All right, we're going to get started here. Thanks for joining us on Day Three of the Morgan Stanley TMT Conference. My name is Sean Diffley from Morgan Stanley Equity Research. For important disclosures, please see the Morgan Stanley Research Disclosure website. If you have any questions, please reach out to your Morgan Stanley sales rep. Perry, Lee Ann, good morning. Thanks so much for joining us again this year. Thanks for having us. All right, we wanted to get right into it. I think first question I wanted to turn over to Lee Ann. You guys just reported your full year 2025. You had nearly $5 billion of revenue, over a $1.5 billion of EBITDA, almost $1 billion of free cash flow. This represents record top-line performance compared to prior odd years and continues to highlight the strength of the broadcast medium. Maybe you could talk about what separates your business from cable networks and streaming services in terms of both value and growth potential. Right. Yeah. By the way, 2024 was also a record year for us in terms of revenue. We feel like we are. If you look at the overall media landscape, broadcast is the area that continues to perform. Why is that? I think it's for a number of reasons. I think number one is that we have the most watched programming on our stations. We've got the broadcast networks, we've got our local news, we've got, you know, very highly watched programming. That really is also benefited by our distribution model. Our distribution model is we are everywhere. If you wanna see broadcast television, you can come to Nexstar and see it because we are gonna be on every platform that's out there. We're on paid TV, we're over IP, we are also available over the air. Over the air is what really provides broadcast in general with an advantage because we've got an additional, you know, call it 15%-20% of the country that can have access to our content. We've seen all of that really kind of, you know, be reiterated in terms of the benefits with just all of the viewership numbers that you've seen over the last year. I mean, sports in particular, you know, NFL had record year. NBA now with their programming now being on NBC was up 16%. We're even seeing it with our own programming at The CW. Overall, The CW network was the second fastest-growing network in 2025. You know, all of these things are kind of compounding and really benefiting us with respect to our revenue and our bottom line. Excellent. We're gonna get into a bunch of those things. I wanted to talk about the TEGNA merger. A few weeks ago, Donald Trump publicly endorsed your deal. Perry, how has that impacted the approval process, and what are the other impediments that you have to work through as you work towards your second quarter close? Well, I would say, you know, certainly having the endorsement of the nation's Chief Executive doesn't hurt in the regulatory agencies. I think that has brought focus to the transaction and focus on the benefits that will come from putting the transaction together. You know, we are in active discussions with both the FCC and the DOJ. I think at last count, we'd provided over 2 million documents to the DOJ pursuant to their second request, and so we are highly engaged in those discussions. I've seen the filings we've made and the economic studies we've provided, and it's very good information that provides rationale that the definitions of markets and the definition of video certainly needs to evolve with the times. I think that will happen and our transaction will get approved. We still stand by the, you know, in the second quarter or by the end of second quarter, our transaction, we expect will have cleared the approval process, and we fully intend to close as soon as we have that approval. Great. What divestitures, if any, are you expecting to make to close the deal? Unclear at this point. What we have said, all along is, if divestitures are required, and that if is still a part of the sentence, is that, we think they will have, de minimis, financial impact on the overall deal. Got it. That has yet to be determined in any definitive fashion. Great. You've spoken to $300 million of EBITDA synergies, most of which within the first 12 months post-close. What are some of the pockets of value that maybe you aren't quantifying as you see as, like, potential incremental opportunity? Sure. You know, we have, we will overlap operations in 35 markets, which means we start with two facilities. We will only need, in most cases, one facility. There will be a downstream potential of additional synergies from facilities consolidation as well as real estate sales. It won't be anywhere near the number in the Tribune transaction of net proceeds from real estate. There is something there, and we will quantify that as time goes on. None of that was in the original synergy calculation, which, as you pointed out, those are synergies that will be realized, you know, by and large in the first 12 months. Great. I wanted to ask the timeline for lowering leverage following the deal. That's a CFO question. Yeah. If you just look at our history, what we've done is after every major transaction, we've levered up a little bit. We've used all of our excess cash flow to delever the balance sheet. If we do that, which we anticipate we will, we should see leverage back to kind of where we were before we announced the transaction sometime in 2028. Great. Obviously TEGNA at the forefront. Investors are always wondering what's next? When that, you know, when that deal closes, you'll be approaching close to $3 billion of EBITDA. Where do you go from here? What is the focus? Is it in terms of just O&Os and CW and other broadcast, or do you focus on other adjacencies? How should we think about kind of the next play beyond TEGNA? Well, we've chosen to found and build the company, which turns 30 years in June. Right ... in the local end of the pool. You know, we will continue to focus on the local end of the media ecosystem, we think it's much more durable than others that are much more exposed to national. While we have certain national assets, but the vast majority of our revenue and EBITDA earnings will come from assets that are in our local markets. Lee Ann explained a lot of the reasons why we chose that area. It's durable, it's the least sexy, but the most sticky part of the media ecosystem. I would think, you know, we will always look to extend, expand our footprint, of local television stations, but there's also different kinds of digital video assets that, you know, in local markets that could potentially be of interest. Everything has to be at the right price, and has to be highly accretive. You know, we have a cable network, and we have a broadcast network. We'll always be opportunistic, but I think our focus will continue to be local. Great. I wanted to talk more broadly about the pay TV ecosystem. It does seem like options are moving in the favor of the viewer packages coming, bundling with streaming services and the proliferation of skinny bundles. As you flagged on your earnings call, Charter, who will be here today, posted sequential growth in video subs for the first time in a long time. Can you talk about pay TV sub-trends as you see them, where do you see them playing out as we move across 2026? Yeah. I mean, this has been something we've been talking about for the last few years in terms of belief that we're gonna see some stabilization in the rate of attrition of subscribers. You know, that's for a variety of different reasons. One is that, you know, we've gotten down to a point where, you know, the people that we're really trying to get out of the ecosystem are now out of the ecosystem. We see some stabilization. We've also seen the great things that companies like Charter have done to rebundle and create more value for the consumer by bringing back in those DTC packages and putting it as part of their overall subscription. We're now seeing the advent of these skinny bundles, like YouTube is launching one that is gonna include broadcast and news. Those are things that should be able to create some stability for the pay TV ecosystem. We're excited to see, you know, the Charter numbers I graphed out. You know, the decline in it, you know, was sort of a, you know, big decline for a long period of time, but now we're seeing that come up. It's been pretty dramatic in terms of the quickness of the recovery. We're bullish about that. We have not, you know, seen it quite yet in our numbers, but we do in our distribution guidance that we put out in connection with our earnings call, have expected that we will have, you know, some rate, some level of improvement in 2026 as a result. Excellent. I wanted to turn to retrans. How are you thinking about retrans negotiations to shake out in 2026? Well, in 2025, we had about 60% of our subscribers up for renewal. Those contracts are done, and those will benefit primarily 2026. Our guidance includes that. We do have some additional, we have about 30% of our subs up for renewal in 2026, which are, you know, more towards the middle to the end part of the year. We feel like we will be able to, you know, successfully navigate those negotiations and really get the benefit of what we bring to bear to those companies. Great. You've previously suggested there's maybe one more kind of cycle of retrans price increases before leveling off. Does that idea still hold, or do you think the TEGNA merger could actually give you enough leverage to support retrans growth for a longer period of time? No, we still think that that's kind of the horizon. It's all about the Broadcasting ecosystem getting its fair share of the distribution dollars, viewership in, value out, and I think we've got one more round until that gets pretty close to a terminal velocity. As the bundles get skinnier and, you know, we're in those skinny bundles, you could make a case that more of that money would rotate toward viewership. We still believe that that's the general thesis, that there'll be one more opportunity cycle of opportunity to get to our fair share, and then I think things will fairly level off after then. Great. On reverse retrans, are you seeing better reverse retrans trends now that a lot of network fees are on streaming services? How does net retrans evolve going forward? Well, we will be, once we close on the TEGNA acquisition, the largest affiliate partner for every one of the Networks. In three of those Networks, we will be distributing their programming in as large a piece of the country as they do with their owned and operated stations. That's a whole different place than a lot of other folks in the Broadcasting business will be. We think the negotiations, you know, perhaps could take on a different flavor for Nexstar than for other folks that are affiliate partners. You know, I open every one of those discussions by saying, you know, we have historically paid you for programming and geographic exclusivity of that programming to monetize with advertisers and in distribution. To the extent that your program is less and less or, in a couple of cases, non-exclusive to us, it's worth less to us. A gain, I think when you are the largest affiliate partner to that network organization, you probably have leverage that other folks don't have. We'll see how those conversations continue to progress. We believe that the reverse payments, you know, which have flattened out, will begin a downward trajectory. Got it. The NFL has been another hot topic in recent weeks. We had Lachlan Murdoch here earlier this week. The press is reporting that the NFL is seeking to renegotiate its current media rights package, which was just done a few years ago. Curious how you see that playing out and how it could impact Nexstar going forward? Remains to be seen. You know, the networks have a change of control provision, which Goodell is on record saying that they don't plan to trigger that in relationship to Sky- CBS. Their next opportunity with their contracts as currently constructed, you know, comes in 2029. It's, it would be curious to me as to how that negotiation would be reopened unless it were voluntary on the parts of the rights holders, the networks, which could happen. You know, I look at, you know, the NFL is an important part of our sports revenue and our sports programming. When you look at, you know, the totality of sports programming, it's obviously not all of it. Sports as a% of our ad support is important, but it's certainly not all of it. I think that the NFL, while interesting certainly, and in where we have NFL home team cities is an important component of sports advertising. The NFL is not as important to local affiliates that make the vast majority of their revenue from local news as it is to networks that, you know, that might be a singular source of revenue programming and, you know, building their flywheel. Listen, we love having the NFL on our stations, and, you know, think that will continue long into the future. I think Roger Goodell is on record saying that, you know, as long as he's in the chair, that the NFL will always be on broadcast. We'll see. I think the games that were recaptured out of the ESPN package will likely go into a Sunday morning package, which is hard for affiliates that are in local news or religious programming or whatever to clear. That maybe goes to a streamer. There'll be more, you know, more around the edges. I think the base product, I don't see that going anywhere anytime soon, and it'll just be a question of rights. You know, Peter Chernin said years ago, he said, the NFL, one of two outcomes. One is you win, in which case you take all the revenue you generate and put it in a dump truck and drive it down Park Avenue and drop it off at the NFL headquarters, or you lose it, and you don't wanna be, you know, that man or that woman who lost the NFL. I tend to think that, you know, having all four networks involved and always a streaming presence and a credible alternative viable threat will put a floor under pricing.... for the NFL. They're masters at being able to monetize around the edges. Again, I think it's, I tend to think that the current stasis will maintain itself- Right ... for at least the horizon that I'm looking at, which is, you know, the next five to 10 years. Right. The broadcast reach is essential. I think so. Absolutely. Okay. I wanted to turn to Advertising. Ex-political, you're able to grow Advertising a healthy 4.5%, you know, in the most recent quarter. What drove that performance, and what's kind of your state of the ad market as we sit here today? I think in the fourth quarter, we had the benefit in this year of not having to crowd out from last year that we had for political. We still had a better fourth quarter than what we were anticipating at the beginning of the quarter. We view that, you know, that really happened sort of across the board with respect to our businesses, both our National, Local, or Digital businesses all over, overachieved in terms of what we thought they were gonna achieve at the time when we put the fourth quarter guidance out. Really, that was just buys later in the quarter than we normally see. Some big name advertisers kinda came back into the mix that we weren't expecting. So we view that all as a, you know, a positive signal in terms of the, you know, the health of the overall advertising industry improving. In the first quarter, you know, our guidance is that our non-political advertising revenue should be flat. Flattish is our expectation for the first quarter. Okay. Let's talk about political. We're a little over two months into the election year. What are your expectations for 2026 versus the last midterm cycle, and what positions Nexstar to capture more of that overall political dollar spend? Yeah. Our guidance for political advertising is that we will garner a low double-digit percentage share of the advertising dollars that are spent on television. You can see there's a company out there called AdImpact that does some really good work around making estimates for political advertising. They do expect that broadcast will be, you know, fairly consistent with the last cycle in terms of the dollars they're going to generate. Every year we do really a very detailed bottoms-up analysis by district, where the elections are going to be, where they're gonna be contested, how does that overlay with our footprint, and we sort of come up with an estimate of what we expect our share is gonna be. This year it's a little bit lower than what we had in prior years. That just goes to the composition of where the races kinda matching up. It's not anything that's, you know, sort of a big difference. We were low teens before, now we're low double digits. It's in a similar range. We're, you know, we feel like there's obviously no slowdown in spending and fundraising, and we're feeling good about this year. Excellent. We, we just saw in Texas that the Republican Senate primary is going to a runoff. We didn't have that baked into our numbers. You know, John Cornyn is on record saying he spent $70 million to get to last night. Now there's a sprint to May, and then there'll be a sprint to the general in the fall. There's always puts and takes to our political forecast. I would say at this point, we're pleasantly surprised. Excellent. Thank you. I wanted to talk, are you interested in moving into streaming with your existing assets? Obviously, like, FAST channels are very popular. How are you thinking about, you know, if you were to kinda pivot more to streaming and what that would look like? Listen, I think that I don't know that it's as much as it is an addition. I don't see it as an either/or, right? I mean, my view is we have a content factory that produces, you know, all of our local content, and that is roughly 330,000 hours of content that goes to something approaching 450,000 hours once we acquire TEGNA. I view that as, you know, our job with that content factory is to produce as many different pieces of content for as many different audiences as at many different times of the day using as many different distribution mechanisms as possible to distribute that content. It's free over the air, it's in a linear newscast, it's on our website, it's in a station app, it's probably in a FAST channel. you know. I tell our people that, listen, if we were in the furniture business and we only made one couch, that wouldn't be much of a business. We can't just take the same content and populate it everywhere. You know, our job is to continue to evolve our mindset and continue to evolve what we do and not be concerned with how we do it. I mean, distribution is just a means to reach the consumer where they are. You know, in Tampa, for example, I was there a few weeks ago, you know, our 11:00 A.M. newscast, you think of folks that are available to watch TV at that time of the day, and they're generally retired, right? Or home or whatever. Our 11:00 A.M. newscast looks a lot like a podcast now. There was trepidation, well, geez, if the viewers just finished watch The Price Is Right, are they ready for this, right? Well, lo and behold, the ratings came out, and that time period, that newscast is up 43%. It shows that the audience is interested and willing to look at different formats and different distribution of content. But there was a real trepidation to take that leap. They said, "Well, we haven't done it at 6:00 A.M." I said, "Well, why not?" You know, we gotta think about those things. TEGNA has actually done some very interesting work around this as well. There's a whole conversation to be had about how we produce different newscasts at different times of the day, and how we can use technology, how we can use AI to make sure that there is no unconscious bias in our stories, and we're developing those kinds of tools. It's an exciting thing because that's the IP that we own. That's the space that we have chosen to be in and want to ultimately dominate. It's a real opportunity. We're also trying to create a creator economy inside of Nexstar that, you know, will allow people to maybe produce podcasts or shows for FAST channels and perhaps down the road if we monetize them, we can share that. You know, I said to our folks, I said, "That model seems to work pretty well for TikTok, so maybe we can introduce something like that to our, you know, 15,000, 16,000, 17,000 employees, and if some of us, some of them take us up on the offer, you know, that might be interesting to see how that all plays out." It's just trying to get people to think more broadly and differently. Streaming is, you know, it's not broadcast versus streaming. I think it's broadcast and streaming and connected TV and this and, you know, other things that we can do. You know, the, it starts with our content, which, you know, that IP is very precious, very valuable to us, and we just have to be very smart about how we produce it and distribute it and be imaginative about it. That's fascinating. Thank you. I wanted to turn to The CW, which saw almost a 20% increase in viewership last year. As you noted in your earnings call, you expected to reach profitability by the 4Q. Maybe just how much of this do you attribute to the sports rights? You've acquired NASCAR, and what else is going on beneath the surface there? Well, first of all, it's been a dramatic pivot, right, from what the network was. It was 15 hours a week of basically scripted entertainment. Now it's, you know, there's 800 hours a year of sports programming on The CW. If I look at the, our, you know, initial broadcast of NASCAR this year, the Daytona race, not the 500, but the Saturday race, you know, we peaked at almost 2.4 million viewers. That's people exposed to The CW. You know, our programmer there, the man who oversees that, Sean Compton, put an episode of one of our game shows coming out of a NASCAR race, and now that game show in prime time is generating, you know, significant increases in viewership. It's Scrabble hosted by Craig Ferguson, who used to host The Late Show on CBS. That flywheel is starting to work there. I look at, you know, the shows that are really working for us. We have police shows, we have game shows, we have scripted entertainment, and then obviously we have WWE on Tuesday nights, and then our entire sports portfolio. At the same time, our costs were down by over 30% year-over-year in terms of that's the amount we were able to reduce our expenses, and we will be profitable in the fourth quarter of this year and then on a going forward basis. Our teams are getting much better at selling sports. We've got a lot of new advertisers as well as new sponsors into our sports programming. You know, we took a almost, you know, a costless, low risk chance on professional bowling and put it on the air, and it did half a million viewers on a Sunday afternoon. That used to be a good night in prime for The CW, which it is no more. You know, it's just, it's adding things on and, you know, we'll, you know, add some more Savannah Bananas games this year and just around the edges, and it's entertainment, right? We're just trying to speak to the broadest possible audience that, you know, advertisers follow eyeballs, and the more eyeballs we generate, the better we do. You hit on it with bowling and Savannah Bananas, which is obviously trending very positively right now. Do you see other opportunities to selectively expand your sports rights portfolio? I think that, yes. I mean, you know, obviously, you know, we have a chart like every sports organization does of when major rights, you know, are due to expire. There's not a lot that we expect will come before the end of the decade. But I think there's an opportunity, as we have done in the past, to partner with rights holders and maybe offload some of their, you know, some of their inventory that they either don't have space for or can't, you know, monetize appropriately. We did that with NBC and NASCAR, you know, two years ago when they had Olympic, you know, overflow from the Summer Olympics. You know, I think we'll continue with those conversations. But we're still playing Moneyball, right? We're still growing this network into, A, profitability, and then, B, into, you know, something more substantial. We're not gonna get out over our skis. Great. I wanted to turn to NewsNation. It posted the strongest year ever in 2025. It was the fastest-growing cable net in the 25- 54 demo. You know, what do you see progressing for the network through 2026, and where are the biggest opportunities there? We had a fantastic February. We're up dramatically, and again, the 25-54 in total viewer demo over last February. The streak continues. I think it's just, you know, we're live 18 hours a day now, and, you know, pretty much all cable networks, you know, repeat overnight. We have live programming, live news, and then adding, expanding our, you know, our talk shows in primetime all the way to midnight now. I think people are just. What we're seeing is when there's breaking news, a lot of times our numbers will spike because particularly on the weekends, people know we're live when some of the more mature cable news networks, in an effort to cut costs, have gone to, you know, taped programming on the weekends. We're there immediately and instantly and, you know, we've got a correspondent in Tel Aviv and, you know, reporting live from there. You know, we were on the air at 5:00 A.M. in the morning on Saturday. You know, we're competing with and, you know, we keep track every time we beat one of the legacy cable news networks. You know, we make sure everybody in the organization knows about it. We've got some real momentum. Obviously, we're growing off of a very low base, but, you know, we're able to show growth in a marketplace where not many others can make that same claim. We just need to continue to do what we're doing, and if we can show incremental growth, you know, on a sustained basis, that's all I can ask of them. Makes sense. I wanted to turn to capital allocation. You've obviously returned a lot of capital to shareholders through buybacks and dividends over the years. Clearly, delevering post-TEGNA is gonna be the near-term focus, how should we think about capital allocation over the next 12 months and, you know, once you've kind of reached your target leverage? Yeah. Right now we're conserving cash for the transaction, right? That's the most accretive thing that we're working on, which is the acquisition of TEGNA. We announced we're gonna continue to pay our dividend. We didn't increase it, so we're using all that cash to go towards the acquisition. We're gonna lever up a little bit in connection with this transaction. Around 4x is the estimate for at the time we close, then we'll use our, you know, our free cash flow to delever. We'll have to see, you know, from a, you know, share purchase perspective. You know, if we get back down to kinda where we were, we can do that unless there's other better uses for our cash. You know, we've always said M&A is number one with a bullet in terms of what we've been able to achieve in terms of the accretion relative to other things that we can do. We always look at that. We look at what, you know, if we just buy back our shares or if we make acquisitions, what is more accretive? Really M&A has been the, you know, opportunity for us. We just haven't been able to do it given the regulatory environment for some time. Great. I wanted to see if we had any questions in the audience here. Okay, I got more. I guess maybe for investors who are a little less familiar with your company, how would you outline the key investment thesis for Nexstar? Obviously, you know, you have some tailwinds working for you and some self-help with M&A on the come, but how would you frame the investment opportunity for maybe those who haven't looked at the company in a while? I think when people think about media, you know, I put it into three buckets. That there's, you know, you probably are gonna have your favorite streaming company, you know, whatever that would be. You may have your favorite networks company, you know, whatever that may be. What we have been driving toward is that if you, if you choose to play in the local end of the media ecosystem, there's only one company that you think about, and that's us because we are the biggest. We'll continue to get bigger. When you look at the amount of free cash flow we generate, we rival some of those companies in the network space. Of course, you know, hardly anybody in streaming makes any money. I tend to read the financial statements from the bottom up, which I think is an important note for investors. You know, if you read it the same way, you know, you mentioned it earlier, you know, pro forma, we'll have $3 billion of EBITDA. You know, that's a pretty decent company. I think that if the sub-trends continue in cable, as we've seen them, and, you know, Charter buying Cox, if Cox posts similar results, then I think everyone else is gonna say, "Okay, that model looks like it works, and maybe we ought to emulate that in our company that's not called Charter," or others. I think you could see that turn fairly quickly. I think if that happens, the space potentially gets rerated, right? That could lead to multiple expansion. We're gonna keep doing what we do, which is acquire, integrate, put the synergies out, deliver the numbers, and, you know, lather, rinse, and repeat. That's been the story since 2010, right? The company turns 30 years old this year. Again, we've just been doing what we've been doing. I think we've got a pretty well put together playbook here to continue to perform. You know, I just signed a new three-year agreement with, you know, to continue at the helm here. You know, continue to be the third-largest shareholder of the company. You know, you can't say that about a lot of those other media companies necessarily, and I'm not throwing shade on them. I'm just saying if you wanna know why we're unique and why I think we're worthy of consideration, you got a Founder/ CEO that started on his own, didn't inherit anything, and has been, you know, showing up at the office for 30 years here to build this thing into something substantial. You know, we have aspirations to continue to build the company and this won't be our last transaction. You know, I gotta tell you that, you know, we are very. We would not be considering these kinds of transactions were it not for this administration in place, both at the regulatory agencies and then obviously in the White House, because they have been conducive to M&A and thinking about investing in local markets and communities and things like that. We're very appreciative of the support of the administration as well. You know, we've got another two and a half to three years to run there. I think that, you know, we'll take as much advantage as we can. I think it's interesting to note that while we're levering up to, you know, 4 x, I mean, that is by far the lowest leverage post-acquisition, if you go back and look at Tribune and Media General. If we close on my expected timetable, the balance of the year with the political advertising bump that will come, I think you'll see us, you know, focus on delevering pretty quickly. You know, if you're starting at 4x, it's a lot easier to get to 3x than it is if you start at 5.5x. You know, I think that, you know, we will continue to have a very solid balance sheet that will be an asset of the company. Our local content assets and our business development team, which is our local and national sales force, those are the assets we have. Then how can we overlay all of those assets into as many growth opportunities for the company, again, using that local base that has been our core from for 30 years. Excellent. I wanted to close out, you've been outspoken about the benefits of sunsetting ATSC 1.0 and moving to ATSC 3.0. Can you maybe just hit on the benefits and the implications for Nexstar there? Sure. We are, you know, members of a consortia that is looking at spectrum monetization, spectrum development, and we have cash-paying customers now. They're not spending life-changing money with us at this point in time, but I think that will happen over time. It's high-speed data transmission. It's precision, you know, location devices and things like that. There's a 1,001 uses, if you will. We are a lower cost replacement for expensive 5G networks that are out there. We could provide a backup GPS system to the United States, which is a public benefit of We're the largest industrialized country in the world that doesn't have a backup GPS. There's a lot that can be done with spectrum monetization. Chairman Carr at the FCC is open to innovation and development and so those are the kinds of things that we plan to work on the day after we close on the transaction. Not that we're not working on them now, but they will come increasingly into focus because, again, we'll have more spectrum available for commercialization, you know, by advent of the TEGNA acquisition. Excellent. Perfect place to end. Perry and Lee Ann, thank you so much for joining us. Thank you. Thanks for having us. Appreciate it.