Q1 2024 Nexstar Media Group Inc Earnings Call
Good day and welcome to Nexstar media group's first quarter 'twenty 'twenty four conference call. Today's call is being recorded I will now turn the conference over to Joe <unk> Investor Relations. Please go ahead Sir.
Joe: Thank you Maria and good morning, everyone I'll read the Safe Harbor language, and then we'll get right into the call.
Joe: 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 <unk>.
Joe: Nexstar cautions that these forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those reflected by the forward looking statements made during this call.
Joe: For additional details on these risks and uncertainties. Please see <unk> annual report on Form 10-K for the year ended December 31st 2023, and filed with the Securities and Exchange Commission and Nexstar subsequent public filings with the SEC.
Joe: Nexstar undertakes no obligation to update or revise any forward looking statements, whether as a result of new information future events or otherwise.
Joe: It's now my pleasure to turn the conference over to your House, Nexstar founder Chairman and Chief Executive Officer, Perry Sook Perry. Please go ahead.
Perry A. Sook: Thank you Joseph and good morning, everyone. We appreciate you joining us today. This morning with me on today's call are Mike Byrd, Our President and Chief operating Officer, and Lee <unk>, Our Chief Financial Officer, I will start with a summary of recent highlights followed by Mike's operational review as well as we in his financial review then we'll.
Perry A. Sook: Get to your questions next.
Michael Biard: Next our first quarter results marked an excellent start to 2024 and what we expect will be another strong year for the company. We delivered record first quarter net revenue of 1.28 billion driven by all time high quarterly distribution revenue of $761 million adjusted EBITDA and adjusted free cash flow once again.
Michael Biard: Exceeded consensus expectations and more importantly, underscore the strong profitability of our business model.
Michael Biard: Our continued outperformance in the current environment is no surprise to us we've been consistently clear in our view that broadcast is the bellwether of the pay TV ecosystem.
Michael Biard: <unk> value of the bundled programming offerings provided by pay TV distributors that are anchored by our stations.
Michael Biard: And as the largest local broadcaster and owner of one of the nation's five major broadcast networks as well as the nations fastest growing cable news network nexstar as importance to the industry is clear and further validated by our consistently strong financial execution free cash flow generation and shareholder returns.
Michael Biard: I recently came across a Harvard business review article on the subject of disruption, which has been a recurring theme for many years now in the pay TV industry and N. At the authors note that corporate leaders have continually been told that the only way to innovate and grow is to disrupt their industries or even their own companies, but for disruption to be a success there needs to be.
Michael Biard: Weird tradeoff between the winners and losers looking at our industry. It's now been more than three and a half years since the majority of diversified media companies launched direct to consumer products seeking to generate new value and profits in the digital world by disrupting their linear business models to date. These products have generated billions of dollars of losses in market cap.
Michael Biard: Destruction and because of the disruption in the linear business of these companies has also suffered which in our mind is a lose lose proposition.
Michael Biard: As a result, we expect to see direct to consumer and pay television programming bundles content spending and pricing ought to be rationalized across the industry going forward better models are being developed with broadcast as the anchor as it always has been given viewer demand for our must have local and national programming, including sports and special event program.
Michael Biard: That relies on our unrivaled reach to maximize audiences.
Michael Biard: The virtuous cycle of the broadcast business combined with the strength of Nexstar has diversified portfolio of local and national media assets, including multiple growth drivers to support our long term value proposition will continue to fuel our financial momentum and strong shareholder returns.
Speaker Change: Before turning the call over to Mike, Let me briefly touch on some of those growth drivers starting with the CW Nexstar has owned the network for just over a year and we're making excellent progress as we can continue our march towards breakeven.
Speaker Change: To Cdw's first quarter operating profit improved by $50 million year over year, driven by a $55 million reduction in programming costs and for the full year, we expect to see revenues operating profit to improve by over $100 million.
Speaker Change: In terms of viewership the CW delivered sequential ratings growth in the first two quarters of the 'twenty three 'twenty four broadcast season. The first broadcast season, where nexstar controlled the programming lineup and we're confident that the positive viewership trends will continue throughout the year in fact, if I look back to this Tuesday, the most recent night for which overnight ratings are available.
Speaker Change: CW had its highest Tuesday performance of the season in both adults 18 to 49 and in total viewers and police 24 seven was the number one new series premiere on the CW and the last three seasons.
Michael Biard: Yeah.
Michael Biard: We're especially excited about the accelerated launch of the NASCAR Xfinity series on the CW with the final eight races of this season, including all of the playoff races for this year airing exclusively on the network beginning in late September as well as the WWE next launch on October the first.
Michael Biard: We're also finding other opportunities for the CW to leverage the benefit of being part of the larger next our enterprise to date, we have added 12 CW affiliations to our station group, which has led to significant additional operating profit on the station side of the ledger.
Michael Biard: And all of the work we have been doing to generate audience growth at news nation has begun to pay off as news nation has officially entered the zeitgeist you may have seen our network featured in the series finale of curb your enthusiasm and last month and what May have been the funniest sketch on SNL one years, a news nation town Hall event with Ryan Gosling as Bemis and Mikey day as Buckhead.
Michael Biard: And in the audience.
Michael Biard: As we said one of the funniest sketches on the network in years and Saturday Night live if you Havent Google that is highly recommended significantly as of the May 2020 for Nielsen reported news nation.
Michael Biard: Is now the second largest cable news network and pay TV distributions, surpassing both C N N and M. S. N B C. As distributors recognize the value of news nation, and what it brings to their consumer offering.
Michael Biard: And the consumers will get even more value for that distribution. When we complete the news nation expansions of 24 seven on June the first of this year.
Michael Biard: We continue to make progress on our <unk> initiatives, surpassing our goal of 50% of the U S. Population served by a T. S E. Three dot O signals from a nexstar owned or partner station following the conversions into Chicago and San Diego This past quarter.
Michael Biard: We believe the earliest revenues generated from this spectrum will be from business to business applications that require moving large amounts of data to multiple devices simultaneously.
Michael Biard: We're also developing advanced applications for the positioning and timing industry think GPS if you will where we think our terrestrial broadcast capabilities provide us some unique advantages compared to satellite based systems.
Michael Biard: In this regard we are seeing interest from auto manufacturers digital signing providers device manufacturers and the internet of things industry and even content delivery networks. We're all looking to gain efficiency in the delivery of Internet data using our broadcast technology.
Michael Biard: To commercialize our technology, we're pursuing new customers through our own business development activities as well as through joint ventures with other broadcasters, here's where the scale of our spectrum assets as our advantage as we are able to partner with one or maybe two other broadcasters to achieve nationwide coverage of spectrum.
Michael Biard: Looking ahead, we remain confident that Nexstar will deliver another strong year of financial results in 2024, given the successful renegotiation of our distribution contracts in 2023 significant presidential election year political advertising and reduce losses related to the CW network were focused on executing our strategy and leveraging the <unk>.
Michael Biard: <unk> of our platform to maximize every opportunity to drive continued strong growth and shareholder returns our confidence in the continued strength of the <unk> business relative to our current valuation and our long term growth prospects is further reflected by our capital allocation, including our recently upsized dividend as well as our now announced first quarter share repurchase.
Michael Biard: As with all of that said, let me now turn the call over to Mike Baird.
Michael Biard: Thanks, Perry and good morning, everyone.
Michael Biard: Third a remarked on our record first quarter net revenue of one point to $8 billion, which compares to 1.2 dollars $6 billion in the prior year quarter, an increase of $27 million or two 1%.
Michael Biard: Primarily due to growth in distribution revenue and partially offset by a slight decline in advertising and other revenue.
Michael Biard: All time high quarterly distribution revenue grew $33 million or four 5% to $761 million, primarily due to our successful renewals in 2023 on terms favorable to the company annual rate escalators and the return of our partner stations on one N V. P. D in January.
Michael Biard: Partially offset by N V P D subscriber attrition.
Michael Biard: As a reminder, nextera is distribution revenue includes retransmission revenue carriage fees affiliation fees and spectrum leasing revenue.
Michael Biard: Which in aggregate accounted for approximately 59% of Nexstar is first quarter revenue.
Michael Biard: Excluding the impact of the removal of partner stations from certain Mvpds subscribers grew in the quarter in the low single digit range, reflecting the benefit of the increased carriage of our CW.
Michael Biard: My network and independent stations on Youtube TV and other V. Mvpds. The addition of new CW affiliations that Nexstar stations and recent station acquisitions.
Michael Biard: Overall advertising revenue, which includes core TV advertising digital advertising and political advertising revenue decreased 1% or $5 million compared to the first quarter last year, reflecting a year over year reduction in core and digital advertising offset in part by a year over year increase in election year.
Michael Biard: Political advertising.
Michael Biard: Excluding political advertising declined 7% in the quarter impacted by a continued challenging national advertising market and a slightly softer local advertising market is local advertisers and their customers show the strains of the high interest rate environment.
Michael Biard: That negative comparison was exacerbated slightly this quarter by the Super Bowl airing on CBS versus Fox, which is less favorable to us.
Michael Biard: So far in Q2 2024, however, the trends are improving we're seeing a much slower rate of decline versus the first quarter. As we are currently pacing down in the low single digits as advertising headwinds begin to abate.
Michael Biard: In particular, we're starting to see some green shoots on the national side as advertisers respond to the large aggregated audiences, we deliver particularly in live sports and special events.
Michael Biard: And on the local side, we are seeing improvement in core TV, while we continue to benefit from double digit growth in local digital advertising.
Michael Biard: And I'm pleased to report that we completed the seamless transition of national advertising sales in all 117 of our markets from third party representation firms to our own sales force.
Michael Biard: We are already seeing dividends from this transition as we have an experienced motivated sales force, creating new ways for advertisers to generate their best ROI, while maximizing revenue across diverse sales channels and the full array of our unique asset mix.
Michael Biard: In addition, we are optimistic that the big data measurement services enabled by our recently expanded agreements with Comscore and Nielsen.
Michael Biard: Together with additional advertising measurement services available in the marketplace.
Michael Biard: We'll help modernize linear TV measurement to better highlight the reach and reach at scale benefits our assets bring to our partners messaging.
Michael Biard: Turning to political.
Michael Biard: In the first quarter political advertising of $39 million increased by $31 million over year over year.
Michael Biard: But was down versus 2020, when the outsized primary runs by Bloomberg and stier boosted revenue during that presidential cycle.
Michael Biard: Excluding the impact of those two campaigns or political advertising was up 29% in the quarter versus 2020.
Michael Biard: Overall, our market share of total political television spending was in the mid teens slightly ahead of our expected market share for the full year.
Michael Biard: Historically, the substantial majority of political television advertising spending comes in the 10 to 12 weeks before election day.
Michael Biard: In fact, despite the relatively muted presidential primary season in.
Michael Biard: In March B I E increased its estimate for 2020 for political advertising spending to over $11 billion versus the 10 billion previously projected.
Michael Biard: We're already seeing some of this in new spending on valid issues such as reproductive rights.
Michael Biard: In addition, a significant factor in the amount of political spending on our assets is control of the house and Senate as both are up for grabs in this election, driving campaigning that will benefit our bottom line.
Michael Biard: As the saying goes all politics is local and campaigns and packs deploy the lion's share of their advertising spending on the media. They know is proven to help them win local television.
Michael Biard: As we discussed on our last call our audience over indexes on the actual electorate with over 60% of voters in the last election, aged 50, plus according to Pew research based on the experience of our station group in the last four election cycles, we expect to garner a low to mid mid teens percentage of the political.
Michael Biard: Advertising spending on broadcast television.
Michael Biard: And with that I'll turn the call over to Leann for the remainder of the financial review and update Dan. Thank you, Mike and good morning, everyone. I'm. Mike gave you most of the details on the revenue side. So I'll provide a review of expenses adjusted EBITDA and adjusted free cash flow along with a review of our capital allocation activities.
Leann: Before I jump in a quick note on our new earnings release format in an effort to make it easier for investors to folks focus on the key items management is focused on it since we have now own the CW for over a year. So comparability is no longer an issue we have simplified our reporting and a reconciliation. We will continue to provide you with key operating data in our MD&A commentary.
Michael Biard: On this call.
Michael Biard: In addition in an effort to create better comparisons to others reporting in our sector in the first quarter of 'twenty 'twenty four we adjusted our definition of adjusted EBITDA to add back stock based compensation and one time expenses related to restructuring actions and just subtract out noncash pension pension credits. Please note that the guidance we issued for.
Michael Biard: The year on our last call was based on our prior definition and the net impact of these changes as a positive $52 million.
Michael Biard: We also adjusted our definition of adjusted free cash flow, which we previously referred to as attributable free cash flow just subtract out noncash pension credits and payments for capitalized software obligations and to adjust for actual cash contributions from noncontrolling interests in lieu of adjusting for our partner share of losses in the C. W. What do you think.
Michael Biard: You're a better picture of our consolidated performance.
Michael Biard: The prior the comparative prior disclosures were also recast in the earnings release to conform with the current presentation.
Michael Biard: Turning to expenses.
Michael Biard: Check out our first quarter direct operating and SG&A expenses, excluding depreciation and amortization and corporate expenses increased by $8 million the increase was.
Michael Biard: Was primarily due to the expansion of news programming and promotional expenses offset by a reduction in severance at the CW by $7 million.
Michael Biard: Also included in our calculation of adjusted EBITDA, but not but not included in direct operating and SG&A expenses above are the payments for broadcast rights of our station that declined by $8 million in the first quarter due primarily to reduced reliance on syndicated content news nation as we continue the transition to 24 seven news.
Michael Biard: Q1, 2024 total corporate expense was approximately $55 million, including noncash compensation expense of $18 million compared to $48 million, including noncash compensation expense of $14 million in the first quarter of 2023.
Michael Biard: Q1, 2020 for depreciation and amortization was $190 million versus $249 million in the prior year quarter, a reduction of $59 million due primarily to lower programming expenses at the CW. Please note that the CW programming costs, which are included in our definitions of adjusted EBITDA and adjusted free cash flow are counted.
Michael Biard: For in this line item is amortization of broadcast rights for more information on this amount. Please refer to the schedules in our earnings release and in our 10-Q.
Michael Biard: We received $129 million in Q1 distributions from equity investments primarily related to our 31% ownership interest in television network, which represents an 18% decrease from the prior year quarter.
Michael Biard: The reduced amount reflects lower income at TV food network, primarily due to lower advertising revenue the distribution amount of $129 million includes 9 million related to the amortization of a portion of the distribution that was paid to us in the first quarter of last year related to their our accounts receivable securitization and not included in our definition of adjusted EBITDA.
Michael Biard: <unk>.
Michael Biard: Putting it all together on a consolidated basis first quarter adjusted EBITDA was $542 million, representing a 42, 2% margin an increase of $46 million from the first quarter of 2023, adjusted EBITDA and an increase in margin of 270 basis points from 39, 5% which included.
Michael Biard: Improvements in our net distribution margin year over year first quarter, Capex was $44 million compared to $36 million in the first quarter of last year, an increase of $8 million, primarily due to quarterly timing of capital projects first.
Michael Biard: First quarter net interest expense increased to $114 million from $107 million in the prior year quarter due to higher silver rates applicable to our floating rate debt cash interest expense was $112 million by the quarter.
Michael Biard: First quarter operating cash taxes payments for capitalized software obligations and proceeds from disposal of assets and insurance recoveries net of $2 million, primarily reflecting timing of payments.
Michael Biard: During the quarter, we received $19 million of cash from our minority partners in the CW, reflecting amounts required to be contributed pursuant to the LLC agreement.
Michael Biard: And putting this altogether consolidated fourth quarter adjusted free cash flow was $403 million.
Michael Biard: Together with the cash from operations generated in the quarter on hand and kept it in the quarter and cash on hand, we returned $168 million to shareholders comprised of $57 million in dividend and the repurchase of $111 million of stock at an average price of $166, an 11th reducing shares outstanding net of equity vest.
Michael Biard: By one 7%.
Michael Biard: Nexstar has outstanding debt as of March 31st with $6 8 billion slightly down for the quarter as we meet our quarterly amortization payments of $30 million, our cash balance at quarter end was $237 million, including $90 million of cash related to the CW.
Michael Biard: Because we designated the CW is an unrestricted subsidiary the losses associated with the CW are not accounted for in our calculation of leverage for purposes of our credit agreement.
Michael Biard: As such our net first lien leverage ratio for Nexstar, excluding CW as of December 30 for our sorry as of March 31, 2024. It was 2.21 times, which is well below our first lien and only covenant of two five times.
Michael Biard: That leveraged for Nexstar, excluding CW was 373 times at quarter end.
Michael Biard: As is typical in non political years, we expect leverage which we calculate on an LTM basis.
Michael Biard: Versus the two year average default during 2024 and EBITDA will grow with the return of political advertising.
Michael Biard: As we move forward, we continue to strategically deploy our cash in a manner that is consistent with our commitment to creating the highest shareholder value.
Speaker Change: Before turning the call back to the operator for questions I want to frame some thoughts regarding our business industry position and valuation.
Speaker Change: We continue to get questions based on the results comments and capital structures of some of the other companies that operate in the local broadcast industry, while we understand the desire to compare notes in a sector, where there are a relatively small number of public companies I know for those of you who've been around the sector for a very long time next are used to be just one of the pack, but times have changed.
Speaker Change: <unk> and Nexstar has changed we are a very large company now significantly out scaling the other broadcasters and we built our platform over the past 10 years or so we consistently highlighted the benefits and necessity of scale, including operational efficiencies and increased negotiating leverage and as our results continue to demonstrate our vision was spot on.
Speaker Change: On.
Speaker Change: Just to put it in perspective at the risk of stating the obvious for the last 12 months ended March 31, 'twenty 'twenty four we generated almost $5 billion of revenue, we have a market cap of $5 $5 billion in an enterprise value of over 12 billion. Our revenue is more than 40% greater than the next largest local broadcast or our market capitalization.
Speaker Change: <unk> is more than a 110% greater than our enterprise value is more than 65% greater in fact, our enterprise value of $12 billion puts us on a path to approaching something like Fox Corporation, which has an enterprise value of 20 billion.
Speaker Change: Our LTM leverage was three seven times and will be in the twos by the end of the year, our secured debt trades at or around par the consensus annual free cash flow for Nexstar for the average of 24, and 25 and $1 1 billion could delever just by more than half a turn a year. If we decided to do that and represents a whopping $33 per share and our stock price.
Speaker Change: Yeah, we traded only a 6.4 times 24, 25 consensus EBITDA multiple and a 21% 24 25 free cash flow yield both impacted by the short term losses of the CW.
Michael Biard: We believe this all adds up to an undervalued company, which is why we have been aggressively active on share repurchases, which deliver a substantial intangible return.
Michael Biard: We believe there is significant upside in our stock our free cash flow keeps flowing and we are putting it to the best use to maximize shareholder returns. There is simply no comparable local broadcaster and we won't gladly put our record of operating execution and returns of capital and shareholder Hansman up against almost every company in the media telecom space with that I'll open the call for questions.
Speaker Change: Operator, you can go to our first question. Thank you.
Speaker Change: Thank you we will now be conducting a question and answer session. If you'd 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 he 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.
Michael Biard: Yes.
Michael Biard: Our first question comes from Dan.
Dan: Benchmark. Please proceed with your question.
Dan: Thanks, Good morning, I start to the year two high level for a perrier, Mike just on the core commentary, we keep hearing that core could be flat or better even with crowd out in the back half of the year. So maybe just talk about some of the trends there and now that you guys have really scaled news nation CW.
Michael Biard: Other external platforms you guys have added maybe thoughts on political maybe even outside of local just how we should we should be thinking about political in 'twenty 'twenty four and then for Leann just on the expense side the underlying expense growth thoughts would be super helpful. Thank you.
Speaker Change: I'll start on political and I can turn it over to Michael to talk about core and Leigh Ann can provide the.
Speaker Change: The remainder of our answers to your questions, but as it relates to political as you know it is primarily a local.
Speaker Change: Our local medium a local business.
Michael Biard: Because that's where the voters vote and and broadcast is the preferred medium of choice as you know our local broadcast to deliver those messages to the electorate.
Michael Biard: Having said that we recently expanded on news nation Hill to a six day.
Michael Biard: Sunday morning was the addition of an hour long.
Michael Biard: Sunday morning talk and issue show.
Michael Biard: And we we offered that out to the CW affiliates.
Michael Biard: At no charge, if they were interested in picking it up for <unk>.
Michael Biard: Additional complement to their local programming and we cleared it and over 82% of the country. So we do think there will be moderate opportunities with both news nation and and also with the CW to capture.
Michael Biard: Political dollars incrementally to what our stations are going to do but having said that the stations will contribute by far the largest percentage of our of our political revenue composition for this year, but when it gets too.
Michael Biard: The presidential race, and perhaps some Pac money.
Michael Biard: And even some ballot initiatives across multiple states, we do expect that there could be a national conduit to deliver those messages out to.
Michael Biard: To to the electorate Michael.
Michael Biard: Sure with respect to core I guess I'll start by making it clear that our core does not include digital and so there is some noise. When you talk about comps with others in our space, having said that as I mentioned in my remarks, we are seeing some green shoots in the current quarter.
Michael Biard: We are optimistic about the business model that is in transition here as we as I mentioned also in my remarks have launched our own internal sales force instead of using the external rep firms that is offering some positive momentum as we head into the upfront for the first time.
Michael Biard: We are seeing some interest in.
Michael Biard: And at an upfront level selling some of our local national combined with our national business on an upfront basis, which historically has not been done inside local sales. So that is one of those elements with our scale that gives us the ability to go to market in a way that is different than our peers.
Michael Biard: Okay.
Michael Biard: And then Dan on our expense side of things you know, we don't usually provide sort of detailed granular level.
Dan: Forecast, but theres nothing sort of unusual or any incremental expense build that's going to happen in the end in the course of 2024 and that is embedded in the guidance that we provided previously.
Dan: Okay perfect. Thank you.
Dan: Yeah.
Michael Biard: Our next question comes from Benjamin Socked with Deutsche Bank. Please proceed with your question.
Benjamin Soff: Hey, Thanks for the question guys.
Benjamin Soff: First as a follow up on political I think last quarter. You guys said that you were expecting a low teens share of the market and today it sounded like your expectations for that an increase so I'm just kind of wondering.
Benjamin Soff: What youre seeing there and what that dynamic looks like and then for the CW. I think you guys said that you're expecting a $100 million improvement. Obviously, you guys saw a pretty healthy improvement in <unk>. So just curious if you could talk to that as well thanks guys.
Speaker Change: I'll take the first question and then I'll handle it or hand off the second one to you. So I think what we're seeing on political in the experienced in Q1.
Speaker Change: Is the low to mid teens is right in line with what we project for the rest of the year.
Speaker Change: I think I said in my opening remarks, slightly higher and I'll emphasize slightly marginally different and really.
Speaker Change: From a from 100000 foot perspective, consistent on a percentage basis with what we expect for the full year. So we feel pretty good about that.
Speaker Change: Yeah and look on the CW I think you're starting to see just the benefit of our programming plan coming to it coming into fruition. You know we had a $50 million improvement in the first quarter. We expect you know over $100 million for the year I think some of that's just due to you know timing of con.
Speaker Change: And when.
Speaker Change: You know when those.
Speaker Change: When those different programming expenses hit over the course of the quarter.
Speaker Change: That's why you know, we just had a little bit more in the first quarter that we then we will have through you know through the rest of the year.
Speaker Change: On a quarterly basis.
Speaker Change: Okay, great. Thanks, guys.
Speaker Change: Yep.
Speaker Change: Our next question comes from Steven Cahall with Wells Fargo. Please proceed with your question.
Steven Lee Cahall: Thanks, maybe first just to expand on some of the advertising commentary on local I think there are different from your peers in terms of talking about local being a little softer in the quarter. It sounds like that's maybe starting to improve so I was wondering if you could just expand on what youre seeing there and you're also a bit different and seeing the green shoots on national.
Speaker Change: So wondering if that's direct response at the CW or if that's more broad based national improvement.
Speaker Change: Then just a political question you talked about your new AD sales force and the improvements that's having should we assume that you'll have some of the same transformation political since I think you're guiding about kind of gross spend but we model and on a net revenue basis is there any upside to the ability to flow that through using your your own sales force and then lastly, leann.
Leann: I appreciate your comments about how unique nexstar as you said, you'll probably be in the twos and leverage by the end of the year as you think about the strength in political so just wondering what your run rate basis leverage is that youre comfortable with and given some of that frustration. You know would you ever think about adding a bit of leverage if you are.
Speaker Change: Already low to buyback, even even more stock. Thank you.
Speaker Change: Let me answer the leverage question first.
Speaker Change: It's not been in our DNA to to borrow money to buy back stock we generate substantial free.
Speaker Change: Free cash flow here, and and nobody returns meaningful capital to shareholders like Nexstar does our annual dividend our average since we instituted the dividend 11 years ago has been in excess of 25% annual increases and where two thirds of the way through our $1 $5 billion by.
Speaker Change: Back authorization in less than two years, so and and and as was reportedly and retired one 7% of the float in the first quarter. So we think we are appropriately aggressive you know and we buy on the on the on the weakness in the marketplace and perhaps throttle back some as the stock.
Speaker Change: Price appreciates, but it's always a part of our calculus, but I would put our return to capital return of capital to shareholders up against any any company that you cover and I think we do quite well. So I think it would be fairly unlikely that we would borrow money to to continue to buy back stock.
Speaker Change: I think on the on the with respect to the sales questions. I think there is some noise in the respective numbers that I think render the comps with some of our fellow.
Speaker Change: Celebrate casters, a little bit difficult so starting with the station composition the markets that we have or are fundamentally different particularly with respect to our presence in the large markets.
Speaker Change: So you know I think you combine that with the fact that there's.
Speaker Change: In our core doesn't have digital they do there's been some additional products.
Speaker Change: Products launched in the digital space with some of those others that I think also make the comps difficult. So I will say with respect to national.
Speaker Change: And the.
Speaker Change: The larger initiatives, that's really where our focus has been and you know with the addition of the new Salesforce I mentioned the ability to go to market in a way that we haven't before.
Speaker Change: Our focus is really on the larger initiatives that have the potential to move the needle for the business at our scale.
Speaker Change: So we think about political.
Speaker Change: Both across local and national and the fact that our sales force is selling all of that together, we are optimistic that it opens up new channels for us.
Speaker Change: I'll just mention on political.
Speaker Change: We do intend to bring that Salesforce in house to to sell our political advertising at the station level.
Speaker Change: In 2025, given the size of the of the dollars and the quantum of dollars. We expected to receive this year, we chose to slow roll that transition to make sure. We hit on a hit on all the all the metrics and delivered our our revenue promise not only to ourselves but to our shareholders.
Speaker Change: But I do think you'll see.
Speaker Change: A stand up our political force as part of our National sales force, representing our stations all other political that we sell for any network or digital asset is all handled internally already so you'll see that incremental change at the end of this year and.
Speaker Change: You know I think anytime we can go to market with our entire portfolio.
Speaker Change: At one stop it creates an opportunity for incremental benefit.
Speaker Change: At this point I think it would be too early to quantify and next year will not have the tsunami of political dollars for this year does so I think the.
Speaker Change: The next comparable period would be 2026 versus 22, and 28 versus 24 to really see where the proof is in the pudding, but I would expect incremental revenue benefit but.
Speaker Change: No.
Speaker Change: Who knows when we go to market with a unified package, what we're going to market with now nationally using our networks as well as a local activation at scale using our stations is getting a great reception in the upfront market in the early going however, no dollars are booked yet so so stay tuned.
Speaker Change: Okay.
Speaker Change: Our next question comes from Craig Huber with Huber Research Partners. Please proceed with your question.
Craig Anthony Huber: Great. Thank you I'll just take my questions wanted Tom if I could please.
Craig Anthony Huber: <unk> W. Could you maybe share with us what the revenue percent change was there year over year, maybe talk about some of the wins you are having on the on the programming side. That's the first question.
Tom: Look I would say Craig we we're not we're no longer going to externally disclose the CW numbers separately.
Tom: Now on a corner you know we've owned it for more than a year. So in the quarter over quarter comparison is is good I would say just anecdotally you know it's.
Tom: It's still you know driven by national advertising market, which is still not.
Tom: A positive.
Tom: You know not in a positive place quite yet even though the even despite the green shoe.
Tom: What about the programming.
Tom: On the programming side, you know I think you've seen us announce you know a number of new programming initiatives with respect to our you know our new sports initiatives and we've tried to put on some programming that is.
Tom: Not just focused on kind of the 18 to 34 demographic, but be more focused on the the broader demographic of of the CW and that has been benefited in the first two quarters of the broadcast year. If you recall, we had the 2022 'twenty three broadcast season was really already pre baked for us when we bought the company so 23 months.
Tom: 24, we've had two quarters now of a sequential audience growth in prime time.
Tom: By virtue of the programming that we put on them.
Tom: You know put forth. So we feel good about it we think you know we think it would all just continued to do well for the rest of the year because some of those sports programming that we've announced.
Tom: Announced but haven't hasn't yet gone on the air will be on later this year. So we're looking we're looking fairly positively at this on a go forward basis.
Tom: As evidenced by our first quarter results.
Speaker Change: And then my second question News Nation can you, maybe just give us a further update there about how the ratings are trending there how the profits are growing.
Speaker Change: Sure.
Speaker Change: The network has been profitable from day, one because as you remember we're financing the journalism expansion with the money that used to go to syndicated program expense.
Perry A. Sook: So we will complete that transition on June the first we are the fastest growing cable network in terms of total audience in prime time, which is where the bulk of the revenue lies.
Perry A. Sook: And you know.
Perry A. Sook: As I as I reported in my remarks.
Perry A. Sook: We now are second only to the Fox News cable network in terms of cable news network distribution in the pay TV universe.
Perry A. Sook: With now more pay TV homes than either C N N or M. S. N. B C. So reception is not the problem awareness is the opportunity right now we have about a 35% awareness of the channel and the monthly awareness surveys that we do and you know when we started.
Perry A. Sook: Nation that was 11%.
Perry A. Sook: And so the more we can grow awareness are the more we think we will continue to grow the audience. We believe with the direct and indirect feedback that we get that are centrists approach we call. It the moderate majority of which is the demo and the folks we're trying to reach and our balanced coverage coupled.
Perry A. Sook: With the 5500 journalists that are stationed in 40 states around the country that can be first on the scene for the tornadoes in Michigan or Oklahoma as well as you know our sizeable Washington D. C Bureau that serves both our stations and our national assets.
Perry A. Sook: All of these things cumulatively, we think continuing to build on each other but my goal and I focused our senior management team.
Perry A. Sook: What can we do to increase awareness of the network. We know that when we have content that is exclusive and sought out like the fourth and final sanctioned Republican presidential debate.
Perry A. Sook: That more than a million viewers will show up at any one point in time.
Perry A. Sook: And so we know that they have no problem receiving the channel out now or are we our job is to continue to raise awareness continue to put on content that is differentiated and interesting and that that reaches the moderate majority that we believe comprises the majority of the viewers in this country.
Perry A. Sook: And Perry My last question is I appreciate your opening remarks about the state of the TV landscape streaming landscape. The DTC products out there et cetera, maybe just can you just finish up your thoughts there and how do you think this all plays out here longer term in terms of all these various streaming products out there versus the legacy products compete here.
Perry A. Sook: Well I think the announcement that you saw last night is further evidence of a re bundling of the assets in the industry and I said, we've got around the corner around the world to go around the corner and what we're doing is repeating basic cable basically if you will and the one thing again basic cable has that.
Perry A. Sook: An amalgamation of apps doesn't have as seamless navigation, which you know for our viewers of a certain age being able to you know change channels is kind of something we grew up doing is something we still like to do so I I think you'll see pricing rationalize I see there was announcements of that you know streamers are raising.
Perry A. Sook: Their prices and I think the consumer now looks at the cost of an Ala Carte broadband package and all of the streaming or other pay services I wanted to add on it can quickly eclipse the cost of the traditional bundle and you don't have again seamless navigation and some of the other things you may you probably don't have the number of content choices that you.
Perry A. Sook: You do in a in a traditional bundles. So we'll continue obviously to support the bundle and support our distribution partners as best we can.
Perry A. Sook: But the main reason we're not in streaming is because we just don't think it's a good business and so it's not a business that we want to get into to lose money.
Perry A. Sook: And so we think there are any number of ways that we can reach the consumer everyone wants to stream because they don't have broadcast assets that are free over the air that can reach 100% of the population I mean, so they're trying to expand outside of that traditional pay TV universe, but we we've been there for time in memoriam. So.
Perry A. Sook: The more the more things change the more they start to look the same as my personal view.
Speaker Change: Sorry, one more quick thing.
Perry A. Sook: We are your expectation to get to breakeven profitability on a sustained basis for Tobey Thats still late 2025, maybe early 2026.
Speaker Change: Yeah, we haven't changed anything on our point of view there.
Speaker Change: Okay, great. Thank you guys.
Speaker Change: Our next question comes from Jason Bazinet with Citi. Please proceed with your question.
Jason Boisvert Bazinet: I just had two quick questions.
Jason Boisvert Bazinet: Leon I was struck by your comment about getting down to two turns of leverage and I was just looking at my model.
Jason Boisvert Bazinet: And I guess have you down to sort of high twos and the political year.
Jason Boisvert Bazinet: We really saying to dot O or just something with the tool set in the kids in the in the twos, Okay, sorry, I missed that and my second question.
Speaker Change: Do you mind, just sort of it to.
Jason Boisvert Bazinet: To the extent you can just talking about I think between last quarter and this quarter. The FCC came out around your CW.
Speaker Change: In New York City, your ownership with that station.
Speaker Change: You mind, just sort of summarizing your position in the etsy fees and how you anticipate this all sort of playing out.
Speaker Change: Yeah, I mean look.
Speaker Change: We put out a response I think you're referring to the you know the FCC.
Speaker Change: I meant around tax.
Speaker Change: We put out a response, we think that the.
Speaker Change: We feel like it's really kind of an unvalued dated.
Speaker Change: Requests by the FCC.
Speaker Change: It's based on.
Speaker Change: Not a lot of things that we think are accurate and so we have filed a response and we're going to defend it vigorously and we will continue.
Speaker Change: Continue to see how that process plays out it will take some time to get through that processes, what we believe.
Speaker Change: Okay. Thank you very much.
Speaker Change: Our next question comes from Aaron Watts with Deutsche Bank. Please proceed with your question.
Aaron Lee Watts: Thanks for having me on two questions. If I may the first perhaps in parallel with Perry with some of your remarks, you've made already but with the recent introductions of a couple of notable streaming AD supported offerings that are bringing more targeted video inventory online.
Aaron Lee Watts: You see that as being a headwind for your business today or in the future and maybe perhaps contributing to the lack of sustained momentum on the national side and then secondly.
Aaron Lee Watts: I appreciate this isn't necessarily a new phenomenon, but perhaps topical with some of the MBA headlined with sports commanding.
Aaron Lee Watts: And even greater share of viewership, attracting the largest audiences and rights holders continuing to seek higher rights fees, how does that dovetail with commentary, suggesting growth in network compensation should be moderating for you another affiliate partners.
Speaker Change: Well, let me start with that and then I'll turn it over to Michael.
Michael Biard: The CW compensation from affiliates is a is not a significant number you know and what we're trying to do is build value in those affiliation agreements not only for our value in the network that we can then attempt to.
Michael Biard: Further monetize those agreements at a fraction of what each affiliate group might be paying any of the big four but you know success for us as it is a different bar, but you know what.
Michael Biard: When I look at sports we are NASCAR deal goes.
Michael Biard: In excess of seven years, we did a four year deal with ACC basketball, we've got a multiyear deal with WWE next.
Michael Biard: So.
Michael Biard: We have made we have over.
Michael Biard: And when people talk about sports.
Michael Biard: We as a company Nexstar has contracted for over 500 hours of sports that will flow primarily through our CW network and you know the largest CW affiliate group, which are our stations, which reached the CW and in excess of 35% of the country. So.
Michael Biard: You know it is obvious to us and I think by our actions and by Division we've laid out for the industry that you know live news and live sports right away, we're not the only one saying this and I think you're seeing other networks that are that are maybe either taking their cue or attempting to mimic what we have already.
Michael Biard: But live news and live sports is what drives eyeballs drives distribution drives value creation. So I think we've been very active in that and.
Michael Biard: 500 hours of sports and multiyear agreements, we feel pretty good about the CW.
Michael Biard: Cw's place in that ecosystem and and again the only thing that has aired on the CW. So far as one season of ACC and now our second season of lives. So all of the Big event programming is still yet to come. So you know, we think things will get pretty exciting pretty quickly as we approach and get into.
Michael Biard: The fall.
Michael Biard: Michael.
Michael Biard: Yeah, I'll just add to that I think if your question is really directed at the potential impact on our reverse comp as a result of potential NDA deals I guess I'll just reiterate what we said in the past on that with respect to exclusivity, whereas the value from our perspective vis vis our network partners is exclusivity I've said many times exclusivity is.
Michael Biard: The coin of the realm and.
Michael Biard: In our business and it remains to be seen I think what happens with those deals when they are announced and the value that ultimately is delivered to our.
Michael Biard: Affiliated stations so turning to your question on advertising I think listen.
Michael Biard: Listen it's early days I think the reports.
Michael Biard: On the street are that some of the Ah <unk>.
Michael Biard: Our entrance into a into the AD business in their AD supported streaming services.
Michael Biard: <unk> healthy aspirations with respect to the C. P M that haven't necessarily been met by the marketplace. So I think.
Michael Biard: Remains to be seen how that shakes out but for our business I'll just return to the strength of sports right, particularly as it relates to.
Michael Biard: The CW that is where a lot of our investment in the future.
Michael Biard: Turning to sports and our ability to not only drive audience, but drive advertising revenue. There I think the you only have to look at.
Michael Biard: Back as far as the most recent quarter right in the first quarter, we saw consistent dramatic demonstration of the enduring strength of sports NFL set New Records College football set New records, we saw women's basketball set new records. So.
Michael Biard: Sports continues to demonstrate strength I think.
Michael Biard: Our programming will distinguish itself in our ability to monetize it will be different.
Michael Biard: Really different than the advertising and the S. Five products based on our ability to aggregate audiences.
Michael Biard: And live programming.
Speaker Change: Thanks, very much guys.
Michael Biard: Sure.
Michael Biard: Our next question comes from John Cornish JK Media. Please proceed with your question.
John Kornreich: Yeah good morning.
John Kornreich: If you extrapolate out about three years.
John Kornreich: Given.
John Kornreich: How are you trending now and given no change in station rules, you're going to be down very close to X and leverage and 25 million shares.
John Kornreich: Is there any point that going below two X.
Speaker Change: Is there any benefit to.
John Kornreich: To it at all.
Speaker Change: I mean look I think at that point in time, we would have to kind of reevaluate what our capital strategy would be we obviously believe that.
Speaker Change: Third return gives it that gives you a whole there's a better total return.
John Kornreich: But we would have to see what the you know what the market looks like at that point in time, but that would be a very low leverage number I agree.
Speaker Change: Okay, I mean with the way things are going now you're sort of in a <unk>.
Speaker Change: Slow going private mode.
John Kornreich: Frankly.
John Kornreich: Dan.
Speaker Change: I mean, where do you see this company in three or four years.
John Kornreich: Or do you see the company in three or four years.
Dan: Well I I see our basic mission, John not changing of providing.
Dan: Providing content and helping you know local businesses sell stuff I mean, that's our reason to exist.
Dan: When you strip away all the noise. It is a very simple business model that we operate on here right.
Dan: Given the discount at which the stock trades compared to its fundamentals.
Dan: We continue to believe there's a lot of way for investors to win and you know if if it were the principal or acquirer of our stock then obviously the company will win and investors in the company win but I.
Dan: I point back to that article that was talking about the 100 baggers over the last 15 years and John you were around during that time I Remember you asked me on the call is into your free cash flow per share higher than your share price in 2008, and it was and those that joined the party in 2009 and stayed with it through the end of last.
Dan: Last year, which is what this article was all about would've seen in excess of a 300% return over that 15 year period on their equity, which is the third largest return of any public stock with a market cap over five.
Dan: 500 $500 million so.
Dan: I think that you know long investors have been rewarded by this company.
Dan: With that amount of.
Dan: On an unused powder, we look at the balance sheet as you know an asset of the company and you know one of the ways, we produce that outsized return.
Dan: Was through make taking some big swings media General and Tribune. So we will continue to look at it.
Dan: We're being very patient right now given not only the cost of capital, but the opportunities that are out there, but you know we will continue to look at.
Dan: Opportunities to grow the company and create additional value for shareholders beyond the embedded 20% return of us buying back our stock and if we feel there is a risk adjusted adjusted return.
Dan: An acquisition out there of any scale, then we would certainly diligence the heck out of that and and try and get to the finish line. If if if if everything proved but I think the company looks a lot like it does if I had to bet I would bet. The company will be larger three years from now than it is today.
Dan: What acquisition will lead to that in combination with our organic growth I can't really say, but.
Dan: But I'm excited too to run out those ground balls and find out.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Jim Goss with Barrington Research. Please proceed with your question.
Speaker Change: Thanks.
James Charles Goss: I Wonder if you might talk a little bit more about.
James Charles Goss: The Comscore Nielsen.
James Charles Goss: Effort to develop the linear and cross platform audience measurement.
James Charles Goss: Information that should inform your national sales organization that you are now.
James Charles Goss: Working with.
James Charles Goss: Is there some measurable impact or is this primarily a support of effort to the targeting efforts than pricing.
James Charles Goss: Is there a way to look at it.
James Charles Goss: Yeah.
James Charles Goss: Some identifiable way.
Speaker Change: Hey, I'll I'll just answer this you know obviously, we reported that we struck new deals with both Comscore and Nielsen and we're excited about the new data that they've got coming into there.
Speaker Change: Services that hopefully is going to be able to provide us with better insights and information about who's watching and be able to kind of talk to advertisers about the breadth of our audiences and the reach of our audience that is we think is second to none.
James Charles Goss: But I think from a tangible impact perspective, I think it's to be determined.
James Charles Goss: We are continuing to work with these providers to get us the best information that we can then utilize with our clients.
James Charles Goss: Okay and should provide some upward bias to our.
James Charles Goss: Yeah.
Speaker Change: So I would imagine.
Speaker Change: Well, we've gone to the market.
Speaker Change: In the upfront and said that Comscore would be our preferred currency upon which to transact but.
James Charles Goss: I found out in kind of 45 years in the broadcast business you can't make a lot of money trying to tie your clients what to do so the clients will buy in March <expletive> term dictate the currency.
James Charles Goss: And we will obviously react and adjust as best we can but you know comscore has a much larger dataset and not surprisingly you know we think as you know provides better numbers.
James Charles Goss: Over the long term, but we will transact with our customers on the basis.
James Charles Goss: That they would like to transact upon.
James Charles Goss: Okay.
James Charles Goss: One thing I was wondering are there any other.
James Charles Goss: Nexstar stations to transition to the CW or are you pretty much through that process.
James Charles Goss: From a from the perspective of there.
James Charles Goss: There are additional opportunities out there you know as you saw that we even bought a station that we intend to make into a CW network at San.
James Charles Goss: San Diego.
James Charles Goss: Theres other opportunities we just we'll look at those on a case by case basis as we move forward, but that I'm glad you.
James Charles Goss: Brought it up because it's an important point for us because we've been able to already transitioned 12 market then that generate significant and EBITDA for us on the station side of the ledger, which just goes to our overall thesis around making this acquisition.
Speaker Change: Okay and the last thing.
James Charles Goss: Note that our Nexgen is now over 50% when you added.
James Charles Goss: I think it was Chicago and San Diego.
Speaker Change: I was wondering if.
Speaker Change: And are there any priority applications now that you're at this stage you talked about TV versus data over time.
Speaker Change: And you've also been ambitious about ramping up monetization I wonder if you might give us an update on that area as well.
Speaker Change: Well it is an area, where I'm spending a fair amount of my time as well as Brett Jenkins our CTO.
Speaker Change: We do have a.
Speaker Change: Dedicated BD personnel that are involved in.
James Charles Goss: Exploratory conversations.
James Charles Goss: On behalf of our company, but also in concert with the two partnerships we've historically.
James Charles Goss: <unk> been involved with one with Sinclair and on what scripts and so.
James Charles Goss: The.
James Charles Goss: There is high interest, we just completed a test with an auto manufacturer and one of our markets.
James Charles Goss: And regarding both data and video delivery to an automobile.
James Charles Goss: And the preliminary results were that they were impressed with the picture quality and the stability of the signal using our threet auto as a delivery mechanism. So.
James Charles Goss: You know this is long tailed development as you can imagine because theres got to be proof of concept test trials before people are willing to put pen to paper and spend and spend a lot of money with us, but that's the phase in which we're in and and I continue to believe that you'll.
James Charles Goss: You'll hear about commercial clients before this year is out and you'll see money continued start to flow from some of these new applications.
James Charles Goss: As early as the later this year, but more likely next year and then meaningful money.
James Charles Goss: If we are able to.
James Charles Goss: Sunset the simulcast requirement to free up more bandwidth to be able to do more things then, we'll we'll be able to generate more more money. So there is a regulatory piece as well that has to play into all of this but.
James Charles Goss: They are the velocity of the conversations if that's any any constellation to your help to you have dramatically increased the amount of time, we are spending in meetings with people on this topic is I would say more than double of what it was a year ago. So the cadence has increased.
Speaker Change: Alright, Thank you I appreciate it.
Speaker Change: Our next question comes from Alan Gould with Loop capital. Please proceed with your question.
Alan Steven Gould: Yeah. Thank you for taking the question.
Alan Steven Gould: Terry going back to the concept of big swings.
Alan Steven Gould: The press is reporting that if a paolo and Sony are successful going after paramount of knowledge big yet.
Alan Steven Gould: Then intend to sell the CBS stations.
Alan Steven Gould: One I know you guys looked at ABC, when Bob Iger through that.
Speaker Change: No doubt there that it was potentially for sale and I know CBS has a lot bigger coverage would that even be a possibility.
Alan Steven Gould: Just physically to do that and to what is the value of stations without the network.
Speaker Change: Well, let's see there's a lot to unpack there first of all I don't know that we ever commented on looking at ABC, others commented on our behalf, but I don't think we ever have or ever would.
Alan Steven Gould: Confirm or deny rumors about what we may or may not be considering vis vis acquisitions.
Alan Steven Gould: Obviously, given our station footprint.
Alan Steven Gould: The digestion of CBS station assets would be a tough patch, particularly under this regulatory environment and regime.
Alan Steven Gould: If that were to change maybe our.
Alan Steven Gould: Our opinion would change.
Alan Steven Gould: But you know that that certainly would have to happen I think for anyone to have confidence they can pursue a complicated regulatory transaction.
Alan Steven Gould: In the current environment.
Alan Steven Gould: At what is the value of stations without well WGN in Chicago as an independent television station it will be rejoining the CW network.
Alan Steven Gould: It produces 109 hours a week of local news and is generally the number one or number two builder in that marketplace.
Alan Steven Gould: Without the benefit of a network affiliation.
Alan Steven Gould: For a more of its commercial life than it had a brief association with the CW and we'll be coming the CW be coming back home. This fall.
Alan Steven Gould: Quite frankly that'll benefit the network more than it will benefit WGN I mean, they'll love, having the sports, but they've had some of that most of that on a hybrid.
Alan Steven Gould: Situation in that marketplace since we began.
Alan Steven Gould: Programming sports on the network, but.
Alan Steven Gould: Strong stations.
Alan Steven Gould: And I tell our people all the time there were.
Alan Steven Gould: TV stations before there were television networks and there'll be television stations. After there are TV networks and.
Alan Steven Gould: And from my point of view, if you're serving your community with a robust local news and commerce opportunities, you're you're going to be in business. It doesn't matter what programming you rent and from whom you rent it to fill the times when youre not programming locally and that's basically what our network affiliation is at this point.
Speaker Change: Okay. Thank you.
Speaker Change: Our next question comes from Barton Crockett with Rosenblatt Securities. Please proceed with your question.
Barton Evans Crockett: Okay, great. Thank you.
Barton Evans Crockett: I wanted to drill down a little bit on the advertising commentary.
Barton Evans Crockett: And I was just wondering if you could give us a little bit more granularity on what is driving the inflection to you know kind of a better trend in the second quarter versus the first quarter.
Alan Steven Gould: Is that largely kind of bringing up our national sales force is it largely kind of getting past some of the super.
Alan Steven Gould: Super Bowl type you know comp issues or is there just a feeling that the AD market is firming up maybe because the macro feels better maybe people are just getting more accepting of this higher for longer interest rate environment.
Alan Steven Gould: And within that you gave kind of local national.
Speaker Change: <unk> could you give us remind us again the split of that in your AD revenues.
Speaker Change: Yeah. So.
Alan Steven Gould: Local revenues are just under.
Alan Steven Gould: 70%, it's kind of somewhere between 65 and 70% of our advertising revenue excluding political comes from our local business I would say you know in general I think our thought process on the national side as it is kind of a firming of the market which is.
Alan Steven Gould: A positive after many quarters of decline.
Alan Steven Gould: Starting to see some of that kind of growth come back, especially you know in the back half of the year, where the comps will be a lot easier.
Alan Steven Gould: I would say also you know there's a few categories like sports betting that you know are now kind of down to a low number that are.
Alan Steven Gould: There's some positivity in terms of some of those comps on a on a go forward basis, but I think in general you know from a national perspective, it's more kind of affirming of the overall overall market than than anything else.
Alan Steven Gould: Okay and.
Speaker Change: Is there anything you can elaborate on the wall aren't at the local level.
Speaker Change: These settings, where I guess where are you.
Speaker Change: Local has been pretty resilient I mean, I think that you know we saw a little bit of.
Speaker Change: Weakness in the in the first quarter and but.
Alan Steven Gould: It's not anything to kind of talent and that's why we haven't counted it because it's been a very stable sort of environment on the local side.
Alan Steven Gould: And faith in the face of the economic issues in terms of the advertising market.
Speaker Change: Okay, and then switching.
Alan Steven Gould: Switching gears on the distribution revenue.
Alan Steven Gould: One of the things underlying.
Alan Steven Gould: Your commentary there is that you talked about a low single digit growth in homes.
Alan Steven Gould: And which is partly some new carriage how sustainable is that I mean is there in three or four quarters, while we comp that in and Youll revert to the industry trend or just thoughts about the sustainability of that would be interesting.
Speaker Change: I know that Youre, absolutely I mean, you're right I mean, we're gonna combat I think you saw that.
Speaker Change: We put out some press releases as we've acquired stations he put out press releases as we got carriage on the V. Mvpds for our CW as our minds and our independence and so you can kind of look at the timing of those releases and see when those are going to roll off in terms of a year over year comp, but look I think as we've as we've said before at the end of the.
Speaker Change: Des we are as the market goes we kind of go because the you know the lion's share of our our revenue is really tied to kind of the overall pay TV market.
Speaker Change: And just to try and you know the organic trends in that in that part of the business.
Speaker Change: We have reached the end of our question and answer session I would now like to turn floor back over to Terry for closing comments.
Terry: Thank you operator, Nexstar is consistent record of operating execution cash flow growth and capital allocation.
Terry: <unk> strong shareholder returns continues to differentiate differentiate nexstar from its peers and its larger diversified media companies and as I mentioned earlier, we were recently recognized by the Investor Relations service provider quarter ranked the <unk> best stocks over the last 15 years for companies in the European Union and North America.
Speaker Change: With a market cap of over $500 million Nexstar was ranked number three on that list with more than a 300 times return obviously, the only media and telecom company on that list. So while we look to the past to focus our goals for the future. It is one step at a time, we expect to build momentum through the second half of fiscal 'twenty four and we are.
Speaker Change: Remain excited about the many opportunities ahead of us to deliver long term value to our employees partners and shareholders. Thank you everyone for joining US today, we look forward to speaking with you again, when we report our second quarter results.
Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: [music].