TEGNA Stock

TEGNA Inc. (TEGNA) operates as a media company serving the greater good of the communities.

Across platforms, the company tells empowering stories, conducts impactful investigations, and delivers marketing services. With 64 television stations and two radio stations in 51 U.S. markets, the company is the largest owner of top four network affiliates in the top 25 markets among independent station groups, reaching approximately 39% of the U.S. television households. The company also owns leading multicast networks True Crime Network, Twist and Quest. Each television station also has a robust digital presence across online, mobile, connected television and social platforms, reaching consumers on all devices and platforms they use to consume news content.

The company, through TEGNA Marketing Solutions (TMS), its integrated sales and back-end fulfillment operations, delivers results for advertisers across television, digital and over-the-top (OTT) platforms, including Premion, the company’s OTT advertising network.

The primary sources of the company’s revenues are subscription revenues, reflecting fees paid by satellite, cable, OTT (companies that deliver video content to consumers over the Internet) and telecommunications providers to carry the company’s television signals on their systems; advertising & marketing services (AMS) revenues, which include local and national non-political television advertising, digital marketing services (including Premion), and advertising on stations’ websites, tablet and mobile products and OTT apps; political advertising revenues, which are driven by even-year election cycles at the local and national level (e.g. 2022, 2020, etc.) and particularly in the second half of those years; and other services, such as the production of programming, tower rentals and distribution of the company’s local news content.

The company’s portfolio of ‘Big 4’ NBC, CBS, ABC and FOX stations operate under long-term network affiliation agreements. Generally, a network provides programs to its affiliated television stations and the network sells commercial advertising for certain of the available advertising spots within the network programs, while the company’s television stations sell the remaining available commercial advertising spots. The company’s television stations also produce local programming, such as news, sports, weather, and entertainment.

Subscription Revenue

The company has retransmission consent agreements with almost all cable operators, telecommunications and satellite providers in the company’s television stations’ markets for carriage of those stations.

The company’s scale and strength in local content have contributed to its ability to grow the company’s subscription revenue beyond traditional multichannel video programming distributors (MVPDs) into the growing OTT (i.e., streaming) space. Distributing the company’s content via OTT platforms allows the company to reach viewers who consume content via internet-based platforms rather than (or in addition to) via traditional television platforms, enabling the company to expand its subscription revenues and deliver advertising products to a broader viewing audience.

The company has distribution contracts with major network partners and OTT service providers for carriage of the company’s stations’ content on virtual MVPD (vMVPD) platforms, such as Hulu, YouTube TV and DIRECTV Stream. The company’s vMVPD distribution arrangements contain financial terms similar to those in the company’s more traditional distribution agreements with cable and satellite operators.

Affiliation Agreements

The company is the largest independent owner of NBC affiliated stations and third largest independent owner of CBS affiliated stations based on TV homes reached as reported by Nielsen (October 27, 2022). In 2022, the company successfully executed multi-year renewals with CBS (extended through late 2028) and Fox (extended through mid 2025). During 2020, the company executed multi-year renewal of its affiliation agreement with NBC (extended to early 2024). In 2019, the company executed multi-year renewals with ABC (extended through 2023).

Local News

The company is recognized for its journalistic excellence and innovation in reinventing local journalism in the digital age.

Innovative Content Offerings to the company’s Consumers

The company’s trusted, local content is the driver of the company’s success across all distribution channels. The company’s scale has allowed the company to invest in comprehensive content and digital innovation initiatives. The company’s focus on data-driven editorial processes, new storytelling formats, and unique visual presentations across all its platforms are helping the company to advance its intention of making its content the consumers’ first choice, regardless of platform.

The company produces the daily live, multi-platform syndicated news and entertainment program ‘Daily Blast LIVE’ (or DBL) out of KUSA in Denver. Now in its sixth year, ‘Daily Blast LIVE’ is carried in all TEGNA markets and in select non-TEGNA markets, together covering 48% of the U.S. markets. ‘Daily Blast LIVE’ is a true multi-platform play, broadcast across linear TV, digital and social media. The program broadcasts live 5 days a week, at least 48 weeks per year, and streams up to 5 hours of trending news each day across YouTube, Twitter, Twitch, DailyBlastLive.com, the DBL app and TEGNA’s station apps on Roku and Fire TV.

The company owns and operates entertainment brands True Crime Network, Quest and Twist, which capitalize on the rapidly growing over-the-air (OTA) and OTT television platforms. In addition to 24/7 linear broadcasts on hundreds of broadcast stations nationwide, the True Crime Network and Quest streaming apps are available on Roku, Amazon Fire TV, and Apple TV, as well as via mobile and tablet on iOS and Android devices, Chromecast, and on the web. Each streaming service offers hundreds of free, ad-supported, on-demand episodes of high-quality shows and generate millions of ad impressions per month, sold in part in partnership with the company’s Premion business. The company also operates VAULT Studios, which develops high-quality podcast and original television programs developed from the company’s stations’ vast library of true crime and investigative content.

Engagement Across all Platforms

The company, through websites, mobile and OTT apps, extends its local brands reaching more than 80 million visitors per month. As the consumption of content on digital platforms increases, the company has continued to make investments in developing new ways of connecting with local audiences and enhancing the company’s digital capabilities.

In late 2016, the company launched Premion, the industry’s first local advertising solution for OTT streaming and connected TV (CTV) platforms. The company provides local, regional and national brands with an effective, turnkey solution to run streaming CTV advertising campaigns in all of the 210 Designated Market Areas (DMAs) in the United States.

With premium inventory from 125+ branded networks, advanced targeting, and outcomes-based measurement, Premion is a highly desirable and effective way for advertisers to reach a highly engaged streaming audience, and has enabled the company to expand its revenue base and reach new markets. The company has built its business on local as its competitive advantage: the company’s large, local salesforce is leveraging relationships with local and regional advertisers to sell Premion inventory to deliver scale and measurable outcomes at the local level. The company’s TEGNA stations and Gray each have the right to independently sell Premion’s inventory in markets where the company both operate a local television station. With this additional sales channel, the company’s combined TEGNA, Gray and Premion direct sales forces reach OTT viewers in more than 78% of the U.S. television households.

Regulatory Environment

The company’s television and radio stations are operated under the authority of the Federal Communications Commission (FCC), the Communications Act of 1934, as amended (Communications Act), and the rules and policies of the FCC (FCC regulations).

As of December 31, 2022, the company was broadcasting the primary channels of KGW (Portland, OR), WTSP (Tampa, FL), KUSA (Denver, CO), KING (Seattle, WA), KONG (Everett, WA), WGRZ (Buffalo, NY), KXTV (Sacramento, CA), KPNX (Mesa, AZ), WCNC (Charlotte, NC), KTHV (Little Rock, AR), WXIA (Atlanta, GA), KSDK (St. Louis, MO), WTHR (Indianapolis, IN), WTIC (Hartford, CT), WCCT (Waterbury, CT), KHOU (Houston, TX), WUSA (Washington, DC), WHAS (Louisville, KY), WWL (New Orleans, LA), and WUPL (Slidell, LA), in both ATSC 1.0 and ATSC 3.0 formats.

Environmental Regulatory Matters

The company is subject to various laws and government regulations concerning environmental matters and employee safety and health. The U.S. federal environmental legislation that pertains to the company include the Toxic Substances Control Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, and the Comprehensive Environmental Response, Compensation and Liability Act (also known as Superfund).

The company is also regulated by the Occupational Safety and Health Administration (OSHA) concerning employee safety and health matters. The Environmental Protection Agency (EPA), OSHA and other federal agencies have the authority to write regulations that have an effect on the company’s operations.

Competition

The company competes against both traditional and new forms of media that offer paid advertising, including radio, newspapers, magazines, direct mail, online video, and social media. Major competitors in this space include cable providers Comcast and Charter, as well as internet platforms Google, Facebook, and YouTube.

In addition, the company competes for audience share from broadcast stations and cable networks, as well as companies providing/facilitating the delivery of video content via the Internet to computers, televisions, and other streaming and mobile devices (such as Amazon Prime, Apple TV+, Disney+, HBO Max, Hulu, Netflix, and others).

History

The company was founded by Frank E. Gannett and associates in 1906. The company was incorporated in 1923. It was formerly known as Gannett Co., Inc. and changed its name to TEGNA Inc. in 2015.