Research Update: TEGNA Inc. 'BB+' Issuer Credit Rating Affirmed; Thresholds Tightened; Outlook Stable

We believe TEGNA Inc.'s gross retransmission revenue, which had been a growth vehicle for the company and its local broadcast TV peers over the past decade, will decline in 2024. Beyond this year, we anticipate gross retransmission revenue will be relatively flat to down in the low single-digit percent area, depending on the cadence of contract renewals with pay-TV distributors. We tightened our upgrade and downgrade thresholds for the current 'BB+' rating to 2.5x-3.5x from 3.25x-4x as increasing business risks results in lower leverage tolerance. We affirmed our 'BB+' issuer credit rating on TEGNA. The stable outlook reflects our expectation that TEGNA's S&P Global Ratings-adjusted net leverage will remain between 2.8x-3.0x over the next year, with more than half of

...- We believe TEGNA Inc.'s gross retransmission revenue, which had been a growth vehicle for the company and its local broadcast TV peers over the past decade, will decline in 2024. Beyond this year, we anticipate gross retransmission revenue will be relatively flat to down in the low single-digit percent area, depending on the cadence of contract renewals with pay-TV distributors. - We tightened our upgrade and downgrade thresholds for the current '##+' rating to 2.5x-3.5x from 3.25x-4x as increasing business risks results in lower leverage tolerance. - We affirmed our '##+' issuer credit rating on TEGNA. - The stable outlook reflects our expectation that TEGNA's S&P Global Ratings-adjusted net leverage will remain between 2.8x-3.0x over the next year, with more than half of its free operating cash flow (FOCF) going to shareholders through share repurchases and dividends....

Research Update