Nexstar Media Group, Inc.

Good day and welcome to Nexstar Media Group's second quarter 2024 conference call. Today's call is being recorded. I will now turn the conference over to Joe Giaffone, Investor Relations. Please go ahead, sir.

Thank you, Paul, and good morning, everyone. I'll first review the safe harbor language, and then we'll get right into the call. All statements and comments made by management during today's conference call, other than statements of historical fact, may be deemed forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Nexstar cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those reflected by the forward-looking statements made during today's call. For additional details on these risks and uncertainties, please see Nexstar's annual report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission, and Nexstar's subsequent public filings with the SEC. Nexstar undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. It's now my pleasure to turn the conference call over to your host, Nexstar founder, chairman, and CEO, Perry Sook. Perry, please go ahead.

Thank you, Joseph, and good morning, everyone. Thank you for joining us today. With me on our call today are Mike Baird, our president and chief operating officer, and Leanne Gleha, our chief financial officer, and I will start with a summary of the recent highlights, followed by Mike's operations review, and then Leanne will review our financials. Next, our strong second quarter financial results mark another quarter of record total net revenue and our third consecutive quarter of all-time high quarterly distribution revenue. We translated this revenue growth into another quarter of solid adjusted EBITDA and adjusted free cash flow growth, reflecting our disciplined operating strategies. Just stop and think about that for a minute. At a time when the pay TV industry continues to experience subscriber attrition and there is intense competition for national advertising dollars, Nexstar generated the highest first and second quarter distribution and total revenue levels in the company's history. Why is that? Well, it comes down to the value our programming and reach deliver to our audiences, customers, and programming partners. The power of broadcast television was again validated in a few recent high profile settings. For example, the NBA bypassed a contract renewal on a cable television network in favor of a deal that included increased distribution on broadcast television, given our tremendous proven value of the broadcast model that that will bring to the league. In fact, a recent statement by the NBA said, quote, throughout these negotiations, our primary objective has been to maximize the reach and accessibility of our games for our fans, end quote. We know that reach and accessibility is the lifeblood of every sport, and there's no platform that can match the reach of broadcast television. This is a proven path that has sustained the long-term growth of the NFL, and one we believe the NBA will prosper from as well. To that point, NFL Commissioner Roger Goodell reiterated his commitment to broadcast television during an interview just last month, saying, quote, a lot of our media is not about the dollars as much as it is about how we reach more fans. That's the primary objective for us. He went on to comment that the NFL's presence on broadcast is, quote, what has led to the great not only popularity of the league, but obviously the great ratings, end quote. The broadcast television business model is anchored by loyal pay television subscribers, including sports and news viewers who subscribe in order to access our content and which account for the increasingly large percentage of the pay TV subscriber universe. And the high net worth audiences aged 45 plus who enjoy the superior interface and experience that pay TV provides. Moreover, as more media companies lean back into the power of linear, the only segment that generates profit, by the way, we expect the relative value of the pay TV bundle with all of its premium sports and local news content to look more and more attractive, leading to an inflection point in the future in subscriber attrition. Beyond that, we believe the next star story is highly differentiated based on the operating leverage our scale provides enabling us to generate consistently strong free cash flow and maintain a solid balance sheet. As a result, we have delivered outsized long-term returns for our shareholders. In the first half of 2024 alone, we returned 74% of our year-to-date adjusted free cash flow, or $358 million, to shareholders in the form of dividends and share purchases, reducing our share count by over 3% just this year alone. Now I'd like to briefly touch on some of our achievements in the quarter, including the progress we're making on our longer-term growth drivers, including the CW. Nexstar has owned the network for less than two years, and we're making excellent progress as we continue on our march to turning that business around. The CW operating loss improved by $33 million in the second quarter and by $83 million year-to-date, largely driven by our reductions in programming costs and SC&A. For the full year, we remain on plan and continue to expect the CW's operating loss to improve by over 100 million. Our programming strategies are being validated as the CW delivered its third consecutive quarter of primetime entertainment ratings growth since implementing our new programming lineup. Continuing this positive trend in May, we added Police 24-7 to the network, which has quickly risen to the number two CW series across all demos. We've also announced our fall primetime schedule for the 24-25 broadcast season, which will include a mix of new and returning original series and family-friendly game shows, including Superman and Lois, Solomon's Crossing, and Inside the NFL, which is moving to Friday nights to preview the upcoming weekend's games, and which will now feature the unique insights and analysis of the legendary Bill Belichick. New premieres will include Trivial Pursuit, hosted by LeVar Burton, and Scrabble, hosted by Raven Simone, and we renewed the popular series All-American and Wild Card. We also announced that Pac-12 football will be joining our lineup of marquee sports, including Live Golf, ACC Football and Basketball, the NASCAR Xfinity Series, and WWE Next. The CW will broadcast 11 Pac-12 football games beginning August 31st, with a doubleheader featuring featuring each of Washington State and Oregon State. Additionally, the CW will be the exclusive broadcast home to the 2024 Snoop Dogg Arizona Bowl. Sports remains an important component of our strategy to attract viewers and advertisers, and the Nexstar CW is already clearly different than the one we acquired in 2022. We believe that the best is yet to come. As we've said previously, the station side of our business continues to benefit from our ownership of the network, We announced that three additional Nexstar stations in Chicago, Norfolk, and Lafayette, Louisiana will become CW network affiliates beginning September the 1st. These additions benefit us by generating additional operating profit on the station side of our ledger. To date, we have announced the addition of 14 CW affiliates to our station group, bringing the number of company and partner-owned CWs to 49, covering over 45% of all U.S. television households, marking the biggest station footprint of all of the Big Five networks. Turning to News Nation, we successfully expanded to a 24-7 cable news network on June 1st, ahead of schedule, which enabled us to be on the air live during recent history-making news events. We were live on the air during the attempted assassination of former President Trump and when President Biden announced that he was dropping out of the 2024 presidential race. Importantly, our team's focused effort to build a fact-based, journalism-first news network continues to pay off. According to Nielsen, NewsNation's total viewers in prime time were up over 200% in Q2 of 24 versus Q2 of 2021, the comparable period following the network's rebranding and launch in March of that year. And while we are executing well on our business, we continue to take a leadership role supporting the communities where we operate. Each June, on the anniversary of Nextar's founding, we give employees a half day with pay to perform voluntary community service or charity work. This June, we again celebrated Founders' Day with more than 5,000 of our employees participating. The work benefited 241 community service organizations or public charities by helping with meal preparation, building of houses, school backpack, hygiene kit assemblies, trash collections, and blood donation, among other activities. In addition, we also raised nearly $150,000 on behalf of these community service organizations. On the corporate governance front, subject to quarter end, we announced the appointment of Ellen Johnson, Executive Vice President and CFO of Interpublic Group of Companies, to our board of directors. As many of you know, IPG is one of the world's leading providers of marketing and advertising solutions, and Ellen has served as an integral member of IPG's executive team for many years. Her extensive financial and advertising industry experience, coupled with her expertise in all areas of ESG and information technology, which she oversees at IPG, will be invaluable to Nexstar as we continue to advance our business and execute on the company's goals to enhance shareholder value. Ellen will join our board effective October 1st, and once Ellen joins, our board will be back to 10 members, of which nine will be independent and three will be women. Before I turn it over to Mike, let me make a final comment. We have a differentiated business and cash-generative operating model underpinned by strong execution and the unique scale of our local and national media assets. Our unmatched competitive attributes provide Nexstar with the financial strength and operating leverage to support our strategy as we pursue several substantial growth opportunities ahead of us. Finally, our confidence in our future is underscored by our board's recent approval of a new $1.5 billion share repurchase authorization. With all of that said, let me turn the call over to Mike.