.

Speaker 3: paying $48 million in dividends and repurchasing $141 million of stock, which together with first quarter dividends and share repurchases.

86% of our first half attributable free cash flow as we move forward, we will continue to strategically deploy our cash in a manner that is consistent with our commitment to creating the highest shareholder value.

Speaker 3: strategically deploy our cash in a manner that is consistent with our commitment to

Speaker 3: That concludes the financial review for the call. Operator, please open the line.

That concludes the financial review for the call operator, Please open the line for questions.

Okay.

Speaker 2: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would 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. One moment please while we poll for questions.

Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue.

Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

One moment, please while we poll for question.

Speaker 2: Our first question comes from Dan Kurnos with Benchmark. Please proceed with your question.

Our first question comes from Dan <unk> with benchmark. Please proceed with your question.

Speaker 6: Great, thanks. Good morning. Perry, first, let me say, my great hire, he probably grabbed one of the most respected public negotiators out there. He clearly has some big shoes to fill. A few people in the broadcast landscape are as respected personally and professionally as Tom is. I know you've earned your retirement, Tom, but obviously I wish you the best.

Great.

First let me say, Mike great hire probably grab one of the most respected public negotiate notes negotiators out there.

He clearly has some big shoes to fill few people in the broadcast landscapers are as respected personally professionally upon us.

No you've heard your retirement, but obviously I wish you the best.

Speaker 6: Perry, can you give us your thoughts on moving up in AAB around content spend? You called it a money ball strategy. You know, it's definitely a bigger step up in terms of what we've seen in broadcast from, you know, willing to spend on upfront licensing costs. Can you just kind of talk through sort of your willingness to kind of continue pursuing that and sort of the monetization strategy going forward?

Perry.

Can you give us your thoughts on moving up in AAV around content and you called it a moneyball strategy.

It's definitely a bigger step up in terms of what we've seen in broadcast from.

Willing to spend upfront licensing cost could you just kind of talk through sort of your willingness to kind of continue pursuing that and sort of the monetization strategy.

Forward.

Speaker 4: Sure, I think that it's consistent with our acquisition strategy just generally is that, you know, we're going to take smart bets and some calculated risk.

Sure I think that it's consistent with our acquisition strategy. Just generally is that you know we're going to take a smart bets and some calculated risk.

Speaker 4: with the thought that if things go according to plan that these will pay out over the length of the agreement.

With the thought that if things go according to plan that these will pay out over the length of the agreements.

Speaker 4: You know, we know what the market was with NASCAR for the cup series, which was out of our reach as we're just now taking over this network, standing up sports on the weekends. And we chose to make a considered bet for the Xfinity series, which actually, having the whole season gives us 33 weeks of weekend programming that, you know, rates right behind the NFL in terms of regular season versus regular season delivery.

We know what the market was with NASCAR for the Cup series, which was out of our reach as we're just now taking over this network standing up sports on the weekend and we chose to make a considered bet for the Xfinity series, which actually having the whole season gives US 33 weeks of weekend programming that you know rates.

Right behind the NFL in terms of regular season versus regular season delivery.

Speaker 4: And the same with the ACC, that was opportunistic and we moved quickly and were able successfully to jam it into the upfront selling season and monetize some of those.

And the same with the ACC that was opportunistic and we moved quickly and.

And we're able successfully to jam it into the upfront selling season and monetize some of those match ups and in the upfront and.

Speaker 4: Matchups in the upfront and and so I you know, it's it's just like the entertainment programming that Dennis Miller and And Brad Schwartz are putting together, you know It's got to be something where we can own the back end we can participate financially in the back end and not just be a barber channel for Content that ultimately ends up on net

And so I you know, it's it's just like the entertainment programming that Dennis Miller, and and Brad Schwartz are putting together you know it's got to be something where we can own. The backend we can participate financially in the backend and not just be a Barker channel four content that ultimately ends up on Netflix and so that.

Speaker 4: And so that influences the programming that we go after, the programming we put on the air, the price we pay for it. And we were able to renew some of the incumbent series.

Influences the programming that we go after the programming we put on the air the price we pay for it and and we were able to renew some of the incumbent series that have historically been on the CW at substantial discounts to what the predecessor owners were charging themselves.

Speaker 4: that have historically been on the CW at substantial discounts to what the predecessor owners were.

Speaker 4: charging themselves or paying themselves. And that's because we couldn't get all of the rights that we want. So everybody is cognizant. This is a 15-year-old network, but now has a startup mentality.

Paying themselves and that's because we couldnt get all of the rights that we want so you know everybody's cognizant. This is a 15 year old network, but now has a startup mentality. The entrepreneurs that Dennis has brought in to run the various divisions, whether it's digital entertainment.

Speaker 4: the entrepreneurs that Dennis has brought in to run the various divisions, whether it's digital, entertainment, unscripted. I mean, these folks are out there. They know the mandate. They're on a mission. They see exactly the opportunity, and they all will participate in the upside. So I say it's money ball. We're competing in the same league as the big four network.

Unscripted I mean, these folks are out there they they know the mandate there they're on a mission they see exactly the opportunity and they all will participate in the upside. So it's I'd say, it's Moneyball you know where we're competing in the same league as the big four networks are.

Speaker 4: But obviously we've got to do it on a budget and we've got to do it smartly and we've got to crawl walk

But obviously, we've got to do it on a budget and we'd rather do it smartly and we've got to crawl walk run.

Speaker 6: Got it. That's helpful. And then just, I know Tom said, you know, update us next call on the ongoing negotiation. The loss is kind of a new tactic. You've got NFL looming, I guess maybe Perry or Tom, just how do you think about, you know, resolution of these outages? You have a big chunk coming up in the back half of the year two of sub-renewal. So has anything really changed given the environment right now?

Got it that's helpful and then just I know Tom.

Update us next call on the ongoing.

Negotiation the lawsuit is kind of a new tactic you've got NFL looming I guess, maybe Perry or Tom just how do you think about resolution of these outages, you'll have a big chunk coming up in the back half of the year to sub renewals. So has anything really changed given the environment right now.

Speaker 4: No, and if you look back, I think it's instructed to look back four years in our renewal with a certain MBPD satellite company that

No and if you look back I think it's instructive to look back four years and our renewal with a.

Certain M B P D satellite company that are.

Speaker 4: We went off the air in July and we were able to reach agreement by the end of August , which is coincidentally about the time college and professional football kicks into high gear.

We went off the air in July and we were able to reach agreement by the end of August which is coincidentally about the time college and professional football kicks into high gear.

Speaker 4: I'm not going to predict the outcome here. I can tell you that our negotiating team has been in Los Angeles since Sunday, and we're having meetings with our Counterparties we fully expect that we'll be able to reach an agreement as we have historically with every other

I'm not going to predict the outcome here I can tell you that our negotiating team has been in Los Angeles since Sunday, and we're having meetings with our Counterparties, we fully expect that we'll be able to reach an agreement as we have historically with every other significant M. B P D. Both past and future are on <unk>.

Speaker 4: significant MVPD, both past and future, on commercial terms that are acceptable to both parties.

Terms that are acceptable to both parties.

Got it Super helpful. Thanks, guys.

Speaker 2: Our next question comes from Steven Kehow with Wells Fargo. Please proceed with your question.

Our next question comes from Steven Cahall with Wells Fargo. Please proceed with your question.

Speaker 7: Yeah, thank you. And 1st, just want to echo my congratulations as well. Tom and certainly good luck on the on the golf course. We'll miss you a lot.

Yes. Thank you and first just wanted to Echo my congratulations as well Tom.

And certainly a good luck on the on the golf course.

Well Miss you a lot.

Speaker 7: Maybe just first on on retrans kind of follow up with Dan's line of thinking. I think folks are curious what you thought about when you started the year with the retrans guidance. There was always a range in there. I think cord cutting was part of that blackouts both previous and new might have been part of that.

Maybe just first on Retrans kind of follow up with Dan's line of thinking I think folks are curious what you thought about when you started the year with the Retrans guidance. There was always a range in there I think cord cutting was part of that blackouts, both previous and new might've been part of that so is there anything from your opinion occurring sort of outside of what you would've.

<unk> you know July and August are pretty light for sports. So it's probably not a huge surprise to most of us that youre in a black out right now, but would just love to get your context around how we should think about the current retrans guidance.

Speaker 7: So it's probably not a huge surprise to most of us that you're in a blackout right now, but we just love to get your context around how we should think about the current retrans guide.

Speaker 3: Yeah, I mean, I think when we put the guidance together, we take into consideration the facts that we know at that.

Yeah, I mean, I think when we.

We put the guidance together, we take into consideration. The fact that we know at that point in time, and I wouldn't say a whole heck of a lot has changed other than you know now.

Speaker 3: I wouldn't say a whole heck of a lot has changed other than now we are.

And in the black.

Speaker 3: And when we look at our guidance, we only take into consideration what we know at that point.

And when you look at our guidance, we only take into consideration, what we know at that point and at that point.

We would be able to come to some kind of agreement so we'll have to.

Provide future updates on that as we go for it but there's nothing that sort of materially change other than.

Sure.

Okay.

Yeah.

Speaker 7: Thanks. And then on the Food Network Group distribution, I know it's a little choppy quarter to quarter. That's been a really stable provider of cash flow and EBITDA historically. It maybe does face a little more cord cutting and advertising risk as a cable network. Just curious from what you're seeing, do you expect it to sort of remain at prior levels for the next year or two or any change you're seeing there?

Thanks, and then on the food network group distribution I know, it's a little choppy quarter to quarter, that's been a really a stable provider of cash flow and EBITDA historically.

He does face a little more cord cutting and advertising risk as the cable network just curious from what Youre seeing do you expect it to sort of remain at prior levels for the next year or two or any any change youre seeing there.

Speaker 8: Well, I think they're not immune to some of the same factors that our national business is most notably direct response.

Well I think they're they're not immune to some of the same factors that are national businesses. Most most.

<unk> direct response, I would say generally speaking that they're having.

Speaker 5: I would say, you know, generally speaking, that they're having, you know, having not any more luck than we are in that regard. So you might see a modest deterioration. But I think the good news is Warner Brothers Discovery has started to really prove themselves out with regard to the operating strategy that they have and specifically deleveraging, which doesn't necessarily affect us because there's no debt on the partnership. But just in terms of...

Having not any more or less and we are in that regard. So you might see a modest deterioration, but I think the good news is.

Warner Brothers Discovery has starting to really prove themselves out with regard to the operating strategy that they have and spin.

Specifically deleveraging, which doesn't necessarily affect us because theres no debt on the partnership but just in terms of the.

Speaker 5: their ability to continue to allocate resources to new programming and we believe and they have told us that the Food Network is one of their three most important channels, at least from the Discovery side, maybe not including HBO now, but they're very bullish on Food Network and we are as well. So you may see some variability in the results but nothing material from our...

Their ability to continue to.

Allocate resources to.

Two new programming and we believe and they have told us that the food network is one of their three most important channels.

At least from the discovery side, maybe not including HBO now, but they're very bullish on food network and we are as well. So you may see some variability in the results, but nothing material from our perspective.

Speaker 7: Thanks, and then just lastly, some of the media conglomerates have suggested that there may be linear networks, national linear networks up for grabs. That can include ABC. That could include some cable networks.

Thanks, and then just lastly, some of the media conglomerates have suggested that there may be linear networks national when your networks up for grabs that can include a b C. That could include some cable networks I certainly won't ask you to speculate on anything specific but just based on the possibility of a lot more coming to market in <unk>.

Speaker 7: I certainly won't ask you to speculate on anything specific, but just based on the possibility of a lot more coming to market and after having done the CW, do you find a national network to generally be a good fit given the strength you have in distribution or just any way to think about kind of bigger long-term M&A? Thank you.

After having done the CW do you find a national networks to generally be a good fit given the strength you have in distribution or just any way to think about kind of bigger long term M&A. Thank you.

Speaker 4: Well, I think we start with the the supposition or position that, you know, there are only five

Well I think we start with the.

Supposition or position that you know there are only five English language broadcast networks commercial networks operate and reach virtually 100% of the country. So that's a scarce resource and something that is special obviously, we feel you know as the local distribution partner you know our Lincoln that.

Speaker 4: English language broadcast networks, commercial networks that operate and reach virtually 100% of the country. So that's just gives resource and

Speaker 4: something that is special. Obviously we feel, you know, as the local distribution partner, you know, our link in the chain is obviously the strongest.

Jane is obviously the strongest.

Speaker 4: Um, so I you know, I would say it would be totally situational, you know What was available at what price what other assets come with? You know and uh, but but I will point out that as it relates to the cw It is not considered a big four network for purposes of the big four network exclusion rule at the fcc Which means you can't own two of the top big four. So

So I you know I would say it would be totally situational what was available at what price what other assets come with you know and but I bet I will point out that as it relates to the CW. It is not considered a big four network for purposes of the Big four network exclusion rule at the F.

C C, which means you can't own two of the top big bore so legally technically it would be possible, but it would have to be the right deal at the right fit for us and you know and we will.

Speaker 4: legally, technically it would be possible, but it would have to be the right deal at the right fit for us and you know, and we would do what we do with everything else. We look at everything.

We would do like we do with everything else, we look at everything.

Thanks, a lot.

Speaker 2: Our next question comes from Craig Huber with Huber Research Partners. Please proceed with your question. Great. Thank you. Perry or Tom, can you just update us, if you would, on your long-term plans for alternative uses for your spectrum?

Our next.

Comes from Craig Huber with Huber Research partners. Please proceed with your question.

Thank you Perry or Tom can you just update us if you would on your long term plans for alternative uses for your spectrum.

Speaker 4: Well, we are in two different business development arrangements, one with Sinclair called BitPath and one with Scripps.

Well, we are in two different business development arrangements, one with Sinclair called bit path and one with one with Scripps.

Speaker 4: That is unnamed at this point, but both are going after different applications and uses of the spectrum I think you know It's worth saying that you know Particularly if you look at scripts and its spectrum assets and next are with its spectrum assets we reach

That is unnamed at this point, but both are going after different applications and uses of the spectrum I think it's worth saying that you know, particularly if you look at scripts and its spectrum assets and Nexstar with its spectrum assets, we reached 92% of the United States population on them duplicated basis. So.

Speaker 4: 92% of the United States population on an unduplicated basis, so we think that holds great promise.

We think that holds great promise and we are in we have or are in tests and in discussions with HPE. We have had discussions with our with the Hollywood studio as well as a major automotive manufacturer regarding uses in the car are we also are involved with.

Speaker 4: And we are in you know, we have are in tests and in discussions with HPE We have had discussions with a with a Hollywood studio as well as a major automotive manufacturer regarding uses in the car

Speaker 4: We also are involved in with bit path and trying to develop a technology that currently exists in South Korea that is enhanced GPS.

Bit path and trying to develop a technology that currently exists in South Korea that is enhanced G. P. S, which think of anything any vehicle that needs to know where it is or you need to know where it is from a new split to a truck fleet to U P. S trucks that we can provide five G like location.

Speaker 4: which think of anything, any vehicle that needs to know where it is, or you need to know where it is, from a news fleet to a truck fleet to...

Speaker 4: UPS trucks that we can provide 5G like location-based services at a fraction of the cost of the current 5G.

Based services at a fraction of the cost of the current five G proposition. So that's just a handful of things that we're involved in as an industry I think one of the more interesting things to follow is there is a mandate out primarily from the.

Speaker 4: So that's just a handful of things that we're involved in. As an industry, I think one of the more interesting things to follow is there is a mandate out primarily from the Department of Defense agencies to develop a...

Department of defense agencies to develop a a G. P S backup for the country because if G. P. S goes out you know not only do navigation in your car doesn't work, but the gas comes pumps don't work because they rely on GPS to put that time stamp on your receipt. The Atms don't work I mean, all kinds of things. So it is it.

Speaker 4: a GPS backup for the country.

Speaker 4: because if GPS goes out, you know, not only the navigation in your car doesn't work, but the gas pumps don't work because they rely on GPS to put that timestamp on your receipt. The ATMs don't work, I mean all kinds of things. So it is it has been deemed to be in the national interest to provide a 5G backup and our industry because of its ubiquitous reach.

Theres been deemed to be in the national interest to provide a a five G backup.

And our industry because of its ubiquitous reach.

Speaker 4: Has the ability to provide that service and we are in very preliminary as an industry informal discussions about trying to Fill that mandate as part of our transition to ATSC 3.0. So a lot of moving parts I don't want to say there was one killer app, but I do think it is

Has the ability to provide that service and we are in very preliminary as an industry in formal discussions about trying to fill that mandate as part of our transition to a T. S. E. Three dot O. So a lot of moving parts I don't want to say there was one killer app, but I do think it is.

Speaker 4: uh, you know an opportunity for us to as we continue to build out 3.0 presence around the country uh, Nexstar is the leader in terms of

And.

An opportunity for us to as we continue to build out three dot O presence around the country Nexstar is the leader in terms of percent of the population reached with the threet auto signal under our own power, we will continue to be that and continue to push.

Speaker 4: percent of the population reached with a 3.0 signal under our own power. We will continue to be that and continue to put markets on the air. You know, we hope to have an announcement about New York City before the end of the quarter that would go on air before the end of the year. We think that's important to both regulators.

Markets on the Air you know, we hope to have an announcement about New York City before the end of the quarter that would go on air before the end of the year. We think that's important to both regulators set manufacturers and investors to understand that we're committed to three dato. So a lot of things in the works Craig but those are the some of the.

Speaker 4: set manufacturers and investors to understand that we're committed to 3.0. So a lot of things in the works, Craig, but those are some of the current thoughts on monetization.

Current Fox on monetization.

Speaker 9: And Perry, what are you thinking on that front when you might see the first significant or material slug of revenue and when does it get really large for your company at the end of the decade?

What are you thinking on that front when you might see the first significant or material slug of revenue when does it get really large pickup at the end of the decade.

Speaker 4: goes according to plan? I think it will, you know, I've been saying, you know, five years. So five years takes us into, you know, toward the end of the decade. I think we will have.

If all goes according to plan.

I think it will you know I've been saying to you know five years. So five years takes us into you know towards the end of the decade.

I think we will have proof of concept and revenue from from Counterparties as early as next year, but I don't think I would characterize it yet as significant so I think again it will be kind of a crawl walk run scenario, where are those that have deployed three out of spectrum will be the first beneficiary, which I think.

Speaker 4: proof of concept and revenue from counter parties as early as next year, but I don't think I would characterize it yet as significant. So I think again, it'll be kind of a crawl, walk, run scenario where those that have deployed 3.0 spectrum will be the first beneficiary, which I think will encourage others to move quicker to get to that point. Obviously, if we can do away with the simulcast requirement and not have to have.

Encourage others to move quicker to get to that point obviously.

Obviously, if we can do away with the simulcast requirement and not have to have two substantially similar signals on the air one in three of them one of them one on one dot O.

Speaker 4: two substantially similar signals on the air, one in 3.0 and one in 1.0. You know, if that and the whole 1.0 can sunset at some point, which will give us free up spectrum for, you know, more ancillary uses. So we're working the legislative and the regulatory front there as well. But I do think that this 5G replacement could motivate a lot of folks to move faster.

With that if that in the whole one dido can sunset at some point, which will give us free up spectrum for you know more ancillary uses so we're working the legislative and the and the regulatory front there as well.

But I do think that this five replacement could motivate a lot of folks to to move faster quicker.

Speaker 9: And then my last question, if I could, just more near term, just go through for me again just something clear. Your 2Q core ad revenue excluding the CW, what was that percent change year over year? And more importantly, what are you expecting it to be for the third quarter core excluding CW?

And then my last question if I could I'm just more near term just to go through for me again, just some clear your two Q core AD revenue, excluding the CW what was that percent change year over year and more importantly, what do you.

<unk> to be for the third quarter core excluding CW. Please.

Speaker 4: I think it was in Tom's commentary that the, I believe the Q2 revenue excluding CW was, total revenue was what down? You're talking about core advertising. Core advertising, yes. The Q4 advertising was down 8.4% and that was primarily driven by double.

I think it was in Toms commentary that the I believe the Q2 revenue. Excluding CW was total with total revenue was went down you're talking about core advertising core advertising yes.

Advertising was down eight 4%.

And that was primarily driven by double digit decline rate.

National spot and also were awesome.

Speaker 3: impacted by the fact that we've got a lot of CW affiliates in those big markets that tend to be more now.

And by the fact that we've got a lot of CW affiliates in those big markets that tend to be more national type focus.

Speaker 3: You know, I think for the third quarter, we're seeing a slight improvement to the rate of decline over all four television advertising revenue related to the second quarter. And that is due in part to the fact that there's a lot of displacement in the third quarter of last year.

You know I think for the for the third quarter, we're seeing a slight improvement to the rate of decline.

Vision advertising revenue related to the second quarter and that is due in part to the fact that there's a lot of displacement in the third quarter of last year because of political.

Great. Thanks, a lot guys.

Yeah.

Speaker 2: Our next question comes from Benjamin Soft with Deutsche Bank. Please proceed with your question.

Our next question comes from Benjamin Zhang with Deutsche Bank. Please proceed with your question.

Speaker 10: Hey guys, thanks for the question. I was wondering if you could elaborate a little bit on the issues with current measurement tools and how much you think they undercount your audience. And then you guys are standing up a national advertising platform. Just wondering if you could elaborate a little bit more on how that initiative is going and where you see that opportunity going. Thanks.

Hey, guys. Thanks for the question I was wondering if you could elaborate a little bit on the issues with current measurement tools and how much do you think your audience.

And then you guys are standing up a national advertising platform I'm. Just wondering if you could elaborate a little bit more on how that initiative is going and where do you see that opportunity. Thanks.

Speaker 4: Sure, well it depends on what service you want to use as your baseline. If you use Nielsen and compare that to Comscore, the audience undercount is...

Sure well it depends on what service you want to use as your baseline if you use a nielsen and compare that to comscore. The audience Undercount is north of 20% almost across the board its interesting when a when we look at our news nation National numbers.

Speaker 4: north of 20% almost across the board. It's interesting when we look at our NewsNation national numbers and then we look at NewsNation delivery in the individual markets that we're in that we get overnight numbers, they often add up to a number just in the metered markets that's greater than the number reported for the whole country. So obviously there is an issue in undercounting. We, with the CW, measured...

When we look at news nation delivery in the individual markets that we're in that we get overnight numbers, they often add up to a number it just in the metered markets that's greater than the number of reported for the whole country. So obviously the you know there was this an issue went under counting we with the CW measured.

Speaker 4: sports on the weekend using the iSpot technology which, you know.

Sports on the weekend using the ice spot technology, which are you know.

Speaker 4: was a completely different measurement experience to what the incumbent provider would have provided. And so we have decided as all of our measurement contracts expire at the end of this year.

Was a completely.

Different measurement experience to what what.

The incumbent provider would have provided and and.

And so we have decided as are all of our measurement contracts expire at the end of this year that we put out an RFP to the measurement community, saying. This is what we want you to design for we'd like to see what you can present, along these lines to bring measurement into the 20th century.

Speaker 4: that we put out an RFP to the measurement community saying this is what we want you to design for. We'd like to see what you can present along these lines to bring measurement into...

<unk>.

Speaker 4: know we're currently operating with such outmoded and limited data that the sometimes the margin of error is greater than the number we're you know we're discussing so we'll see what comes from the RFP it's a pretty quick turnaround and it may be that we go with more than one measurement service

You know, we're currently operating with such outmoded and limited data that the sometimes the margin of error is greater than the number. We're you know we're discussing so.

We'll see what comes from the RFP, it's a pretty quick turnaround.

And it may be that we go with more than one measurement service to try and write this one for our national assets one for our local assets, we will negotiate with our incumbent providers of Nielsen and Comscore, but they're invited to submit under the RFP as well and made the best Best company win but in terms of standing up this this.

Speaker 4: to try and write this, one for our national assets, one for our local assets. We will negotiate with our incumbent providers of Nielsen and Comscore, but they're invited to submit under the RFP as well and made the best company win.

Speaker 4: But in terms of standing up this.

Speaker 4: One Nextar is what we're calling it, which will be a unified sales force selling all of the assets of the company.

One nexstar is what we're calling it which will be a unified sales force selling all of the assets of the company. This this is basically a three year project that started last year. We architected. This in 'twenty 'twenty. Two we are implementing the national piece of this as we speak this year.

Speaker 4: This this is basically a three-year project that started last year. We architected this in 2022.

Speaker 4: We are implementing the national piece of this as we speak this year, and then we will fold in the local piece of it next year. And what it's meant to be is that, you know, totally, totally focused on the customer. You know, whether we go to the agency holding companies, the local customer, or, you know, clients, national clients directly.

And then we will hold in the local piece of it next year and what it's meant to be is that.

Totally totally focused on the customer you know, whether we go to the agency holding companies the local customer or client national clients directly. The focus is on here. We can do local activation at scale better and then any other company out there because we reached approximately 70% of the U S population. So.

Speaker 4: The focus is on here, you know, we could do local activation at scale better and than any other company out there because we reach

Speaker 4: approximately 70% of the US population. So you can do a network buy on news, you want to do a local news overlay in the states where your business is concentrated. You know, we can do a deal as we did with the Clippers, you know, so we're in to the NBA telecast.

You can do a network buying on news you wanted to do a local news overlay in the states where your business is concentrated.

No. We can do a deal as we did with the Clippers you know so we're into the NBA telecast, but because of our local relationship with the team.

Speaker 4: But because of our local relationship with the team, if you wanted a player to show up for an hour to sign autographs at a store opening or appear at a charity function, those are the kinds of things that we can deliver. Again, local activation at scale. So we really feel that we're a unicorn in that regard and that we reach more direct consumers with our brands than any other company in media. So our view is we want to train everybody.

You wanted a player to show up for an hour to sign autographs set of store opening or appear at a charity function.

Those are the kinds of things that we can deliver against local activation at scale. So we really feel that we're a unicorn in that regard and we reached more direct consumers with our brands than any other company in media. So our view is we want to train everybody to sell all of the assets of the company.

Speaker 4: to sell all of the assets of the company. And it's interesting that in every one of our markets, there is a...

And it's interesting that in every one of our markets. There is a top 100 national Advertiser that has that is a that is headquartered there and so our local people can have those relationships bring in subject matter experts to help develop a unified pitch and our goal obviously at the end of the day, it's just to quad.

Speaker 4: top 100 national advertiser that is headquartered there. And so our local people can have those relationships, bring in subject matter experts to help develop a unified pitch. And our goal obviously at the end of the day is just to qualify for and earn a larger share of wallet, digital OTP.

Wifi for and earn a larger share of wallet, our digital OTT traditional broadcast national broadcast you on cable or broadcast and with <unk> and and so putting all of that together and so that everybody has the same focus for going to market. So Michael Strober as our CRO He is out.

Speaker 4: traditional broadcast, national broadcast. You want cable, you want broadcast, you want digit net.

Speaker 4: And and so it's putting all of that together and so that everybody has the same focus for going to market So Michael Strober is our CRO. He is that hired a head of national sales He is in the process of hiring ahead of local sales and activation. We're standing up our national

Higher at a head of National sales. He is in the process of hiring ahead of local sales and activation, we're standing up our national.

Speaker 4: our national sales force and even in the middle of doing all of that delivered a very good results for NewsNation in the upfront 25% increase in dollar volume, 15 new advertisers.

Our national sales force and even in the middle of doing all of that.

Delivered very good results for news nation in the upfront, 25% increase in dollar volume 15, new advertisers.

Speaker 4: And in a not very supportive market, I mean, the market is pretty rough out there. But we're selling a story of growth. And there are precious few other folks out there that are selling that. And the good news is that the advertisers are responding. So all I can ask for with the CW and NewsNation now is take what you've had and grow it. And we're doing that on both fronts. So I'm often pleased but never satisfied.

And in a in a not very supportive market I mean, the market is pretty rough out there, but we're selling a story of growth and there are precious few other folks out better selling that and the good news is as the advertisers are responding so all I can ask for with the CW and news nation now is take what you've had and grow it and we're doing that.

On both fronts, so I'm, often pleased but never satisfied.

Great. Thanks.

Speaker 2: Our next question comes from Nick Zengler with Stevens. Please proceed with your questions.

Our next question comes from Nick <unk> with Stephens. Please proceed with your question.

Speaker 11: Hey guys, congrats on the results and congrats to Tom on a great run here.

Hey, guys. Congrats on the results and congrats on a great run here.

Speaker 11: You know, thinking about your initial plan to shift the CW from scripted to non scripted content, did your original plans account for all the sports content that you've accumulated thus far? Or has the shift to sports been a more favorable outcome post that acquisition as a result of acquiring the CW, which which may potentially lead to faster and higher profitability assumptions for the CW in the coming years?

Thinking about your initial plan to shift the CW from scripted non scripted content did your original plans account for all the sports content that you've accumulated thus far.

Or is the shift to sports than a more favorable outcome post that acquisition as a result of of acquiring the CW, which may potentially lead to faster and higher profitability assumptions for the CW in the coming years.

Speaker 4: I would say that we had sports in our mind's eye when we bought the CW. We were the only

I would say that we had sports in our minds eye. When we bought the CW. We were the only top five net network that didn't program on weekends and.

Speaker 4: top five network that didn't program on weekends and

Speaker 4: We knew through our experience with the Clippers and in a larger context with the NBA that because of the collapse of the RFMs there was a thirst for wider distribution.

We knew through our experience with the Clippers and in the larger context with the NBA that because of the collapse of the <unk>. There was a first for wider distribution.

Speaker 4: And I would say that the deals we made were opportunistic. Contracts that were up at the right time, that were the right size for us.

And I would say that the deals we made were opportunistic contracts that were up at the right time that we're the right size for us.

Speaker 4: um you know we began you know we along

We began a long a.

Speaker 4: cultivation of relationships that at NASCAR that began literally at the time we closed the CW. Obviously, Liv was very opportunistic for us. They wanted a partner. We wanted to introduce sports on the weekends. And the simple fact is, is the first weekend Liv was on the air, our prime time on Saturday and Sunday, Liv telecasts are

Cultivation of relationship set at NASCAR that began literally at the time, we close the CW. Obviously live was very opportunistic for us. They wanted a partner we wanted to introduce sports on the weekends and the simple fact is is the first weekend live was on the air our primetime on Saturday and Sunday live telecast or.

Speaker 4: Our primetime ratings that those nights were up 20% and I told our team I said well That's one of the reasons you buy sports so you can recirculate audience and new audience into your other product So I would say that it was like a lot of acquisitions. We made opportunistic

Our primetime ratings that those nights were up 20% and I told our team I said well that's one of the reasons you buy sports. So you can re circulate audience and new audience into your other products. So.

I would say that it was like a lot of acquisitions, we made opportunistic, but but I feel good about the deals you know and and on paper, both ACC and NASCAR make money for the CW overtime.

Speaker 4: But I feel good about the deals. And on paper, both ACC and NASCAR make money for the CW over time. And we feel good about where we will end up. And now it's all just about getting to the starting line with both of them, literally.

And we.

We feel good about where we will end up and and now it's all just about getting getting to the starting line with both literally and figuratively.

Speaker 10: Understood. Thanks. And then just on the core revenues here, obviously down 8%.

Understood. Thanks, and then just on the core revenues here.

Honestly down 10%.

Speaker 10: excluding the CW. I'm wondering in your view if there's an element

Excluding the CW I'm wondering in your view if there is an element.

Speaker 10: to this softness recently that could potentially reflect an acceleration

To this softness recently.

It could potentially reflect an acceleration.

Speaker 10: of national spending to alternative channels, such as connected TV in particular. And if so, obviously, maybe that would potentially limit what's available for the broadcast channel and really....

National spending to alternative channels, such as connected TV in particular.

And if so obviously, maybe that would potentially limit what's available for the broadcast channel and really resulting in what could be you know a secular just secular pressure I guess cause for core revenues for you going forward just just your thoughts on that whether but do you think that national advertising in particular is it.

Speaker 10: resulting in what could be a secular, just secular pressure, I guess, for core revenues for you going forward. Just your thoughts on that, whether you think that national advertising in particular is accelerating to...

Tolerating too.

Speaker 4: I wouldn't try and read too much into it. Advertising is a cyclical business. We're in an economic downturn. And national is the most volatile piece. I mean, if you went back and looked at 10 years of our King's reports, I think you'd hear us talk about national.

It can be I wouldn't I wouldn't try and read too much into it advertising is a cyclical business. We're in an economic downturn and and national is the most volatile piece I mean, if you went back and looked at 10 years of our things reports I think you'll hear us talk about national being the most volatile so I don't see a sea change I just see you know are on.

Speaker 4: Volatile so I don't see a sea change. I just see you know An economy and cautious advertisers and national are the first to pull the budgets those that are closest to the cash register

Economy, and cautious advertisers and national we're the first to pull the budget is those that are closest to the cash register still see customers buying they might be buying different things, but they want to capture that share of wallet.

Speaker 4: still see customers buying. They may be buying different things, but they want to capture that share of wallet. But Tom, you want to amplify something? Sure, I was just going to refer back to the category information.

But Tom you want to amplify something here I was just going to.

Refer back to the category information that I kind of.

Quoted in my in my comments with regard to the top declining categories Radio television cable newspaper, obviously, we've been in a dispute and then in disputes with various.

Speaker 5: quoted in my comments with regard to the top defining categories.

Speaker 5: radio, TV, cable, newspaper. Obviously, we've been in a dispute and been in disputes with various

Speaker 5: other media companies for some period of time and that's reflective of that. Medical healthcare, obviously we're coming out of a couple of years of heavy government and medical spend from a COVID and a post-COVID perspective and that has started to return back to more normal.

Other media companies for some period of time, and that's reflective of that medical health care, obviously, we're coming out of.

A couple of years of heavy government and medical spend from a COVID-19 in a post COVID-19 perspective, and that has started to return back to more normal levels gaming and sports betting again, a big rush to the door early on in the process on a number of large markets and now we're seeing a more measured.

Speaker 5: Gaming and sports betting, again, a big rush to the door early on in the process on a number of large markets and now we're seeing a more measured approach going forward in those markets where sports betting is already the case. And there are fewer large states left outside of Texas, Florida, and California. When those hit, I think you'll see sports betting take off again.

The approach going forward in those markets, where sports betting is already the case and there are fewer large states left outside of Texas, Florida, and California, when those hit I think Youll see sports betting take off again bank and savings and investments obviously it was a tough.

Speaker 5: bank and savings and investments, obviously it was a tough first quarter for banking in general and I think that showed up in some of our numbers as well. So really if you look at the categories, you can see why those categories may not be performing up to prior year's dollar levels relative to some of the particular sequencing and situations that they're in as well. Yeah, and I would just say I think also we're starting to see some of the

First quarter for banking in general and I think that showed up in some of our numbers as well. So really if you look at the categories. You can see why those categories may not be performing up to prior years.

<unk> levels relative to some of the particular sequencing and situations that they're in as well.

I'd just say I think also we're starting to see like slight lessening in terms of the rate of decline on the national side. So that just kind of goes back to what you're seeing in the overall economy.

Everything seems to be getting better.

Really appreciate the color there thanks guys.

Yes.

Speaker 2: Our next question comes from Alan Gold with Boop Capital Markets. Please proceed with your question.

Our next question comes from Alan Gould with loop capital markets. Please proceed with your question.

Speaker 6: Thanks for taking the questions and let me do my congratulations to you Tom on a terrific job and on your retirement. First question, there was no comment on the annual guidance, the 23-24 cycle. Is that because of the lack of visibility due to the distribution agreement or can you reiterate that guidance?

Thanks for taking the questions and my congratulations to you Tom.

On the terrific job and on your retirement.

First question there was no comment on the annual guide into 'twenty three 'twenty four cycle is that because of the lack of visibility due to the distribution agreement our ku, we reiterate that guidance.

Awesome.

A few more but.

Speaker 12: I'll stop here. I think we obviously have a situation here being dark on one of our MVPDs and so we will kind of revisit.

I'll stop here.

I think we obviously have a.

Situation here being dark on one of our Mvpds and so we will kind of revisit all of this in the next quarter as Tom indicated.

Speaker 6: OK. And the, and in the wording the ongoing negotiations, that was specifically with that one MVPT correct.

Okay.

And the wording the ongoing negotiations that was specifically with that one MVP key correct.

Yes.

Speaker 6: Okay, and on the CW, this investment in sports, does that have any impact on your near-term profits, or do you think the incremental ad revenue and affiliate fees potentially will offset the incremental sports costs? There's no material change in our near-term expectations.

Okay and on the CW. This investment in sports does that have any impact on your near term profits or do you think your incremental AD revenue in an affiliate fees potentially will offset the incremental sports costs.

And Theres no material change in our near term expectations for the CW with respect to the sports.

Yeah, I think that we can.

<unk> made those decisions I think as Terry mentioned in fashion.

Looking.

To generate more revenue.

This call.

Okay and last question that was the CW upfront this year.

Speaker 4: PW up front, I think was pretty good in terms of the overall performance. Dollar volume basically flat with the prior year. Unit rates were up mid single digits.

GW upfront I think was was pretty good in terms of the overall performance.

The dollar volume of basically flat with the prior year unit rates were up mid.

Mid single digits.

Speaker 4: And again, the money, the absolute dollars are not going to change our style of living, but it's an important marker, I think, for us. The reaction to the new programming and the sports, obviously, with sports dollar volume was up, but Leanne, if you want to provide any more color on that, go right ahead. Yeah, look, I think that the overall upfront market was down overall. I think that, you know,

And again the.

The money the absolute dollars are not going to change our style of living but you know it's an important.

Marker I think for us the reaction to the new programming and sports obviously with sports dollar volume was up but we and if you want to provide any more color on that go right ahead, yeah look I think that the.

The overall upfront market was.

Down overall, I think that the CW.

In line with what our expectations were for that business and so I think and I also think that there is a little bit lots sold in the upfront then.

Speaker 3: I also think that they're a little bit less sold in the upfront than in a calculated way because then that will provide us more opportunity with

You know on the calculated way because then they'll provide us more opportunity with the scatter market.

We're seeing the hopefully the economy will continue to increase in the national market will come back and that will benefit us in the back end.

Okay. Thanks for taking the questions.

Speaker 2: Our next question comes from Barton Crockett with Rosenblatt Securities. Please proceed with your question.

Our next question comes from Barton Crockett with Rosenblatt Securities. Please proceed with your question.

Speaker 13: OK, great. Thank you. And your retirement plan sounds great. Congratulations. And thanks a ton for all the help. I wanted to ask a question about just being a dead horse. But you're not, at this point, saying anything about your former guidance on retransmission. You're going to wait till you get clarity on the distribution deals. Is that correct?

Okay, great. Thank you and.

You're a retirement plan sounds great congratulations and thanks, a ton for all the help.

I wanted to.

Ask a question about just beat a dead horse, but.

Not at this point.

Saying anything about your former guidance on retransmission Youre kind of wait till you kind of get clarity on their distribution to us is that correct.

That is correct yes.

Speaker 13: Okay, all right. And then in terms of the sports, the new commitments, are you thinking about the recoupment being, you cover the sports rights costs on advertising alone, or is there also an idea that this can give you leverage on affiliate fees or, you know, retransmission fees? Yeah, look, I think absolutely the focus is not only on advertising, it's on recoupment.

Okay, Alright, and then.

In terms of the the sports the new commitments.

Are you thinking about the recoupment being you.

You cover the sports rights costs on advertising alone or is there also an idea that this can give you leverage on affiliate fees are.

Retransmission fees.

Yeah look I think absolutely.

The focus is not only on advertising, it's on retransmission fees distribution fees or affiliate fees as what he would I characterize that it's difficult to compete for sports rights without having a distribution revenue stream.

Speaker 5: If you think about it, the timing of this has worked out really well because ACC sports begins this fall, September 9th, so we've proven to the affiliates that we can deliver on this. And NASCAR starts in early 2025, so we've got some time from a NASCAR perspective in order to prove out sports with ACC and then be able to take that to the affiliates.

And if you think about the timing of this has worked out really well because ACC sports begins this fall September nine so we've proven to the affiliates that we can deliver on this and NASCAR starts in early 2025. So we've got some time from a NASCAR perspective.

In order to prove out sports with ACC, and then be able to take that to the affiliates.

Speaker 5: with a value proposition that we think is appropriate at that time to include sports. And let's be honest, we're going from on sports weekends, something, or on weeks where we have sports, something like 14 hours of programming from the CW to 25 or 30 hours of programming from the CW, given Saturday and Sunday. So there's a significant.

With a value proposition that we think is appropriate at that time to include sports and let's let's be honest, where we're going from on sports weekends something.

Weak, where we ask for something like 14 hours of programming from the CW to 25 or 30 hours of programming from the CW, given a Saturday and Sunday, So theres a significant.

Speaker 5: value proposition improvement that we want to put forth.

Value proposition improvements that we want to.

Put forth to the affiliates and I'll just add as it relates to our guidance and we haven't been specific nor will we be but the CW is in affiliate negotiations with a number of sizable affiliate groups and there will be a affiliation fee revenue upside to that.

Speaker 4: And I'll just add as it relates to guidance, and we haven't been this specific nor will we be, but the CW is in affiliate negotiations with a number of sizable affiliate groups.

Speaker 4: and there will be affiliation fee revenue upside to that which is in our current guidance.

As in our current guidance so a lot of things when I sat down yesterday listed all the things that will happen between now and our next call. We may buy a business. We may sell a business. We've got the affiliate negotiations you know we hope to settle the M. B P D and virtual Mvpds that were that were off.

Speaker 4: So a lot of things, Leeanne and I sat down yesterday and listed all the things that will happen between now and our next call. We may buy a business, we may sell a business, we've got the affiliate negotiations, we hope to settle the MBPD and virtual MBPDs that were off and increase our distribution. There's opportunity for increased distribution of NewsNation as a byproduct in a not insignificant way. So there's a lot of ingredients that go into baking the cake and so our thought is if there's an update to guidance, let's know as much as we can and right now we don't know.

<unk> increased our distribution there is opportunity for increased distribution of news nation as a byproduct and are not a not insignificant way. So theres a lot of ingredients that go into baking the cake and so.

Our thought is if if theres an update the guidance, let's know as much as we can and right now we don't know enough to change our guidance.

Speaker 4: enough to change our guidance and don't expect it will change in a material way. But in any event,

And don't expect it will change in a material way, but in any event.

Speaker 4: There's a lot of things that go into running this company and a lot of things that go into the guidance that we deliver and it's a multi variable equation, not a single variable equation, I guess is the point I wanted to make.

There's a lot of things that go into running this company and a lot of things that go into.

The guidance that we deliver and it's a multi variable equation not a single variable equation I guess is the point I wanted to make.

Okay I appreciate that and that's it for me. Thank you.

Speaker 2: Our next question comes from Jim Goss with Barrington Research. Please proceed with your question.

Our next question comes from Jim Goss with Barrington Research. Please proceed with your question.

Speaker 14: All right, thank you. And I'll be the broken record and thank Tom and congratulate you for a successful career and your important contributions to Nexstar.

Alright, thank you.

I'll be the broken record.

Thanks, Tom and congratulate you for a successful career in Europe .

Important contributions to Nexstar.

Speaker 13: I might ask about NewsNation going into the political year. I wonder if you might...

I might ask about news nation going into the political year I Wonder if you might.

Speaker 13: and talk about any particular things you might be doing incremental to the network. Are you going to be doing a number of debates again, and will these be economic or reputational? And do you have plans to take that path to the next step of 24-7, the true 24-5?

I'm talking about any particular things you might be doing incremental to the network.

Are you going to be doing a number of debates again and will these be economic or reputation all.

Do you have plans to take that.

Pass to the next step of 24 seven.

Four five.

Speaker 4: Sure, and I don't want to give our playbook to any of our competitors, but we do plan to be as active in

Sure and I don't want to give our playbook to any of our competitors, but we do plan to be as active in debates as we were last year and those that have national implication of national interest will be offered to.

Speaker 4: debates as we were last year and those that have national implication and national interest will be offered to

Speaker 4: the cable channel as potential programming as those were wildly successful in 2022.

The cable channel as potential programming is those were wildly successful.

In 2022.

Speaker 4: And we will expand, we will be 24-7 by September 1 of 2024. Because that's when the last of our syndicated programming commitments contracts will run out. So those plans have already been made and we will begin to execute those here staffing up for 2024 in about another month. And yes, that's already in the model that we use for guidance.

And we.

We will expand we will be 24 seven by September one of 2024.

Because that's when the last of our syndicated programming commitments contracts will run out. So those plans have already been made and we will begin to execute those here.

Here staffing up for 'twenty 'twenty four in about another month and yes, that's already in the model that we use for guidance so and.

Speaker 4: So, and I think you'll see our panel show the Hill expand to the weekend, probably weekend mornings that will allow us more access to the movers and shakers in Washington. So there's a comprehensive plan that includes more debates. We're doing town halls.

And I think you'll see our panel show the hill.

Expand to the weekend probably weekend mornings.

That will allow us more access to the movers and shakers in Washington, So Theres a comprehensive plan that includes more debates we're doing town halls.

Speaker 4: We did one with Kennedy. We're doing some with the Republican and Democratic candidates as time goes on and opportunistically as they make themselves available to us. And those will be, you know, primetime events well promoted. As far as debates go, we don't make any money on them. Those are all you know, at the local level for as a public service to our voters and at the national level as a service to those that again might be interested in the national implications of such.

We did one with Kennedy our were doing some with the Republican.

And Democratic candidates as time goes on and Opportunistically as they make themselves available to us and those will be primetime events, while promoted.

As far as the Batesville, we don't make any money on them those are all.

At the local level for as a public service to our voters and at the national level as a service to those that are again might be interested in the national implications of such a because the debates unless we find an underwriting sponsor are offered with no commercial interruptions for for the full hour or more so.

Speaker 4: because the debates, unless we find an underwriting sponsor, are offered with no commercial interruptions for the full hour or more.

Speaker 4: So expect this to be as active, if not more, in 2024 on the political...

Expect us to be as active if not more in 2024.

On the political side.

Speaker 6: Okay, thanks. And one other one regarding CW. Maybe

Okay, Thanks, and one other one.

Regarding CW, maybe maybe.

Speaker 6: the actors and writers strikes have come at a good time for you because you're just redefining what your programming should be, but are there any strategic implications or workarounds you're going to need to do with regard to the strike?

Yeah. After his regular strikes have come at a good time for you because you just.

Redefine what's your program it should be but are there any.

Strategic implications or work around you're going to need to do with regard to the strike.

Speaker 4: We have four shows that were planned in the 23-24 season that we renewed from Warners and from Paramount.

We are we have four shows that were planned in the 'twenty three 'twenty four season that we renewed from Warners and from Paramount that are all scripted shows that currently appear on the network. All of those are pushed at least now until 2024 and the farther.

Speaker 4: that are all scripted shows that currently appear on the network. All of those are pushed.

Speaker 4: at least now until 2024 and the farther the strike goes on, they get pushed further and further into 2024. And so those, those, those, the only four shows affected everything else on the schedule is acquired programming that has already been produced or reality programming that is being produced. So we'll have the most.

The strike goes on they get pushed further and further into 2024.

And so those those are those the only four shows affected everything else on the schedule is acquired programming that has already been produced a reality programming that is being produced so we will have the most scripted as a percentage of our schedule.

Speaker 4: scripted as a percentage of our schedule with the commitments that we've made of any of the big five broadcast networks going into the fall. We also have a lot more high profile and noisy reality shows, which I think will bring attention to the network as well. So we kind of like our chances in this chaotic environment.

The commitments that we've made of any of the big five broadcast networks going into the fall. We also have a lot more high profile and noisy reality shows, which I think will bring attention to the network as well so we kind of like our chances in this chaotic environment and and you know when when others are afraid is when we tend to take some <unk>.

Speaker 4: And when others are afraid is when we tend to take some big swings. So I think that we'll do well vis-a-vis our expectations. And hopefully that will help us prove in the scatter market that the tack that we're on is the correct one to grow the network.

Swings, so I think that.

We will do well vis vis our expectations and and hopefully that will help us prove in the scatter market that you know the tack that we're on is the correct one to grow the network.

Alright, thanks very much.

Speaker 2: There are no further questions at this time. I would now like to turn the floor back over to Perry, the Chief Executive Officer, for closing comments. Perry Wilson Thank you,

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

Speaker 4: Thank you Maria. Nextar posted another strong quarter of financial results and we continue to execute on our strategy focused on levering our linear digital mobile and streaming assets in new ways to drive increased monetization and growth across our entire portfolio. While we are performing well now, we are very optimistic about 2024 as we will have the wind at our backs with what we anticipate to be an economic recovery before your impact of our 23 distribution contract renewals.

Thank you Maria Nexstar posted another strong quarter of financial results and we continue to execute on our strategy focused on levering arent linear digital mobile and streaming assets in new ways to drive increased monetization and growth across our entire portfolio. While we are performing well now we are very optimistic about 2024.

For us we will have the wind at our backs with what we anticipate to be in economic recovery, but full year impact of our 23 distribution contract renewals.

Speaker 4: moderating losses at the CW and what is expected to be a record-breaking political year also in a declining interest rate environment. Our strong free cash flow allows us to return a significant percentage of that to shareholders in the form of dividends and share purchases while maintaining very modest leverage and pursuing strategic opportunities to further enhance shareholder value.

Moderating losses at the CW and what is expected to be a record breaking political year also in a declining interest rate environment. Our strong free cash flow allows us to return a significant percentage of that to shareholders in the form of dividends and share repurchases, while maintaining very modest leverage and pursuing strategic opportunities to further enhance shareholder value.

Yeah.

Speaker 4: Thank you everyone for joining us today and we look forward to speaking to you again in November when we report our third quarter results. Maria, I'll turn it back to you.

Thank you everyone for joining us today, and we look forward to speaking to you again in November when we report our third quarter results Maria I'll turn it back to you.

Speaker 2: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.

Speaker 1: so you

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Speaker 15: I.

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