Nexstar Media Group, Inc. (NXST) August 24, 2026 Conference Transcript

We're really pleased to have Nextar management here with us. We have Perry Sook, chairman and CEO, Leigha, CFO and executive vice president, and along with me, Jessica Reberlick, I have Brett Navon on my team, so we will be tag teaming you guys. Okay. So, Perry, we'll start with you. Nextar started over 30 years ago with a single television station, but you've now become the largest local broadcaster in the country, And you have other assets, including the CW and NewsNation, following the Tegna acquisition, which hopefully we'll get into it. But anyway, how should investors think about what Nexstar is becoming over the next three to five years? Are you leaning towards a larger local broadcaster, a national media company, something else, something in between?

Sure. Well, I think it's a great question. I think of us as a local media company with what is approaching national scale. We have focused primarily on the local end of the media ecosystem. We think it is surprisingly durable. We also think it's the most sticky part of the media ecosystem. We have business relationships with approximately 47,000 SMBs in 80% of the U.S. We operate in 44 states. So that is approaching national scale. But we look at everything through the ends of kind of bottoms up what is good for our local stations, which the CW has been for those owned and operated stations. What will benefit the stations by making changes at the network or, you know, adding News Nation and National News Service on top of what we do locally? So I think the correct way to think about it is kind of in the local media space being without peer in terms of our size and scale and balance sheet and flexibility, but also just being a local media company but with national scale, being able to do local activation at scale, I think, is our secret sauce. maybe just taking a step back given the secular transition towards streaming it's easy for some investors to question whether local broadcast is a structurally declining business and how this high cash flow generating business transitions in a new paradigm what do you think the market misunderstands about the next star model and its durability yeah oh yeah let me i'll i'll take

some of that you know i think you know first and foremost i think it's our programming i think people tend to overlook the fact that almost 50% of our audience comes from our local news and our other local programming that we source ourselves. So we in and of ourselves are a very important programmer for the local communities that we service and the advertisers that do business with us. I think that's number one. Number two is our distribution model. There's about 20% of the audience out there today that receives their television signals over So when you are thinking about any sort of third-party programmer, like a sports organization or any other kind of entertainment content, you're immediately getting 20% more audience than what you would get if you were just kind of in the pay TV ecosystem on a standalone basis. So, you know, the fact that we, and we've seen that time and time again, you know, even with our own CW network, when we acquired the rights for the O'Reilly Auto Part Series for NASCAR, we've seen double digit, 20% plus improvement in ratings that accrues to the benefit of the network and the sports team, the sports league, and then also with respect to the viewers. So there's incremental value in the distribution that we bring to bear that isn't very important. And then I think, you know, the evolution of this ecosystem is kind of, I think, kind of come in our favor. If you think about over time, what has been the reason that you've seen the decrease in the pay TV ecosystem and that attrition? Well, it's really been because you've had a lot of these major network companies launch these direct-to-consumer services at price points that were very, very low. And what you're now seeing is, you know, those price points are now increasing because those direct-to-consumer services were generating massive losses for these larger media companies, and that's no longer sustainable. And so as you're seeing those prices increase, you're seeing the distributors actually rebundle some of these services into their pay TV profile. You know, you are getting an ability to now as a consumer access whatever content you want on whatever method you want, but you're going to be paying the same price. And so that is what we think is very important, is that we are, you know, Nexstar and our content, we are available. We're available on any sort of service that you're going to want. We're available on streaming. We're on YouTube television. We are on Hulu. We are on Peacock. We're on Paramount. We are over the air. We are on via the satellite companies. We're on via the cable companies. And I think over time, as we see the pricing more start to equalize, you're going to start to see, you know, a stabilization in the overall ecosystem. And that's going to accrue to the benefit of the broadcasters.

So just maybe continuing on that, but, you know, there's multiple concerns about the current ecosystem, whether it's, you know, the decline of pay TV subs, advertising headwinds, advertising transitioning from linear to digital, reverse comp, changing viewing habits. I mean, the list goes on. Do you think these are overstated at this point? Or what are you concerned about and what are you not concerned about?

Well, I think that Leanne addressed the distribution paradigm, which now with the average streaming service is $150 a month for the full package. that's about where the bundle is or was when people started to gravitate away from it so it's no longer a skinny bundle it is a very robust bundle and if pricing is roughly the same people might tend to stay where they are because I still think that you know the the traditional cable or MBPD bundle offer offers a superior navigation tool to a la carte streaming services so if If attrition begins to level out, I think that is probably one of the primary issues that people have had some existential dread about the melting ice cube nature of the sector. From an advertising perspective, there is no question that buying linear television is more expensive of a process than buying digital for the agencies. We have a former CFO of an agency holding company on our board of directors, and it It is indisputable that the agencies have less of a margin placing linear than they do placing digital, which is surprising to me we do as well as we do if the frictional costs are higher. So we next are attempting to address that by developing a seamless kind of pitch to pay system that we hope to be able to bring out and at least announce and talk about at next year's up front that would allow an advertiser to go through the process, access customer data, and go pitch to pay and basically access linear television inventory more in a programmatic fashion, which puts us then on par from a buy-sell process with digital. And I happen to believe that money will flow to the sector because people see the superior value proposition of the linear relationship that we, that we deliver, you know, at the end point. So I think that, you know, from that perspective, you know, we're trying to address the two things that I think are the kind of the biggest drag on the business. And we also, you know, that money has migrated to connected TV. And so we have dramatically increased and will continue to grow our presence in the connected TV space to at least be competitive and offer a full suite of audience extension products in addition to our primary linear or digital products.

So as promised, let's shift gears to Tegna. So maybe just beyond just scale, can you talk about the strategic rationale of the Tegna acquisition and what it brings to Nexstar?

Sure. First of all, you know, the acquisition as modeled was substantially accretive to Nexstar shareholders, so it made it work worth doing. It increases our national footprint of local stations from roughly 70 percent to roughly 80 percent of the U.S. There are 35 markets of the 50-plus markets where we will operate or derive an economic benefit from more than one television station in the marketplace, which allows us to rationalize a cost basis across two platforms, add additional local content in markets where we had a CW and maybe Tegna had a Big Four station with a robust news organization and can produce news for the CW now rather than us having to go out and, you know, buy that a la carte elsewhere. So there are all kinds of industrial logics and touch points, rationalizing the real estate portfolio, you know, two buildings down to one in those overlap markets. You know, we still make our money selling local content. So it's very important to us to have as robust a local market content offering. So there's no savings there, but there might be savings in housing the two different studios in one building and not having to pay to heat and cool and cut the grass of the building down the road. So there was a lot of industrial logic, a lot of synergies. But again, it's the kind of acquisition that we have made. And we feel that getting to approximately $3 billion of EBITDA puts us in the neighborhood of Fox pre-Roku and Paramount Skydance pre-Warner Brothers Discovery. And that's a different neighborhood than most of the rest of the pure play broadcasters are from a financial standpoint.

Unfortunately, you're stuck in the regulatory process. Can you give us an update on exactly where you are in the key timeline from here?

Sure. First of all, on overall regulatory, you know, the FCC has voted to eliminate the national cap. And we're waiting for that order to be published or released by the FCC, which will then cause it to be published in the Federal Register, which is, as we used to say in Schoolhouse Rock, how the bill becomes law. So there's that. There is also the quadrennial review of the local ownership rules, which we believe that those should be addressed this fall in attention to that rulemaking, which would then modernize the local ownership limitations, eliminate some of those limitations, modernize the rules for both television and radio. And I would say that, you know, I think if Chairman Carr is able to affect both of those changes, those will be signature pieces of legislation and administrative rule changes that will really have modernized and given additional life to the local radio and television industries. And I think those will be signature achievements of his current tenure as FCC chair. So we're optimistic about all of that. As it relates to our jurisprudence issues, we will be heard in the Ninth Circuit in the middle of November. That is on our appeal on the whole separate order, as well as attempting to determine if the states have standing to proceed in this litigation, that oral argument will be heard in the middle of November. And when we get a ruling on the results of that is anybody's guess, but we're anticipating probably sometime in early to mid-first quarter. And then the trial on the actual initial court case that was brought in the Sacramento Federal District Court, that trial will commence in July of 2027. And, you know, that will probably take a couple of weeks and then we'll see where they rule and, you know, whomever loses may well appeal. And we may be taking this all the way to the Supreme Court. I think the most important thing for us is that we've closed on the asset. We have the benefit of the cash flows of the Tegna acquisition, And we paid down in excess of a half a billion dollars in debt from the March closing through, you know, close of business yesterday. And we will pay down in excess of a billion dollars in the acquisition debt between now and the end of the year on a cumulative basis. So it's not the 100 percent solution, but it's also not a zero percent solution. So we're not there's no negative implications as time goes on. It's only positive as we'll continue to, you know, carve away at that debt balance.

Well, just to maybe continue the conversation, I mean, you alluded some of the strategic rationale for the acquisition, but given the requirements to maintain independent operations, what exactly can Nexstar do to extract the economic value that underpin the deal itself right now?

Yeah. So for right now, we are subject to this whole separate order. So we have in place a team, a CEO, Pat Palini, who came over from Fox, who is running Tegna in the interim. He's very business focused. And you probably saw he had an interview the other day with TV News Check where he's working on trying to invigorate the organization and continue to operate the business. So we think the business is an excellent hand with his operations. So in the interim, you know, it's really kind of, you know, his show with respect to operating the business. But as Perry just mentioned, you know, we do own the company. So we get to benefit from all of the cash flow of the combined business. And we are using that cash flow to repay debt, which is extracting economic value for our shareholders from the acquisition. And, you know, hopefully if we are successful in our appeal, we'll be able to at least narrow the scope of the litigation, which would potentially allow us to enact some synergy sooner rather than later.

So switching gears, let's move on to advertising. I mean, core advertising still is a key driver of your model. How would you assess the overall health of the ad market at the moment? And as we think about the drivers of your ad business, where do you see the most opportunities?

Yeah, I think, look, from an advertising perspective, we had – we were down kind of mid-single digits on a nonpolitical basis in the first quarter and – or sorry, in the second quarter, and I expect to be down a similar, maybe slightly – a little bit better in the third quarter. And that really is driven by a number of factors. Number one is we're in a political year, so there is a good amount of crowd out as we are selling advertising for a political. We cannot sell it for nonpolitical purposes. Number two is we are impacted by just the general competition from increased AVOD inventory that's out there, CTV inventory, and then just general economic weakness that we are seeing a little bit of that. But having said all that, we have a number of different areas where we are working very hard to grow the business. Number one is on our local digital side. Just because there's a lot more CTV out there doesn't mean we can't be selling it. So we are utilizing our local sales force. We have a very large local sales force to not only sell our core linear inventory, but then extend the audience for our advertisers by selling third-party CTV inventory as well. And so that business has been doing incredibly well, growing at a double-digit rate, and that's really helping us kind of stem the tide of some of the impacts on the linear side of things. As Perry mentioned, we're working to transform our go-to-market from an advertising perspective and being able to make our inventory look more similar to advertisers as CTV inventory is, make it easier to access. But that's a longer-term sort of strategy, but something that we're focused on. And then we've got a number of really good organic businesses within our organization. We own the News Nation, which from a ratings perspective peaked at number 35 in terms of the rank of all networks in the first quarter. CW Network is at the number eight ranked network that's out there. And so these are businesses that we are continuing to focus on and grow the audience, which then will have a positive impact on our ability to grow our advertising revenue. So we have a number of interesting areas where we're focused, not the least of which is what we're dealing with right now with the political cycle, because broadcast television is known far and wide as the best place to put your dollars to work if you were really looking to get people out to vote and to influence how they vote.

That's a great segue. We're heading into this robust political cycle. What are your expectations for advertising and political, and how does your footprint overlap with some of the key competitive races that we should expect to see?

Yeah, I mean, political is doing incredibly well this year. I think there's a third-party research firm out there named Ad Impact that I think has called for, This is on a gross basis, $5 billion of political advertising coming into the broadcast space, which is up versus 22 and up versus 24. So we're feeling good about that. With respect to our portfolio, we have a pretty broad portfolio. And prior to the tech acquisition, we were already covering 80% to 90% of the contested election markets in any given year. So we feel usually what happens is you'll have a race that you think is going to be very strong and it's not strong, but then you'll have another race somewhere else within our portfolio that you didn't think was going to be strong that ends up being very strong. So when you go back and you look at Nextar's history in terms of how much political advertising revenue we're able to achieve, we look at it on a market share basis. And so if you look kind of pretty consistently, Nexstar is able to achieve low double-digit to low teens percentage of the dollars that are spent on broadcast for political advertising. And you have to be a little careful because the ad impact number is gross, and we refer to our revenue on a net basis. So there's a 15% differential there. And then Tegna, historically over time, has done kind of like high single-digit market share. So, you know, we're feeling good about this year's political cycle, and, you know, we've had some unusual things happen, like, you know, first quarter with Texas being a very, very big number, and we're looking forward to seeing what happens throughout the rest of the year.

So overall, advertising does appear to be getting more competitive. What is the path to returning nonpolitical advertising back to growth?

Again, I think if we can remove the inequities in the buy-sell process and make ourselves more user-friendly, that will be a conduit. We know that most automotive advertising, when you get below the Tier 1 level, is done through certified OEM vendor relationships. We have worked with and worked to become one of those certified OEM vendors, which our automotive spend, I think, is holding up probably comparative to the rest of the industry relatively well. And so I think we need to continue to do things like that, continue to make our digital offerings more robust so that we can sell nationally and locally and a total audience profile that we can offer you CTV. We can offer you apps. We can offer you other streaming opportunities. We can offer you linear as well as sponsorship opportunities. And we're doing that with our national sales team across all of our national inventory on our local stations, as well as our national inventory on our networks, our DigiNets, as well as our cable networks as well. So I think the one-stop shop nature is another reason yet to continue to try and scale, to compete with those that sell enormous amounts of advertising, Meta and others, in a one-stop basis. And I think that's where we need to get to, and we are working and striving very hard to get to that point so that we have a competitive value prop. Because we know that from an audience delivery perspective, with the sports leagues we deal with, there's a tremendous appetite to be on broadcast, to get that full potential distribution, to get the audience uplift from streaming only or cable only. And so, you know, we see that as driving our sports portfolio on the CW, but also applying that kind of enthusiasm across the entire buy-sell process and all of our inventory. You know, I think we'll, again, if we can remove the structural impediments to doing business with us, that we'll end up doing more business.

So you kind of just touched on this a bit, but search and social and increasingly connected TV are also taking share from local advertising budgets. I guess what are the opportunities for Nextar to migrate some of the advertising businesses back toward some of your digital properties?

Yeah, go ahead. I mean, one of the things that we've done is we've launched OTT apps in all of our local markets over the course of the last year. And so we've got our local news that's available on OTT's CTV capabilities, so that can be a way of doing that. I think the other – we also have the CW app, and News Nation has CTV capabilities as well. So that's part of it is creating our own content, kind of driving that. And I think, as I was saying earlier, part of it is not only leveraging our local sales force, but leveraging third-party content and relationships that we have to actually sell that. You know, make it more about our local advertiser and what we can provide to that service.

So, Perry, you just mentioned that, you know, you've beefed up your sports. CW is on a – you know, you're positioning it on a path to profitability. But can you talk a little bit about where you are in the transformation of the network? What opportunities still exist, including managing programming costs or building an audience? and, you know, really driving profitability.

Sure. Listen, I have to compliment Sean Compton and Brad Schwartz and the team. We took a money-losing network, and we now will be cash flow EBITDA positive in the fourth quarter of this year, and we've added 800 hours of sports while our entire expense for programming is half of what it was at the time of acquisition. So, you know, we're playing money ball, and we are acting like an upstart, which we are, but it's been a tremendous turnaround from, you know, a reducing of cost and redundant overhead, and it's a very lean organization now, but I think appropriately structured for the time. We believe that the CW and by extension kind of the Fox network model is the preferred network model for local stations where there's a primetime component of marquee programming and a mix of scripted and game shows and police shows, reality shows. But then there's just 800 hours of sports on the weekend, which allows our stations to sell sports that maybe haven't had that opportunity and our network sales organization to sell and compete for sports dollars where previously they were they were closed out. And so we've done a great job. We were with the NASCAR folks last night at a charity function. And we're told, A, we're we're the best partner they have. And B, you know, we we are the growth entity for for NASCAR. And, you know, when we we put NASCAR on, we're doing numbers for those races that they haven't done in six or seven years. And as Leanne said earlier, it's 20 plus percent year over year growth. And that's the power of broadcast, the power of having being able to form viewing habits that every Saturday the NASCAR race will be on CW. There's no ambiguity about that. And so that's what we saw as the opportunity and is a proof point now. And we're bringing additional sponsorships in addition to selling that inventory at sports CPMs in both the upfront and the scatter market. I think as we go forward and think about the renewal of the NFL, I know you have a question on that. We think there could be opportunities as people rationalize their spending for the NFL. while there may be other sports opportunities that fall out of those big four network portfolios that could potentially benefit the CW and things that might come to us that we otherwise might normally not have a chance to bid on.

Segue into Brad's question.

Yeah, a big part of CW has been the incremental sports rights you have acquired. What have you learned about this market, the audiences that it attracts, the affiliate and advertising and economics associated with sports rights, And how do you balance driving profitable growth, especially at a time when sports media rights continue to escalate in price?

Sure. Well, our opportunity to monetize sports on the CW is through advertising and through increased distribution fees for our affiliated stations, including our owned and operated. That, you know, three years ago when we told everybody what we were going to do, they said, well, we're from Missouri, so show us. Right. So now we have proof points. We have 800 hours of sports on the CW. sports every weekend most saturdays this fall the cw will program 12 to 14 hours of continuous programming you know starting with you know a college football game then a nascar race then maybe a prime time and even late night college football game so it's the full portfolio of sports our florida state new mexico state game which was our week zero game did approaching two million viewers for the cw which is an all-time high for sports on the cw not that that's a huge large sample size but it's also the highest gross audience that the cw has delivered in in a dozen years so it's you know it's buffy yeah exactly you know back back when the market was not as fragmented as it is so uh we feel very good about that um i think that you know what we see you know we're very full on saturday sports we could use more sunday sports sunday right now for us in basketball season is where we have women's basketball. We've actively added more women's basketball from both the ACC, the Pac-12, and the Mountain West because there's advertiser demand for it. Even though the ratings are lower, the advertisers want to be associated with that product. So we could use more Sunday sports, you know, throughout the year, and we'll look for those opportunities as they come available to us. But, you know, we, again, you know, the advertising piece is fairly immediate proof. The reverse compensation from affiliates, you know, takes time because they have to reset before they have the money to pay us. But we've seen tremendous progress in our affiliate fees, albeit from a fairly low base. But we've shown tremendous growth there as well. And it's kind of unfolding as we had expected it would.

So let's go back to the NFL, which you mentioned. There's an opt-out in 2029 for the current rights holders. To the extent that the broadcast networks are successful in getting these rights, we expect a big step up in rights fees. So, you know, one of the offsets for the networks is obviously to try to get higher reverse comp from the local stations. How do you view the implication of rising sports rates in your portfolio? and what can you do as you get larger? Is there something you can do about that?

Well, it's interesting because I do expect that the sports rights fee bubble will continue to grow, certainly through this cycle of the NFL. And as I mentioned earlier, you know, that may create opportunities for the CW, but as it relates to our local affiliates, you know, So we have typically, as a group, paid, deferred approximately 10% to 12% of the cost of the total rights fees that the networks have paid. I would expect that to continue. So as they get an increase, we will get an increase as well. But I think you have to look at that at what cost, you know, or, you know, what's the offset to that? The offset is that I'm willing to pay for sports rights, but I may not be willing to pay as much for general entertainment programming. that is ubiquitous across multiple streaming services. And so I may pay more for sports, but want to pay less for everything else. That would certainly be our position. And, you know, we'll see how that all plays out. But again, I think the next star opportunity there will be not only as the largest affiliate group of each of the big four pro forma for Tegna by a significant margin, by the way. you know i we you know i think we'll have a more balanced discussion than smaller players and who knows you know you look at what we've done with espn and putting our cw sports in partnership on their app there may be as these sports costs continue to balloon you know opportunities as the largest affiliate group to enter into some sort of a co-venture for certain aspects of their sports relationships which could be a benefit to those stations as well as benefits to the cw through you know other opportunities that's really interesting could you like meaning local rights is it potentially yeah i mean i think you'd have to think through it and you know and is there shoulder programming that we could produce our own or you know i i don't know that you'll see next start necessarily bid you know on on our own for nfl rights uh but um but could we participate in some way shape or form in partnership with the network you know again we're not just an affiliate. When you deliver more homes for CBS than their owned and operated stations do in local marketplaces, that's different than if you're 8% of the U.S., right? And so I think that our discussions should necessarily seek a different level maybe than the rest of the affiliate universe. And I think we're open to any and all of those discussions. We need to start working to create opportunity rather than working for a zero-sum value transfer, which is how the negotiations have been in the past.

Very creative.

Time will tell.

Shifting gears to NewsNation, that continues to generate significant audience growth. However, many advertisers avoid news programming. How should we evaluate this progress, how this progress translates economically? What are the key milestones that you're targeting for NewsNation, both from an audience and a revenue profitability perspective? And maybe just as a follow-up to that, you know, there's a lot being made about news stations in themselves becoming political. Do you view that as an opportunity for NewsNation?

Well, let me take that. You know, I think let me take that last part first. I mean, that's the foundation of NewsNation was to create a news network that really caters to the majority of America that is not very left and not very right, but really is kind of more that 60 percent in the middle. but then we'll provide opinions and, you know, information kind of on both sides. We are really focused on being an unbiased, you know, fact-based organization, and we are consistently rated in that regard. So we think that, you know, over time, you know, people will, you know, come to us. They like to fact-check the other two networks, the left and the right, and come to NewsNation for that perspective. You know, we're very proud of what NewsNation has done. You know, I think I mentioned earlier in the first quarter we peaked at, I think, number 35 in terms of the ranking of all broadcasting cable networks out there. The News Nation has been very successful and profitable from day one. So we are just looking to kind of continue to build and monetize on that. You say advertisers don't really like news. I don't know if that's the case. I mean, I know that Warner Brothers put some numbers out there about CNN, and I think CNN's doing something like close to $2 billion of revenue a year. And when you look at the top-ranked networks, you always see Fox News right in there and MSNBC. And so we're really looking to aspire to kind of drive our audience to be able to get to those types of levels. And we think News Nation has a potential for really a breakout success and a real good organic driver for the entire Next Star story.

I have a regulatory question, but before I ask that, what are the demographics for News Nation? Are they, like, upscale, Democrat? Like, how do they compare to the rest of your programming?

Well, not unlike other cable news networks. It skews older. It does skew a little bit more upscale than other cable networks. And, again, when we started the company or when we started News Nation five years ago, a little over five years ago, with a $20 million launch campaign to introduce News Nation, we did research afterwards and found that 11 percent of america knew what news nation was well now among news viewers it's about 55 percent no but that still means we got to introduce ourselves to you know four out of ten homes in on the street um you know little points of pride is like if you know when i'm have spent a long day or a couple of days in washington dc i'm sitting at the admiral's club news nation is the news network that they have on in the admiral's club and at Reagan National, if you walk through the concourse at Newark, if there's a news network on, it's usually News Nation. And again, people are saying, well, this this is one that is not partisan. It's not going to tick off half of the people in the Admirals Club or half the people in the you know, it is seen as as down the middle. And it's very hard to to continue to stay there because so much bias is unconscious in the words we use. I'm married to a rhetorician, as you know, And so it's, you know, the words are very important and the words that are used often have impact. And so for us to remain objective and balanced in everything we say and do requires constant vigilance. But, yeah, I think we're pleased at the growth, the fact that this network now is relevant. I mean, success is Fox News, right, in terms of audience, in terms of revenue, in terms of profitability. But the fact that, as Leanne said, we were totally self-funded. As our syndicated program contracts expired on the old WGN America, we took that money and plowed it into expanding the journalism. So it is a profitable network and has been from day one. It's been totally self-funded. So growth for us is organic, and success is anywhere between where we are today and where Fox and CNN are today. So that's our opportunity.

I just want to get a quick one, because I know we're sort of running out of time. But Perry, you mentioned that the FCC will announce the repealing 39% ownership cap on broadcast networks. Not really getting into the specific deal, but how does removing the caps changes the dynamics between the ecosystem of station groups, broadcast networks, and distributors?

Well, I think that, you know, we want to continue to grow. I mean, there are some markets where, you know, once we have line of sight and clearing our current litigation, you know, we could acquire stations to improve the distribution of the CW network and give us a station in a market we're not in. And we can do that now because the cap is, you know, is removed. And so, you know, we think it's not unlike other businesses that, you know, five years from now, when you look at the local station industry, you'll have Nexstar, which will be kind of the largest by a margin. And without peer, you'll probably have a second competitor that is maybe half our size. And then you'll have a bunch of smaller competitors that, you know, but you'll care about these big two as public equity investors. And we're almost in that place now, but I think it will even become more defined in the next three to five years. I think others, as they create balance sheet capacity, will probably try and run the same play to expand their holdings or consolidate among themselves. And so I think it's just like any other industry where you have a dominant player, a significant secondary player, and then a bunch of smaller companies that make up the remainder. And so I don't see our industry following a much different arc than others already have.

Shifting gears a bit to capital allocation priorities, I mean, you mentioned some of the deleveraging you've done already. But how should we think about those priorities in your term, whether it be debt reduction following the tech and acquisition and capital returns?

So, you know, if you kind of go back and look at our history and what we said prior to the tech acquisition, we always, you know, do use the leverage capital markets to facilitate the acquisitions, which helps drive shareholder returns. So we leverage up and then we use our free cash flow to repay the debt. And this is, you know, a great time to have done the acquisition going into a political year when we have excess free cash flow. So we look to, you know, to you know, conservative enough so that we can, you know, be opportunistic if there are other opportunities that come along. And, you know, as you know, every dollar of debt that gets paid down, it creates a dollar of equity value. And that really is what helps generate that leverage return for our shareholders that has been so beneficial historically with prior acquisitions. So, you know, that's really our kind of main point of focus is to make, to kind of continue to deleverage. We are continuing to pay our dividend. We're, I think, somewhere north of a 4% dividend yield, so one of the highest dividend yields within the S&P 400, which is the index we're in, and we're going to continue to do that. And then once we get our leverage down, we will relook at the best possible utilization for capital going forward for our shareholders, which heretofore has been M&A. That's been kind of the best strategy. But if there's no M&A to be done, then we look for another type of M&A, which is buying our own stock back and returning capital in that regard. And so, you know, as painful as it is right now looking at our stock price and not being in the buyback market, we do think paying down debt is still the right way to go for the time being.

I'm going to make one last one, and I know we have like a minute left, but, you know, you've talked a lot about the growth drivers. You're really thinking creatively on the sports side. I thought it was super interesting. Is there something, another, like what do you think is the biggest opportunity that investors currently don't appreciate?

We haven't the time to talk about spectrum, but we do see the opportunity to monetize our spectrum vis-a-vis high-speed data transmission being the single largest value creation lever in our business as it's currently known. That's probably a sidebar discussion or a whole other session, but we formed this consortium with Sinclair Gray and Scripps to anti our spectrum in and try it. And we've hired a company, we've created a company called EdgeBeam Wireless, and they're kind of, think of them as the leasing agent. And we want to go to market with this robust collection of spectrum, which is about 98% of the U.S., so nationwide coverage. And we think the opportunity for high-speed data transmission is significant, whether it's lower-cost 5G network replacement, partnering, you know, giving, you know, 5G networks that need more spectrum. We have that. There are other applications that I could go into. But it is living in Texas. So it's like finding shale oil and gas in the ground. It takes a while to monetize it. But the asset is there and it is worth something. And I know the minute money starts to flow, investors will start to pay attention to it. And we've been telling this story for some time. But we're spending a lot more time on it now, and I think we're closer than we have been to having the ability to unlock value. Obviously, it requires some assistance from the FCC in sunsetting 1.0 requirements and allowing 3.0 spectrum kind of to blossom across the full allocation of 6 megahertz. But I think once we get there, it is a substantial value creation opportunity, not just for Nexstar, who has more spectrum than anybody else's right now, but for the entire industry. And I think it could rival distribution revenue in terms of what it could mean to the P&L of local license holders.

Amazing. Thank you. Thank you both so much.

Thank you, Jessica. I appreciate it.