Nexstar and NBC Renew Multi-Year Partnership, Reaching Over 14 Million Households Nationwide

Nexstar Media Group Secures Multi-Year NBC Affiliation Renewal, Strengthening U.S. Broadcasting Presence

January 8, 2025 – Nexstar Media Group, a leading player in the U.S. local broadcasting landscape, has announced the renewal of its affiliation agreements with NBCUniversal. This strategic multi-year deal encompasses 33 markets across the United States, extending Nexstar’s reach to over 14 million TV households. The renewal underscores Nexstar’s commitment to maintaining robust partnerships with major networks, ensuring a steady stream of diverse content for its expansive audience.

Comprehensive Agreement Details

The newly signed agreement between Nexstar and NBC Television Network marks a significant extension of their longstanding partnership. Spanning multiple years, the deal covers 33 key markets nationwide, reinforcing Nexstar’s substantial presence in local broadcasting. With this renewal, Nexstar continues to deliver NBC’s acclaimed programming, including top-tier news, sports, and entertainment, to more than 14 million U.S. TV households. Although the financial terms of the agreement remain undisclosed, the partnership is poised to sustain Nexstar’s influential role in the broadcasting sector.

Extensive Station Network

Nexstar’s extensive network comprises 29 stations directly owned by the company, supplemented by three stations under Mission Broadcasting and one station owned by White Knight Broadcasting. This diverse portfolio enables Nexstar to effectively distribute NBC content across various regions, enhancing its market penetration and audience engagement. The strategic distribution of stations ensures that Nexstar maintains a dominant footprint in the local broadcasting arena, leveraging NBC’s popular programming to attract and retain viewers.

Robust Financial Performance

In the third quarter of 2024, Nexstar reported record net revenue of $1.37 billion, marking a 20.7% increase compared to the same period the previous year. This remarkable growth was primarily driven by significant rises in distribution and advertising revenues. The company also achieved a net income of $180 million and an Adjusted EBITDA of $510 million during this quarter, highlighting its strong financial resilience and operational efficiency.

Navigating Industry Challenges

Despite its impressive financial results, Nexstar faces several challenges within the dynamic media landscape:

• Cord-Cutting Trends: The shift of consumers from traditional pay-TV services to streaming platforms has led to a decline in pay-TV subscribers. This trend adversely affects retransmission fees, a crucial revenue source for Nexstar.

• Elevated Debt Levels: As of the end of 2023, Nexstar holds $6.9 billion in long-term debt, primarily due to its acquisition of Tribune Media. Managing this substantial debt is essential for maintaining financial stability and supporting long-term growth initiatives.

• Regulatory Scrutiny: Nexstar encountered regulatory hurdles, including a $1.2 million fine imposed by the FCC in March 2024 for unauthorized transfer of control related to its operational agreements with Mission Broadcasting. Such regulatory actions necessitate careful navigation to mitigate potential operational and financial impacts.

Strategic Implications of NBC Renewal

The renewal of affiliation agreements with NBCUniversal is a strategic maneuver that provides Nexstar with a reliable content pipeline, enhancing its ability to attract advertisers and sustain a strong viewer base. NBC’s portfolio, featuring popular programming like NFL games and prime-time shows, is instrumental in driving audience engagement and advertising revenues. Additionally, covering 14 million households solidifies Nexstar’s leadership in local broadcasting and advertising markets.

Investment Implications and Future Outlook

Investors are encouraged to consider Nexstar’s robust financial performance and strategic partnerships alongside the prevailing industry challenges and regulatory landscape. The company’s ability to adapt to evolving media consumption trends, effectively manage its debt, and comply with regulatory requirements will be pivotal in determining its future financial health and stock performance.

Short-Term Outlook (1–6 Months): The NBC renewal is expected to provide stability, potentially mitigating stock price volatility. However, the initial market reaction has been modest, with Nexstar’s stock down by 1.18% following the announcement. Investors may view this as an opportunity to hold or accumulate shares, especially if the company demonstrates further strategic initiatives or financial clarity in upcoming quarters.

Medium to Long-Term Prospects (6 Months – 3 Years): The success of the NBC renewal will hinge on Nexstar’s ability to leverage NBC content to sustain and grow advertising revenues, expand its digital and streaming offerings, and manage its significant debt load. Effective navigation of these factors could contribute to sustainable growth and reinforce Nexstar’s market position.

Risks to Monitor: Key risks include declining viewership due to ongoing cord-cutting trends, adverse regulatory developments, and financial pressures from debt servicing. Investors should remain vigilant about these factors as they assess Nexstar’s long-term viability and growth potential.

Conclusion

Nexstar Media Group’s multi-year renewal of its NBC affiliation is a testament to its enduring partnership with one of the major broadcast networks, ensuring a steady supply of high-quality content to its extensive audience. While the company continues to navigate industry challenges such as cord-cutting and regulatory scrutiny, its strong financial performance and strategic initiatives position it well for future growth. Investors are advised to adopt a cautious yet optimistic stance, capitalizing on potential opportunities while closely monitoring key risk factors.