Good day and welcome to Nexstar Media Group's third quarter 2026 conference call. Today's call is being recorded. I will now turn the conference over to Joe Giffoni, Investor Relations. Please go ahead, sir.

Thank you, Nicole, and good morning, everyone. I'll read the safe harbor language and then we'll get right into the call. 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 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's annual report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission, and Nexstar's subsequent public filings with the SEC. Nexstar 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 founder, chairman, and chief executive officer, Perry Sook.

Perry, please go ahead. 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. Next, I 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 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 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 caption 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 Nexar'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 Thank you for joining us. Moving on to the bottom line, in the first nine months of 2026, Nexstar 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 were paid 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'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'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, added 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 26 growing 9% over the comparable prior year period. and more. Year-to-date, NewsNation has delivered the strongest audience growth among major news networks, outperforming Fox News, CNN and MSNOW, with total day viewership increasing 34%. The momentum at the CW and NewsNation carried into a strong 26-27 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, and Mike Baird.

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 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 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'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 VMBPD and streaming subscribers, and the addition of 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+, 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 CW affiliations. Tegna also completed multi-year affiliation agreements to extend ABC and CW affiliations. Year to date, the CW network has successfully negotiated agreements representing more than three-quarters of the network's 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 Nextar, which we reiterated last quarter as well. 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 Nextar, 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, nonpolitical 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 Nextar. Top performing categories included gaming and sports betting, and banks, savings, investments. And bottom performing categories included medical slash healthcare, home repair and manufacturing, and auto. For the fourth quarter, including Tegna on an as combined basis, nonpolitical advertising is expected to decline high single digits impacted by political crowd out. In positive news, on the rating 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 10-11% 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 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 Nextar 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 Lee Ann for the remainder of the financial review.

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 SG&A expenses, excluding DNA 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 operating expenses. Third quarter recurring cash operating expenses on a combined basis were flattish. Q3 2026 total corporate expense was $105 million including non-cash compensation expense of $20 million and one-time cost of $28 million compared to Q3 2025 total corporate expense of $68 million including non-cash compensation expense of $19 million and one-time cost 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 $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 despite debt reductions. In Q426, payments for programming are expected to be in excess of amortization by about $20 million. Turning now to capital allocation in 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. Nextstar'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 and 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 the synergies we expect to realize within 18 months of the close of the transaction, which would be September 27. 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 September 27 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 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 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?

Thank you. We will now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 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 Stone

with Stonex. Please go ahead.

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 30 extension. So I 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.

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 list 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, we have The appeal is really a two-pronged appeal. One is to narrow the scope of the appeal, and then the other is 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 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 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.

Great. Thanks, Mike.

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

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 from strong cyclical sporting events like World Cup and Olympics. That won't be in the cards for next year.

Yeah, so 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 nonpolitical advertising once we've 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 strong number that will 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, count for that when we see it.

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 pay down 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 one, could priorities change?

You know, Aaron, we've said many, many, many times, and the Commentary is not different today. Our focus is to continue to repay debt. That's our use of our excess cash is going to go to repay debt. We're going to be focused on that. 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. We're done. We don't have anything like that. Everything will have to be analyzed at the time when we bring our leverage down and we'll have to look at what does the market bear, what are the best uses of our capital, and where do we want to put that. And you've seen what our strategy has been historically, which is 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 or purchases make sense at that point, that's what we would look to do.

Great. Thanks for the time.

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

Hi. 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 the kind of sequential change from the crowd out from like the minus 5% to the high single digit decline. Obviously, it's mostly driven by crowd out, 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?

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 obviously a key driver. You know, advertisers like to be in and around where there's a lot of viewership and a lot of in sports does drive that. But I wouldn't necessarily say that's the main, you know, the main reason for our guidance with respect to advertising revenue.

Okay. And then, you know, just again, also with the election in the rear view mirror, you know, aside from the national ownership cap that you mentioned and your prepared marks, is there any sort of sense in 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?

Sure. Well, there's an open proceeding at the FCC related to the quadradial 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 to move on that report, an order coming out of the Court of Unreal to further deregulate radio and television within the local markets. And 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 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.

Okay, thank you. Our next question comes from Jason Bazinet with Citibank.

Please go ahead.

I did 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 risks, if any, investors should sort of think about when we might know if someone is going to challenge it.

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, in an attempt to challenge the rulemaking. But until that time, you know, all you have is speculation and idle chatter.

Okay, super helpful. Thank you.

Our next question comes from Stephen Cahal with Wells Fargo and Company. Please go ahead.

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, you know, 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. Thank you.

I'll speak to the macro. You know, we, you know, if you follow the ad impact data, you know, not only, you know, 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 of 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 You know, things will not be less contentious two years from now. Good Lord, you know, the entire House will be relitigated again, as 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, yeah. We think that if you look at where the early primaries will be and the geography of Nexstar, 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 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.

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 Nexter 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. Our reported numbers will be a little bit lower than the $1.1 billion, but $1.1 billion was the 2026 standalone number.

Great. I can do that math. Thank you.

Our next question comes from Craig Huber with Huber Research Partners.

Please go ahead.

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?

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

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, do 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 for next year?

No, not for the full year.

will not get the profitability for the full year.

Is that what you're saying? I don't know that.

Don't know, okay. And then just update us on the CW. How much right now is sports as a percentage, represented as a 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?

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

Okay, and then you guys are 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 to increase that further?

Yeah, I think we're always going to be interested in additional rights. I mean, CW is still very much a nascent business with tremendous upside, right? 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 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, we're still Nexstar, and we're going to remain disciplined and opportunistic as we approach every single one of those conversations.

And 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.

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.

Okay, thank you.

Our next question is from Benjamin Soft with Deutsche Bank.

Please go ahead.

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.

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 Thank you for joining us today.

will be a bright spot with respect to Nexstar'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 premium assets. 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 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 vector for us.

That's helpful. Thank you.

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?

Thank you, operator. Thank you to everyone for joining us today. Time and again, Nexstar has demonstrated its ability to navigate a changing media landscape, outperform expectations, and deliver exceptional results, and today is no interruption in 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's long-term outlook and the significant opportunities ahead of us are indeed there. We have a clear strategy, 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.

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