Nexstar Media Group is strategically positioning itself to benefit from potential broadcast deregulation under the current administration. CEO Perry Sook remains optimistic about the company's $6.2 billion acquisition of Tegna, anticipating closure by the second half of 2026, despite potential regulatory challenges.
The proposed deal would significantly expand Nexstar's reach, covering approximately 80% of U.S. households, exceeding the current 39% national ownership cap. This expansion hinges on regulatory adjustments, with Sook citing the recent court ruling that removed restrictions on owning multiple top-four stations in a single market as positive momentum. As Sook stated during Nexstar’s Nov. 6 earnings call: “The pieces are falling in place. This administration, the Trump administration and Brendan Carr at the FCC are focused on deregulating business, allowing businesses to breathe, allowing businesses to compete.”
Tegna shareholders are scheduled to vote on the transaction on Nov. 18. Nexstar has already submitted its Hart-Scott-Rodino antitrust notification and received a second request from the Department of Justice. The company has also prepared applications for the Federal Communications Commission (FCC) seeking approval for the transfer of Tegna’s licenses. However, these filings are currently on hold due to the government closure. The Eighth Circuit Court of Appeals' mandate eliminating the FCC’s “top four” ownership rule is pending, awaiting the government's reopening for publication in the Federal Register. Sook emphasized that Nexstar has been “spending a lot of time in Washington” to demonstrate that the transaction aligns with the public interest, the primary criterion for FCC evaluation.
Nexstar anticipates approximately $300 million in synergies from the merger, primarily from retransmission revenue and operational efficiencies. CFO Lee Ann Gliha mentioned that the company conducted a “very deep analysis” looking “line by line, person by person” at potential cost savings. While these synergies represent near-term goals, Gliha noted that additional savings could be realized through facilities consolidation in overlapping markets, though this would require more time.
Sook also highlighted the potential for expanding local news programming in nine markets by leveraging Tegna’s existing newsroom infrastructure. He cited Dallas as an example, where Tegna’s WFAA could support news production for Nexstar’s CW affiliate. As Sook said: “We can use the newsroom of WFAA and their people and maybe some additional resources to create a news presence on our CW affiliate.”
Beyond operational efficiencies, the acquisition of Tegna is seen as crucial for monetizing ATSC 3.0 spectrum, also known as NextGen TV. The combined entity would control spectrum reaching approximately 80% of the country. Sook described the “opportunity to develop monetization of the non-video uses of our ATSC 3.0 spectrum” as “the biggest value creation lever in our business as we know it today.” This signals that Nexstar views large-scale spectrum holdings as vital for forming partnerships and developing new revenue streams from the technology.
When asked about the broader implications for the broadcast sector, Sook stated that Nexstar would become “the poster company for not only what the future of the industry will look like, but also the strength of our balance sheet, management team, financial profile and the amount of local content that we deliver.” He emphasized that industry revitalization requires strong companies, even if they are competitors. President and COO Mike Biard added that Nexstar is “not afraid of competition by any stretch of the imagination,” noting the importance of a robust broadcast sector when dealing with tech platforms and large media companies.
While the Tegna acquisition is the immediate priority, Sook indicated that Nexstar remains open to future deals. “I don’t think that means that we are forever done with acquisitions,” he said. “We will continue to look opportunistically for acquisitions that make good industrial logic and, most importantly, are substantially accretive to the company. I think we’ve got a pretty good track record of finding those, and we will continue that quest.”
For the third quarter, Nexstar reported revenue of $1.2 billion, a decrease of 12.3% year-over-year, primarily attributed to the election cycle. Distribution revenue was essentially flat at $709 million, while nonpolitical advertising revenue was $476 million. Adjusted EBITDA was $358 million, with a 29.9% margin. The company generated $166 million in adjusted free cash flow during the quarter. Nexstar’s CW network reduced losses by $5 million, driven by sports programming, and expects to reach breakeven in 2026. The company suspended share repurchases to focus on the Tegna acquisition, which is projected to be highly accretive to free cash flow. Nexstar returned $56 million to shareholders in dividends and made $25 million in debt repayments.