Nexstar Media Group (NXST) UBS Global Media and Communications Conference summary

Regulatory and industry outlook

• Strong bipartisan momentum for broadcast deregulation, with focus on eliminating the national ownership cap and duopoly rule, expected to progress within the first six months of the new administration.

• Industry consensus now supports full elimination of ownership restrictions, driven by competition from big tech and the need to preserve local journalism.

• FCC could independently address in-market consolidation and relax duopoly rules, while Congress would need to act on the national cap.

• Anticipated deregulatory changes could trigger significant industry consolidation, with well-capitalized players positioned to benefit.

• License revocation threats by the administration are seen as unlikely to materialize, with historical precedent showing limited executive power in this area.

Business strategy and capital allocation

• Focus remains on recurring revenue streams, particularly through ATSC 3.0 deployment, rather than one-time spectrum sales.

• Capital allocation prioritizes dividends, share repurchases, and debt reduction, with flexibility to shift toward M&A if deregulation creates new opportunities.

• Record political advertising revenue in 2024, with strong performance in contested markets and a continued focus on broadcast as the primary medium for political campaigns.

• Distribution revenues have grown despite cord cutting, attributed to effective monetization and pricing strategies, with expectations for continued sustainability as attrition rates decline.

Broadcast, streaming, and sports positioning

• Local broadcast TV remains the largest category for political ad spend, outperforming CTV and cable.

• Broadcast is positioned as the most effective reach vehicle, with sports leagues increasingly favoring broadcast over streaming for marquee events.

• The CW network has shifted to a sports-heavy programming mix, reduced costs, and aims for profitability by 2026, leveraging affiliate renewals and expanded distribution.

• Industry rebundling trends favor premium broadcast content, with distributors restructuring to prioritize high-value networks and reduce attrition.

• Streaming is viewed as a distribution technology rather than a standalone business, with the future likely to involve bundled offerings across platforms.