Nexstar Media Gr Q3 2026 Earnings Call Transcript

Nexstar Media Gr (NASDAQ:NXST) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Nexstar Media Group reported record third-quarter net revenue of $2.13 billion, driven by the Tegna acquisition and strong political advertising, with adjusted EBITDA reaching $756 million.

Political advertising revenue hit a record $1.1 billion, significantly contributing to the company’s financial performance, especially in key markets like Ohio and Texas.

The company successfully completed key distribution negotiations and maintained growth in distribution revenue, highlighting the value of its broadcast and cable programming.

The CW network saw a 9% year-over-year increase in viewership, and NewsNation reported a 9% increase in total viewers, maintaining strong audience growth.

Nexstar Media Group reduced debt by $1.3 billion year-to-date and reaffirmed its commitment to shareholder returns through dividends and strategic investments.

Management expressed optimism about future political advertising cycles and indicated confidence in the regulatory environment post-election.

The company is focused on expanding sports programming, particularly through The CW, and continues to explore digital growth opportunities.

Full Transcript

Joe (Investor Relations)

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. Nexstar Media Gr 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 today’s call.

For additional details on these risks and uncertainties, please see Nexstar Media Gr’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission, and Nexstar Media Gr’s subsequent public filings with the SEC. Nexstar Media Gr undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. With that, it’s now my pleasure to turn the conference over to your host, Nexstar Media Gr Founder, Chairman and Chief Executive Officer, Perry Sook.

Perry, please go ahead.

Perry Sook (Founder, Chairman and Chief Executive Officer)

Thank you, Joe, and good morning. We appreciate everyone joining us today to discuss our record third-quarter financial results. Mike Baird, our Chief Operating Officer, and Lee Ann Gliha, our Chief Financial Officer, are with me. As always this morning, Nexstar Media Gr achieved the highest quarterly net revenue in the company’s history of $2.13 billion, as well as record third-quarter adjusted EBITDA of $756 million and free cash flow of $433 million.

These results reflect the Tegna acquisition, as well as continued strength in distribution and advertising revenues, highlighted by record third-quarter plus political advertising revenue. With Election Day now behind us, we can now report on the results of what proved to be a record-breaking election cycle for Nexstar Media Gr and Tegna, with combined net political advertising revenue reaching an all-time high of $1.1 billion, representing an increase of 31% versus 2022 and 29% versus 2026. Our broad and diversified footprint, which covered more than 80% of the contested election markets, positioned us to capture political advertising demand as spending shifted throughout the cycle.

In particular, Ohio, Texas, California, Michigan, and Maine were among our strongest-performing markets. This was Nexstar Media Gr’s first election cycle managing all political advertising sales internally, and the results demonstrate that we not only capitalized on a strong overall political cycle, but we anticipate that we also gained market share through our enhanced systems, our coordination, and especially our execution. In terms of the overall industry, broadcast television once again demonstrated its strength as the most effective platform for PACs, candidates, and political parties to reach voters in local markets, accounting for more than half of total political ad spend in 2026, based on the early estimates. While we heard some concerns that the Supreme Court’s decision to extend lowest unit rate protections to political parties could negatively impact revenues, our results suggest the opposite.

Access to LUR pricing and greater flexibility to coordinate with candidates appear to have driven increased political party spending on local broadcast television. Historically, broadcast has under-indexed in political party spending relative to other media, but early indications suggest that this trend may have begun to reverse in this election cycle. Moving on to the bottom line, in the first nine months of 2026, Nexstar Media Gr generated $1.1 billion in adjusted free cash flow, allowing the company to reduce debt by $786 million and return $171 million to shareholders through dividends, while continuing to fund investments in local news and sports programming. Subsequent to quarter end, we repaid another $525 million in debt, bringing our year-to-date debt reduction to $1.3 billion as of today.

Turning to our distribution business, in the third quarter we successfully completed key distribution negotiations without any service interruptions, reinforcing the value that Nexstar Media Gr’s leading broadcast and fast-growing cable news programming brings to our distribution partners and their customers. Distribution revenue continues to grow on a combined basis, and legacy Nexstar Media Gr’s gross and net distribution guidance remains intact.

We believe that broadcasters and pay TV distributors share a common interest in the long-term health and sustainability of the pay TV ecosystem. We remain focused on producing and acquiring high-quality programming that viewers value and that drives engagement across the pay TV platforms. On the advertising side, excluding the estimated impact of political advertising revenue, third-quarter combined non-political advertising revenue came in better than expected, declining low single digits, reflecting the strength of our digital strategies and our wide broadcast audience.

Turning to The CW, the network remained the ninth most-watched ad-supported television network in total day with a 9% year-over-year increase in viewership. In addition, The CW delivered its largest sports audience ever on August 30th with the New Mexico State versus Florida State college football game, averaging 1.96 million viewers in prime time. In fact, over the course of the weekend the network attracted over 15.4 million viewers, aided by the NASCAR O’Reilly Auto Parts Series race from Daytona, as well as WWE NXT Heat Wave.

With our successes to date, we continue to expand The CW sports programming portfolio with the addition of the San Diego County Credit Union Poinsettia Bowl and the Holiday Bowl, as well as a new agreement with the National Hot Rod Association to broadcast the final seven races of the season of the Mission Foods Drag Racing Series beginning in September of 2027. With these additions, The CW will air almost 800 hours of sports programming annually.

The CW has doubled its share of broadcast-network college football programming year over year, and the network now accounts for approximately 20% of all college football programming aired on all broadcast networks. Our programming strategy, centered on live sports and entertainment, continues to deliver results, and yes, we still expect The CW to achieve its first profitable quarter in Q4 of this year. At NewsNation, the network continues to distinguish itself through its commitment to objective, fact-based reporting and balanced perspectives, maintaining its momentum with total viewers in September 2026 growing 9% over the comparable prior-year period. Year to date, NewsNation has delivered the strongest audience growth among major news networks, outperforming Fox News, CNN, and MSNBC, with total day viewership increasing 34%.

The momentum at The CW and NewsNation carried into a strong 2026–2027 upfront, where we achieved single-digit growth in both pricing and volume and expanded our advertiser base. Our performance reflects the strength of our diversified platform, including the expansion of sports programming on The CW, increased viewership at NewsNation, and our ability to leverage Nexstar Media Gr’s near-nationwide local television footprint to deliver a national unwired network for our advertisers.

Looking ahead, we will continue to execute our playbook to drive long-term shareholder value while enhancing the programming, products, and services that make Nexstar Media Gr a leading choice for audiences and advertisers and an essential partner to networks and distributors. With that said, now let me turn the call over to Mike Baird. Michael.

Tom Carter (President, COO)

Thank you, Perry, and good morning, everyone. I’ll begin with a brief update on the regulatory and legal environment, as there have been a few developments since our last earnings call. On October 1, 2026, the FCC released its report and order repealing the national ownership cap and replacing it with a case-by-case review process. The order is awaiting publication in the Federal Register, and the new rules are expected to take effect 60 days after that publication.

On November 17, 2026, the U.S. Court of Appeals for the Ninth Circuit will hear our appeal challenging the federal judge’s preliminary injunction that prevents Nexstar Media Gr from integrating with TEGNA Inc. Our briefs speak for themselves, but in short, we’re seeking to narrow the scope of the preliminary injunction to the 31 of 53 DMAs where TEGNA and Nexstar Media Gr each have Big Four stations and where the plaintiffs claim the alleged harms may occur.

The appeal also seeks to dismiss the states from the case, given their failure to articulate a plausible theory of injury to a sufficiently large number of their residents. Now turning to our operating review, Nexstar Media Gr’s consolidated financial results for the three-month period ending September 30, 2026, include TEGNA results for the full quarter, while a comparable 2025 period reflects only Nexstar’s legacy business units. Last quarter, we posted supplemental financial information on our website detailing the historical quarterly combined results of Nexstar and TEGNA, and I will also be referencing the combined results of the company based on that information.

As Perry called out, Nexstar delivered record third-quarter net revenue of $2.13 billion, an increase of $935 million, or 78%, compared to the prior year, primarily due to $765 million of revenue from TEGNA and higher advertising and distribution revenue from our legacy business units. On a combined basis, net revenue increased 15.4% year over year, driven primarily by political advertising and distribution revenue. Third-quarter distribution revenue of $1.09 billion increased $382 million, or 53.9%, compared to the prior-year quarter and primarily reflects $351 million of revenue from TEGNA and $31 million higher revenue from our legacy business, or 4.2%. That’s due to increased rates, growth in vMVPD and streaming subscribers, and the addition of The CW affiliations on certain of our stations, partially offset by MVPD subscriber attrition. On a combined basis, distribution revenue increased 2.1% year over year, as growth in legacy Nexstar distribution revenue was offset in part by a decline in TEGNA distribution revenue.

Revenue from virtual MVPDs and other streaming platforms, including services such as Paramount Plus, Peacock, and Fox One, continues to grow and now represents a low-teens percentage of our distribution revenue. These revenues are recognized on a net basis and provide an increasingly meaningful contribution to our distribution business. During the quarter, Nexstar completed multi-year affiliation agreements to extend its Fox, CBS, and The CW affiliations.

TEGNA also completed multi-year affiliation agreements to extend ABC and The CW affiliations. Year to date, The CW Network has successfully negotiated agreements representing more than three quarters of the network subscriber base on favorable terms. In addition, we migrated eight affiliations to Nexstar and Nexstar partner-owned stations, where we have more favorable and direct monetization opportunities. Inclusive of all these factors, as Perry mentioned, we have no changes to the original 2026 distribution guidance we provided for legacy Nexstar, which we reiterated last quarter.

Advertising revenue of $1.02 billion increased $547 million, or 114.9%, over the comparable prior year, primarily reflecting $405 million in TEGNA advertising revenue and a $163 million increase in political advertising revenue at legacy Nexstar, offset in part by lower non-political advertising, partially due to crowd-out from political advertising. In total, Q3 political advertising revenue was $317 million, a 15% increase versus combined Q3 2024 levels and a 44% increase versus combined Q3 2022 levels.

On a combined basis, non-political advertising was down 5% for the same reasons I just mentioned, partially offset by incremental revenue from the impact of the FIFA World Cup in the quarter and strong local digital revenues. At legacy Nexstar, top-performing categories included gaming and sports betting and banks/savings/investments, and bottom-performing categories included medical/healthcare, home repair and manufacturing, and auto. For the fourth quarter, including TEGNA, on an as-combined basis, non-political advertising is expected to decline high single digits, impacted by political crowd-out.

In positive news on the ratings side, Comscore released its inaugural Score Report in August, which measures advertising exposure as opposed to viewership only by platform across broadcast, cable, and streaming. Reflecting the importance of broadcasting to the overall advertising ecosystem, the Comscore report shows that broadcast represents the highest share of advertising exposure at over 43%, followed by cable at 34.5% and streaming by 22.3%. In terms of media ownership, Nexstar ranks third in terms of total ad exposure time at 9.3%, behind only Fox and Google.

The enduring value of the broadcast platform is further underscored by its broad reach and continued relevance to viewers. For example, now entering its fifth season of Thursday Night Football on Amazon Prime, more than 50% of the viewers in the local markets of the participating teams continue to watch the games on broadcast television rather than Prime. It’s a similar story on Monday nights, with more than 50% of the Monday Night Football audience watching on ABC rather than ESPN.

And that phenomenon is even more pronounced on Sunday nights, with only 10% to 11% of Sunday Night Football viewers estimated to watch via Peacock rather than NBC. These results again reinforce the unparalleled reach and audience appeal of broadcast television. Simply put, we continue to see broadcast as the bedrock of every successful distribution strategy that’s premised on maximum reach. At The CW, we are further extending that reach through innovative digital distribution partnerships. In August, we launched a dedicated CW hub on The Roku Channel, expanding next-day streaming and monetization opportunities with more than 800 hours of entertainment content. Also in August, we launched CW Sports on the ESPN Unlimited app, extending our audience reach and enabling incremental viewership across all our live sports programming, which is already delivering an estimated low single-digit percentage increase in The CW Sports audiences.

With our local footprint, The CW’s growing sports and entertainment lineup, and NewsNation’s rising audience, it’s clear that Nexstar has the scale and relevance that viewers, advertisers, and distribution partners desire. And with that, it’s my pleasure to turn the call over to Leanne for the remainder of the financial review.

Lee Ann Gliha (EVP and Chief Financial Officer)

Thank you, Mike, and good morning, everyone. Mike gave you most of the details on the revenue side and the CW, so I’ll provide a review of expenses, adjusted EBITDA, adjusted free cash flow, along with a review of our capital allocation activities. Third quarter direct operating and SGA expenses, excluding D&A and corporate expenses, increased by $488 million, driven primarily by the acquisition of TEGNA, partially offset by a low single-digit percentage reduction in recurring legacy Nexstar Media Gr operating expenses. Third quarter recurring cash operating expenses on a combined basis were flattish. Third Q3 2026 total corporate expense was $105 million, including non-cash compensation expense of $20 million and one-time costs of $28 million, compared to Q3 2025 total corporate expense of $68 million, including non-cash compensation expense of $19 million and one-time costs of $23 million.

The $37 million increase is primarily due to the acquisition of TEGNA, increased litigation costs, certain accounting adjustments, and other one-time costs. Q3 2026 amortization of broadcast rights included in our definition of adjusted EBITDA was $87 million, an increase of $15 million from $72 million in the third quarter of 2025, primarily due to the TEGNA acquisition and timing of programming at the CW. On a combined basis, amortization of broadcast rights was up approximately $6 million year over year. Putting it all together, on a consolidated basis, third quarter adjusted EBITDA was $756 million, representing a 35.4% margin, an increase of $398 million from the 2025 third quarter of $3,358 million.

TEGNA operations accounted for $243 million of this gain, with the remainder due primarily to the political cycle. On an as-combined basis, Q3 2025 adjusted EBITDA, including TEGNA, would have been $496 million. Moving to the components of free cash flow and adjusted free cash flow, third quarter CapEx was $46 million, an increase of $16 million from $30 million in the third quarter last year, primarily again due to the TEGNA acquisition. On a combined basis, third quarter CapEx in 2025 was $41 million. Third quarter net interest expense was $186 million, an increase of $92 million from the third quarter of 2025 due primarily to increased interest expense associated with the debt incurred to facilitate the TEGNA acquisition.

Third quarter operating cash taxes were $63 million. Cash programming payments were higher than amortization costs by $12 million as we prepaid for certain programming airing in Q4 and in the future, and we received a $4 million distribution from the Food Network. Putting this all together, consolidated third quarter 2026 adjusted free cash flow was $443 million versus last year’s $166 million. Looking ahead, we’re currently projecting CapEx and capitalized software in the $58 million range in Q4. Fourth quarter cash taxes are estimated in the $120 million range. Q4 interest expense is expected to be in the $183 million range, given the impact of increasing SOFR. This despite debt reductions in Q4 26, payments for programming are expected to be in excess of amortization by about $20 million.

Turning now to capital allocation and our balance sheet, together with the cash from operations generated in the quarter and cash on hand, we’ve returned $58 million to shareholders in the form of dividends. Consistent with past commentary, we made no repurchases, instead using excess cash to repay $350 million of debt. Nexstar Media Gr’s outstanding debt balance as of September 30, 2026 was $11.4 billion, an increase from $6.3 billion at year end, reflecting the impact of the TEGNA acquisition.

Our cash balance at quarter end was $446 million. Because we designated the CW as an unrestricted subsidiary, the losses associated with the CW are not accounted for in our calculation of leverage for purposes of our credit agreement. In addition, our credit agreement allows us to include the adjusted EBITDA of TEGNA as if we acquired the business on the first day of the period presented, to add back one-time expenses related to the deal and any operational restructuring, and to include the impact of synergies we expect to realize within 18 months of the close of the transaction, which would be September 2027.

In early July, we learned that the trial on the merits of the plaintiff’s claims is set for July 6, 2027. So given the limited time between the resolution of the trial and the September 27th date, we removed the synergies from the leverage calculation. If conditions change, we can revisit this assessment and calculation. As such, our first lien covenant ratio as of September 30, 2026 for the last eight quarters annualized was 3.03 times, which is well below our first lien and only covenant of 4.75 times. Our total net leverage for Nexstar Media Gr was 4.04 times at quarter end, a reduction of 0.18 times from last quarter. Given the combined strong political year cash flow of the company subsequent to quarter end, we repaid an additional $525 million dollars, bringing year-to-date total debt repayment to $1.3 billion in total of debt, over 20% of the debt we incurred to fund the acquisition of TEGNA earlier this year.

With that, I’m going to open up the call for questions. Operator, can you go to our first question?

OPERATOR

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 you 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 keys. One moment please while we poll for questions.

Our first question comes from Dan Kernos with StoneX. Please go ahead.

Dan Kernos (Analyst)

Great, thanks. Good morning. Obviously, first, congrats on the strong quarter across the board, guys. Two for me, Mike. Appreciate the regulatory update, I guess. Now that we’re post election, do you think that perhaps some of the more politically motivated parties, aka the AGs, who don’t seem to understand your business, are more likely to be able to be dealt with in one way or another? And if you guys are successful in narrowing the injunction, you know, help us think through what that could mean from your vantage point from the process from here.

And then I guess relatedly, Perry, in your prepared remarks you seem to intimate that a deal got done in Q3 with DirecTV. Now I don’t know if or what you can share in terms of additional color given that they had originally turned down the November 30th extension. So just maybe if you can say anything, if this was an extension, a full renewal, or I know you can’t go into specifics, but just any color there would be super helpful, and thank you.

Mike

Yeah, thanks, Dan. I’ll take both of those. Let me start with the last one first. I don’t want to comment on any specific agreements, although, as we did mention in the commentary, we did renew every agreement that we had up during the quarter without any disruption. And the agreement that you mentioned in particular, we did successfully conclude. So let me move to the first question with respect to the regulatory environment. Listen, from your lips to God’s ears in terms of the impact of the election being behind us and maybe taking some of the political pressure or various pressures and dynamics that we think have been relevant to what’s going on with our case out of the mix. We certainly hope that will be the case. It takes two to dance, so we’ll see how that shakes out going forward. I think specifically with respect to the preliminary injunction and our appeal of that.

Again, as I mentioned in the remarks, the appeal is really a two-pronged appeal. One is to narrow the scope of the appeal, and then the other is, you know, more relevant, I think, to the question you just asked on the political pressures, is to eliminate the states from the case entirely. We’ll see what happens on that with the oral argument, you know, here in a week and a half or so, I guess a little under two weeks, and then it’ll take some time obviously before we get a ruling from the panel on that.

But we’re optimistic. We certainly think that if you read the paper, both, you know, our moving papers and the opposing papers, the merits of the argument are entirely on our side, and we’re looking forward to resolution of that.

Dan Kernos (Analyst)

Great. Thanks, Mike.

OPERATOR

Our next question comes from Erin Watts with Deutsche Bank. Please go ahead.

Erin Watts (Analyst)

Hi. Thanks for having me on. I have two questions, if I may. The first, around core advertising. With the election now behind us, can you talk a little bit more about what you’re seeing and hearing from the environment the remainder of this year and into early 2027, perhaps highlight any verticals that are moving around, including auto, given the high fuel prices, lingering macro uncertainties, etc.? And then I guess relatedly, could you help us think about the benefits you had this year from strong cyclical sporting events like World Cup and Olympics that won’t be in the cards for next year?

Mike

Yeah. So, you know, I don’t, there’s nothing that’s particularly standing out one way or the other on categories. I think it’s been that way for a little while. I think we were pleasantly surprised with the performance of our non-political advertising once we adjusted out crowd-out in the third quarter and so are feeling fairly good about the outlook. With respect to the political advertising, we did have a positive impact in the third quarter given our strong FOX footprint from the World Cup, which was, I would say, it wasn’t in the double-digit millions, but it was a, you know, a strong number that will, you know, not repeat again next year.

And then, you know, from the Olympics perspective, you know, that will, you know, we’ll have to, you know, wait for another time to provide sort of specifics around that expectation. But we do, you know, obviously, you know, account for that when, when we, we see it.

Erin Watts (Analyst)

Okay. And Lee Ann, if I could ask one more question, pointed maybe in your direction on capital allocation. You’ve certainly delivered on paying down debt since TEGNA closed. Looking ahead, does debt paydown remain a priority and is there any target we should think about, whether that’s absolute dollars or a leverage level that you’re aiming for with those efforts, and when you reach that, when could priorities change?

Lee Ann Gliha (EVP and Chief Financial Officer)

You know, Erin, we’ve said many, many, many times, and the commentary is not different today. You know, our focus is to continue to repay debt. You know, that’s our use of our excess cash is going to go to repay debt. We’re going to, you know, be focused on that. You know, we know our shareholders like our total leverage to be closer to three than to four, and so that’s our objective. There is no specific bright-line test of once we get to this number that’s, you know, we’re done.

We don’t have anything like that. Everything will have to be analyzed at the time when we, you know, bring our leverage down. And we’ll have to look at, you know, what does the market bear, what are the best uses of our capital, and, you know, where do we want to put that? And you’ve seen what our strategy has been historically, which is, you know, after an acquisition, we first use our cash flow to repay debt. We continue to pay our dividend, and then once we get to sort of a leverage level that we feel comfortable with and that gives us enough flexibility to do what we need to do from an M&A perspective or otherwise on a go-forward basis, we then look to redirect that excess cash flow to other uses. If stock repurchases make sense at that point, that’s what we would, we would look to do.

Erin Watts (Analyst)

Great, thanks for the time.

OPERATOR

Our next question comes from Patrick Scholl with Barrington Research. Please go ahead.

Patrick Scholl (Analyst)

I was curious if you could provide a little bit more detail on the effect that sports is having on the ad trends. And just like the, I guess, you know, with, with the kind of sequential change from the crowd out from like the -5% to the high single digit decline, obviously it’s mostly driven by crowd up. But like with the increase in political, is there anything kind of like sports programming or anything else in there that’s kind of helping to drive to support that?

Lee Ann Gliha (EVP and Chief Financial Officer)

You know, look, I think sports programming has had a positive impact on overall viewership of broadcast television. And so that obviously has a positive impact, but I wouldn’t say that. And that’s, you know, obviously a key driver of, you know, advertisers like to be in and around where there’s a lot of viewership and a lot of, and sports does drive that. But I wouldn’t necessarily say that’s the main, you know, the main reason for the, you know, for our, for our guidance with respect to advertising revenue.

Patrick Scholl (Analyst)

Okay. And then, you know, just again, also with the election in the rearview mirror, you know, aside from the national ownership cap that you mentioned in your prepared remarks, is there any sort of sense of what sort of like the priorities would be going forward on the FCC on additional deregulatory efforts around or additional rulemaking around, like the broadcast sector?

Perry Sook (Founder, Chairman and Chief Executive Officer)

Sure. Well, there’s an open proceeding at the FCC related to the quadrennial review that would deal with local ownership in market deregulation for both TV and radio. And I certainly wouldn’t want to speak for the chairman, but I do believe his intent would be to move on that report and order coming out of the quadrennial to further deregulate radio and television within the local markets. And, you know, we’re hopeful that that happens perhaps before the end of the year.

I think beyond that, we continue to be in dialogue with the FCC regarding ATSC 3.0 and the transition to next-gen transmission, which would enable a better viewing and listening experience for the consumer as well as, and probably more importantly for investors, ancillary use of the spectrum for non-video uses. That could open up a plethora of new services to offer to businesses and advertisers and viewers in the local community. So, you know, we continue to advocate for all of those changes at the FCC level.

I don’t think anything changes in terms of the commissioner’s intent to continue to free broadcasting from the regulatory shackles that are not incumbent on any other media provider and to encourage a continued robust local journalism, which is what we’re all about as a company, obviously. And so I look for him to continue to further his aim during the remainder of this administration.

Patrick Scholl (Analyst)

Okay, thank you.

OPERATOR

Our next question comes from Jason Bazinet with Citibank. Please go ahead.

Jason Bazinet (Analyst)

I just have a legal question. If someone was going to try and challenge the lifting of the 39% ownership cap, is the right way to think about that, that it has to actually go into effect, meaning, I think you said 60 days after it’s put in the Federal Register, or could they do it now? Or could they do it after it’s officially filed but before it goes into effect? I’m just trying to gauge sort of, you know, what, what risks, if any, investors should sort of think about when we might know if someone is going to challenge it.

Perry Sook (Founder, Chairman and Chief Executive Officer)

Yeah, until the, as we used to say in Schoolhouse Rock, until the bill becomes law, which would be the publication in the Federal Register, there’s really no law to challenge. So that would be the time at which those opponents would come out, I would imagine, and attempt to challenge the rulemaking. But until that time, all you have is speculation and idle chatter.

Jason Bazinet (Analyst)

Okay, super helpful, thank you.

OPERATOR

Our next question comes from Steven Cajal with Wells Fargo and Company. Please go ahead.

Steven Cajal (Analyst)

Thanks. I have kind of a slew of questions on political. So just wondering if there’s anything that you think was unique about this cycle. I think it’s up 30% over 2022. I won’t ask you to comment on 2028, but just trying to think about whether this is like a new normal for the industry or whether the growth rate might have been elevated this cycle because it was a little lower in 2022. And also, do you think that lowest unit rate brought in more political dollars, net of the core displacement?

Do you think it was, like, somewhat neutral? Do you think it was negative? I’m getting the sense it was probably a positive, but would love to get your commentary. And lastly, the 1.1 billion, I think that was for the cycle. So just wondering if you could help us with what 4Q looks like for political.

Perry Sook (Founder, Chairman and Chief Executive Officer)

I’ll speak to the macro. If you follow the AdImpact data, not only was it a record for spending, but that broadcast we project at this point has gained share. And I think that’s because those that spent heavily in connected TV as their primary strategy two years ago didn’t win. And so we think that has, there’s been a validation of, you know, the spending on broadcast and the results in the elections. We also, as I said in my remarks, the lowest unit rate, opening that up to political parties, we think actually encouraged more money, more coordination between the parties and the candidates, which resulted in more money, which is validated by the increases over the cycle. And I do think of that as the new normal, absent any change in laws or campaign finance reform, that things will not be less contentious two years from now. Good Lord, the entire House will be relitigated again, as we will the White House.

And so again, if you look at our geography, and by the way, I know you live in Texas, as do we, and we saw plenty of political ads, but we actually had more political spending in Ohio than we did in Texas, and then followed by California and Michigan, not far behind. So we think that if you look at where the early primaries will be and the geography of Nexstar Media Gr once again favorable for a presidential election and also the House elections that will be contested for 2028 actually starting yesterday.

So at this point, I think it is kind of a new normal, Steve, given that, you know, the LUR restriction has been removed, that now sets the playing field for, you know, all campaigns on a going-forward basis. So I think it is a shift that favors broadcast and will just favor increased spending continuing over time.

Lee Ann Gliha (EVP and Chief Financial Officer)

And Steve, the $1.1 billion number was actually just for 2026 on a standalone basis or, sorry, on a combined basis, including Tegna for the full year and Nexstar Media Gr for the full year. There’s only $32 million of Tegna political revenue from the first quarter that will not be in our reported numbers. So our reported numbers will be a little bit lower than the 1.1 billion. But 1.1 billion was the 2026 standalone number.

Steven Cajal (Analyst)

Great. I can do that math. Thank you.

OPERATOR

Our next question comes from Craig Huber with Huber Research Partners. Please go ahead.

Craig Huber (Analyst)

Yeah, hi. A few questions. I’ll just take them one at a time if I could, please. On The CW, can you just update us on the outlook for the losses this year? I think in the past you said it should be down 30% plus. Is that still a good range to think about?

Tom Carter (President, COO)

Yeah, it’s still. There’s no real change there, Craig. We expect to continue to have a positive number in the fourth quarter and a positive improvement by about that percentage for the full year.

Craig Huber (Analyst)

And then you might not want to tackle this. But thinking out to next year, if you do hit profitability here in this current quarter, you think it’s reasonable, then for the full year, next year, assuming the macro holds together, to get the whole operation to above break even. CW next year?

Tom Carter (President, COO)

No, not for the full year.

Craig Huber (Analyst)

We’ll not get the profitability for the full year? Is that what you’re saying?

Tom Carter (President, COO)

I don’t know that.

Craig Huber (Analyst)

Okay. Don’t know. Okay. And then just update us on The CW. How much right now is sports as a percentage, representative percentage of your ad revenue at The CW and/or the hours, how should we think about that? Where’s that at right now, please?

Tom Carter (President, COO)

About 50% of the hours. In terms of the revenue breakdown, I’d have to get back to you.

Craig Huber (Analyst)

Okay, and then you guys still want to increase that further going forward? Are you pretty happy where it’s at right now? I mean, are there more opportunities out there as you kind of think out of next year, increase that further?

Perry Sook (Founder, Chairman and Chief Executive Officer)

Yeah, I think we’re always going to be interested in additional rights. The CW is still very much a nascent business with tremendous upside, still on a positive trajectory, but it’s not where we want it to be ultimately. And when you look at what we’ve done in a relatively short period of time, particularly around sports, by acquiring rights, getting them produced on air, attracting a completely new audience now on a regular basis, what that has done is really established our sports bona fides with really everybody, everybody who has rights to sell.

So as marquee rights become available over the next couple of years, we’ll certainly be in dialogue with everyone who’s got something to sell and we’ll look at everything. Having said that, you know, we’re still Nexstar Media Gr and we’re going to remain disciplined and opportunistic as we approach every single one of those conversations.

Craig Huber (Analyst)

Then my final question, if I could ask, please, is there any update on alternative uses of excess spectrum out there and do you still think it’s several years away before it could be potentially meaningful like 2030, 2031? Thank you.

Tom Carter (President, COO)

Yeah, I wouldn’t put an exact time window on it, Craig, but I do think that it’s a ways away and no, there’s no real update on that right now.

Craig Huber (Analyst)

Okay, thank you.

OPERATOR

Our next question is from Benjamin Sop, Deutsche Bank. Please go ahead.

Benjamin Sop (Analyst)

Good morning. Thanks for the question. It sounds like the Tegna CEO made some new sales and operational appointments recently. Can you talk about their strategy for running Tegna and any changes or improvements they’ve been implementing since taking over? And then I wanted to ask about the digital strategy, how those assets are performing versus your expectations and how Tegna’s digital assets might eventually complement yours. Thanks.

Perry Sook (Founder, Chairman and Chief Executive Officer)

Well, I’ll take the first question because it’s an easy one to answer. And that is we can’t really comment on anything that Tegna is doing from a day-to-day operational perspective. I wish that weren’t the case. And we’ll see what happens with our appeal of the preliminary injunction. But as you know, we’re prohibited from integrating it, we’re prohibited from any day-to-day operations. So that said, we have complete confidence in the CEO there, Patrick Palvini, that he’s doing a great job day to day and I think the results speak for themselves.

Lee Ann Gliha (EVP and Chief Financial Officer)

And then on the digital side of things we are feeling good about our opportunities. On the digital side it continues to be a bright spot with respect to Nexstar Media Gr’s core business in terms of looking at our overall non-political advertising. Digital continues to grow at very strong rates, which is good. I think on the Tegna side of things they have a couple of different assets including the Premion asset which had a little bit more of a focus on national, had some third-party partners that have left the partnership and so they have a little bit of headwind against them with respect to some of those businesses. But by next year a lot of that stuff should be cleared out. So we’ll have a more clean look at digital for Tegna on a go-forward basis. But, you know, we look at digital as really a big growth opportunity.

We’ve been spending a lot of time and energy around developing our own CTV apps and then also just selling third-party CTV inventory which has been a nice growth, nice growth vector for us.

Benjamin Sop (Analyst)

That’s helpful. Thank you.

OPERATOR

We have reached the end of the question and answer session. I would now like to turn the floor back over to Perry Sook, CEO, for closing comments. Perry.

Perry Sook (Founder, Chairman and Chief Executive Officer)

Thank you, operator. Thank you to everyone for joining us today. Time and again, Nexstar Media Gr has demonstrated its ability to navigate a changing media landscape, outperform expectations and deliver exceptional results. And today is no exception to that trend. Our track record speaks for itself. We will continue to raise that already high bar while maintaining our commitment to our core mission of serving local communities, investing in quality journalism and programming and creating shareholder value.

Looking ahead, I remain confident that Nexstar Media Gr’s long-term outlook and the significant opportunities ahead of us are indeed there. We have a clear strategy and strong operating model and an outstanding team that knows how to execute. As one of the company’s largest shareholders, I obviously have significant skin in that game and I remain as committed as ever to our long-term success. We appreciate your continued support and interest and look forward to sharing our progress with you in November.

Thank you very much and have a great day.

OPERATOR

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.