Nexstar Media Group (NXST) The Citigroup Global TMT Conference summary

Strategic positioning and industry trends

• Broadcast television is outperforming cable, with record net revenue growth despite an ongoing advertising recession and national ad revenue declines.

• Scale in local broadcast stations provides leverage in distribution, vendor, and advertising negotiations.

• Affiliate fees for broadcast networks are seen as underpriced relative to viewership, with expectations for continued improvement.

• Retransmission fees for broadcast are projected to rise 5% through 2026, while cable affiliate fees are expected to decline 5%.

• The company expects distribution fee growth to outperform market expectations, betting on more than low single-digit growth.

Network operations and profitability

• The CW has shifted from 100% entertainment to a 46% sports/54% non-sports mix, reducing programming costs by more than half.

• Over $100 million in cost savings are targeted for the current year, with most realized by Q3, and further cost reductions expected.

• CW's primetime audience has grown for three consecutive quarters, with additional sports programming expected to drive further gains.

• The network aims for EBITDA breakeven by early 2026, with management confident in achieving this despite market skepticism.

• NewsNation has become profitable by leveraging existing distribution revenue and reallocating syndicated content spend to news.

Distribution, negotiations, and market dynamics

• Negotiations with MVPDs and virtual MVPDs are increasingly contentious, with the company leveraging its premium broadcast assets for better terms.

• Broadcast networks deliver four times the viewership of ESPN, strengthening negotiating leverage.

• The pay TV ecosystem is now dominated by sports and news fans, with non-sports/news viewers largely having exited.

• Attrition in pay TV is moderating, with 70% of those over 45 still subscribing, suggesting a stabilizing base.

• The company continues to post linear growth in distribution revenue, offsetting declines in the overall pay TV universe.