Nexstar Media Group Stock

Nexstar Media Group, Inc. (Nexstar) operates as a diversified media company.

The company produces and distributes engaging local and national news, sports and entertainment content across the company's television and digital platforms, including more than 310,000 hours of programming produced annually by the company's business units. Nexstar owns America's largest local television broadcasting group consisted of top network affiliates, with over 200 owned or partner stations in 117 U.S. markets in 40 states and the District of Columbia reaching over 220 million people. Nexstar's national television properties include a 75% interest in The CW Network, LLC ('The CW'), America's fifth major broadcast network, NewsNation, America's fastest-growing national cable news network in primetime, popular entertainment multicast networks Antenna TV and REWIND TV, and a 31.3% ownership stake in TV Food Network. The company's portfolio of digital assets, including its local TV station websites, The Hill and NewsNationNow.com, is collectively a Top 10 U.S. digital news and information property, attracting almost 99 million unique users for December 2023.

Growth Strategies

The company's strategies are to leverage the company's scale; continue to grow distribution and advertising revenues; improve and expand national broadcast and cable networks; develop new revenue streams; and acquire and invest in new and complementary businesses.

Stations

As of January 2024, the company owned, operated, programmed or provided sales and other services to 201 full power television stations in 117 markets in 40 states and the District of Columbia, reaching approximately 39% of all U.S. television households (reflecting the company's owned stations only and after applying the Federal Communications Commission's ('FCC') ultra-high-frequency ('UHF') discount) and approximately 70% of all U.S. television households reflecting the company and its partners' stations and excluding the FCC UHF discount. The stations are affiliates of CBS, FOX, NBC, ABC, The CW, MyNetworkTV ('MNTV') and other broadcast television networks and provide television programming to consumers in the company's markets, including network programing, content that the stations produce, including local news, and syndicated programs that the stations acquire. In 2023, the company acquired KUSI-TV, a full-power independent station in San Diego, CA, WSNN-LD, a low power independent station in Tampa, FL, which is now affiliated with MNTV; and in 2024 the company entered into a time brokerage agreement with KAZT, a full power independent station in Phoenix, AZ, which is now affiliated with The CW. These stations are included in the table below and the full-power stations and included in the company's station count. The company also owns and operates one AM radio station in Chicago, IL.

Of the 201 full power television stations, 37 are 100% independently owned by VIEs. The company consolidates 35 of these VIEs (the 'consolidated VIEs') in the company's financial statements. In compliance with FCC regulations for all the parties, all VIEs maintain complete responsibility for and control over programming, finances, personnel and operations of their stations. For the consolidated VIEs, the company is deemed under the U.S. GAAP to have controlling financial interests in these entities because of Nexstar's (i) local service agreements with the consolidated VIEs' stations, (ii) guarantee (excluding The CW) of the obligations incurred under the senior secured credit facility of Mission Broadcasting, Inc. ('Mission'), a consolidated VIE, (iii) power over significant activities affecting the consolidated VIEs' economic performance, including budgeting for advertising revenue, certain advertising sales and, in some cases, hiring and firing of sales force personnel and (iv) renewable, exercisable and assignable purchase options granted by each consolidated VIE which permit Nexstar to acquire the assets and assume the liabilities of all of the consolidated VIEs' stations at any time, subject to FCC consent.

Network Affiliations

All, except three, of the full power television stations that the company owns and operates, program or provide sales and other services to are affiliated with a network pursuant to an affiliation agreement. The agreements with CBS, FOX, NBC, ABC, and The CW are the most significant to the company's operations.

Networks

The CW. The CW is one of America's major broadcast networks and reaches 100% of the U.S. television households. The CW delivers 15 hours of primetime entertainment programming and three hours of children's programming per week in addition to over 300 hours of sports per year as the broadcast home to LIV Golf, ACC football and basketball games, Inside the NFL, WWE NXT beginning in 2024 and NASCAR Xfinity Series beginning in 2025. For its smaller market affiliates, CWPlus supplements The CW programming with additional syndicated content to provide 24 hours of programming, seven days per week. The fully ad-supported CW App, with more than 100 million downloads to date, is available for free to consumers on all major platforms and is home to the latest episodes and seasons of The CW's primetime programming, live streaming of LIV Golf tournaments and a library of entertaining film and television content for on-demand viewing.

NewsNation. NewsNation is a national cable news network which primarily delivers national news programming supplemented by quality television series. NewsNation is the fastest-growing national cable news network in primetime reaching 69 million television households across the United States. Validated by independent watchdog groups, NewsNation is America's source for engaging and unbiased news, which reflects the full range of perspectives across the country. The network draws on the local and national expertise of Nexstar's 6,000 journalists in 110 newsrooms across the country. NewsNation is available on every major cable and satellite provider, streaming platforms, including YouTubeTV, Hulu, DirecTV Stream, FuboTV and Sling, online at www.newsnationnow.com, and on the NewsNationNow app available on Android and iOS.

Antenna TV and REWIND TV. Antenna TV and REWIND TV are multicast networks reaching 100% and over 50% of the U.S. television households. The networks primarily air sitcom hits from the 1950s through the 1990s.

TV Food Network. The company also holds a 31.3% interest in TV Food Network, which annually distributes significant cash flow to the company. TV Food Network operates two 24-hour television networks, Food Network and Cooking Channel, offering quality television, video, internet and mobile entertainment and information focusing on food and entertaining. The company's partner in TV Food Network is Warner Bros. Discovery, Inc., which owns a 68.7% interest in TV Food Network and operates the networks on behalf of the partnership.

Digital Assets

The company's digital businesses include video and display advertising platforms that are delivered locally or nationally through the company's own and various third-party websites, mobile and over-the-top ('OTT') applications, other digital media solutions to media publishers and advertisers and a consumer product reviews platform. The company's digital assets include 140 local websites, 278 mobile applications, 25 connected television applications, six free-ad supported television ('FAST') channels representing content from the company's local television stations, The CW, NewsNation, The Hill, and BestReviews, and a suite of advertising solutions.

The Hill. The Hill is the nation's leading digital-first political news brand and the definitive source for non-partisan political news and information. Inside the Beltway it's known as an essential, agenda-setting read for lawmakers and influencers. Beyond the Capitol, millions of Americans turn to The Hill to decode how events in Washington will impact their communities and lives.

BestReviews. BestReviews is a leading consumer product recommendations company which simplifies the way consumers buy products and services across thousands of categories by independently researching, analyzing, and testing products and recommending the best picks. BestReviews monetizes its content through a revenue share model with its retail partners against all sales generated by BestReviews.

Operating Model

The company's primary sources of revenue include contractual distribution revenue from retransmission consent and carriage agreements with MVPDs, such as cable and satellite providers, and OVDs, companies that provide video content through internet streaming either directly or via the company's network affiliation partners, as well as affiliation fees from local affiliates of The CW; the sale of commercial air time by the stations to local advertisers; the sale of commercial airtime by the stations and by the company's broadcast and cable networks to national advertisers; the sale of advertising on the stations' websites, on the company's other owned or third party websites, and through mobile and OTT applications and other digital advertising solutions.

Advertising

The company's advertising revenue is primarily derived from the sale of local and national advertising on the company's stations, networks, websites, apps and other digital platforms or via third party media.

The company generates substantial advertising revenue from the political advertising the company sells to candidates, political action committees and political parties. Advertising revenue is also positively affected by certain events such as the Olympic Games or the Super Bowl. Advertising revenue is generally highest in the second and fourth quarters of each year, due in part to increases in consumer advertising in the spring and retail advertising in the period leading up to, and including, the holiday season.

Local advertising is sold by each station's local sales staff who call upon advertising agencies and local businesses. Compared to revenue from national advertising accounts, revenue from local advertising is generally more stable and predictable. In 2023, national and political advertising was sold through third party national sales representative firms which call upon advertising agencies. Beginning in January 2024, the company's national advertising is sold through the company's national sales division. The company continues to sell its political advertising inventory through third party national sales representative firms. Digital advertising that is not sold through the company's local and national sales teams is typically sold via programmatic exchanges.

Competition

Audience: The CW, the company's broadcast television network, competes with other broadcast networks and other video programming for viewers and NewsNation, the company's growing national cable news network, competes with other established national news networks, such as CNN, FOX News and MSNBC for viewers.

Advertising: The company's stations compete for advertising revenue with other television stations in their respective markets and other advertising media such as online media (e.g., Google, Meta, Tiktok, Snapchat, etc.), OVDs, MVPDs, radio stations, newspapers, outdoor advertising, and direct mail, among others. NewsNation also competes for advertising revenue with other advertising media and with other established national networks such as CNN, FOX News and MSNBC.

Federal Regulation

Certain provisions of the Communications Act of 1934, as amended and the Federal Communications Commission's regulations and policies affect the company's operations.

Nexstar and its partners have adopted the Advanced Television Systems Committee, Inc. (ATSC 3.0) technology in their stations covering over 50% of U.S. television households.

History

Nexstar Media Group, Inc., a Delaware corporation, was founded in 1996. The company was incorporated in 2001.