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Edited Transcript of NXST earnings conference call or presentation 8-May-19 2:00pm GMT

Q1 2019 Nexstar Media Group Inc Earnings Call

Irving May 9, 2019 (Thomson StreetEvents) -- Edited Transcript of Nexstar Media Group Inc earnings conference call or presentation Wednesday, May 8, 2019 at 2:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Joseph N. Jaffoni

Nexstar Media Group, Inc. - IR Contact - JCIR

* Perry A. Sook

Nexstar Media Group, Inc. - Chairman, President & CEO

* Thomas E. Carter

Nexstar Media Group, Inc. - Executive VP & CFO

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Conference Call Participants

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* Clayton Keever Griffin

Deutsche Bank AG, Research Division - Research Associate

* Craig Anthony Huber

Huber Research Partners, LLC - CEO, MD, and Research Analyst

* Daniel Louis Kurnos

The Benchmark Company, LLC, Research Division - MD

* David Carl Joyce

Evercore ISI Institutional Equities, Research Division - MD & Senior Analyst

* Davis Hebert

Wells Fargo Securities, LLC, Research Division - Director and Senior High Yield Analyst

* James Charles Goss

Barrington Research Associates, Inc., Research Division - MD

* Kyle William Evans

Stephens Inc., Research Division - MD

* Marci Lynn Ryvicker

Wolfe Research, LLC - MD of Equity Research

* Zachary Alan Silver

B. Riley FBR, Inc., Research Division - Associate

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Presentation

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Operator [1]

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Good day, and welcome to the Nexstar Media Group 2019 First Quarter Earnings Call. Today's call is being recorded. I would now like to turn the conference over to Mr. Joe Jaffoni. Please go ahead, sir.

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Joseph N. Jaffoni, Nexstar Media Group, Inc. - IR Contact - JCIR [2]

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Thank you, Mike, and welcome, everyone, for joining the Nexstar Media Group 2019 First Quarter Conference Call. Statements and comments made by management during this conference call may include forward-looking statements. Nexstar has based these forward looking statements on its current expectations and projections about future events. Forward-looking statements include information preceded by, followed by or that include the words guidance, believes, expects, anticipates, could or similar expressions. For these statements, Nexstar claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained in today's call concerning, among other things the ultimate outcome and benefits of the announced transaction between Nexstar and Tribune Media and timing thereof, and future financial performance, including changes in net revenue, cash flow and operating expenses, involve risks and uncertainties and are subject to change based on various important factors, including the timing of and any potential delay in consummating the proposed transaction; the risks that are a condition to closing of the proposed transaction may not be satisfied and that the transaction may not close, the risks that a regulatory approval that may be required for the proposed transaction is delayed, is not obtained or is obtained subject to conditions that are not anticipated; the impact of changes in national and regional economies; Nexstar's ability to service and refinance outstanding debt; successful integration of the Tribune Media, including achievement of synergies and cost reductions; pricing fluctuations in local and national advertising; future regulatory actions and conditions in the television stations operating areas; competition from others in the broadcast television markets served by Nexstar, volatility and programming costs; the effects of governmental regulation of broadcasting; industry consolidation; technological developments and major world news events. Unless required by law, Nexstar undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

In light of these risks, uncertainties and assumptions, the forward-looking events discussed in today's communication may not occur. You should not place undue reliance on these forward looking statements, which speak only as of the date of this -- of today's call. For more details on factors that could affect these expectations, please see Nexstar's filings with the Securities and Exchange Commission. Well, thank you for your patience with that, and now it is my pleasure to turn the conference call over to your host, Nexstar's Chairman, President and Chief Executive Officer, Perry Sook. Perry, please go ahead.

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [3]

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Thank you, Joe, and good morning, everyone. Thank you all for joining us today to review Nexstar's record 2019 first quarter operating results. Today, we'll review the quarter's progress and our outlook as well as other ongoing initiatives to drive free cash flow growth and shareholder returns in 2019 and beyond, most notably the progress we've made towards completing the Tribune Media transaction, our ongoing vigilance in reducing leverage and the upside on this front related to the announced divestiture transactions. As always, our Chief Financial Officer, Tom Carter is here with me this morning.

Before we start, I want to acknowledge my colleagues and our local news teams, who worked tirelessly and passionately in pursuit of the highest ideals of their profession to provide credible trustworthy news and tremendous and sometimes life-saving public service to our local communities in the 100 markets we serve across the country. Their work was recently highlighted as they were bestowed a Walter Cronkite Award and a Host of Regional Edward R. Murrow awards with our local news operations garnering 27 awards, including 4 for overall excellence.

Many of our award-winning entries highlighted the critical local news coverage and essential services provided by Nexstar stations, which ensure the safety of our local communities in times of emergency. We're extraordinarily proud of our strong standings in our local communities where we operate, and I congratulate our colleagues that were honored and all of our more than 3,500 local journalists, who are dedicated to delivering the highest quality local programming and service, while also giving back to our neighbors in the communities where we operate.

Onto the results, 2019 is off to an excellent start for Nexstar and it highlights our expanded scale, ongoing diversification and commitment to localism, innovation and growth as we capitalize on the many opportunities to serve our local market viewers and our local market businesses.

Our record first quarter 2019 free cash flow reflects another period of operating growth and momentum and also represents the start of an exciting year for Nexstar as we balance our focus on current operations, including preparations for the 2020 election cycle and a significant level of retransmission consent renewals this year with the expected completion of the highly accretive Tribune Media transaction later this year. We generated record first quarter net revenue despite the absence of nonrecurring political and Olympic revenue, which led to first quarter operating income, net income and BCF as well as adjusted EBITDA and free cash flow before $5.4 million of one-time transaction expenses.

For the quarter, we delivered about 20% of every net revenue dollar to the free cash flow line, which enabled us to generate free cash flow of $125.8 million or about $2.75 per share in Q1 of 2019 compared to $1.23 in Q1 of '17 the prior nonpolitical period. So in just 2 years, we've grown that important metric by over 120%, which has allowed us to invest in our people, our local media platform and in complementary accretive acquisitions, while at the same time reducing net debt and returning capital to our shareholders.

In addition to our solid operating performance, during the first quarter and in early April, we announced 3 divestiture transactions, which address our commitment to comprehensive regulatory compliance, while also moving us closer to completing the strategic and financially compelling Tribune Media transaction. In the aggregate and concurrent with the closing of the Tribune transactions later this year, we will divest a total of 21 stations in 16 markets for gross proceeds of $1.36 billion.

Total gross proceeds from the proposed station divestitures exceeds our initial projections by approximately 36%, while the cash flow to be devastated inclusive of elimination of certain synergies is less than those in our first projections. These developments serve to reinforce our confidence that the Tribune transaction will result in approximately 46% growth in Nexstar's average annual free cash flow in the 2019 -- 2018-2019 cycle, I should say, to approximately $900 million or equivalent of $19.50 per share.

I'll now walk through the quarterly highlights after which Tom will go through the numbers indicating an update on our capital structure, 2019 expectations and other items of interest for those of you here on our call.

Again Nexstar's record first quarter free cash flow before one-time expenses highlights our growth and our diversification and our ability to offset nonpolitical non-Olympic years as we continue to grow retrans revenue and build new-to-television ad revenue. In total, first quarter revenue rose by 1.8% as television advertising revenue, excluding political advertising declined by $8.5 million or 3.3%, reflecting the -- over $20 million of net Winter Olympics revenue recorded in the comparable 2018 period.

As we previewed with the pacings on our Q4 call, excluding political, Q1 TV ad spend increased by low- single-digits on a percentage basis in January and March, partially offset by a high- single-digit decline in February related to that absence of political -- Olympic ad spending.

In Q1 of '19, 5 out of our top 10 categories were flat or up and overall core revenue continues to reflect healthy levels of new business with our Q1 new-to-television ad revenue equaling $14.5 million, which is 5% over the prior year. Combined first quarter digital media and retransmission fee revenue collectively were $366.8 million, that was a rise of 8.3% over the prior year period and accounted for 58.5% of net revenue compared to 55.1% of net revenue in the first quarter of 2018, illustrating again the positive and ongoing shift in our revenue mix.

First quarter retransmission fee revenue increased by $38 million or 13.8% over the prior year period, reflecting recent renewals of distribution agreements with MVPDs and growing contributions from the OTT distribution agreements. At $314 million in the quarter, retransmission fee revenue reached the highest ever quarterly level in the company's history, and we expect our long-term distribution revenue growth to continue at a double-digit pace. We continue to see consistency in our pay-TV sublevels in our markets with continued growth in OTT subs. Retransmission consent agreements representing approximately 10% of our subscriber base were renewed in late 2018 with more than 70% to be renewed by 2019 year-end, continued growth from this source of revenue remains highly visible for us for 2019 and beyond.

As noted in our Tribune acquisition presentation from last December, once we complete the transaction, the Tribune stations are immediately party to our new distribution agreements, and our rates and terms will account for approximately $75 million of the targeted $160 million of synergies we outlined at the time we announced the transaction.

Digital revenue declined by approximately $10 million due to over $1 million of Winter Olympic digital revenue recorded in the comparable 2018 period and our continued focus on pursuing only profitable digital revenue opportunities going forward.

Moving on now with a few additional updates on the Tribune transaction, which remains on track for our time line to close in the third quarter. As I mentioned earlier, the $1.36 billion of gross proceeds from the announced station divestitures was in excess of our initial estimate of $1 billion. In addition, the blended multiple for all the stations to be invested amounts to about a 10.6x aggregate 2-year average broadcast cash flow multiple of these stations.

As a result, our borrowings and leverage will be lower than anticipated at closing, and we now estimate that our net leverage at closing the transaction will be reduced to approximately 5.1x from our initial expectation of 5.3x.

In March, Tribune Media stockholders overwhelmingly have voted to approve the transaction and in April, the Federal Trade Commission and DOJ approved Nexstar's divestitures of Scripps from the standpoint of the transaction compliance with the national ownership cap. And in late April, the divestiture applications were all put on public notice with the public comment period for these applications ending on May 27.

Nexstar has committed financing for the transaction has made all required FCC and other regulatory applications, and we're now awaiting FCC approval, DOJ as well as HSR approvals. Understandably, we have very high expectations for the value that the Tribune transaction brings to Nexstar shareholders. Since 2011, Nexstar has completed a number of accretive transactions, which have increased our scale and diversified our portfolio. Our proven ability to significantly expand free cash flow through acquisitions, integration and disciplined operating practices is reflected by Nexstar's financial growth over this period, as net revenues grew from $306.5 million in 2011 to $2.8 billion in 2018, while free cash flow rose from $34.2 million in 2011 to $693 million in that same time period ending in 2018.

The Tribune transaction is a perfect match with all of our M&A criterion as it marks further progress towards our goal of improving our competitive position by strategically expanding our operating base to realize the benefits of scale, increase our strategic and financial flexibility, all driving shareholder value.

With our experienced management team, our operating discipline and our focused approach to managing our capital structure and cost of capital, we believe the Tribune acquisition will present another meaningful opportunity for Nexstar and its shareholders to grow value.

Notably, after giving effect to the transaction, the incurrence of debt, the transaction expenses, the expected first year's synergy and the divestiture proceeds, we see a clear path to rapid deleveraging with the free cash flow generated from our soon-to-be-expanded base of operations. We continue to expect Nexstar's leverage to decline to approximately 4x by the end of 2020.

In the first quarter, we completed visits to every Tribune Media operating location, a practice which is proven over our 23 years in business and many acquisitions to ensure that we integrate quickly and deliver operating and financial results that meet and usually exceed the expectations we provided at the time the deal was announced. As we have said before, with the significant and growing free cash flow and the upcoming closing of the Tribune transaction, Nexstar has excellent visibility to delivering on or exceeding our free cash flow targets in the current cycle and a clear path for the continued near- and long-term enhancement of our shareholder value.

With all of that said, let me turn the call now over to Tom Carter for the financial review and update. Tom?

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Thomas E. Carter, Nexstar Media Group, Inc. - Executive VP & CFO [4]

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Thanks, Perry, and good morning, everyone. I'll start with a review of Nexstar's Q1 income statement and balance sheet data, after which I'll provide an update on our capital structure and some points of guidance. Total net revenue for Q1 of '19 was $26.6 million, which represents a 1.8% increase over the same period of 2018. TV ad revenue was down 6.1% to $253.2 million, the largest component of that decline was a political revenue decrease of $8 million from $9.3 million in Q1 of '18 to $1.3 million in Q1 of '19.

Local and national revenue were down combined approximately 3.3% during the quarter. As Perry mentioned, the largest driver of that was the lack of recurring Olympic revenue, which was in Q1 of '18 as we saw the January and March results up low- single digits on a same station -- on a same month basis within the quarter.

Retransmission fees were $314 million, which represents a 13.8% increase, and I'll just stop here for a second. Same-station results don't vary significantly due to the relative immaterial nature of the acquisitions we made during the quarter. So all of those statistics are roughly the same for reported results as well as same station, the one difference is retrans revenues were up 12.5% on a same-station basis as opposed to 13.8% on a reported basis.

Broadcast cash flow was basically flat, up 1.6% to $207.7 million and adjusted EBITDA was up 1% to $183.8 million prior to one-time expenses, and as Perry mentioned before, free cash flow was $125.8 million prior to the one-time cash expenses. Excluding political, first quarter television advertising declined by $8.5 million or 3.3%, as I mentioned before. And again this is -- the components of that were single-digit percentage basis increases in January and March, offset by a high single-digit decline in February related to the 2018 Olympics.

First quarter non television advertising revenue growth of 8.3% to $367 million, reflects the 13.8% growth in retransmission fee revenue to $314 million, which was partially offset by a $10 million decline in digital revenue. We're on pace with regard to our retransmission revenue expectations for the year, and our subscriber levels also are consistent with our expectations due to continued strong DMVPD growth and new launches by DMVPDs in some of our smaller markets.

As we previously stated in last quarter's call, we anticipate top line growth in digital would be impacted in the near-term due to continued deemphasis of nonprofitable and marginally profitable lines of business. The aforementioned marketplace changes and cyclical Winter Olympic net digital revenue recorded in prior years also impacted our growth in the first quarter. We expect improvement in our digital revenue growth in the second half of 2019.

As Perry mentioned, with retransmission consent agreements representing approximately 10% of our subscriber base renewed late last year and more than 70% to be renewed by year-end 2019, continued revenue growth from this source remains highly visible for 2019 and beyond. First quarter's station direct operating expenses net of trade expense increased approximately 5%, primarily reflecting budgeted increases in network affiliation expenses.

Same-station fixed expenses, excluding those programming expenses were down 0.3%. The $4 million or 3.4% decline in first quarter SG&A expense reflects the decrease in variable costs relating to additional political programming and sales that occurred in the first quarter of 2018.

First quarter corporate expense was in line with our expectations at $30.8 million, inclusive of $8.1 million of stock-based compensation and $5.4 million of one-time transaction costs related to the Tribune merger. Excluding one-time transaction expenses in stock comp, recurring corporate expenses were essentially flat, which was in line with our guidance for the first quarter.

Looking ahead to 2019 second quarter, we project recurring cash corporate overhead will be similar to Q1 levels, exclusive of stock comp and Tribune related transaction costs. Noncash compensation is expected to approximate $9 million for the second quarter and $37 million for the year, reflecting the issuance of new equity incentive awards earlier this year.

Cash transaction expenses, primarily professional fees that cannot be capitalized, are expected to approximate $5 million during the second quarter. Turning to the balance sheet, I'll review the key items as of 3/31/2019. Total net leverage at 3/31 was 3.575x, which compares to 4.23x at the end of Q4 '18, and the first-lien covenant level was 2.09 actual versus a covenant of 4.25 and that compares to 2.11 at the end of Q4 of '18, so obviously gives us a quite a bit of headroom with -- relating to the leverage covenant.

Outstanding debt, net debt at the quarter end was $3.764 billion, inclusive of $129 million of cash. This amount compares to $3.84 billion at 12/31/18 and $4.7 billion in January of 2017 when we closed the Met transaction. Thus in the first quarter, we reduced net debt by $71 million and funded debt by $92 million.

In addition, we quickly reduced debt -- net debt by approximately $800 million since closing the Media General transaction through 9 quarters of operation, even though -- even as we have allocated capital to several other enhancement activities. As it relates to funding our pending acquisition of Tribune Media, we intend to be opportunistic in tapping the markets and have $6.4 billion in committed financing, initially provided by Bank of America Merrill Lynch, Crédit Suisse and Deutsche Bank to fund the transaction's cash consideration.

Similar to our previous transaction, our intention is to have our pro forma capital structure reflect the proper balance of fixed and floating debt and an attractive weighted average cost of capital prepayment and refinancing flexibility.

As mentioned -- as Perry mentioned during the first and second quarter, we entered into 3 agreements to sell a total of 21 stations in 16 markets for an aggregate gross proceeds of $1.36 billion, and we intend to use the net proceeds from the divestitures to fund the Tribune acquisition and to reduce debt. At closing, which is anticipated in 3Q of '19, we expect our net leverage level will approximate 5.1x compared to our prior estimate of 5.3x.

Our net leverage ratio is based on LAQA adjusted EBITDA after giving effect to the transaction, the occurrence of debt, transaction expenses and anticipated first year synergies of $160 million as well as the net divestiture proceeds amount.

With the free cash flow generated from this base of operations, we continue to expect Nexstar's net leverage to decline to approximately 4x by the end of 2020. We remain committed to applying our growing free cash flow to take further action to enhance shareholder value through our return of capital and leverage reduction initiatives, which in total amounted to $112 million in the first quarter, including approximately $21 million in dividend payments and the aforementioned $92 million in funded debt reduction. Subsequent to quarter end, we have paid another $42 million on our term loan balance in April.

First quarter interest expense amounted to $53 million compared to $55 million in the prior year, while cash interest was $51 million compared to $52 million in Q1 of '18. We expect cash interest expense to amount to approximately $50 million in 2Q of '19. In Q1 2019, we paid operating cash taxes of only $1.8 million compared to a refund of $1.2 million of cash taxes in the prior year. We continue to expect cash operating taxes to amount to approximately $115 million for the full year of 2019 with approximately $44 million in cash tax payments in Q2.

Nexstar's CapEx for the quarter totaled $28 million, of which $13.2 million was related to station infrastructure investments, our platform programming and digital operations with the remaining $14.7 million for station repack and relinquishment of spectrum costs, which are fully reimbursable. We expect second quarter CapEx for station operations to approximately -- to approximate $17 million with an additional amount for repack CapEx. Free cash flow of $125.8 million inclusive of the impact of $5.4 million of one-time transaction expenses, and this compares to the consensus estimate of approximately $103 million, and we reiterate our guidance for the annual free cash flow in the '18, '19 cycle of approximately $615 million or $13.40 per share under Nexstar's stand-alone basis.

As it relates to management's focus on free cash flow generation, our positive outlook on Nexstar will continue to follow the approach we've successfully deployed in terms of building the top line, maintaining close control of fixed and variable costs and optimizing the balance sheet and capital structure. This plan will continue to support our goals of generating significant free cash flow by allowing us to reduce leverage, pursue additional selective accretive acquisitions, pay dividends, repurchase shares and take other actions that can enhance shareholder value.

As Perry noted, we expect the Tribune transaction to result in approximately $900 million of average annual free cash flow in the '18-'19 cycle or $19.50 per share per year representing growth of approximately 46% compared to the guide of $615 million of Nexstar's legacy operations. We'll remind you that we do not intend to update our specific free cash flow guidance until we finalize all of the elements of the Tribune financing, which will happen later this year and have completed our full diligence. We look forward to reporting back to you later this year as we finalize these items.

In summary, Nexstar is executing well across all functions, including operations, integrations, synergy realization, our capital structure and service to our local communities. Our disciplines in these areas have driven significant growth as well as consistency and visibility to our results. With our financial results and the value we expect to derive from our pending accretive acquisition with Tribune Media, we continue to believe we have forged a clear path for continued near and long-term enhancement of shareholder value.

That concludes the financial review of the call. I'll now turn it back over to Perry for some closing remarks before Q&A.

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [5]

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Thanks very much, Tom. Looking ahead with the FCC's support for the voluntary adoption of the new ATSC 3.0 standards for innovative next-gen TV services, the opportunity for increased advertising, automation and our pending transaction with Tribune Media, I'm more than excited for what the future holds for our company and the overall industry. The Tribune Media transaction represents a strategic and financially compelling growth opportunity for Nexstar and our shareholders, and that will also further expand our geographic diversity and our audience reach.

Upon closing, Nexstar will be the largest local television group in The United States with a portfolio of 197 full power owned or operated television stations as well as 1 radio station in 115 markets. This is all pro forma for the required divestitures.

With nearly doubled pro forma average annual revenue and adjusted EBITDA and approximately 46% growth in Nexstar's pro forma average annual free cash flow in the 2018 and 2019 cycle to the number aforementioned of $900 million per year, this combined entity will be ideally positioned to compete in today's rapidly transforming industry landscape, while extending our long-term record of delivering greater levels of service to our local communities and increased returns for our shareholders.

As we begin to benefit from the initial contributions from Tribune later this year and the continued double-digit growth of combined retransmission and digital revenue as well as a large number of distribution contract renewals at 2019 year-end and what we all believe to be a substantial and possibly unprecedented spending levels for the 2020 presidential election cycle, collectively we have excellent visibility to delivering on our free cash flow targets and in fact, exceeding them and a clear path for the continued near- and long-term enhancement of shareholder value through our commitment to localism, innovation and growth.

With that, thank you for joining us on our call today. And now let's open the call to Q&A to address your specific areas of interest. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from Zach Silver with B. Riley FBR.

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Zachary Alan Silver, B. Riley FBR, Inc., Research Division - Associate [2]

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Perry, you made some interesting remarks at the media institute last month, some discussion around ATSC 3.0 and wondering if you could help provide some more detail on your thinking about revenue opportunities with that technology, recognizing that it's early days still, but that would be helpful.

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [3]

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Sure. We're very much in the kind of crawl-walk-run stage as it relates to the transition to ATSC 3.0. We had a meeting internally in addition to our work in Phoenix, we're hoping that we will be able to transition another 4 markets to the dual 3.0, 1.0 transmission serving those local markets by the end of the year, and the industry along with Spectrum Co. and Pearl have a more ambitious transition plan of approximately 40 markets by the end of next year. And obviously we have to build it before we can use it and have to have a fairly widespread platform, we think. The things that we touched on in terms of potential revenue opportunities, there is obviously advanced advertising opportunities that we think will come to the fore. We think that our 4G and wireless technology, if you will, of being the wireless interconnector of the Internet of Things get served well in the autonomous auto industry, whether it's navigation tools or providing video to the monitor in the back of the head seat for the kids or other people in the car to watch and I can go on, but those are some of the areas where we think we can add value by having this ubiquitous spectrum and the ability to connect one to many for data as well as additional video.

We think conditional access could potentially play a part in the economic framework of all of this. But as I said at Media Institute, I said my belief is that perhaps the largest value creator of our ancillary use of our digital spectrum perhaps is something we haven't thought of yet. And I think in that goal, we have to build it. They will come and my overriding principle is we're not going to try and sell something to the market, we're going to see what the market wants to use our spectrum for and we think that will ultimately create the highest and best use of that ancillary spectrum.

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Zachary Alan Silver, B. Riley FBR, Inc., Research Division - Associate [4]

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Got it. That's really helpful. And then one more if I could, you've been getting a nice boost from new-to-TV local ad revenues, which I think is mostly coming from the legacy Media General market. I'm wondering if you see that same opportunity with Tribune and if that is currently factored into the combined company free cash flow guidance?

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [5]

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It is not directly factored in, but we do believe that there is an opportunity in each of the Tribune markets to increase our local focus, not only additional local programming, but to increase our focus on developing new-to-television advertisers and additional direct business. So we think overlaying our playbook on the Tribune stations will lead to enhanced operating results beyond the operating synergies. I don't like to characterize synergies as things could happen 2, 3, 4, 5 years out. To me that's just running the business well, but synergies for us are kind of what we can establish on the first tee at the date of closing, but we see opportunities to increase local focus in each of the markets. We see opportunity to enhance operating efficiencies in each of the markets as well as in WGNA and WGN radio, and I will tell you that we're right now doing a deep dive into the financials and the budgets and the contracts post our initial site visits. And I would just say all-in I would expect that $160 million in synergies will be guided up at the closing.

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Operator [6]

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And next question comes from Dan Kurnos with Benchmark Company.

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Daniel Louis Kurnos, The Benchmark Company, LLC, Research Division - MD [7]

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Perry, no surprise you guys continue to outperform on the distribution side, the retrans. Just curious you guys gave a lot of color around subs, which is helpful. Obviously, with the big step up and being able to negotiate Tribune in the back half of the year, it feels like with Tribune, I should say, it feels like we're all kind of under shooting on '20. I mean, I don't want to get ahead of our skis here, but just relative to what you're thinking about from both the growth and net perspective, do you have any kind of updated guide or at least high-level thoughts on how '20 looks?

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Thomas E. Carter, Nexstar Media Group, Inc. - Executive VP & CFO [8]

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Well, I think -- Dan, this is Tom. I think, we feel very good about 2020. I mean we're just in the very early innings of the game of looking at the renewals and the contracts and the puts and the takes as it relates to that both on a gross retrans and on a net retrans basis. So it's a little too early to tell, but clearly our results in Q1 exceeded our expectations. I think some of that really comes -- we are seeing continued strong growth in the VMVPD category, both from an organic growth perspective with the exception of DirecTV Now, which took a half step back with their price increase, but also due to continued launch of new markets by all the big MVPDs in our portfolio, which they were slow to move on over the course of the last 12 months, they're getting around to it now and we're seeing a take rate that's healthy from that perspective. So the fundamental business, I think, remains very good for us from a unit count, and now we're just trying to overlay on that what's the art of the possible on a rate basis. And I think that's still to come, but I think we'll stick with what we have until we have more definitive data.

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [9]

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And I will also remind you that Tribune brings a much higher quantum of CW affiliates, where we have a very high conversion margin of retrans, gross to retrans net, if you want to keep score that way. So I would say, on the bias, on an all-in basis, you could probably bet the over at this point on a margin perspective.

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Daniel Louis Kurnos, The Benchmark Company, LLC, Research Division - MD [10]

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Got it. That's super helpful and interesting commentary on kind of the down market, Tom. And then, Perry, just the kind of requisite question on core. Just any thoughts on pacings heading into Q2 and kind of category strength both in Q1 and Q2?

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [11]

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Sure. Our -- obviously, we did a great job with the Olympics in 2018 in the first quarter, and that somewhat colors our results on a comparable basis, but for the fact that we were down roughly 3%. Obviously, we recovered a lot of that $20-plus million in ad revenue and $1 million plus in digital revenue. But as we said, if you extract February, we were up mid and I would say mid-plus single digits in January and March. March was better than January in terms of growth over the prior year. And as we look at the second quarter, thematically that mid-single growth on core continues and the only extraneous factor in Q2 of last year was obviously the political number grew more and displaced some inventory. But I would say that we would show better results on core in the second quarter than we did in the first. I would say that our digital pace at the station level is better than it was in the first quarter. And -- but we're still not going to be chasing on profit -- I'm not trying to buy revenue that is unprofitable to show top line growth and give it back at a greater level than 100% on the bottom line, and that's just a decision we made last year that will work its way through the system and we do anticipate will be through that system probably by the time we turn to the back half of the year from a digital comp perspective and you'll be able to see the underlying growth on the revenue base that remains.

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Operator [12]

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And our next question comes from David Joyce with Evercore.

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David Carl Joyce, Evercore ISI Institutional Equities, Research Division - MD & Senior Analyst [13]

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Couple of questions on the regulatory front. If you can please provide your thoughts about the DOJ workshop? And then also where would you think the FCC is on the quadrennial review and the national TV ownership cap?

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [14]

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Sure. Well, I think most have read the press reports from the DOJ's workshops last week on market definition. I applaud the DOJ for acknowledging current realities and taking the step of having these workshops to get folks both from the digital and the television industries to testify around what the market truly is today. So I think it was a very positive first step in what will probably be many steps for reconsidering those positions, but it was a good first step to address the marketplace reality as it relates to the competition that over the year television faces from not only digital but other sources. And so I think it was a good first step. As it relates to the quadrennial review, that is underway and we filed our comments last week. But as you may know, the national ownership cap is specifically exempted from the quadrennial review process. So that is its own rule-making proceeding, we've obviously filed comments, we said more on that recently in the last couple of weeks, but those are 2 separate proceedings, and again we are always hopeful that the FCC along with DOJ will continue to recognize that the current regulatory schema is probably behind the times in terms of reflecting marketplace realities. So we will continue to lobby on that behalf and I'm hopeful that there will be change in the future.

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David Carl Joyce, Evercore ISI Institutional Equities, Research Division - MD & Senior Analyst [15]

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Do you have any sense on the timing? Any sort of update there?

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [16]

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I really doubt. I mean, the quadrennial review obviously is an ongoing process. We filed comments, there will be a period to reply to those comments and all of that. When and if the FCC takes any action is totally under their purview, we're hopeful that they will, but obviously have no insight into what they will do and when they will do it. But particularly as it relates to the national ownership cap, that proceeding has been outstanding for a while, and we hope that it will come to some sort of a conclusion at sometime this year.

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David Carl Joyce, Evercore ISI Institutional Equities, Research Division - MD & Senior Analyst [17]

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And just a quick question on digital, is all of that revenue generated from the liquid acquisition? Or do you have some of that activity outside of that asset?

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [18]

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Yes. So if you look at the reported digital revenue number, it is made up of 2 basic components. One is the revenue that we generate in our local markets on our local sites, and that's about half the number. The other half of the number is what our digital subsidiary Nexstar Digital LLC generates from its various activities. And in the first quarter, we did see mid-single-digit growth from our local site revenue, and again that's up against the year Olympic revenue of last year that was a 7-digit number on our local site. So we rose our growth over that. I will tell you that in the second quarter, we're pacing in the high- single-digits, may crest double-digits in the second quarter internally against our forecast. And in Nexstar Digital piece, again those are -- that's digital programmatic video, that's sponsored social with Facebook and those kinds of things. And obviously when you're dealing with Google and Facebook, they'll set the terms of the game, they'll set the rules of the game and sometimes they'll change those rules in midstream and some of that has happened here, and we made a conscious decision that we're not going to go out and buy inventory to resell -- buy inventory from publishers in a competitive marketplace and then resell that at a loss just for the sake of showing top line revenue growth, but not -- I read the financial statements from the bottom up. So I -- -- we made that decision about this time last year, and it's working its way through the cycle, and we will lap ourselves in the back half of this year and then I think you'll see the underlying growth of the revenue streams that we have chosen to stand behind. And you did notice probably that we took an impairment charge in the fourth quarter, related to the write down of some of those unprofitable operations that we either inherited or were in previously.

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Thomas E. Carter, Nexstar Media Group, Inc. - Executive VP & CFO [19]

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And just to put a finer point on it. On the Nexstar Digital side, revenues are derived from a number of different lines of business, not just liquid. So it's our social media platform, it's our CMS system, et cetera. So it's not -- there are a number of contributors on the Nexstar Digital side besides just liquid.

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Operator [20]

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And our next question comes from Marci Ryvicker with Wolfe Research.

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Marci Lynn Ryvicker, Wolfe Research, LLC - MD of Equity Research [21]

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I just want to dig in a little bit more on digital. What did you shut down? And then I'm confused on your commentary of it will grow year-over-year because you just lost $10 million in revenues. So maybe I'm confused [with it].. How should the rest of the quarters look relative to the $52 million in Q1?

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Thomas E. Carter, Nexstar Media Group, Inc. - Executive VP & CFO [22]

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Marci, it's not -- the part that's going to grow year-over-year is the local digital piece, the website piece. The Nexstar Digital piece will continue to show negative comps to the prior year. Definitely, in Q2 and likely in Q3, we think that by the end of the year, Q4 hopefully, it will return to a growth and clearly in 2020, it will have easier comps. But total digital revenue will not grow meaningfully for the rest of this year, and it will continue to decline relative to 2018 results. Show negative variances to 2018 results, if that answers your question.

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Marci Lynn Ryvicker, Wolfe Research, LLC - MD of Equity Research [23]

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Yes. And then can you talk about what you shut down? And what was not profitable.

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [24]

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Sure. It's a number of names that you probably heard in the past. We shut down Federated Media, Dedicated Media, Kixer, Yachi. We have pivoted.

(technical difficulty)

hyphen to only profitable social growth and revenue association with Facebook. But I would tell you that we now have a data science team that is going to generate a high single-digit revenue number against revenue that was barely there a year ago. So we continue to evolve our digital portfolio and the revenue mix to meet the changing tastes of the marketplace. And again, as I said, there was a change of the rules at Google kind of going into the first quarter that cause us to take a step back. We have now remedied that and we're now doing business with Google again. So I think you will see sequential improvement in our digital revenues comped to the prior year, but again we're not going to -- for the sake of showing revenue growth, take a loss on that incremental revenue and that's just a decision I made to not chase on unprofitable revenue and kind of build this portfolio for the long-term. We also kind of changing our vision of what success looks like here when you look at putting Tribune and Nexstar together, not only from a linear perspective but from a digital perspective and look at the size of that local media and information platform, it is a top comps score site in the country and also in the world, if it were a single website. Now can we develop an ad network that if you wanted to do a homepage takeover that reaches 2/3 of the country, we can do that. Now it'll be on a 130 different homepages, but can we deliver the same kind of heft with the added diversity of it being brand safe, purely local content, and those are the things that Greg Raifman and his team are working on right now and I'd much rather play the long game there than chase unprofitable revenue for a quarter's sake.

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Marci Lynn Ryvicker, Wolfe Research, LLC - MD of Equity Research [25]

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I agree. Two clarifications for you, Perry. It sounded like you said Q2 core may be up mid-singles so I just want to confirm that? And the second thing is in your prepared comments, I think, I heard Scripps got approval for the divestiture stations from the DOJ and FTC, I just want to confirm that?

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [26]

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The FTC approval and early termination of HSR in the Tribune acquisition related to the stations necessary for divestiture for the national ownership cap. So these were not overlap markets. So that was the piece that received early termination of HSR. What is still at issue at the DOJ -- it's DOJ now, not FTC -- arms of DOJ --. it's DOJ, is the overlap markets, and they are and have met with the divestiture buyers. 2 of the 3 divesture buyers have been in front of the DOJ recently. So we think we could say that they are brand safe and known entities. And the DOJ has said they need nothing further from either Nexstar or Tribune at this time, all of which we take as a positive sign as we move through the process. And from FCC perspective, as I mentioned, all the applications are on public notice, including the divestiture applications and that public comment period will end on May 27. So potentially, we could receive a grant at the end of June. I'm not attempting to bind the government to that. It's a big transaction, and they will take their time to make sure they are sure footed of their approvals, but we at minimum still stand by our third quarter closing time line and with the thought that potentially could be slightly accelerated. Your question on core, if I said mid-single digits, that's kind of where we're currently pacing. We're not forecasting to finish in the mid-single digits, but we will see sequential improvement over the first quarter. I would say that would be more of a low- single-digit growth over the prior year on core.

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Operator [27]

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And our next question comes from Kyle Evans with Stephens.

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Kyle William Evans, Stephens Inc., Research Division - MD [28]

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Two-part retrans question. Perry, I think you mentioned double-digit retrans for the year just want to clarify and make sure you meant at the net level? And then on a related note, a lot of focus and commentary around the virtual MVPDs. What kind of visibility and escalators do you have on those subs, given where those rates are negotiated and the way that money flows? And I've got a follow up.

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Thomas E. Carter, Nexstar Media Group, Inc. - Executive VP & CFO [29]

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Sure. With regard to the virtual MVPDs, we're still on a cash basis, basically. So there is not a lot of visibility into their sub counts yet. So we're not accruing that. We're recognizing the revenue as it comes in. So from that perspective, I think, we feel good about it, it's a real-time exercise. And just to be clear, we have not changed our guidance with regard to near-term double-digit growth in retrans revenue or if you want to think about it in net retrans contribution. And I'll let Perry answer the question with regard to kind of the cadence of the virtual MVPD transaction and contracts.

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [30]

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It depends, Kyle, on the network and the virtual MVPD, but a number of those agreements are up for repricing this year as well and the initial offers from the network have been an increase. Now we just negotiate the size of that increase. So we continue to believe that the economics are going to be somewhere in the range of net dollars per subscriber to us will be roughly the same and obviously we'll continue to negotiate with the networks who are providing the MVPD -- the virtual MVPD agreements to us, and it is our choice to opt in or not. And again, as Tom said, a number of the -- for example, DirecTV Now and YouTube, Hulu, PlayStation, View, Fubo -- have announced launching in more markets than they are currently launched in today. And as they fulfill those commitments, we will benefit because we're in a lot of those markets that have been announced, but not launched as of today. And as Tom said, we will find out in 30 or 60 or 90 days from now what those launches mean in terms of incremental subscribers. But with that as the backdrop, our subscriber count over the last 12 months is absolutely exactly flat with the decline in traditional MVPD subs being uptaken by the emergence of OTT sub. So we're net at the same number where we were 12 months ago. And against the backdrop of all of that and the puts and that takes, our retransmission revenue is up 13% here in the first quarter, 13.8%. And we do project that we will have double-digit retrans revenue growth throughout the remainder of this year.

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Kyle William Evans, Stephens Inc., Research Division - MD [31]

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Great. Could you give any strategic kind high-level view of how you view the OTT in streamed markets? You got 3 competitors that are kind of diving head first into that market with third-party ad networks and launching their own channels. Can you tell us what you have there today and kind of how you view that longer-term.

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [32]

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What we have in terms of OTT revenues?

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Kyle William Evans, Stephens Inc., Research Division - MD [33]

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Yes.

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [34]

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Well, that currently is being fulfilled by our digital division, and it is an emerging and growing revenue source off of a very low base at this point in time, but we are competing in that space programmatically and it is a growing revenue stream for the digital division. Small in the scheme of things, but again we do believe that there is opportunity there to continue to grow again using the programmatic capabilities that came with liquid.

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Kyle William Evans, Stephens Inc., Research Division - MD [35]

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I guess, I'm asking, should we be expecting you to start a third-party ad network? Would you be starting channels like your peers or are you very happy with what you have there today?

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [36]

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Well, I think, there are a couple of things. First of all, we have launched the direct-to-consumer product in San Francisco. We launched it late last year, it's called KRON ON which is a 100% subscription revenue supported direct-to-consumer app with exclusive content. It is in its infancy, but I can tell you that it is profitable in the early going, and we continue to work with that product to broaden its appeal and we think once we kind of have this figured out -- our local news is our product. That's only thing we own. We rent everything else. So any direct-to-consumer offering we have will be market specific, local news, sports and weather specific, traffic specific and we look to roll out this KRON ON. We charge $2.99 a month or $29.99 for a year. Interesting the learnings we have -- over half of the subscribers we have right now signed up for a year. So they see a value to the service. But again we're in the top of the first inning of this ball game in terms of our learnings internally, and Tim Busch and his team along with Brett Jenkins, our CTO and Greg Raifman and his team are all collaborating on this product to see if there is an opportunity for us in the direct-to-consumer space with explosive local news and information offerings.

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Operator [37]

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And our next question comes from Craig Huber with Huber Research Partners.

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Craig Anthony Huber, Huber Research Partners, LLC - CEO, MD, and Research Analyst [38]

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My first question on digital ad revenue. Can you help us -- what percent of digital comes from the TV stations as opposed to the company level, Nexstar level?

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [39]

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It is roughly half of the total digital revenue comes from our local station sites. That would be in our internal accounting and reporting classified as NBI revenue or Nexstar broadcasting digital revenue.

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Craig Anthony Huber, Huber Research Partners, LLC - CEO, MD, and Research Analyst [40]

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Okay. If we could switch over to cost, just sort of thinking of your cost base for this last 3 quarters of this year putting aside network compensation. How should we sort of model or think about the rest of your cost on a year-over-year basis?

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Thomas E. Carter, Nexstar Media Group, Inc. - Executive VP & CFO [41]

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Well, I think from a SG&A perspective, similar to the first quarter, you're going to see that go down simply because in 2018, we had largely political expenses, not only from a sales perspective and a national rep comp perspective, but also we did a number of specific local news events focusing on political such as debates, et cetera, et cetera, additional half hour programming around political events. So you will see SG&A moderate, continue to moderate over the year. And then as I mentioned before, our fixed costs, we continue to drive that down wherever possible, because you're exactly right, we see continued growth in programming expenses, mainly affiliate expenses, and so we've got to keep a rein on all other controllable expenses knowing that, that one's increasing at a significant rate.

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Craig Anthony Huber, Huber Research Partners, LLC - CEO, MD, and Research Analyst [42]

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And then also on the core TV ad revenue number for the second quarter, I think you said is pacing, Perry, is right now is up mid-single digits you thought maybe it was more reasonable to expect up low- single-digits for the whole quarter, I want to make sure I have that right. And also can you speak about how auto did specifically year-over-year in the first quarter how much may be trending when you think of the second quarter?

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [43]

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Yes. You are correct. Now in the cadence of the business and how outpacing evolves over the course of the quarter, we are pacing at kind of a mid-single-digit level, but I'm not guiding that we will finish at that level. I think, we will finish slightly below that just kind of the way business is written and business comes in throughout the quarter. As it relates to automotive, automotive in the second quarter is -- will be better than the first quarter and first quarter results were better than fourth quarter in terms of comps for the prior year. We're seeing growth from Chevrolet, General Motors, Subaru. The only one that is down significantly is Dodge Chrysler Jeep, that's been a recurring story and I'm sure you would hear that in your channel checks as well. But local dealer spending was about 36% of our category and that's a focus area for us in terms of generating growth. Dealers are somewhat less profitable than they used to be. So they're spending less on advertising, but we are focused on and trying to sell -- our pitch to local dealers is you don't need to buy 5 auto intender sites because of duplication, buy one and put the rest of the money into local TV not only to build your brand, but create awareness for the auto intender site that you are on. And in the second quarter, our Tier 3, our dealers are now pacing positives by kind of a mid- single-digit number. So overall, our automotive picture, we think, is improving. It was about 23% of core revenue in the first quarter. So kind of hanging in at about the same level. So I hope that is responsive to your question. If you're looking at overall product categories, attorneys were up, medical healthcare, fast foods were basically flat, cable was up, home repair was up, banking was up and then categories that were behind were, as we said automotive furniture, paid programming and retail.

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Craig Anthony Huber, Huber Research Partners, LLC - CEO, MD, and Research Analyst [44]

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And my last question, Perry, if I could ask. I just want to get a sense given all the markets you guys are in around the country, what's your sense of how the economy is doing out there at a local level when you go out and talk to the people at your stations, when you go visit them, et cetera? What's your sense -- put aside what the government says the economy is doing, what the economists says it's doing, what do you see out there?

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [45]

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Well, I think, we're in concert with the CNBC Survey that was released this morning saying that MainStreet remains pretty bullish on the economy. I think of the folks that CNBC surveyed 60% expect their revenues to increase in the coming year and only 6% expect that their revenues will go down. I would tell you that, I think, energy prices are maybe the one issue that affects businesses if you're rolling trunks for plumbers or air conditioning repairmen or whatever and it affects auto purchases. But we have not seen any kind of a pinch of wages of inflation in any other way in our local marketplaces. And I think the businesses that we talk to on a weekly basis are kind of in this goldilocks economy, the benefits of the tax cuts of last year have probably at this point just about lapped themselves. And we're seeing continued GDP or nominal GDP growth in the single digits. I think people have made their peace with that. And, but we don't see any storm clouds on the horizon unless there were a particular spike in energy prices, which energy prices are up pretty handsomely over the last year, but I wouldn't characterize that as a spike. So the conference level in Mainstreet, we think is pretty high and again we talk probably to more auto dealers than anybody else, just I'm looking at their trending and they're trending internally in terms of our pacing at the local retail level, Tier 3 level is much improved over a year ago and even over 2 quarters ago going back to fourth quarter.

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Operator [46]

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And our next question comes from Jim Goss with Barrington Research.

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James Charles Goss, Barrington Research Associates, Inc., Research Division - MD [47]

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Perry, you made a comment, an interesting one earlier that -- about the gross net CW affiliate spent -- take you to get. And I'm wondering if you have any sense that you could provide of how the Tribune stations you're acquiring fared in terms of ad to revenue retrans mix prior to the bump they will get with being part of your system?

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [48]

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Not really sure, how to answer that, James. I mean obviously, we have their results. We have announced $75 million in retrans synergies. And again a lot of that is coming from the CW and My Network part of their portfolio. So obviously our results will be better than theirs on a gross revenue and a net revenue basis, but I'm really not sure that it's prudent to comment much beyond that. But again we reiterated guidance not only free cash flow, retrans revenue growth, retrans margin, and I don't know we can do much more than that than just say we want to reaffirm the guidance we've already given.

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James Charles Goss, Barrington Research Associates, Inc., Research Division - MD [49]

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Okay. And then to the extent that you might continue to have an interest in M&A, and unless there is a change in the ownership limits, your M&A would be focused on a continual refining of your station mix and in that context, are you developing any biases in terms of wanting either more large stations versus small? Or certain geographic concentration? Or parts of the country, sunbelt or whatever that you have an interest in or a network mix that you think it would be part of the determination of what sort of properties you'll be looking to acquire?

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [50]

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I would say that it's driven by accretion of the acquisition. Obviously, if you look at our portfolio today pre-tribune, our revenue contribution is about 33% CBS, about 27%, NBC, FOX is about 11%, ABC is about 19% and the other 10% comes from CW, My Net and others. So it's a pretty well-diversified portfolio. That mix will change some with a higher FOX contribution and higher CW, My Net contribution as a percent of the whole, which will push down some of those other percentages with Tribune. And in 115 markets, we're in more markets than we're not in that 210 in the country. So we're pretty fully distributed by region and geography, but again, I think, from our perspective all money is green and we'll go where the accretion is and the good deals are for our shareholders, and I think that we've been able to make almost any combination of stations work in terms of growth and accretion. So we'll continue to run our same playbook on whatever opportunistic acquisitions we can make from this point going forward. And if there is a role change, that will create more opportunity for us.

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Operator [51]

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And our next question comes from Clay Griffin with Deutsche Bank.

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Clayton Keever Griffin, Deutsche Bank AG, Research Division - Research Associate [52]

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Just wanted to clarify, I mean, I guess, the revenue benefit from the retrans, the as-required clauses on the retrans agreement is pretty clear, but Perry, are you implying that there are also benefits on the affiliation side? And to that extent, maybe that's a CW and My Net specific comment, but maybe if you could just comment broadly about when you step into those affiliation agreements on the stations that you bringing in, are you inheriting those as is? Or are there elements to those affiliation agreements that changes well when you acquire those stations?

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Thomas E. Carter, Nexstar Media Group, Inc. - Executive VP & CFO [53]

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Clay, I'll take that one. We assume the agreement and stand in their shoes. The difference is twofold. One is the mix of stations that Tribune has, which is much more heavily weighted toward CW and the higher margin because of that. And then also given the legacy of Tribune with their recent M&A activity on the sell side, they did a number of short-term agreements with affiliates over the networks rather than for their affiliations. So a number of those come up, and we think that's when we'll get the first real benefit of the scale of the combined businesses, because Nexstar will be renegotiating those affiliation agreements, not Tribune. And so we think that, that will allow us to maximize the net retrans margin for those new agreements. So it's really twofold. One is mix, and then 2 is the sequence of the affiliation agreement, maturities at Tribune which we'll get to renegotiate and not have to fall back on Tribune's negotiation of those. Is that responsive?

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Operator [54]

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(Operator Instructions) And our next question comes from Davis Hebert with Wells Fargo Securities.

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Davis Hebert, Wells Fargo Securities, LLC, Research Division - Director and Senior High Yield Analyst [55]

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Just a quick question for, Tom. You mentioned being opportunistic in the capital market ahead of the Tribune raise. Would you anticipate also looking at expanding that opportunity set to include the 22 maturities?

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Thomas E. Carter, Nexstar Media Group, Inc. - Executive VP & CFO [56]

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Nothing is off the table.

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Perry A. Sook, Nexstar Media Group, Inc. - Chairman, President & CEO [57]

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Well, thank you very much for joining us the -- for our call this morning. We look forward to getting together in 3 months time and reporting on our second quarter progress as well as our progress towards the completion of the Tribune acquisition. So thank you very much for your time today. We'll talk to you again soon.

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Operator [58]

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Thank you, ladies and gentlemen. This concludes today's teleconference. You may now disconnect.