Nexstar Media Group Inc at Stephens Investment Conference Transcript

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

Question: Nicholas Todd Zangler - Stephens Inc., Research Division - Analyst : Yes. But maybe just as an introduction, would you mind discussing the reach, the scale of your assets how you feel about your positioning, the strategy versus your peers and other broadcasters within the current market environment.

Question: Nicholas Todd Zangler - Stephens Inc., Research Division - Analyst : And I'm just going to allow the questions up. And so I kind people want to watch them and everybody in the audience, guys want to step in. Sorry, go ahead. Unidentified Participant Just a broad picture, number of minutes spent on this network after that trend, individual, I'm just thinking (inaudible) in the last 5 years. How much do I guess way far out to the next. So I am watching at on the phone. I'm not watching our screen.

Question: Nicholas Todd Zangler - Stephens Inc., Research Division - Analyst : Honestly, I was hoping just to talk about sports the whole time. There's some exciting things going on here, but I'll walk through the overview of the company. But I am going to get into a bunch of sports-related questions. But before I do that, Mike, you're almost 3 months into the role as COO. Can you talk about your background hailing from Fox and how that background helps with the strategic direction the Nexstar is pursuing.

Question: Nicholas Todd Zangler - Stephens Inc., Research Division - Analyst : Well, that's what I'm most excited about. The sports content and all that's coming to Nexstar Media, either local or broadcast. I mean opportunity to some of those ACC network games on the CW. But obviously, within this sector, I think it's the most exciting thing that's happening for broadcast and it's happening for all you guys, Nexstar Gray, scripts, you're all gaining incremental access. It's either from the move from logo content from RSNs back into the RSN model? Or you've got -- I mean, even the NBA is talking about potential looking for broadcast partner. The sports dynamic is changing. They want broader access and I think they're looking to the networks or the broadcasters to potentially provide that. So can you just talk a little bit, starting high level REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 16, 2023 / 4:00PM, NXST.OQ - Nexstar Media Group Inc at Stephens Investment Conference about the benefit that the broadcast model in general brings to sports and what it kind of looks like now versus potentially what it could look like going forward?

Question: Nicholas Todd Zangler - Stephens Inc., Research Division - Analyst : If you think about that dynamic, I mean, what's been announced thus far on the local side, you got Scripts talking about gaining 2 exclusives for some hockey teams, more weather hockey teams, so they're going to benefit their advertising revenues by $24 million on a base of $600 million, right? So like 2 hockey teams, 2 sports relationships, is that meaningful for Scripts. And obviously, Gray is formulating some unique relationship with the Phoenix Suns. You guys thus far, I would say, have been more focused on what you're bringing to the national stage versus with the CW, right? But you do have the local content exclusive with the big clipper. So can you just kind of frame up where you see more of the opportunity going forward? Is it going to be more steered towards, what I call it, the national market with the CW? Or do you see more of an opportunity on the local side? And then just given your footprint, I would imagine that you are in a more advantageous position and any other broadcaster to attract these local teams. Maybe you can just dissect that a little bit when you think about the opportunity.

Question: Nicholas Todd Zangler - Stephens Inc., Research Division - Analyst : Great. Yes. So we'll continue to look for more sports deals as the time goes on. Go ahead? Unidentified Participant We force them to make a guess on the RSNs. I know the tone of your voice and your merger suggests you to the (inaudible) notes, but you're educated (inaudible) assuming your background, what do you think that is. We're going to see a bunch of billionaires come in and do vanity buy like Time, Magazine or The Washington Post.

Question: Nicholas Todd Zangler - Stephens Inc., Research Division - Analyst : You'll see some of that, I think. In other words, the vanity buys have already happened around the teams. And the question is, do they sort of pivot into owning their own distribution platforms. I think there will be some of that, but I think mostly that will be -- you can look at what's happening in Washington, all right, around the (inaudible) Group, right, where they're going to launch a direct-to-consumer product and try and pick up, I think, subscale, but they'll pick up some viewers and fans outside of pay-TV. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 16, 2023 / 4:00PM, NXST.OQ - Nexstar Media Group Inc at Stephens Investment Conference But I think what you will see is that paired up with broadcast to get the reach. And I think the most sort of progressive thinker on that is a billionaire with a vanity buy in the suns, right? And you can see the deal that they did with local broadcast paired up with a D2C app. That D2C app, I think, allows them to sort of reach into the corners and maybe experiment with some different programming, but the sort of cornerstone or bedrock of it all, as it relates to really making sure that the product is widely available back to growing that fan base for sustaining it and then growing it that Bedrock is broadcast, right? And if you listen to the executives at the Suns talk about it. That's exactly the way they see that. So I think you will see more of that going forward, whether some subset of the RSNs survive. I think is the question, there's no question that it won't emerge looking like it does right now. I think, for sure, that's not in the cards. I think the only question in my head is whether some number of those RSNs and they really are operated as individual businesses. They lose scale as they start to sort of really operate individually, which I think creates even more pressure on a challenged business. But I do think there is a business model for 2 or 3 of them that cover broad swaths of the country. I'm thinking now in the Southeast and Florida in particular, where there are economies of scale and really strong teams there and long-term rights deals that they could probably rationalize. But I think that's the exception to the general rule. Unidentified Participant You may talk a little bit about (inaudible) so a lot of these initiatives, is this -- if I think about '24 cash flows and to sort of mean that we're going to kind of maybe flat even lower, but then looks (inaudible) is the same all these contemplate when you guys did the deal? I'm just trying to think about this specifically. Should we be thinking about '24 cash loans lower but maybe greater payoff or this is kind of what we expected.

Question: Nicholas Todd Zangler - Stephens Inc., Research Division - Analyst : Initially move from (inaudible). I mean I really thought of it as like costs take out old business.

Question: Nicholas Todd Zangler - Stephens Inc., Research Division - Analyst : I see like there's a lot of -- I won't say that was (inaudible) it sounds like it was there's a lot of offensive buyer. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 16, 2023 / 4:00PM, NXST.OQ - Nexstar Media Group Inc at Stephens Investment Conference

Question: Nicholas Todd Zangler - Stephens Inc., Research Division - Analyst : Well, I think in getting to these next few questions, I think the distribution revenues is a hot topic as well in the face of declining subscriber count from MVPD. So I wanted to touch on that as well because this is a dynamic that you continue to outrun here, but obviously, your paid distribution fees from the various MVPDs, the Comcasts of the world, charters of the world. They are shedding subscribers at an accelerating pace, right? Comcast was down 13% year-over-year from a subscriber count basis, yet at the same time, you guys are growing distribution fees, right? And you exhibited that into this next quarter's guide, the DIRECTV impact affected last quarter, but we're modeling 13%, I think, next quarter for distribution fees. And obviously, that just showcases that the math is simple. It's subscribers times, subscriber fee per subscriber. And on a net basis, you continue to grow that. So you're able to continue to extract higher fees per user. Can you talk about how you've been able to do that and the leverage you have to extract that value and I've got a few distribution questions that kind of follow up on that, but maybe that's just a good way to start.

Question: Nicholas Todd Zangler - Stephens Inc., Research Division - Analyst : No. Answer my next few questions.

Question: Nicholas Todd Zangler - Stephens Inc., Research Division - Analyst : So basically, to summarize, you see 2 key benefits. One, if we continue to see continued bundling of D2C into the cable offerings. What you could potentially see is a stoppage of the bleeding on the MVPD subscriber attrition that you're seeing there. That's benefit number one to you. And number two, you're seeing them you curate that offering and make more room to pay the people that actually matter by dropping some of those local stations and then you point to the amount of viewership that you track within that bundle, and that's where you can go after them with obviously, higher distribution fees, which leads me to my next question. Like in the investor deck, you talk about the fees that you get right now versus what you could potentially extract if your fees match your viewership, right? And that's -- I mean, the big numbers, right? I think 35% to 75% depending on how you look at it. I guess my question is, why don't you feel that it obviously presents a more long-term tailwind for you to continue to extract higher distribution fees. But if right now, you're giving away a product that -- and you're not being compensated for it, given the viewership of extracts, why can't you be more aggressive right now and just basically command the value you currently offer into each system.

Question: Nicholas Todd Zangler - Stephens Inc., Research Division - Analyst : It was positive about what you just saw is that the TVs are data. They're curating the offering.

Question: Nicholas Todd Zangler - Stephens Inc., Research Division - Analyst : Yes. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 16, 2023 / 4:00PM, NXST.OQ - Nexstar Media Group Inc at Stephens Investment Conference

Question: Nicholas Todd Zangler - Stephens Inc., Research Division - Analyst : Got it. We're over, but thank you guys so much.

Question: Nicholas Todd Zangler - Stephens Inc., Research Division - Analyst : Appreciate it.