Nexstar Media Group Inc at Morgan Stanley Technology, Media & Telecom Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Sid Garg - Morgan Stanley & Co LLC - Analyst : <_ALACRA_META_ABSTRACT>Great. So Nexstar reported record annual revenues of $5.4 billion, adjusted free cash flow of $1.2 billion in 2024, differentiating itself from other media companies that have more exposure to cable nets. As a strong advocate of the broadcast model, what sets broadcast apart from cable networks and streaming services in terms of value and growth potential?

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

Question: Sid Garg - Morgan Stanley & Co LLC - Analyst : Great. Look, there's been a lot of focus on sports moving potentially to the streaming services, the Netflixes, the Amazons of the world, even Peacocks. There's speculation of live sports on lender TV. Where do you come out of that? What is the future of live sports in your mind?

Question: Sid Garg - Morgan Stanley & Co LLC - Analyst : Got it. Great. I guess, switching to kind of the same theme of you've seen three of the big four networks develop their own direct-to-consumer distribution strategies. Fox was here, Lachlan was here. He said he's got plans to join the pack, if you will. As a leading affiliate for each of these big four networks, how do you see these direct-to-consumer initiatives and the pressure that these linear networks are facing? How does that impact your relationship with them?

Question: Sid Garg - Morgan Stanley & Co LLC - Analyst : Got it. We've seen a significant amount of re-bundling at a D2C level, there's an introduction of skinny value price bundles. Charter indicated that they're starting to see some early signs of improving subscriber trends. What is your expectation for subscriber attrition going forward?

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

Question: Sid Garg - Morgan Stanley & Co LLC - Analyst : Great. I want to dig down. I think you mentioned started with CW. Can we -- maybe the next few questions I want to ask about CW. You've been very aggressive in expanding the sports programming at CW. Can you give us some way of what have you accomplished so far? And then importantly, does CW have potential to compete with big four networks?

Question: Sid Garg - Morgan Stanley & Co LLC - Analyst : You've moved 17 CW affiliations into your portfolio covering 45% of the households. Can you describe what's driving that strategy? And why is that important?

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

Question: Sid Garg - Morgan Stanley & Co LLC - Analyst : Great. Perry, you mentioned News Nation. You've had significant wins at News Nation. The network hosted the final Republican presidential primary debate, was the first to call the election for President Trump. How big of a contributor could News Nation be to your business? And how are you -- what are you most excited about at News Nation?

Question: Sid Garg - Morgan Stanley & Co LLC - Analyst : That's very exciting. Shifting to advertising and political advertising in '24 set a record with growth over 2020, if you exclude the Georgia run-ups. CTV became a big sort of player in the election cycle how did Nexstar perform? And what role did broadcast play in the political campaigns?

Question: Sid Garg - Morgan Stanley & Co LLC - Analyst : And then I guess based on 2024, your performance results, what are your expectations for political advertising in the future? election year?

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

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

Question: Sid Garg - Morgan Stanley & Co LLC - Analyst : I guess outside of the ownership cap, what other restrictions are you focused on with this deregulation?

Question: Sid Garg - Morgan Stanley & Co LLC - Analyst : And any of these deregulation, do these require an act of Congress? Or you just spoke about Brendan Carr, could the FCC move in laterally to change this restriction?

Question: Sid Garg - Morgan Stanley & Co LLC - Analyst : And in the event deregulation happens, Nexstar, with your scale, your balance sheet, seems to be a logical acquirer of broadcast assets? Where do you expect Nexstar to focus its M&A efforts? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 9:05PM, NXST.OQ - Nexstar Media Group Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Sid Garg - Morgan Stanley & Co LLC - Analyst : Great. We have a few minutes left. So let's get to capital allocation. You've been a strongly allocated capital offering a nearly 5% dividend yield following your 12th consecutive annual dividend increase in Jan. You've repurchased about 9% of your stock back in 2024, while also reducing debt, resulting in, I think you mentioned 2.91x net leverage. Why do you believe this is the right strategy for capital allocation? And then how does this impact all the M&A discussions?

Question: Sid Garg - Morgan Stanley & Co LLC - Analyst : Great. Maybe I can squeeze in one more. You've been very vocal about the potential of spectrum in ATSC 3.0. You recently formed a joint venture, Edge Beam wireless to provide high-speed data and transmission services. I guess how big is this market opportunity? And where do you expect to see meaningful revenues for Nexstar in the future? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2025 / 9:05PM, NXST.OQ - Nexstar Media Group Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Sid Garg - Morgan Stanley & Co LLC - Analyst : That's great. We're out of time. So thank you again for joining us. Great presentation.