Nexstar Media Group Inc Q3 2024 Earnings Call Summary

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

Question: Daniel Kurnos - The Benchmark Company - Analyst : Great. A few quick ones here. Perry, just how likely do you think regulatory changes? And how does that affect your capital allocation plans given the change in administration. And then on News Nation, it was a good watch on linear, by the way, on election night. Do you think these nation benefits from some of the headwinds swirling from advertisers worried about brand safety. And then lastly, Mike and/or Lee Ann, just on the CW, you the math suggests you're getting pretty close to profitability here. So I just love to get an update on the path going forward now.

Question: Benjamin Soff - Deutsche Bank AG - Analyst : I appreciate all the color on the video ecosystem. I'm wondering you guys have a big round of renewals coming up next year. How do you see the ecosystem during that round of renewals compared to prior cycles as far as your ability to take price or any other important factors. Thanks. Unidentified Company Representative Well, I think the biggest unknown, obviously, is the rate of attrition. We opined on that, and I think there's data points out there to support our point of view. I think in terms of how distributors are approaching deals, I think you can look at the recent trends and obviously from DIRECTV to Charter, in particular, they've pursued a model of bundling D2C products with their linear video. As Perry said in his opening remarks, we sort of look at ourselves in the same boat as Fox in that regard, which is that's kind of someone else's war to worry about how do they reconcile their D2C products with their linear. In terms of how do we sell our linear products, I think we'll sell them the same way we always have. And in fact, with increasing appeal at the CW and at New Nation for the reasons that we articulated. So I think we'll go into the business the same way we always have. We think our content will not only continue to resonate. But as we mentioned in terms of the concentration of viewers who are more prone to watch our programming inside the bundled TV ecosystem, we think we'll go from strength to strength on that going forward.

Question: Steven Cahall - Wells Fargo Securities - Analyst : So your full year political number, I was just wondering if you could put that in context of some of the guidance you gave during the year. I think that was something like low teens percentage of broadcast political spend. I think the dust is still settling in terms of what the overall cycle was and what it was for broadcast. So just curious how that number kind of fits in there. And certainly, with at least 10-year periods, we saw some money move late in the cycle. So it does seem like we continue to get more and more dynamic, but also bigger cycles. So again, I would just love to kind of get your context within all of that. And then you talked about the 54 CW affiliate stations you now have. How do we think about what net retrans looks like for the CW at this point and what you're able to drive there from a cash flow perspective? Is that one of the key contributors to the improvement in losses in the quarter? And I was wondering if you have any thoughts about maybe when you might get to a breakeven on the CW.

Question: Jason Bazinet - Citigroup Inc. - Analyst : I just want to follow up on your regulatory comments. I get your point about sort of a broad regulatory push at the national and local level going through Congress, working with Democrats and Republicans. But my question is, is there a subset of issues that you're interested in that could just make its way through a rule-making at the FCC that could be sort of simpler and we sort of already have the Democrat/Republican backdrop, given that we know the answer to the presidential election? Or is that not the right way to think about it, we should be focused on loss getting passed or bills coming out of Congress and getting signed by the executive.

Question: Craig Huber - Huber Research Partners - Analyst : My first question, Perry, we haven't heard from you in a while alternative uses of spectrum here, how to potentially monetize that going down the road. I know it's a long-term proposition. Some big upside potentially for you in the industry. But what have you guys been working on lately. Is there anything new to talk about shareholders? That's the first question. 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 07, 2024 / 3:00PM, NXST.OQ - Q3 2024 Nexstar Media Group Inc Earnings Call

Question: Craig Huber - Huber Research Partners - Analyst : My second question, the CW loss is down $30 million to $36 million year-over-year in the third quarter. Is there anything that you guys would want to call out to help drive those those losses lower? Is it all just cost savings? Or is there anything on the revenue side you can call out as well?

Question: Craig Huber - Huber Research Partners - Analyst : And my final question, if I could. You guys talked about being down low double digits for ad revenue in the fourth quarter, obviously hurt by political displacement as you talked about. If you could isolate just the month of December, how the bookings or the TV pacings are looking December year-over-year at the same juncture, is there any material change there in the trend which we've seen in prior months before this displacement came through? Is the underlying trend looking better in December? Or is it more of the same?

Question: Craig Huber - Huber Research Partners - Analyst : Sorry, when you compare December versus a year ago, how December was looking at this juncture, how is that trend looking.

Question: Craig Huber - Huber Research Partners - Analyst : I'm just trying to get a sense of what the bookings at this stage today on 2 days after the election, looking out into the month of December, how is that looking versus December last year at the same juncture, 3-plus weeks or before the month starts.

Question: James Goss - Barrington Research Associates, Inc. - Analyst : Following a little to the discussion we've been having here. Is it reasonable to think that the next near-term phase of growth is more likely to come from cost efficiencies more than revenue growth as retrans levels pass and CW and News Nation are still in relatively early stages of their development? Or are there other drivers that we should be focusing on -- on the revenue side?

Question: James Goss - Barrington Research Associates, Inc. - Analyst : All right. One other thing. I'm wondering, are you -- do you have -- or could you update us on app-based delivery of full local affiliates and smart TVs rather than the fast versions and whether or not pursuit of that benefits your ad revenue dollars in a meaningful way. Unidentified Company Representative Sure. We're in the process actually of expanding those products right now. So when you talk about full affiliates being delivered via apps, I think you need to make a distinction between the big 4 affiliates versus our independent stations. And then inside the big 4, the network programming versus the non-network programming. Obviously, we don't have the right to take the network programming outside of CW onto digital apps that we control. So our business there much as it already is in the case of KTLA, WGN, for instance, where we have some robust apps with healthy audiences there that are comprised primarily of local programming, in fact, almost exclusively of local programming, including digital-only programming, we will continue to take that model and expand it across the company. We're in the process of doing that. I think you'll see some announcements of launches certainly this year and going into Q1 at scale.

Question: James Goss - Barrington Research Associates, Inc. - Analyst : Okay. Maybe one last one. When you were talking about the deregulation potential. I guess one of the holy grails was a duopoly of top 4 station -- 2 of top stations in large markets. Do you think that's a more realistic opportunity with the new Republican administration.

Question: Barton Crockett - Rosenblatt Securities Inc. - Analyst : The regulatory situation is just very interesting given the change and also a discussion from some others on earnings calls here in your sector. And I was just wanting to kind of ask about one of the regulations, specifically the ownership cap at 39%, maybe adjusted for the UHF, which obviously Internet guys don't face there's an inequity there. What do you think are the prospects potentially for that being eliminated that ownership cap? And if it was, given all the other antitrust concerns, do you think it would matter for you guys? Or do you think that could be maybe a big opportunity to get back into the M&A game.

Question: Barton Crockett - Rosenblatt Securities Inc. - Analyst : Okay. And then also on the topic of M&A, the Comcast came out with the announcement that they're going to explore spinning off their cable networks. And David Zaslav, I think, was talking about different levels of M&A interest at Warner Bros. So it seems like there could be some cable networks out there that could be something you could look at from an M&A perspective in theory. And I was just wondering, is that an asset class that at all interest you? Could there be you've done some stuff kind of around that with News Nation and CW sort of. But could cable networks at bigger scale, be interesting? Or is that really just a distraction from what you do?

Question: Barton Crockett - Rosenblatt Securities Inc. - Analyst : Okay. And I apologize if that's a duplicate question, just juggling some other things coming in. But thank you for the answer. I appreciate it.