Good day, everyone, and welcome to the Nexstar Media Group 2018 Second Quarter Earnings Call. As a reminder, today's call is being recorded. And at this time, I'd like to turn the floor over to Joe Jaffoni, Nexstar Investor Relations. Please go ahead.

Thanks, Greg. Good morning, everyone, and thank you for joining Nexstar Media Group's 2018 second quarter conference call. We'll get to management's presentation and comments momentarily, as well as your questions and answers, but first I'll review the Safe Harbor disclosure. All statements and comments made during today's conference call other than statements of historical fact may be deemed forward-looking statements within the meaning of the Federal Securities laws and are subject to known and unknown risks, uncertainties and other factors that may cause future results to be materially different from those expressed or implied in the forward-looking statements. Important risks, assumptions and other factors that could cause future results to differ materially from those expressed in the forward-looking statements are specified in Nexstar's filings with the Securities and Exchange Commission. It's now my pleasure to turn the conference call over to your host, Nexstar Chairman, President and Chief Executive Officer, Perry Sook. Please go ahead, Perry.

Thank you, Joe, and good morning, everyone. I'd like to thank you all for joining us today to review Nexstar's record second quarter 2018 operating results. As outlined in this morning's release, Nexstar delivered another period of consensus-beating growth across its revenue and cash flow metrics as we continue to identify new opportunities to improve our performance and profitability across our portfolio. Our operating outperformance puts us solidly on pace to deliver on our free cash flow targets for the 2018-2019 cycle. And combined with our share repurchase activity, that will all result in higher free cash flow per share. Tom Carter, our Chief Financial Officer is with me, as always, this morning. Our second quarter results reflect the value we continue to mine from our local content and business relationships, our accretive scale-building acquisitions and the ongoing development of complimentary revenue streams that are diversifying our revenue mix, the effectiveness of our local broadcast and digital advertising platforms as proven marketing solutions for both businesses and candidates are the drivers of our operating and financial growth and allow us to simultaneously be aggressive with our return to capital, our leverage reduction, and select accretive M&A, which all come together to drive free cash flow growth per share and shareholder returns. With over $148 million of second quarter free cash flow, we allocated a total of approximately $84 million to the return-of-capital and levered reduction initiatives spread across share repurchases, quarterly dividend payments and debt reduction, and Tom will highlight each of those in just a moment. Looking at Nexstar's Q2 results, the 5.5% rise in second quarter net revenue reflects solid television advertising growth, as well as another quarterly sequential and year-over-year rise in retransmission and digital revenue growth. Reflecting these factors, Nexstar posted record second quarter broadcast cash…

Thanks, Perry, and good morning, everybody. I'll start with a review of Nexstar's Q2 income statement and balance sheet data, after which, I'll provide an update on our capital structure and some points of guidance. To start, as noted previously, effective 01/01/2018, the company adopted the new revenue accounting guidance issued by the Financial Accounting Standards Board. As a result, beginning January 1, the company presents local, national, digital, and political revenues net of their related agency commission. This morning's release also provided the 2017 second quarter and year-to-date local, national and political revenue comps adjusted to net out the sales of the agency commissions similar to what we've done in 2018. In addition, we no longer recognize barter revenue and barter expense related to the exchange of advertising time for certain programming materials. These changes don't impact the company's past or future income from operations, net income, broadcast cash flow, adjusted EBITDA or free cash flow. Also, effective on January 1 of this year, the company adopted another accounting standards update, which requires pension and other post-retirement plans, cost or credit, other than service costs to be presented outside of the income from operations category. Thus, the income from operations during the three months ended June 30, 2017 was decreased by a pension and other post-retirement plan credits of $3.2 million. Now, turning to the Q2 income statement. As Perry mentioned before, net revenue was up 5.5%, television advertising revenue, local, national and political was up 3.2%. Political revenue driving all of that at $31.6 million for the quarter, which was a record for our second quarter. Retrans fees were up 9.2% to $276 million. All of those are on a same-station basis as well, given no acquisition activity during the last 12 months as of the second quarter,…

Thank you, Tom. Nexstar's execution consistency across our businesses and in the management of our financial and capital structures enables us to continually elevate service to our local viewers and advertisers while also upholding our commitment to enhance shareholder value with growing operating results and growing the return of capital to shareholders. Now, let's open the call to Q&A to address your specific areas of interest. Greg?

And first, we'll take John Janedis with Jefferies.

Thanks. Hi, guys. Two questions for me. First, you talked about your accretive scale acquisitions and increasing shareholder value. And with your focus on leverage reduction, how are you thinking about the potential for further large-scale broadcast M&A given the assets that are on the market? And then separately, Perry, you hit on the sports betting topic. On a practical level, when do you see that kicking in given your portfolio? And do you see the potential for it to be a category in like the top 5 or 10 range?

I'll take the second part of that first, John. I mean, obviously we have not seen any direct investment spend yet on the sport betting category. But as it goes on a state by state basis, we can see the purveyors ramping in and ramping up. And it most likely for us would happen in markets that are adjacent to major markets where the betting activity may take place in states that have already approved it. But I think it could become a significant category over time and it will be a local category by and large because it will roll out on a state by state basis. So, I think that if I were to handicap it, I think we'd start to see spending perhaps in the back half of this year, but more likely more evidence of spending in 2019. And I'll let, Tom, answer the leverage question and capital allocation question.

John, is your question what is our leverage tolerance given potential M&A transactions? I guess, it was – I wasn't exactly sure what your question was?

Yeah. Maybe it's rolled – a few things rolled and I guess that's part of it. I guess secondly, there's – I mean, given your focus on leverage reduction, I guess I was just wondering what is the appetite you have currently for maybe larger-scale M&A going forward given what may be on the market currently.

Well, I would say the appetite for leverage reduction is exactly so that we can participate in potential future consolidation of the space. We made a pledge to not only shareholders but to the bondholders and the debt holders that post-Media General, we would operate down to below four times to continue to improve the business model and the strong free cash flows. We are well on our way to doing that. We reduced leverage by three-tenths of a turn of cash flow between the first and the second quarter. And the third the fourth quarters are going to have multiples of the revenue that the second quarter had in terms of political revenues. So, we're going to see a substantial turbocharging of debt reduction going forward. Given potential leverage covenants or leverage timing and comfort levels, I would say it's probably somewhere around a 5 times level and that's more deal-specific just in terms of the return on the actual acquisition and the free cash flow characteristics of that. But I would say generally, that's probably a good number.

Yes, John, I would just say for a substantially accretive acquisition, we are happy to consider increasing our leverage profile, because it's a substantially accretive acquisition. Obviously, again with a clear path toward de-levering vis-à-vis synergies and operational improvements in the short term thereafter just as we have demonstrated with our acquisition of Media General in 2017.

Thanks, guys.

All right. Moving on, we'll have Dan Kurnos from The Benchmark Company.

Great. Thanks. Good morning. Two questions just on core, Perry, interesting color around Ford. If you could just talk to kind of sort of the underlying core trends as we head into Q3, understanding that there's incremental displacement? So, if you also want to comment on displacement, auto being a focal point in core. And then, on the OTT, I remember asking you last call, I think you guys have just signed up NBC on YouTube. I think your sub-count was kind of in the mid-6s. Can you just talk about how OTT sub-count is pacing kind of general sub-trends there, and if you have any OTT renewals coming up in your expectations? Thanks.

Sure. Let's start with core and, first of all, kind of review a bit of Q2. We had roughly 5 of our top 10 categories that were flat to up and 5 that were down. The categories that were up were attorneys, medical healthcare, home repair, and kind of infomercials, paid programming, long-form media. The categories that were down were auto, which was down about 10%, and I'll give you some more color on that in just a minute. Fast foods, furniture, other media, radio, TV, cable, and then service various were down. So, kind of a typical quarter in terms of half up and half down in our top 10 categories. As it relates to automotive, we think there are some things that are specifically influencing the category currently that are situational and not secular, and I'll give you our view on that. Car companies continue to spend on incentives. In fact, incentives now represent about 11.5% of the vehicle prices, and that all comes out of the marketing budget. So, they're moderating ad spend and co-op I think in order to stabilize those budgets as we approach the back end of the years. So, I think that's item one. In our footprint, we have multiple dealers that are consolidating, and in that instance, budgets have been put on hold, like in Arkansas, for example, Everett Group buys the Landers Group. And so spending is on hold until the acquisition is completed. Most car companies have changed their executive management in the past 12 months, as well as their ad agencies which we believe impacted their media strategies for 2018. So that's a bit of a color on Q2. I think as it relates to Q3, as we look at our categories, automotive is pacing better than it finished…

Very much so. Thanks, Perry.

Next from Deutsche Bank, we have Aaron Watts.

Hey, guys. Thanks. Appreciate all the color. Bigger-picture question, as you think about M&A opportunities, has the Sinclair-Tribune process with the FCC and DOJ altered your view on the likelihood of getting transactions of scale approved by the government?

I don't believe so, given that we had a very definitive plan to clear through the regulatory agencies when we acquired Media General. I think we would apply that same discipline and rigor to any other large scale. Our opinion and it's just our opinion is that a number of the situations that arose in, the Sinclair-Tribune process are specific to that process. And I don't think there's a read-through that this is a general M&A trend. Having said that, I'll be in Washington next week at both the DOJ and the FCC and asking some of your same questions.

Fair enough. And maybe I'll get more color on this next week, but also, is it still your view that the ownership caps, the 39% cap is still likely to move in one way or another over the near term?

Yes. We think that there will be an increase in the National Ownership Cap proposed by the FCC at some point this fall. And we think it will be a substantial increase that will be coupled with the elimination of the UHF discount. As you know, our position is if you raise it from 39% to some other arbitrary number, all you've done is replace one arbitrary number with another. And that the only answer that will likely survive judicial review would be a total elimination of the cap and allow us to compete with all of the unregulated industries and businesses in media space, primarily on the digital side that are not capped to only reaching or doing business in 39% of the country. So that's the position we will continue to advocate. And where the FCC ultimately ends up and ultimately the courts end up, I think it's too soon for us to speculate on that.

Okay. That's helpful. Thanks.

Next, we have from Stephens, Kyle Evans.

Hi. Thanks. 62% of your revenue today comes from duopoly markets you just announced Springfield and Huntsville. How much more duopoly opportunity is there into the station footprint you've got today?

Well, we're now doubled up in 66 of our 100 markets. So, in theory, a third of our market footprint would create the opportunity for a duopoly. Now, there may be some markets where there's just not a willing dance partner, or it would, in the DOJ's eyes, provide an undue market concentration, so not all 34 of those markets will be actionable. But suffice-it-to-say, we have conversations ongoing in any market where we only have a singleton station to see if there's an opportunity to create a larger revenue share in the marketplace, and an increase in margin by running those two revenue streams off of a single fixed cost structure. So, that continues to be where we will look to opportunistically expand, as well as vertically taking our lead from what kind of capacity we would have under whatever a new national cap scenario might be.

Thanks. Tom, on digital do you mind spending a minute unpacking that line there, I know there's some discontinued from the prior year. Could you talk a little bit specifically about how LKQD is performing, as well, please?

Sure. No. LKQD is meeting our expectations in terms of the second quarter operating performance. It is materially profitable, so we're very happy with LKQD. But you're right, Q2 of 2017, the digital number there included revenue from federated and dedicated that is non-recurring and those businesses were shuttered in the first half of 2017, so that amount was excluded from the 2017 number in calculating the comparable growth numbers in revenue.

Got you. And lastly, you alluded to some progress on the new to TV metric in terms of applying Nexstar practices in Media General markets. How much longer is the tail there? How much – what inning are we in, in terms of getting that full revenue synergy pie?

Well, when you have 100 markets and some get it probably a little quicker than others, so it's a continual process. Tim Busch and his regional vice presidents are in those markets literally on a weekly basis, spreading the gospel as well as making sure that all of our legacy markets are continuing to perform with those expectations. But I think that in terms of sales practices and indoctrinating sales management, you'll see that a continued effort for us into and through 2019, being a non-political year, business development is going to be increasingly in-focus. A, we'll have inventory back that the politicians won't be laying claim to. And, B, we're going to be looking to grow our core revenue in the absence of any potential displacements. So, we tell our GMs all the time, the quickest way to grow your share of market is to develop a piece of business that your competitors don't have because that's a 100 share piece of business. And obviously, we give visibility to it on every quarterly call. That's how important a mandate it is in the company overall, and we kind of speak that talk every day in communications with our local markets.

Great. Thank you.

Okay. Moving on, we have Leo Kulp from RBC Capital Markets.

Hi. Good morning. So, first question, when you think about doing further M&A, how do you think about what the ideal target would look like? Is there a particular type of station or size of market that you're targeting, or is it really just about the financial impact? And I...

I would say, yes, the most accretive deal is going to be the deal that we gravitate towards first and foremost. There are situational things – we could potentially acquire Cox today under the current rules and be under the 39% cap with UHF discount. So, that obviously would have regulatory certainty in today's environment. The environment could change tomorrow or in September or October but – so, that obvious effect (39:54). But it's the most accretive deal, we have CW affiliates. We have ABC, NBC, Fox and CBS affiliates. Money is money and opportunity is opportunity, and we would gravitate to the one that returns the biggest bang for the buck in terms of accretion to our shareholders.

Got it. Thank you for that. And do you see a real strategic benefit from owning, say, non-big four stations in top 10 markets, or is that just about accretion too?

It's about accretion. I mean, I would say that we do well with – we have done a great job. Tim and his team with KRON in San Francisco. And Tim installed a new general manager out there, who has done a great job of making that station more local. We've increased the amount of local news. And what used to be an eight-digit negative cash flow is now an eight-digit positive cash flow. And so, I started my career in independent television even before Fox existed and that can be a good business. I wouldn't say we want that to be our only business or our primary business, but again if you believe as we do that the next value lever for our industry is going to be spectrum monetization. And again, we believe that monetization is T plus 5 years or more – 5 to 10 years before we fully monetize our spectrum assets, then spectrum in larger markets and creating a larger footprint of spectrum across the country would be attractive. So that's one thing that might not be in everybody's vernacular that would certainly be in ours. But the deal would have to stand on its own and be the most accretive opportunity in front of us before we would act on it just for spectrum purposes.

Okay. I appreciate that. And then last question, how do you think about doing a transformational deal on your own? Would you do it on – do you have the financial capacity to do it or would you prefer need to bring in an outside investor?

You know, that's all very situational specific, and we'll do the most accretive thing for our shareholders. We're not excluding or including any or all opportunities, but that's – you're asking a very hypothetical question and I really can't answer any more specificity than that.

All right. Thank you both.

Next, we have Barton Crockett from B. Riley.

Okay. Thanks for taking the question. I guess a couple of things. One is, I know that there's been some kind of talk relatively recently about the potential that private equity may have a renewed interest in the TV station sector. And I'll ask you kind of generally because you guys have some, obvious, kind of background around this. But what can you tell me about your current view of the suitability for a large company like Nexstar in this environment to contemplate being private versus public? How would you describe kind of the attractiveness and unattractiveness and the capacity for that given your current view of credit markets and the appetite for debt? And then I know there's been a history, years past when private equity was very interested in active and TV stations maybe less so in recent years. Are you sensing that there may be more interest generally in private equity and being active in this space again?

Well, I think, Barton, it would start with depending on whose estimates you read. There's a $1 trillion of money raised in private equity looking for a home, so could that necessarily mean that there's more interest in our sector and any other sector. We've said on prior calls that our sector is tailor-made for private equity, given the high margins and the high free cash flow and the ability to delever quickly. That seems to be the first chapter of a private equity playbook, having been in business with a private equity sponsor for the first seven years of the company's existence. Having said that, I think we would only go private if we were paid to do so. And if it were the best decision and to create the most value for our shareholders, then it would be something we would consider. We don't necessarily see it as a financing mechanism or a capacity creation. I mean, we've got a pretty stout balance sheet and equity that is highly valuable to us and, we think, to others. So, the only reason we would do it is if that were in the best interest of our shareholders. And I think you can put a period at the end of that sentence.

Well, if I could follow-up a little bit on that is with going private be a bad idea in this environment, given that it would take away stock as acquisition currency?

I think you'd have to tell me. You'd have to ask our shareholder base at what price and then you can tell me whether it was a good idea or bad idea. There are people that want all cash. There are people that may want stock. I mean, you can give stock in a private company just as well as a public one. It will not be LKQD obviously, but I don't think that would drive any decision here. I think it would be made purely on the basis of what is in the best interest of our shareholders. And if someone were willing to pay a significant premium to what we have been able to generate for our shareholders in the public markets as a standalone company, then that's obviously – the shareholders will get a chance to vote on that if it ever came to that point. So beyond that, I mean, as Tom said earlier, these are kind of hypothetical and theoretical questions, and they're not things that really we've thought about at this point.

Okay. And then switching gears, one other question, if I could. One thing that came out of Sinclair's problems with the FCC was essentially some pushback on what I would describe as sidecar arrangements. And I'm just wondering, do you think that the FCC pushback on Sinclair suggesting that maybe they were deceptive and some of that? Is there anything in that makes sidecar arrangements generally problematic? Or do you think it's just so specific to Sinclair? And I say that because I assume that if you are working with a sidecar, they'd be someone you had a longstanding business relationship or friendly with. So, I'm just curious if you think that there's any broader issue in the way the FCC has come down.

I'll go back to my earlier statement that I think that inferences coming out of a Sinclair-Tribune transaction are specific to that transaction. I don't think there's any read-through to the broader marketplace. I would tell you that all of our VIE or sidecar arrangements, if you want to use that term, are with broadcaster – veteran broadcasters that have experience in the industry, and so we believe that those have been – and we did our first one in 1998, obviously. So, we've been around for a long time. And the FCC has had plenty of time to review them, and I believe that they pass the inspection and we don't anticipate any issues with our sidecar relationships and think that any of the commentary you're speaking to is probably deal-specific and not a read-through to the broader market.

Okay. That's great. Thank you very much.

And next we have Clay Griffin from Deutsche Bank.

Hi. Good morning. So, thank you for taking the question. Tom, I think you mentioned the run rate for corporate expenses and I wonder perhaps if you could revisit that but just at a higher level, just curious what kind of opportunities there are for further efficiency in your non-programming OpEx, and how we should think about that over the next quarters?

When you say other efficiencies in non-programming. Are you specifically speaking to corporate?

Well, just corporate SG&A just kind of non-programming station expenses, just kind of the opportunity you guys might have for further efficiency gains there?

Sure. Absolutely. I mean, there are all the time. We are long on real estate post Media General. I think you'll see us, and we have been taking action to monetize or to exit leased inventory from a real estate perspective in order to reduce costs. Clearly, we're also automating wherever possible not only on the business hub and traffic side, but also at the station level from a master control perspective, etcetera. Those projects are ongoing, and we chip away at that on an annual basis. So, yes, there's plenty of opportunities there, and it's up to us to wring that towel as much as we can. Some of that does require capital in order to put in place technology, in order to generate some of those efficiencies, but all of that is ongoing and a continual process.

Great. And then as we think about other folks have asked about the cap and opportunities to achieve greater scale, I'm curious about the – if your view on in-market consolidation has changed over the last quarter or 90 days. And then as a follow-on just how you see collaboration opportunities like the TIP Initiative and others progressing from here?

Sure. With regard to in-market, obviously we've executed on that in the last 30 days. Some of those opportunities take a little time, a little hand-holding to get them over the finish line, but obviously those are in our view massively accretive. We just wish that there were more media and larger opportunities out there. Those do exist, but they take some time to get to the finish line.

Great. Thanks for the time.

All right. Next, we have Marci Ryvicker with Wells Fargo.

Thank you. I want to follow-up on another, I guess a bunch of questions. If you were to do a large transaction, I know you levered up for the MEG deal to about 5.5 times. Is that the level you're comfortable with, or is it something below that?

Like, I said before Marci, it's all deal-specific with regard to how quickly we can deleverage and get back down. Generally, I would say since we did the MEG transaction, the cost of debt is higher, therefore our appetite for debt is probably marginally less now than it was before. But in terms of trying to put a specific number on that it's difficult because every transaction is different.

Okay. And there's a thought out there in the marketplace that should Tribune and Sinclair not consummate their deal, that Tribune may still be up for sale and that Nexstar would be the most natural buyer to take a second look because you took a first look. Can you comment on that sentiment?

No, other than to say our eyes are wide open as to opportunities that are out there. And I would tell you that at our board retreat last week, we discussed the point that in Nexstar's history, there probably hasn't been this much supply or potential supply in the near term. And so, that's of interest to the company. We are a consolidator. We will continue to attempt to grow where it makes sense for our shareholders and financial sense and operation and the synergies are dramatic. So, we look at everything, and we have a bright line walkaway price from everything. And if we can transact inside of that that means it's more accretive than buying back our stock, and that's what we're kind of paid to do. So, I think that we will have to see how that situation plays out and the timeframe on which it plays out and what the downstream legal situation is with all of the entities involved and what those contingent liabilities could look at. But that's not anything for us to comment on specifically because it's hypothetical as of this point in time.

Okay. And then, last question is on fundamentals. I know you're one of the only companies to give a 2018-2019 free cash flow guide. And, Tom, I can't remember if you talked about what the underlying expectation is for core in that free cash flow guide?

Flat to up slightly.

Okay. Thank you.

But that was also based on a political number which has now been increased.

So, for 2018 it would be lower than that, but 2019 it wouldn't be affected, correct?

Well, 2019 – political is really not that important.

Right. Okay. Thank you.

Yeah. I would just point out Marci that not in the original guide were the two acquisitions that were announced last week, and the increase in the political guide that was announced this morning.

Got it.

Moving on, we have David Joyce with Evercore ISI.

Thank you. A couple of questions on digital and targeted advertising. First, on the digital side, can you discern if the digital – if you're taking share from other digital platforms or is it from advertisers who are allocating new spending into digital?

I don't know that we're taking it so much from other platforms today. Although as we build our digital business, our vision is that our local sellers and our local brand identity can perhaps be the tiebreaker that would allow our local sales people to be the concierge to help SMBs navigate through this morass of opportunity. So, we do think that will be an opportunity going forward. I would say that it is either increased spend that is allocated to digital or a lot of our digital growth in our local sites has come from, frankly, from newspaper over the past several years.

Thanks. And second question is if you could just provide an update on the ATSC 3.0 (54:57) is there any new learnings there, any adjustments to an earlier strategy maybe as you've been moving along in those two markets?

No, it's obviously very early days. We have agreed to be the first 3.0 lighthouse in Phoenix for that full market conversion. That will happen later this year. It hasn't happened yet. And, here, in Dallas, with the build-out of the SFN Network with American Tower as a partner, those are just beginning. So, there's nothing really up and running yet. We're all in the early stages of the transition which will lead to kind of the test, and the learnings will come out of all of that. And I would say we are learning all the time. Brett Jenkins, our CTO, is navigating both the Spectrum consortium and the Pearl consortium and our representation in both. We're the only group that's represented in both of those. So, I think we will have the highest and best learnings out of both of those 3.0 transitions as they develop. And, again, it's not as if Phoenix has transitioned or Dallas has been fully built out yet. Those things are ongoing, but we still have a ways to go.

Okay. Thank you.

And next from Barrington Research, we have Jim Goss.

Thanks. Perry, given that you're headed to D.C., are you expecting that the regulatory issues are about to become or be better defined, or is that still vague and in process?

Well, I think that it's kind of a Texas Two Step, Jim, that the regulatory agencies will propose change and there is likely going to be predictable blowback from special interest groups regardless of what that change is, whether it's a point increase in the cap or total elimination. So, often, these things end up in the courts and jurisprudence would prevail. But I think the affirmation of the UHF discount, creating an effective 78% cap today, while it was – it occurred on a technicality it still occurred. And I think that hopefully will give Chairman Pai some additional momentum to deregulate here. So, we're hopeful and we'll, obviously, be in discussion with that and other topics of issue to the local broadcast market. And I think with the DOJ, to make the case that total television ad spend as a percentage of total local ad spend is about 14% of the marketplace. And so, I'm not sure how anyone could see the 14% is undue concentration of anything at this point in time because obviously video is video, and these sources are replaceable, which is an underlying tenet of DOJ regulation. So, we'll be trying to understand that more and have conversations there that are substantive and make our case and kind of see where things go. But I do think that FCC will take action before the year is out. That's my belief. I don't know anything more than anybody else does. But I do believe that the FCC will make a proposal to increase the National Ownership Cap from 39% and eliminate the UHF discount item as part of that review. And I believe we'll see some action from the FCC before the year is out. It could roll in to next year after the elections, but I don't think so. But again, that's just one man's opinion.

Do you also – are you inclined to wait until the regulatory dust settle before you pull the trigger in any sort of acquisitions? Or do you just continue the negotiations behind the scenes based on what you assume will happen and just wait until that sort of thing happens?

Yeah, we're not really waiting for anything. As I mentioned, there is a particular potential acquisition that could be done under the current rules. But that is going to have to be an accretive acquisition opportunity for Nexstar or we won't act on it. We continue to look at in-market and other acquisitions that would increase our national reach. As you know, we're at about 26% and change against the 39% cap today. So, we have running room with the UHF discount in place. And then obviously more running room if the cap is raised substantially or eliminated. So – and I think we would price the risk accordingly in any transaction that was in discussion while the rules were being reviewed.

Okay. One final thing. There's a general assumption that as you make acquisitions or become bigger, you have better negotiating leverage in terms of things like retrans, given that you doubled your size effectively or more so with MEG. Have you found that to be the case that you do have a better positioning and it's been beneficial to you in that way?

I do believe that scale matters, and I do think we have seen incremental benefit from doubling the size of the company in 2017. And both vertically larger reach, and then horizontally, having more outlets in a marketplace that are wholly-owned that you can bargain for. I think both of those scale matters. And scale matters in MVPD discussions, scale matters in discussions with the networks as we become more important partners to one another, I think that scale is increasingly an asset. So [Technical Difficulty] (61:03-61:08) scale is incremental negotiating leverage.

And it's often the reverse comp issue as well?

Never know because we're not in a control group obviously, but we feel it does. We're an important customer with each of the networks. We're either the number one or number two affiliate group for all networks now. And so, it's important to be important we believe. So, I think we have good relationships with constructive business discussions and we have very spirited negotiations. But at the end of the day, both parties have to be [Technical Difficulty] (61:45)

Okay. Thank you.

Thank you so much.

All right. And ladies and gentlemen, that concludes our question-and-answer session for today. I'd like to turn the floor back to Mr. Perry Sook for any additional or closing remarks.

All right. Well, thank you very much. We look forward to continuing to report on our growth and accomplishments in the second half of 2018. And on behalf of the 9,200 employees of the Nexstar nation, thank you for your interest and your ongoing support and for joining us today.

And once again, ladies and gentlemen, that concludes today's conference. Thank you for joining us. You may now disconnect.