Good day, and welcome to Nexstar Media Group, Inc.'s fourth quarter 2024 conference call. Today's call is being recorded. I will now turn the conference over to Joe Jaffoni, Investor Relations. Please go ahead, sir.

Thank you, Shamali, and good morning, everyone. Thank you for joining Nexstar Media Group, Inc.'s fourth quarter conference call. Let me read the Safe Harbor language, and then we will get right into the call. All statements and comments made by management during today's call other than statements of fact may be deemed forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Nexstar Media Group, Inc. 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 our annual report on Form 10-K for the year ended December 31, 2023, as filed with the US Securities and Exchange Commission, and Nexstar Media Group, Inc.'s subsequent public filings with the SEC. Nexstar Media Group, Inc. 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 Group, Inc. Founder, Chairman, and Chief Executive Officer, Perry Sook. Perry, please go ahead.

Thank you, Joe. I will start with a summary of recent highlights followed by Mike's operations review and then Lee Ann Gliha's financial review. Our fourth quarter financial results mark a strong finish to another successful year for Nexstar Media Group, Inc. in which we delivered $5.4 billion in total net revenue, the highest in our company's 28-year history. Our record fourth quarter and full-year top-line performance were driven by strong election year political advertising, highlighting the effectiveness of local television broadcasting and our presence in nearly 85% of the contested election markets across the country. In addition, we continue to grow distribution revenue, a testament to our position as the largest owner of local broadcast television stations carrying the most-watched programming. For the full year, Nexstar Media Group, Inc. generated $2 billion of adjusted EBITDA and $1.2 billion of adjusted free cash flow. We returned $820 million or 68% of adjusted free cash flow to shareholders through share repurchases and dividends, reducing our shares outstanding by nearly 9% during the year and by one-third over the last five years. Another $327 million was allocated toward debt reduction, resulting in record low net leverage of 2.91 times at year-end, a historic low for the company which positions our balance sheet well should there be any regulatory relief on the ownership front. In January, we announced the twelfth consecutive annual increase in the quarterly cash dividend, underscoring the durability of our cash flows and reflecting a near 5% yield, placing Nexstar Media Group, Inc. in the 94th percentile of all S&P 400 companies. The continued strength and consistency of our financial results and our shareholder returns in the face of what remains a dynamic marketplace environment highlights the value of our business model and the advantages of our unique competitive position as America's largest local television broadcaster. Broadcast television is the foundation for every multichannel pay TV service and every political campaign. And over the past year, the landscape has evolved just as we had anticipated. To start, the industry has made solid strides in adopting more financially sustainable models, including the rebundling of BTC products to the pay TV packages and the introduction of new value-priced skinny bundles including the broadcast stations. At the same time, other major media companies have doubled down on broadcast, recognizing its unmatched viewership and audience reach while making the smart decision to scale back underperforming cable networks. Estimates from leading data aggregators like S&P Global and Wall Street analysts indicate that subscriber trends are poised for improvement. We've already seen early signs of that with Charter's commentary regarding their new video packaging. Above all, broadcast continues to be the gold standard for sports and news programming. While much was made of the two Christmas games that aired on Netflix, the ratings were 17% lower than the NFL matchups that aired on CBS and Fox the prior year despite having the star power of Beyoncé at halftime. And over at the NBA, the five-game Christmas lineup on ABC and ESPN saw an 84% increase in ratings from 2023, aided by all five games being available on ABC versus only two the prior year. Closer to home, we saw the phenomenal launch of the 2025 NASCAR Xfinity series racing on the CW broadcast network in Daytona, on February 15th, where we achieved a total audience of 1.8 million viewers, a 93% improvement from last year when the race aired on FS1. And we repeated the success our second week in Atlanta, generating an audience of over 1.3 million viewers, the best performance for the Atlanta race in over eight years. That's the power of broadcast. With traditional media companies owning over 90% of the major sports rights, it's clear that broadcast remains the best way to reach and engage the largest audience. While sports has dominated much of the conversation about the benefits of broadcast, we were all recently reminded about the importance of local news. As communities across Florida and North Carolina faced devastating hurricanes last September and residents in the Greater Los Angeles area battled destructive wildfires in January, Nexstar Media Group, Inc.'s local stations provided vital information updates and support to those in need. In each case, our stations such as KTLA in Los Angeles, WFLA in Tampa, and WSPA in Spartanburg, Asheville, were there every step of the way, demonstrating the power of local journalism to inform, connect, and offer aid during some of the most challenging moments experienced by our viewers. The impact of these events on local communities made national news and we are proud of the crucial role that NewsNation played in delivering comprehensive coverage of these events to audiences all across America. Before reviewing some of the key achievements across our businesses in fiscal 2024, I would like to briefly address the potential for deregulation. The excitement around M&A opportunities is palpable and we're actively working with lawmakers through the NAB and our in-house government relations team to create more equitable broadcast ownership rules. This will help level the playing field and allow broadcasters to continue to serve their local communities with local journalism and also to compete effectively with big tech and big media. We have a proven playbook for executing accretive, value-driven M&A, one we did on a smaller scale in January when we closed on the acquisition of WBNX, TV in Cleveland, Ohio. This acquisition created a new duopoly with our existing Fox affiliate in the 19th largest television market, and WBNX will become the CW affiliate for Cleveland in September of this year, generating further synergies for Nexstar Media Group, Inc. As M&A has been the key driving factor of our stock over the last fifteen years, and as it becomes more of a possibility with the current FCC, and the potential for deregulation, we look forward to further preparing our balance sheet for these kinds of opportunities, and Lee Ann Gliha will provide more color on that later in the call.

In 2024, NewsNation firmly established itself as a formidable player in the cable news landscape with top-tier talent and reliable, unbiased reporting. Today, NewsNation is a 24/7 news network fully distributed across all platforms with nationwide distribution comparable to or better than the other more established cable news networks. We've also achieved major news milestones by hosting the final RNC president debate last year and becoming the first news network to accurately call the national election for President Trump. This underscores not only the depth and expertise of our data analysts but it also evidences the trust that our peers and our viewers place in our reporting. Our joint editorial relationship with The Hill has further strengthened our content offering, providing insightful perspectives on key issues. In terms of performance, since December of 2024, NewsNation has out-delivered MSNBC seventeen times and CNN twice in the 25-54 demo, proving that our approach is resonating with viewers who are looking for a fresh and balanced take on the news. The CW's transformation into a top-tier broadcast network continued in 2024, driven by our strategy focused on high-quality entertainment, unscripted live events, and sports programming. WWE and NASCAR played key roles in reshaping the network's identity. On October 5th, we drew 4.7 million viewers across NASCAR, Ace, and Pac-12 football in one afternoon. NASCAR, in particular, helped attract twenty new advertisers to the CW so far. These accomplishments highlight the network's ability to drive both audience engagement and value advertising partnerships, supporting our goals for continued growth and profitability. In 2025, approximately 40% of the programming hours delivered by the CW network will be live sports. Turning to ATSC 3.0. In January 2025, we took a significant step toward harnessing the power and potential of ATSC 3.0 with the announcement of the Edge Beam Wireless Consortium, a new joint venture consolidating our prior joint ventures into one among Nexstar Media Group, Inc., the EW Scripps Company, Gray Media, and Sinclair. This collaboration will enable us to deliver wireless data via ATSC 3.0 transmission to businesses across the nation. In total, Edge Beam Wireless represents spectrum covering over 97% of the continental US and over seven billion megahertz pops. In addition, we're happy to report that the new joint venture signed its first paying customer last year in the digital signage space, demonstrating initial proof of concept. Looking ahead, we are energized by the significant prospects before us, and we remain laser-focused on executing our 2025 objectives. Which include renewing distribution contracts covering approximately 60% of our subscriber base, driving the CW further toward profitability, and pursuing deregulation. With that, we are providing adjusted EBITDA guidance for 2025 in the range of $1.5 to $1.595 billion. Mike and Lee Ann Gliha will provide more detail on that later in the call. Given our record 2024 revenue and our consistently strong financial results and outlook, especially in light of a dislocated broader media environment, you should be able to see that Nexstar Media Group, Inc. has a unique positioning increasingly able to bend the curve in our favor. We have a massive scale portfolio of broadcast assets unlike any other. Our position as a top three affiliate group for each of the big four broadcast networks makes us a key partner for the networks and for distributors. Owning the CW network allows us to control our own destiny by boosting both our owned and operated CW affiliate stations as well as the network's profitability. Additionally, investments in NewsNation and ATSC 3.0 offer significant opportunities to deliver outsized growth and create outsized value going forward. Together, our assets generate consistently strong free cash flow which we've used to create the clean balance sheet that we have today and to return capital to shareholders equal to 16% of our market cap. In 2024. We invite you to watch and, in fact, join as we continue to bend the curve in our favor in 2025 and beyond. Thank you, Perry, and good morning, everyone. Nexstar Media Group, Inc. delivered record fourth quarter net revenue of $1.5 billion, up 14% compared to the prior year. Primarily reflecting growth in advertising revenue due to strong election year political advertising as well as continued growth in record fourth quarter distribution revenue of $714 million increased $10 million or 1.4% over the comparable prior year quarter. Distribution revenue growth primarily reflects the benefit of distribution contract renewals in 2023, on terms favorable to the company, annual rate escalators, growth in VMVPD subscribers, the addition of CW affiliations on certain of our stations, and the return of partner stations on one MVPD in January, which more than offset MVPD subscriber attrition. In January, Nexstar Media Group, Inc. and our partner stations reached an agreement with NBC to renew our affiliations in thirty-three markets. And as previously announced, we completed our CBS affiliation renewal in mid-2024. We view our relationships with the networks as symbiotic. The broadcast affiliate model provides significant advantages to the networks by reaching the largest audience for their programming, extending coverage to both pay TV households and over-the-air homes which they cannot do on their own. Major sports, including the NFL, are committed to serving the broadest audience possible to drive fan engagement. That means a commitment to broadcast television, which provides 14% additional reach over the pay TV ecosystem alone, reaching 100% of television households. In addition, with networks only providing two to twelve hours of content daily, affiliates provide the other twelve to twenty-two hours of programming through our highly rated local news and other local and syndicated programming which helps increase overall viewership by offering a more complete product for our viewers. In 2025, we expect both gross and net distribution revenue to be relatively flat with 2024's record levels. With a very modest number of subscribers renewed in 2024, we expect the annual rate escalators in our contracts to be offset by continued subscriber attrition. Although we remain optimistic that subscriber trends will improve as we move deeper into the year. However, later this year, we have approximately 60% of our subscriber base up for renewal, and we expect to benefit distribution revenue beginning in the first quarter of 2026. Fourth quarter advertising revenue of $758 million increased $173 million or 29.6% over the comparable prior year quarter, reflecting a $223 million year-over-year increase in election year political advertising to $254 million, which more than offset a $51 million year-over-year reduction in non-political advertising revenue or approximately 9% due to market softness and political displacement, which we estimate accounted for roughly half of that reduction. In the 2024 election year, broadcast television proved to be one of the few media to see growth. With the overall market expanding from $7.96 billion in 2020 to $9.33 billion. Specifically, according to estimates from AdImpact, TV revenue grew from $4.46 billion to $4.53 billion. Nexstar Media Group, Inc. maintained a solid 13% market share of all television political spending, generating $491 million in political revenue, an increase over the $479 million we had previously reported through election day 2020. Notably, the absence of the Georgia runoff election, which had been a significant driver in 2020, resulted in a slight dip from our record-breaking political revenue that cycle. Nevertheless, Nexstar Media Group, Inc. remains well-positioned for continued growth, and we're confident in our ability to capture a larger share of political ad dollars in future elections. Looking ahead to the first quarter, non-political advertising is currently forecast to be down in the low to mid-single digits on a year-over-year basis. A sequential improvement over both Q4 2024 on an as-reported basis and also when adjusting for the estimated impact of political displacement. While we continue to be impacted by a challenging television advertising market, including weakness in insurance advertising due to the recent natural disasters in Q4 and Q1, and continued weakness in automotive advertising, we are seeing sequential improvement both in local and national advertising. On the local side, the rate of local advertising decline is improving in Q1 due to increased revenue related to the Super Bowl on Fox featuring the Kansas City Chiefs, a market where we have the Fox affiliated station, and double-digit year-over-year growth in digital revenue. On the national side, the rate of national advertising decline improved primarily due to ratings and associated revenue from our new slate of programming. For the year, non-political advertising is expected to be slightly up as weakness in television advertising is expected to be offset by strong performance at The CW, due to our new slate of programming featuring WWE, NXT, and NASCAR Xfinity Racing, as well as local digital revenue growth as we aggressively focus on utilizing our over 1,600 local sellers and third-party digital products. On the operating expense side, as part of our ongoing efforts to enhance efficiency and drive long-term growth, Nexstar Media Group, Inc. implemented a strategic operational restructuring in Q4 that we mentioned on our November call. That initiative included the elimination of a few hundred positions across various divisions, streamlining and improved integration of the CW and The Hill into the broader organization, and reducing middle management within our ad sales division. Additionally, we focused on streamlining work processes at our local markets to improve overall productivity. This restructuring is expected to generate savings in the low to mid-eight figures in total operating expense in 2025, and will enable Nexstar Media Group, Inc. to focus on initiatives that more directly impact our viewers, partners, and customers as we continue to prioritize initiatives that represent our best long-term opportunities. Now turning to the CW. In 2024, we improved cash flow at The CW by $127 million, exceeding our goal of more than $100 million of improvement, which reduced our 2023 losses by approximately 50%. With a substantial majority of cost reductions for the network related to programming cost and overhead efficiencies now executed, in 2025, we are seeing our new programming investments begin to pay dividends. And just to put a few finer points on the new programming, in 2025, CW will have about 400 hours of sports or sports-related programming, accounting for approximately 40% of the hours provided by the network. A dramatic change from the old CW that had no sports programming whatsoever. The 2025 schedule includes 52 weeks of WWE NXT and 33 weeks of NASCAR Xfinity series races. Both of which are proving to be strong ratings performers for us. As Perry mentioned, in the first Xfinity Series race of the 2025 season, notably the first with our own production, we attracted 1.8 million average viewers peaking at over 2.2 million, for the highest viewership of the Daytona race since 2020. To provide some context for those of you who may be more familiar with Formula One, our Daytona NASCAR Xfinity race garnered 24% more viewers than the average of the three US-based F1 races in 2024 aired on ABC and ESPN and nearly 70% better than the full Formula One season average. And that Daytona momentum carried into the second race of the season last Saturday when over 1.3 million average viewers, peaking at over 1.5 million tuned into the Xfinity race in Atlanta. In the process, the CW delivered the best performance for the Atlanta race since 2017. Remarkably, our Saturday race aired amidst a busy sports calendar, it performed better than the college hoops, PGA Golf, and NHL aired across Fox, CBS, NBC, and ABC. Similarly, the CW has raised the performance of WWE NXT with audience improvement of 12% to date versus its 2024 average, USA. Marking a 105% year-over-year improvement over what the CW was airing in that time slot previously. And regularly beating Big Four network programming head to head. In fact, six weeks into 2025, NXT on The CW is enjoying its most broadly viewed quarter in the last five years. In 2025, we expect to cut losses at CW by more than 25% from 2024 levels due primarily to growth in advertising driven by improved ratings and growth in distribution revenue. During 2025, we will reset affiliation agreements representing more than two-thirds of the CW's subscriber base, positively impacting the fourth quarter of 2025 and 2026. Consistent with our prior guidance, we anticipate the impact of these resets in our advertising trajectory will enable The CW to achieve profitability during 2026. In addition, the company continues to benefit from moving CW affiliations to our owned and operated stations. During 2023 and 2024, we moved 17 affiliations to our stations, with more to come. In summary, 2024 was a standout year for Nexstar Media Group, Inc. And we remain excited about the company's future. As Perry mentioned, we believe the market is shifting in ways that will benefit broadcast, that there is meaningful upside potential ahead of us with potential deregulation and actionable growth catalysts in 2026, given our distribution renewal cycle, the midterm elections, and the Olympics. And consistent with our track record, we remain committed to delivering value to our shareholders in a thoughtful and disciplined manner. And we will continue to explore every opportunity to maximize that value over the long term.

Thank you, Mike, and good morning, everyone. Mike gave you most of the details on the revenue side and on CW. So I will provide a review of expenses, along with a review of our capital allocation activities, our 2025 guidance, and some perspectives on valuation. Together, fourth quarter direct operating and SG&A expenses excluding depreciation and amortization and corporate expenses, were essentially flat, decreasing by $2 million. Increases in news and other programming and content costs were offset primarily by reduced product promotion costs in the quarter. Q4 2024 total corporate expense was $48 million, including non-cash compensation expense of $20 million compared to $45 million including non-cash compensation expense of $16 million in the fourth quarter of 2023. The increase of $3 million is primarily due to one-time severance costs associated with our operational restructuring, while the increase in non-cash compensation expense is due to new restricted stock grants and the timing of grants offset in part by a release of reserves, among other factors. Q4 2024 depreciation and amortization was $220 million versus $210 million in the prior year quarter. An increase of $10 million. Of these amounts included in our definition of adjusted EBITDA, is $98 million related to the amortization of broadcast rights for Q4 2024 compared to $87 million for Q4 2023. The increase of amortization of broadcast rights by $11 million was primarily due to programming costs as newly acquired programming premiered offset by a slight reduction of amortization of broadcast rights elsewhere at Nexstar Media Group, Inc. Please note that while Q4 CW programming amortization was up year over year, we do not expect 2025 CW programming amortization to be higher than 2024. So Q4 2024 income from equity method investments, which primarily reflects our 31% ownership in TV Food Network, declined by $5 million in the quarter or 22% primarily related to TV Food Network's lower advertising revenue but better than what we had originally anticipated. Putting it all together on a consolidated basis, fourth quarter adjusted EBITDA was $628 million representing a 42.2% margin and an increase of $171 million from the fourth quarter of 2023 of $440 million. Moving to the components of free cash flow and adjusted free cash flow. Fourth quarter CapEx was $35 million essentially flat for the fourth quarter of last year. Fourth quarter net interest expense was $104 million, a reduction of $11 million from fourth quarter 2023. On a cash basis, this compares to $101 million in Q4 2024 versus $113 million in Q4 2023. The reduction in interest expense was primarily related to a reduction in SOFR and reduced debt balances. Fourth quarter operating cash taxes were $67 million compared to $26 million in 2023, an increase of $41 million primarily related to increased pretax operating income in 2024 related to increased election year political advertising. Payments for capitalized software obligations and pension credits net of proceeds from disposal of assets insurance recoveries were $11 million versus $14 million last year. Cash contributions from our partners in the CW, zero in the quarter versus $15 million in Q4 2023. In Q4, programming amortization costs were actually greater than cash payments by $13 million as certain programming payments were deferred. Putting this all together, consolidated fourth quarter 2024 adjusted free cash flow was $411 million as compared to $245 million last year. Now turning to our guidance for 2025. We believe 2025 adjusted EBITDA will be in the range of $1.5 to $1.595 billion. Mike already provided some of the key assumptions that are embedded in our guidance. Including one, our expectation for growth in net distribution revenue to be flattish in 2025 based on a slight improvement in subscriber attrition trends. Two, expectation for non-political advertising revenue growth to be slightly up as increases at CW are expected to partially offset some of the continued headwinds in national and local, and digital advertising growth is expected to more than offset the rest. Three, operating expenses will be reduced in the low to mid-eight figures of dollars due to our operational restructuring. And four, we expect The CW will continue to reduce its losses by another 25% in 2024. Key factors different from our current expectations could affect our outlook for adjusted EBITDA for 2025 either positively or negatively. Those factors include, among other things, the rate of growth or attrition of pay TV subs, the health of local and national advertising markets, our renegotiation of certain distribution and affiliation agreements on terms favorable to the company, and the attributable net income related to our 31.3% ownership stake in TV Food Network. We do not intend to update this guidance on a quarterly basis. As a few additional points of guidance with respect to adjusted free cash flow, we are currently projecting CapEx of $120 to $125 million for the year and $30 to $35 million in Q1. Based on the current yield curve, we anticipate full-year 2025 cash interest expense to be in the $375 to $380 million area, an improvement of more than $55 million from 2024 levels at the midpoint. We project Nexstar Media Group, Inc.'s cash interest expense utilizing the spread on our floating rate debt instruments, the current SOFR forward curve, and the coupons on our fixed-rate debt along with our expectations for debt repayment, including our mandatory amortization of approximately $125 million, plus a modest amount of additional repayment. Q1 interest expense is expected in the $95 million range. Full-year 2025 cash taxes are expected to be $260 to $270 million, an increase in the low $20 million versus 2024, and we are now using the annualization method for our federal income taxes, which enabled us to defer about $33 million of income tax from 2024 to 2025. For cash taxes, we use a 26% tax rate when calculating our estimated tax before one-time and other adjustments. The first quarter includes only a very small amount of state income tax in the $3 million range. As a reminder, we used the cash that we deferred from 2025 for 2024 taxes into 2025 to repay term loan B. We will pay this deferred income tax in the second quarter of 2025. In 2025, payments for programming are expected to be in excess of amortization by $40 to $45 million due primarily to deferred programming payments from prior years and investment in programming for future years with approximately $7 million of that in Q1. Turning to capital allocation on our balance sheet. Together with cash from operations generated in the quarter and cash on hand, we returned $230 million to shareholders comprised of $52 million in dividends and the repurchase of $178 million of stock at an average price of $167.30 per share. Reducing shares outstanding, net of equity vestings by 2.7%. For the year, we returned $820 million or 68% of our adjusted free cash flow to shareholders in the form of $219 million of dividends and $601 million of share repurchases. Nexstar Media Group, Inc.'s outstanding debt at December 31, 2024, was $6.5 billion, a reduction of $181 million for the quarter, as we made quarterly amortization payments of $31 million in option cash balance at quarter-end was $144 million, including $16 million of cash related to CW. Because we designated the CW as an unrestricted subsidiary, the losses associated with CW are not accounted for in our calculation of leverage for purposes of a credit agreement. As such, our net first lien rate covenant ratio for Nexstar Media Group, Inc. at December 31, 2024, was 1.68 times, which is well below our first lien and only covenant of 4.25 times. Our total net leverage for Nexstar Media Group, Inc. was 2.91 times at quarter-end. As is typical in non-political years, we expect leverage, which we calculate on an LTM basis versus the two-year average, to increase during 2025 as adjusted EBITDA falls in non-election years when political advertising is significantly lower. Our 2025 cash flow will be deployed first to fulfill our mandatory obligations, including debt repayments and pension and defined benefit plan contributions of approximately $145 million, the Cleveland television station acquisition for $22 million, and the anticipated 2025 dividend of approximately $225 million. In January, we announced our twelfth consecutive increase in our dividend, increasing the quarterly dividend rate by 10% which based on our stock price, as of yesterday, now represents an almost 5% yield, which as Perry mentioned, puts us in the 94th percentile of stocks in the S&P 400 for dividend yield. The remainder of our cash flow will be used to fund acquisitions, should an opportunity become available. If no attractive strategic accretive acquisitions are available, we plan to repay debt and repurchase stock. In 2025, assuming no large-scale M&A, we plan to optionally repay an incremental amount of debt and not reborrow the debt that was repaid during 2024 from the cash from deferred taxes. The additional optional deleveraging will prepare our balance sheet better for any potential M&A and should benefit us even if there is no M&A. Many investors value us based on an EBITDA multiple. Based on that methodology, any debt reduction mathematically increases our equity dollar value. Finally, we plan to continue to repurchase shares, which will continue to be the largest component of our capital allocation strategy, especially given our current valuation. In total, we anticipate returning almost two-thirds of free cash flow to shareholders in 2025, similar to the level we returned in 2024. Before I turn it over to the operator for questions, I'd like to address the value proposition in Nexstar Media Group, Inc.'s stock. As Perry mentioned in his remarks, the scale and scope of Nexstar Media Group, Inc. is unlike any other player in the broader media industry, enabling us to bend the curve to achieve results that other operators cannot achieve. While this has been the case with our record-setting revenue performance in 2024, it has not been the case with respect to our stock price over the last year. So that disconnect creates opportunity. Based on current street estimates and as of yesterday's closing stock price, we traded at a 6.3 multiple of 2024-2025 EBITDA and a 21% free cash flow yield. Below the midpoint of the pack of comparable broadcasters, despite achieving top-tier margins and free cash flow conversion, and the highest dividend yield and the highest overall return of capital to shareholders. A top-tier multiple of 7 to 7.5 times would imply a stock price of $197 at the midpoint, a 35% premium to yesterday's closing price. And if we applied the same valuation that Warner Brothers and Paramount did to their cable networks, which do not have the same prospects as the broadcast industry nor the same trajectory of revenue that we've been able to accomplish, which you know, those estimates included a 10.5% WACC, and a negative 3% perpetuity growth rate, but assuming the consensus estimates for the average adjusted free cash flow of 2024-2025 for Nexstar Media Group, Inc., applying those metrics, the math implies a valuation of $210 per share. A 43% premium to yesterday's closing price. And if deregulation comes to fruition, we are able to make accretive acquisitions as we have in the past and PayTV subscriber attrition does slow. Nexstar Media Group, Inc. and our industry should be rerated. But it should be a win-win. Short-term growth to value us like the premium curve-bending company we are, and then a rising tide, floating all media boats with deregulation and slowing attrition. We are believers in the near and long-term value of our stock, and will continue to deploy capital both to grow our business and maximize shareholder return by betting on ourselves. With that, I'll open up the call for questions.

Thank you. We will now be conducting a question and answer session. If you would 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 to remove yourself from the queue. Participants using speaker equipment, it may be necessary to pick up their handset before pressing the star key. One moment please while we pull for questions. Our first question comes from the line of Steven Cahall with Wells Fargo. Please proceed with your question.

Yeah. Thank you. So just on M&A, Perry, you have a great acquisition history between Media General and Tribune. I don't recall the free cash flow accretion off the top of my head of those deals but I know it was significant. Nowadays, your rates are higher a lot of the peers are also higher. So do you still think there's a lot of similar levels of accretion for broadcast M&A opportunities there have been historically if we do see some deregulation? And related to that, do you look harder potentially at how Spectrum assets fit together when you think about broadcast and consolidation over the next decade? And then, Lee Ann Gliha, just on the EBITDA outlook for the year, the impressive work that you're doing on cost. I'm just wondering if there are any costs to achieve that which is included in EBITDA that impacts free cash flow or is all of that behind you and was largely done in 2024? With the benefits, that eight-figure number that you talked about rolling through in the guidance for 2025? Thank you.

Well, Steven, that's a lot. Let me, let me try and take the first part of that. As it relates to Media General and Tribune, they were 40% and 60% accretive acquisitions, which, you know, we think we're probably at a high watermark of what we would be able to achieve on scale M&A. Having said that, you know, we have been consistent in saying, you know, that any acquisition to clear our screen is going to have to be substantially more accretive than buying back our stock, which is a high teens to 20% yield on our equity. So we will maintain that same discipline. We are obviously in conversations and out there looking. If there's a love connection and regulations change that would permit the acquisition to go forward, it's highly accretive. It's something we would strongly consider doing in the broadcast television space and the digital space, but if not, Lee Ann Gliha's told you, you know, Plan B would be to continue to buy back stock and pay down debt.

Yeah. And then, Steve, your other question, the expenses related to those operating cost savings are really behind us. You saw we took, it's about a $12 million one-time restructuring charge in the fourth quarter. That got added back to our EBITDA, and that was really the cost to implement that.

Thank you. Our next question comes from the line of Dan Kurnos with Benchmark. Please proceed with your question.

Yeah. Thanks. Good morning. Very comprehensive, guys. Maybe first one, just on the sports front, what do you guys make of Major League Baseball and ESPN parting ways? Do you expect there's any opportunity for local broadcast to finally get access to the laggard child, so to speak? And then just to be clear, I guess, Lee Ann Gliha, on the distribution or Mike Biard, I guess, are you assuming that the recent subtrends hold for the year, and can we just get a sense of the timing of the renewals we got to see W in Q4, but the other 60%, is that all back-end weighted? Thanks.

I'll take the last one first. Yeah. They're back-end weighted, but not being specific. In the second half of the year. With respect to sports, listen. I think what you're seeing, we'll see where the MLB shakes out, but we are confident that they will look for broader platforms. We did note that Commissioner Manfred referred to cable as a platform. So similar with what we saw with some of the deals that we've done, also with the deal that NBA did, the net migration vis-a-vis broadcast has been to increase the number of games on broadcast rather than move to cable. So we think there will be opportunities out there. We're less interested in the local opportunities, given the fact that the RSNs seem to have kind of gotten back on their feet and at least for the time being, taking the lion's share of the local games. At the national level, we think there will continue to be opportunities, and we certainly think that our performance at the CW has put us on the map for any rights holder out there looking to do deals in the future.

And then just to elaborate on what Mike said in response to your question in terms of subscriber trends. You know, our guidance assumes a slight improvement in the rate of subscriber attrition as is consistent with what the market is expecting. In general. And then, you know, because those contracts are all back-end weighted, you know, the substantial majority of the benefit will be in 2026.

Thank you. Our next question comes from the line of Benjamin Soff with what you mean? Please proceed with your question.

Good morning. Thanks for the question. I'm wondering if you can talk about the progress you're seeing with respect to deregulation and what's your level of optimism that we could see changes this year? And then maybe could you talk a little bit more about the Edge Beam JV, how that helps you accomplish goals, the progress you've made on ATSC to date. Thanks.

Well, thank you. Yeah, I've spent four different days in Washington DC since the first of the year. All on the hill visiting with lawmakers regarding the need for deregulation and I feel the prospect is as good as it has been in my career. To see meaningful ownership regulatory reform come to the broadcast industry, you know, no one can, with a straight face, defend the current rules. In the current environment. And, I think there's a real understanding that preserving local journalism at the local market level is in the national interest. And to do that, you've gotta have strong companies, and strong companies need to be able to get bigger and grow and innovate. And so that message, quite frankly, is resonating on both sides of the aisle. I think you'll see continued movement both at the FCC and the DOJ in terms of understanding that current regulations are outmoded. And we're obviously pressing for progress on all fronts. And I think you'll see evidence of progress being made as the year goes on. Obviously, at the FCC, Chairman Carr has called this a break glass moment for local television. I know he is very interested in seeing the medium survive and have the ability to prosper and to continue to support local journalism and innovate. And so, you know, I think I take him at his word. Obviously, the commission is fully constituted with five commissioners, three Republicans, two Democrats. You'll see activity increase under his purview. As it relates to the next-gen TV generation and ATSC 3.0 and our consortium, you know, this is, you know, Nexstar Media Group, Inc. already reaches 75% of the US population. Our streaming and digital competitors are rapidly advancing, and without our ability to modernize and innovate, we risk local broadcasters risking falling behind ultimately putting the future of our free local service and local journalism at jeopardy. And individual broadcasters can't complete this transition alone, which is why we developed the consortium with Scripps and Gray and Sinclair. And there was a question earlier from Steven about Spectrum. You know, this consortium stitches together spectrum that reaches 97%, which we view as a virtual nationwide footprint. That will allow us to innovate and a set transition date would provide certainty to all the stakeholders allowing the TV set manufacturers as well as the broadcasters, the pay TV operators, all to plan effectively. And as you know at this point, the NAB's petition for rulemaking, which is fairly unprecedented and certainly has it relates to spectrum, contemplates a two-phase transition plan. Which would ensure an orderly implementation. Phase one would be in February of 2028, stations in the top 55 markets, which reach about 70% of the US population would complete the transition fully to ATSC 3.0 and remaining stations would complete that transition on or about February 2030. I think it's important to note that, you know, not only is regulatory clarity essential to completing this shift, it's time-sensitive because our competitors are continuing to advance. We want to be free to be able to innovate and provide additional services not only for viewers but for businesses and the public at large. But the industry, the broadcast industry is fully united behind this effort. And so we think with all of those factors coming together, the prospect of spectrum monetization that I've been talking about for half a dozen years, I think, is upon us and this consortium has a first-mover advantage having stitched together Spectrum that is a near nationwide footprint. So we're very optimistic that progress will come both to deregulation and to innovation of next-gen TV under the current administration.

Great. Appreciate the insight. Thank you.

Our next question comes from the line of Craig Huber with Huber Research Partners. Please proceed with your question.

Great. Thank you. I have a few questions. I'll just do them one at a time to make it easier. On ATSC 3.0, Perry, just talk a little bit further about your expectations, how the revenue ramp for your company and the rest of your consortium may play out. How many more years do you think it'll be to could be significant for you guys?

Well, I think as most new businesses evolve, they start slowly and then grow suddenly. There are a number of things that have to happen. We need to be able to sunset the ATSC 1.0 or current transmission schema requirement, which would free up more spectrum for innovation. We have to complete the transition to 3.0 would enable all stations in the market to fully participate in any data casting opportunities that might present themselves. And again, I think that if we are able to meet the transition date of February 28th that we proposed along with NAB in the petition for rulemaking, that's when I think you could see meaningful progress being made. In the meantime, we have signed clients, and we have a lot of interest from others particularly in the automotive space about the connected car and video and television in the car, as well as providing service updates with a better completion rate than the current satellite-based updates provide. There's also the opportunity to develop a stronger national security with the BPS system, which is the broadcast positioning system which would be a backup to our current GPS system. The United States is the only industrialized country in the world without a backup to its GPS system. And, you know, I don't have to tell you what happens if GPS goes out but we can provide a terrestrial-based system that would be a backup to the current satellite-based system. Less vulnerable to disruption and we have developed the proof of concept of the timing element of this already within atomic clock in Colorado with mist and I won't get into the wonky weeds of all the development that's going on there, but both the DOT and the DOD have said it's in our national interest to have a backup GPS system and we think that this transition would enable this industry, our industry, to provide this and it would be superior to a second satellite-based system. So, again, I think you'll see announcements of clients and trials beginning and continuing throughout this year and the next couple and I think that it would be probably 2028 if we were able to affect the transition of the top fifty markets, top fifty-five markets to a full ATSC 3.0 transmission schema, I think that's when you'll see revenue take a step forward.

And then more near-term question. You guys just talk a little bit further about core advertising trends near term. Are there any maybe national advertising categories that you guys just see any green shoots and any significant change there against positive or negative?

There's nothing specifically to call out positive on the advertising side. I think on the negative side, we talked about insurance and auto being two categories that have been more negative for us in the first quarter.

So maybe if you could just talk a little bit further about what you're expecting for overall core advertising trends in the first quarter year over year?

So what we talked about was that the first quarter advertising trends are gonna be down in the low single-digit range.

So what is it that you're seeing that's obviously a much better number than you guys were able to do last all four quarters last year? Obviously, part of it was hurt by crowding out, but what are you seeing better in particular that you want to highlight?

It's slightly, you know, it's just a general improvement in the trend. It's not like anything hero up. You know, I think we said that about half of the fourth quarter core decline is related to crowd out. So if you back that out, you get to something, you know, just shy of 5% decline in the fourth quarter. Which, you know, low single digits is not too much of a difference from there, but we also have the benefit of improving CW performance given all the new great sports content we've got on the air now.

And sorry if I just ask one more. On the CW losses, you guys talked about it being down 25% or perhaps more. In the New Year. They'll probably put it down loss roughly $100 million, maybe a little bit better than that. How are you feeling about the point in time when you might be able to get to breakeven, you still think by late this year, early next year, you feeling about that, please?

Yeah. We, you know, what we've said is, you know, we think we expect to get to profitability at some point during 2026. And that's still part of our outlook and what we're striving to achieve. We're on target for it.

Okay. Great. Thanks, both of you.

Thank you.

Thank you. Our next question comes from the line of Aaron Watts with Deutsche Bank. Please proceed with your question.

Hi. Thanks for having me on. You've covered a lot of ground. So I'll just have one question. I've asked you in the past about moving towards investment-grade status on your whole cap stack. Because, certainly, your stewardship of the balance sheet has opened the door for that discussion. But in light of the speculation around deregulation in the space and your commentary there today, maybe I can ask about the balance sheet in a different way. How high would you be willing to take your leverage in the current environment to participate in industry consolidation?

You know, I don't think we're looking to max out on leverage and overextend ourselves in any way. So, you know, I think the question is what is the comfortable leverage that the market could bear. And, you know, I know that the rating agencies always give you a little bit of an eighteen-month sort of time period to kind of get your leverage back down to maintain ratings. But, you know, I think we'll have to just look and see that on a case-by-case basis, and look at the deal, but we're not looking to create new headlines regarding being highly leveraged. That's, you know, one of the things that we have not done at the company historically.

Thank you. Our next question comes from the line of Patrick Barrington Research. Please proceed with your question.

Hi. Thank you. With the CW and mentioned you have a lot of renewals coming up later this year. With all of the sports rights that you have added to that network, could you maybe talk about any benefits you're seeing on the distribution side and the contribution that those rights are creating for either your affiliate partners or for your distribution revenue so far?

Well, I think to date, we're in the life cycle of the CW. I guess I would think of it as we're in the show-me phase of the life cycle. Right? And that's exactly what we're doing. We've been talking about programming that we've acquired and what was coming for quite a while, and it's been gratifying over the last couple of weeks, but even longer than that over the last couple of months as NXT came online and we saw the end of last year's performance with NASCAR on the last eight races that we sublicense from NBC. So in the world of distribution, you need to prove it out before you can actually monetize it. That's been our experience. And so we're in the proving out phase, and we'll move into the monetization phase going forward. So yeah, no surprise. The value of programming in the distribution world is heavily centered in live programming. Right? That distinguishes linear programming from SVOD programming. And the value in linear is in live news and sports. Right? And certainly, from the sports side, you can see that notwithstanding headlines on subscriber erosion, big-time sports continue to draw significant audiences, most recently with the Super Bowl setting yet another record. Alright? So we're optimistic with the performance of the programming that will translate into performance in the distribution deals that we have on the near horizon.

And I would just want to supplement something Mike Biard said because he's talking prospectively and talking about the differential between what we get for CW versus affiliations, we actually have been able to grow our distribution revenue with the CW to date with the new programming slate. We just think there's more to come.

Agree. Thank you. And we have reached the end of the question and answer session. I would like to turn the floor back to Perry Sook for closing remarks.

Thank you very much. In closing, I'd like to just tell you all we remain confident in Nexstar Media Group, Inc.'s positioning to continue to deliver long-term growth and value for our shareholders. Our financial results and competitive positioning in the industry coupled with organic growth opportunities as well as the potential of deregulation all positioned us very well for continued success and free cash flow growth. You look at the immense value we've created over the years and our future prospects, Nexstar Media Group, Inc.'s share price has never been more attractive even with the early moves today. We've consistently proven our ability to outperform, and if history's taught us anything, it's that with the long term, don't bet against Nexstar Media Group, Inc. There's a lot more to come. I'd like to ask you all to stay tuned and want to thank our teams for their hard work and dedication as well as our partners and shareholders for our ongoing support. We look forward to updating you on our next earnings call. Thank you very much, everyone.

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