Nexstar Media Group, Inc. Q3 FY2025 Earnings Call

Good day, and welcome to the Nexstar Media Group's Third Quarter 2025 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, Kerri, and good morning, everyone. Let me 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 this 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, 2024, as filed with the U.S. 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 my pleasure to turn the conference over to your host, Nexstar Founder, Chairman and CEO, Perry Sook. Perry, please go ahead.

Thank you, Joseph, and good morning, everyone. Thank you for joining us on our call. Mike Biard, our Chief Operating Officer; and Lee Ann Gliha, our Chief Financial Officer, are both with me this morning. During the third quarter, we made the milestone announcement of our definitive agreement to acquire TEGNA in a cash transaction valued at $6.2 billion. The proposed acquisition will strengthen Nexstar's position as the nation's leading local media company with high-quality broadcast stations, award-winning news operations, and innovative local programming, all of which collectively demonstrate our commitment to trusted community-focused journalism. Operationally, TEGNA will enhance and expand Nexstar's scale, geographic reach, and community impact by adding 64 top-performing stations primarily in the top 75 DMAs to our growing portfolio of media assets. Financially, on a combined pro forma basis, Nexstar and TEGNA generated over $8 billion in revenue and $2.56 billion of adjusted EBITDA. Taking into account expected after-tax synergies and incremental interest expense, the transaction is projected to be more than 40% accretive to Nexstar's stand-alone adjusted free cash flow, and with roughly $300 million in anticipated synergies, we expect only a modest increase in pro forma net leverage. We're making good progress on our path to closing. TEGNA filed its definitive proxy statement, and the shareholder vote will take place on November 18. We submitted our HSR filing on September 30, and as expected, we received a second request letter from the DOJ on October 30, as well as a handful of inquiries from state AG offices. Our FCC applications are ready to go once the federal government reopens, and our expectations for closing the transaction by the second half of 2026 remain unchanged. In the meantime, as previously announced, we are taking a disciplined approach to capital allocation, conserving cash that would otherwise have been used for share repurchases in order to fund the more accretive TEGNA acquisition. As we enter this next phase of Nexstar's growth, I've never been more confident in our strategy nor more energized about the opportunities ahead. This is a defining moment for our company, our industry, our shareholders, and the communities we serve. When I said on our August conference call that I'm deeply committed to seeing this transaction through, I meant that. That's why I was pleased to extend my employment agreement as Chairman and Chief Executive Officer through March 31 of '29. Together with our teams, we will continue our mission to build a stronger, more competitive local media company and expand Nexstar's impressive long-term record of success and shareholder value creation. Turning now to our third quarter financial results. Nexstar delivered another solid quarter of net revenue and adjusted EBITDA, reflecting stable distribution and non-political advertising revenue as well as strong expense management. It's clear that broadcast television remains the bellwether and the most profitable segment of the media ecosystem, delivering the most watched content and most valuable programming. According to Nielsen, time spent watching broadcast TV increased 20% from August to September, representing the largest month-to-month gain since 2021 and more time spent watching television on broadcast than the entire universe of cable networks. September's results were driven by a strong start to the NFL season as well as college football. Through Week 6, the NFL averaged 18 million viewers per game, the highest average viewership since a record 2015 season. Similarly, the average total audience for the first 2 games of the NBA season, newly launched on Broadcast Network NBC, reflected a 36% improvement versus the first 2 games on TNT last year and double the total audience of the games on ESPN and 3.6x the average total audience of the games on Prime Video's first week of the season last year. Moreover, November started with a bang with Game 7 of the World Series delivering over 25 million viewers, the highest number for baseball in nearly a decade. These results underscore the enduring power and reach of broadcast and our consistent ability to aggregate mass audiences in real time, something other platforms just can't replicate. Major sports franchises continue to value the unmatched reach and advantage of broadcast television, and sports programming continues to complement Nexstar's popular local news programming, which accounts for almost half of our total household viewership. In terms of the CW, Nexstar's own broadcast network, CW Sports delivered record performance with the best quarter since the launch of live sports programming in Q1 of 2023, driven by continued strong viewership of the NASCAR Xfinity Series as well as a strong start to the ACC and Pac-12 college football season. In fact, last Saturday night, our final Xfinity race of the season on broadcast in primetime beat college football on CBS in total viewers, adults 25 to 54, and adults 18 to 49. Additionally, solid results from our entertainment programming lineup drove the CW's sixth consecutive quarter of primetime ratings growth. Year-to-date, the CW has surpassed competitive Big 4 primetime telecasts 250 times across total viewers among the 18 to 49 and 25 to 54 demographics. That's an impressive increase over the 45 times we accomplished that for the full year of 2024. The continued success of our long-term strategic growth on high-impact news and sports programming is further validated by the performance of NewsNation, which ranked as the #1 basic cable network for year-over-year growth in the third quarter, continuing its trend from Q2. On a year-to-date basis, NewsNation surpassed MSNBC 57 times and CNN 39 times in head-to-head telecasts across total viewers and in the adult 25 to 54 demographic. That compares to 2024 when NewsNation surpassed MSNBC 4 times and CNN 2 times in the head-to-head telecasts. These results reflect the fact that NewsNation's programming and unique fact-based reporting are resonating with viewers who are looking for refreshingly balanced and impartial reporting and analysis. In summary, the continued strength and consistency of Nexstar's financial performance reflect our stable diversified revenue and operating base, our disciplined expense management, and continued execution across our portfolio. Our proposed acquisition of TEGNA meets the deregulatory moment where it is and sets the stage for an incredibly bright future ahead for Nexstar, our industry, our shareholders, and the communities we serve. With all of that said, let me turn the call over to Mike Biard. Mike?

Thanks, Perry, and good morning, everyone. Nexstar delivered third quarter net revenue of $1.2 billion, a decline of 12.3% compared to the prior year, primarily reflecting the year-over-year reduction in political advertising. Third quarter distribution revenue of $709 million was flat compared to the prior year quarter, down 1.4% and primarily reflects MVPD subscriber attrition and the resolution of a nonrecurring disputed customer claim offset in part by increased rates and other contractual commitments, growth in vMVPD subscribers, and the addition of CW affiliations on certain of our stations. Without the impact of the resolution of a legacy customer dispute, distribution revenue would have been slightly up. Advertising revenue of $476 million decreased $146 million or 23.5% over the comparable prior year quarter, primarily reflecting a $145 million year-over-year decrease in political advertising. However, non-political advertising was essentially flat and better than our expectation of a low single-digit decline. Growth in national advertising, including at the CW and NewsNation, strong growth in local digital advertising, and the absence of political crowd-out that impacted last year's third quarter offset soft local advertising driven by the absence of the Olympics in the third quarter this year. No advertising category materially moved the needle in the quarter, and we have not observed any negative impact on the pharmaceutical category from recently introduced regulations. As a reminder, the pharmaceutical category represents less than 3% of our total non-political advertising. Speaking of political, we generated approximately $10 million in political advertising revenue during the quarter, primarily driven by spending related to statewide elections in Virginia, including the Governor's race, as well as California's redistricting ballot initiative. Looking ahead to the fourth quarter, non-political advertising is currently forecast to decline in the very low single-digit area on a year-over-year basis, benefiting in part from the absence of political crowd-out in the quarter, but offset by advertising revenue softness and tougher year-over-year programming comparisons at the CW and our national digital business. Political advertising is expected to be consistent with 2021 fourth quarter levels. Turning to the CW. We are consistently delivering favorable results from our programming investments, especially from sports, which continues to account for more than 40% of the CW's programming hours. We continue to build our CW Sports portfolio. During the third quarter, we expanded our relationship with the Pac-12 conference through the 2030-31 season to include 66 annual events, including 13 regular season football games, 35 regular season men's basketball games, 15 regular season women's basketball games, and the semifinal and championship games of the new Pac-12 women's basketball tournament. During the quarter, we also completed a new multiyear agreement with the Professional Bull Riders to be the exclusive live broadcast partner of the PBR teams series on Saturdays and Sundays, which began airing this last August. The NASCAR Xfinity Series, transitioning to the NASCAR O'Reilly Auto Parts series next season, is now firmly established exclusively on CW Sports, delivering strong momentum and benefiting from the scale and audience engagement of our broadcast model. Xfinity races delivered an 11% year-over-year increase in viewership for the first 30 races of the season, with more than 1 million viewers for 20 of those races. By comparison to last season, only 8 of the first 30 races broke the 1 million viewer mark in 2024. Audiences are consistently showing up for our live sports lineup. Ratings for ACC and Pac-12 college football games in the CW have more than doubled year-over-year among adults 25 to 54, while WWE NXT continues to climb since moving to the CW from USA Network, up 12% year-to-date. That momentum is translating into progress toward our financial targets. In the third quarter, we reduced losses at the CW by $5 million or 24% year-over-year. In the quarter, growth in distribution and advertising revenue virtually offset lower licensing revenue and lower operating expenses, net of a small increase in programming amortization drove the improvement in losses. Our outlook for the year for the CW remains unchanged as we continue to project 2025 losses to be lower than 2024 by about 25%. Our expectation of achieving breakeven sometime in 2026 also remains unchanged. To close, I want to reiterate our confidence in our long-term outlook and the enduring strength of Nexstar's business model. Our programming strategy anchored by live news and sports continues to deliver results for the CW and NewsNation, and we remain committed to unlocking even greater value from these assets as our audiences grow. Our local programming strategy is similarly anchored by our unrivaled live news product, and the proposed TEGNA acquisition will create substantial and immediate value for shareholders while advancing the public interest by strengthening local broadcast journalism and providing an expanded range of competitive broadcast and digital advertising solutions across our portfolio of local and national assets. With that, it's my pleasure to turn the call over to Lee Ann for the remainder of the financial review. Lee Ann?

Thank you, Mike, and good morning, everyone. Mike gave you most of the details on the revenue side and on the CW, so I'll provide you a review of expenses, adjusted EBITDA, and free cash flow along with a review of our capital allocation activities. Together, third quarter direct operating and SG&A expenses, excluding depreciation and amortization and corporate expenses, declined by $23 million or 3%, primarily driven by our operational restructuring initiatives taken last year. Q3 2025 total corporate expense was $68 million including non-cash compensation expense of $19 million compared to $53 million including non-cash compensation expense of $19 million in the third quarter of 2024. The $15 million increase is primarily due to one-time expenses associated with the expense portion of a nonrecurring settlement of a disputed customer claim and the proposed acquisition of TEGNA, offset in part by the release of certain reserves. Q3 2025 depreciation and amortization was $190 million, matching the amount in the third quarter of 2024. Of these amounts included in our definition of adjusted EBITDA is $72 million related to the amortization of broadcast rights for Q3 2025 compared to $70 million for Q3 2024. The increase in amortization of broadcast rights by $2 million was primarily due to slightly higher programming costs at the CW versus the comparable prior year quarter given the mix of programming. Q3 2025 income from equity method investments, which primarily reflects our 31% ownership in the TV Food Network, declined by $12 million versus the comparable prior year quarter, primarily related to TV Food Network lower revenue. On a consolidated basis, third quarter adjusted EBITDA was $358 million, representing a 29.9% margin and a decrease of $152 million from the third quarter of 2024 of $510 million due primarily to the election cycle. Moving to the components of free cash flow and adjusted free cash flow. Third quarter CapEx, together with payments for capitalized software cost net of proceeds from asset disposals were $34 million, an increase from $31 million in the third quarter of last year. Third quarter net interest expense was $94 million, a reduction of $19 million from the third quarter of 2024. On a cash basis, this compares to $93 million in the third quarter of 2025 versus $110 million in Q3 2024. The reduction in interest expense was primarily related to a reduction in SOFR and Nexstar's reduced debt balances. Third quarter operating cash taxes were $33 million compared to $10 million last year. As expected, our cash tax payments primarily in Q3 2025 and expected in Q4 '25 benefit from the One Big Beautiful Bill Act through the Marine statement of bonus depreciation on CapEx and the ability to deduct amortization of internally developed software. The low cash tax in the third quarter of last year was due to the change in the timing of our tax payments using the annualization method. Cash distributions from the Food Network were $6 million in the third quarter, which amount is still captured in our free cash flow and adjusted free cash flow definition. This amount reflects our pro rata share of distributions to cover tax from our proportionate share of the income of the JV. Included in the third quarter's adjusted EBITDA, but excluded from adjusted free cash flow is $22 million of income before amortization from equity method investments, which is primarily our pro rata share of Food Network net income in the third quarter of 2025. In Q3, programming amortization costs were lower than cash payments by $17 million as certain deferred programming payments were paid, and certain future programming was paid prior to airing. As a result, consolidated third quarter 2025 adjusted free cash flow was $166 million compared to $327 million in last year's third quarter. A few additional points of guidance with respect to adjusted free cash flow; we are currently projecting CapEx in the $32 million range in capitalized software payments in the $6 million range in Q4. In addition, we will acquire one of our buildings subject to a long-term lease for $21 million. Based on the current yield curve and our mandatory amortization payment, Q4 interest expense is expected to be in the $88 million range. Q4 2025 cash taxes are expected to be in the $45 million range. In Q4 '25, cash distributions from the Food Network are expected to be in the low single-digit million-dollar range compared to our share of adjusted EBITDA in the low teens millions, and payments for programming are expected to be in excess of amortization by about $30 million due primarily to the prepayment of future programming payments and payment of deferred programming. Turning to capital allocation in our balance sheet, together with cash from operations generated in the third quarter and cash on hand, we returned $56 million to shareholders in dividends, repaid $25 million in mandatory debt repayments, and did not repurchase any shares as we are conserving cash for our acquisition of TEGNA, which we expect will be more accretive than a stand-alone share repurchase strategy. Our cash balance at the quarter end was $236 million, including $13 million of cash related to the CW. Our debt balance was $6.4 billion. Because we designate the CW as an unrestricted subsidiary, the losses associated with the CW are not accounted for in the calculation of leverage for purposes of our credit agreement. As such, our net first lien covenant ratio for Nexstar as of September 30, 2025, which is now calculated on the last 8 quarters annualized basis was 1.73x, which was well below our first lien and only covenant of 4.25x. Total net leverage for Nexstar was 3.09x at quarter end. These leverage statistics are calculated pursuant to the description in our credit agreement. With that, I'll open up the call for questions. Operator, can you go to our first question?

And our first question will come from Dan Kurnos with Benchmark.

Two for me. Perry, I appreciate the update on the deal timing. It was implied yesterday that the SEC might address the cap in early '26. I appreciate all of the color you gave us around what you guys are doing behind the scenes. So I just wanted to give you the floor to maybe talk about why you're confident that the deal will close and close on time as you proposed it? And then for Mike, just a housekeeping question on the Q3 distribution stuff. I appreciate the color. Any more granularity you could give us? And is that onetime in nature? Is there any flow-through into Q4?

I think as it relates to the timing, the pieces are falling in place. The Eighth Circuit mandate was issued on October 21. That eliminates the top 4 ownership rule, which will go into effect as soon as that order is published in the federal register and is effective 30 days later. We need the government to reopen for that to happen. We have prepared 37 applications seeking approval of the transfer of control of TEGNA's licenses to Nexstar as well as the request for waivers unless they are rendered moot by other rulemaking. Again, we continue to believe that this administration, the Trump administration and Brendan Carr at the FCC are focused on deregulating business, allowing businesses to breathe, and allowing competition. We have spent a lot of time in Washington to reinforce at the regulatory agencies and on the hill that we are indeed here to help meet the regulatory moment, where it is, which all points toward the regulatory rulemakings happening in the first half of next year, concurrent with the processing of our application. I will add that while there's a lot of work ahead of us in complying with the DOJ request, I think our FCC applications are very strong and make a good showing as to why this transaction is in the public interest, which is the standard at which the FCC will hold it. Internally, with several meetings over the last week in conjunction with our Board meeting and integration plans, there is genuine enthusiasm in this building for this acquisition and the opportunity it creates to grow our business and secure a future for our business. We see opportunities that we believe align with 3.0 and spectrum distribution across multiple platforms, allowing us to compete on a much more level playing field with big tech. What's happening in the news underscores why deregulation and consolidation to preserve local journalism and our industry are necessary. There is a lot of work to be done, but we have a coalition of the willing that is really pitching in to comply with all the regulatory requests and to ensure it's done in a timely fashion.

To your second question on the distribution item, no, Dan, that was truly a nonrecurring one-time only anomaly that will not linger into the fourth quarter at all.

We'll go next to Benjamin Soff with Deutsche Bank.

So you obviously already have your big transaction in place, but I'm curious if you have any thoughts on what the rest of the industry might look like a few years down the line. In particular, are there any implications for Nexstar if the rest of the industry goes through consolidation or not? And then I have a follow-up.

I think to address your question, a good, strong industry needs to have good, strong companies comprising it. We believe we will be the poster company for not only what the future of the industry will look like but also the strength of our balance sheet, management team, and financial profile, alongside the amount of local content we deliver as well as our leadership in innovation for the industry. But we realize we can't do it all by ourselves. We are very much in favor of having good and strong companies in our industry. If that means good and strong competitors to us, that will only sharpen our focus. Mike, do you want to add more?

No, I think you've covered it. We aren't afraid of competition by any stretch of the imagination. As Perry indicates, we are dealing with the forces around us, whether that's dealing with big tech, big media, or other large media companies—having others in the broadcast space that are strong and healthy is something we absolutely support.

Great. I'm just curious to get your thoughts on the outlook for the next political cycle. In general, how do you view the dollars and how they might flow between broadcast and CTV in the future?

We've already conducted our way-too-early 2026 political forecast internally here. Suffice it to say, given our geography, we believe our company, even before the TEGNA acquisition, will produce a considerable amount of political revenue in 2026. It's all based on our geographic footprint, the states we operate in, toss-up races, ballot propositions, redistricting—elements that will allocate funding. We believe broadcast will continue to be the dominant repository for political advertising, while CTV advertising will remain the fastest growing area, as it was in 2024. Therefore, we project substantial political revenue in 2026, which should be no surprise to those following the company.

Moving on to Steven Cahall with Wells Fargo.

I have a couple of strategic questions. First, Perry, I made the mistake once of writing that you might be nearing retirement. That's clearly not the case. As you think out to the end of the decade, we'll be in a different administration and various NFL contracts. What are some of your biggest priorities sort of post-TEGNA as you look forward? Pro forma for TEGNA, Nexstar will have local news in approximately 80% of the country. We've seen your network partners not hesitate to enter the streaming market, where there are many households that just aren't on linear. How do you think about your ability to be in the CTV market at that level of scale, either by working with a big platform provider or developing something on your own?

First of all, our eyes are on the prize of getting the TEGNA acquisition to and through the finish line; that is our total focus now. However, I don't think that means we are forever done with acquisitions. We will look for opportunities that make good industrial logic and are substantially accretive to the company. We have a strong track record of identifying those. After the combined entity, we will have spectrum holdings reaching approximately 80% of the country. This, I believe, is the next significant frontier, especially for Nexstar, which will have more spectrum assets than any other company in our space. The opportunity for monetizing non-video uses of our ATSC 3.0 spectrum is, in my view, the biggest value creation lever in our business today. We also need to sharpen our business processes on buying and selling television time, which are currently inefficient compared to digital alternatives. Competing on a level playing field regarding the buying and selling of advertising with the rest of the industry is critical. If we could offer inventory bidding opportunities akin to digital during live events, that could open significant new avenues. Therefore, business processes, acquisitions, and ATSC 3.0 will be our focus post-acquisition and integration of TEGNA. Regarding CTV inventory, we have launched CTV applications in most of our markets and are producing programming to fill those hours. However, our core offering has been over-the-air television, which already provides a direct-to-consumer relationship.

We'll go next to Craig Huber with Huber Research Partners.

Perry, my first question is regarding the $300 million in synergies with TEGNA. I would think, if anything, that's conservative. Can you talk a little bit about how you get to that number? With all those synergies, once this deal closes, I would imagine it would free up a lot of money on your end, if you wanted to enhance news programming at TEGNA. I've always viewed TEGNA as one of the better-run companies in the group, but nothing is perfect, and I think you could potentially increase the number of hours of local news programming and improve the quality. Can you touch on that, please? From a public perspective, that would be appealing, right? That's my first question.

It would, Craig. We have identified nine markets where we can create additional local news broadcasts on stations with either minimal or no local news presence using the combined assets of the two stations in the marketplace. Dallas serves as a perfect example: WFAA does a fine job producing local news, but our CW affiliate only has a half-hour news magazine program and lacks a serious local news effort. We can leverage WFAA's newsroom and resources to build a credible news presence on our CW affiliate in the area. We are currently in our discovery phase or diligence 2.0, looking deeper into the operating and financials of each of the business units to find additional synergy opportunities. We feel very good about the $300 million figure and the enhanced operating opportunity that will result from this acquisition, which will be detailed further in our FCC filing once it's made.

Yes, Craig. As discussed when we announced the transaction, there are about $300 million in projected synergies. This breaks out similarly to how the synergies were calculated on the Tribune deal, with about 45% coming from net retrans and the remainder from operations. The operational side consists of eliminating duplicative corporate overhead and leveraging existing hubs to service the larger station footprint. We'll also find efficiencies by comparing how we operate our stations with TEGNA's operations, which will identify more areas for synergy. The significant overlap of 35 or 51 markets where we can operate two stations off of one infrastructure will also contribute to those synergies. Our initial analysis is thorough, looking at costs line by line, person by person, to evaluate potential savings. We will continue to assess to find further opportunities. For now, we are confident about that number and expect to provide updates as we proceed.

I have one final housekeeping question, Lee Ann. Are you still expecting gross and net retrans revenue this year to be flat compared to last year for the full year?

We do not re-update our guidance. That was our guidance for the year. As you know, in this quarter, we had a one-time impact from an old dispute resolution, which affected our revenue for the quarter. Excluding that impact, our distribution revenue would be up. You can extrapolate to see for the first three quarters of the year, that revenue has remained flat.

And Patrick Sholl with Barrington Research has our next question.

I was wondering if you could talk a little more about the ad trends expectations that you laid out for the fourth quarter. Are there any specific weaknesses in local markets or category drivers of what you called out?

We're not anticipating any sort of particular changes in the category. I think we're receiving some sports betting revenue due to Missouri, which is positive. From a local perspective, I don't foresee significant changes in the trajectory from the third quarter to the fourth quarter. The pressure in the fourth quarter is due to overlapping NASCAR at the CW, which we had last year and will have this year. Additionally, there are some unique one-time items impacting our national digital business.

And we'll go next to Aaron Watts with Deutsche Bank.

Clearly, there's optimism that 2026 will be a strong year for political spending. Typically, we see pressure on core advertising growth due to the crowd-out effect in these situations. That said, with more sports on air, namely NBC broadcasting the NBA and other significant events next year, do you believe core advertising might remain stable or improve compared to 2025, or at least perform better than it did during previous election periods?

That's a technical question, Aaron. Regarding the Winter Olympics, being earlier in the year should provide a monetization opportunity alongside core advertising. However, anticipating core advertising growth amid abundant political revenue might be difficult due to displacements expected this year. We're not issuing formal guidance now, but if interest rates continue to decrease and confidence improves, we could see favorable conditions for advertising spending overall in 2026. Therefore, I think we might have more tailwinds than headwinds, but quantifying expectations now would be premature.

If I could ask one follow-up about sports; there have been reports that the NFL might open negotiations on media rights next year. I think this presents clear advantages to local TV broadcasters but also raises some concerns. What are your thoughts on this potential interaction, and is it a positive for you and the industry?

Yes. I'll take that one. Overall, we're optimistic about that. When you consider the trends Perry mentioned in his opening statements, broadcast effectively delivers greater numbers and viewers for significant events compared to other platforms. We expect incremental movement of games to broadcast, particularly significant events, to continue benefiting local broadcasters. We believe the NFL will maintain its traditional commitment to local broadcast. Early negotiations may leave networks in a stronger position than at the end of the current media deals, and while some games might shift to streaming, significant games are likely to remain on broadcast. Therefore, we view these dynamics as potentially beneficial and believe broadcast is heading for a strong future.

This now concludes our question-and-answer session. I would like to turn the floor back over to Perry Sook for closing comments.

Thank you very much. I will just say quickly in closing that Nexstar's strong third quarter financial results extended our long-term operational track record, and we plan to put that expertise to work in our pending acquisition of TEGNA. We couldn't be more excited nor more energized about our prospects here at Nexstar. In the near term, we see a decreasing interest rate environment, the reset of the majority of our distribution contracts at the end of this year, the acquisition of TEGNA, and an election year in 2026, all of which we expect to drive shareholder value. Longer term, we expect to accelerate our CW and NewsNation network growth strategies, our deployment of applications for ATSC 3.0, and innovation around how we go to market and the products and services we bring to benefit our viewers and advertisers. Thank you for joining us. We look forward to updating you on our year-end results in February of next year. Happy holidays, and have a good day.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.