Good day, ladies and gentlemen, and welcome to the Nexstar Media Group Third Quarter 2020 Results Call. Today's call is being recorded. I would now like to turn the conference over to Joe Jaffoni, Investor Relations. Please go ahead, sir.

Thank you, Keith, and good morning, everyone. I'm just going to read the Safe Harbor language and then we'll get right into the call. All statements and comments made by management during this 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 the 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, 2019 and Nexstar's subsequent public filings with the Securities and Exchange Commission. Nexstar undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. With that, it's now my pleasure to turn the conference over to your host, Nexstar Chairman and CEO, Perry Sook. Perry, please go ahead.

Thank you, Joseph, and good morning, everyone. Thank you all for joining us to review Nexstar's record third quarter operating and financial results. During the third quarter, we continue to overcome most challenges presented by the pandemic, thanks to the ability of our outstanding operating teams to adapt and dynamically manage the business for continued growth. Nexstar delivered record third quarter net revenue, profitability, cash flow, and with each of these metrics, all exceeding nicely our consensus expectations. As always, Tom Carter is here with me on the call this morning. As we announced a few weeks ago, Tom has assumed the additional responsibilities of President and Chief Operating Officer and will eventually be recruiting a CFO to replace himself as our team continues to focus on further leveraging Nexstar's position as the nation's leading local media company and the value of the enormous volumes of content that we produce to optimally create new value for shareholders. I'll touch more on that subject in just a couple of minutes. Third quarter net revenue increased 68.5%, and reflecting strong flow through in our model, Nexstar generated record third quarter BCF, adjusted EBITDA and free cash flow with these metrics growing 128.3%, 209.1% and 268.3%, respectively, on a year-over-year basis. Throughout the quarter, we also made significant progress with our leverage reduction and return of capital initiatives as we lowered net debt by $162.5 million and allocated $150.4 million to share repurchases and quarterly cash dividends. At the same time, we had the pedal to the metal in terms of positioning the company for future free cash flow growth, further deleveraging an increased capital returns to shareholders. In this regard, we completed two capital market transactions that allowed us to further lower our blended cost of capital while extending our maturities. We…

Thanks, Perry, and good morning, everybody. I'll outline – as outlined in this morning's press release, the actual results for the three months ended 9/30/2020 reflect the company's legacy Nexstar broadcast and digital operations and a full quarter results from Tribune Media stations which we acquired on September 19, 2019. The third quarter 2020 revenue from WGN America, also acquired in the Tribune transaction, is included in core television advertising revenue and distribution fee revenue. A full quarter of contribution from Nexstar's 31.3% ownership stake in the TV Food Network and other investments acquired in the Tribune transaction is included in the full income statement under income or loss on equity investments net and the cash flow statement under distributions from equity investments. The comparable three-month period ended 9/30/2019 reflects the legacy Nexstar operations during that period and a stub period of results for the assets acquired under the Tribune acquisition from 9/2019 through 9/30 of 2019 (00:15:20). All actual results reflect the impact of $17.2 million and $34 million of onetime transaction expenses incurred in the quarters ending September 30, 2020 and September 30, 2019, respectively. With that, I'll start a quick update on the Q3 capital markets activity which reflect – which is reflected in a partial quarter in the operating results and on the balance sheet at quarter end. On line three, Nexstar Broadcasting, Inc. and Mission Broadcasting entered into an incremental security revolving credit facility in an aggregate principal amount of $280 million, of which $250 million was allocated to Mission and $30 million allocated to Nexstar. Concurrent with the closing of the amendment, Nexstar also voluntarily prepaid $250 million of its existing Term Loan A with cash on hand while Mission borrowed $225 million from the aforementioned $250 million facility and repaid its Term Loan…

Thank you very much, Tom. Our results in 2020 and our comments today highlight the actions we continue to take to drive shareholder value. While maximizing shareholder value is a key focus for our management team, supporting our local communities is the ultimate goal of the thousands of Nexstar Nation employees who work across our portfolio. With Election Day now behind us, I want to close by briefly highlighting some of our employees' essential work. Our core value of serving our communities with the local news and critical information they need has allowed us to successfully navigate through the evolving pandemic. In this regard, Nexstar has produced year-to-date 77 separate town hall meetings, addressing the state and regional responses to the virus. Additionally, Nexstar stations have produced 34 different specials related to recent civil unrest and race relations in our country. As the nation's prepared for this year's election, Nexstar produced 117 debates in markets across the country covering gubernatorial, senate and local races allowing the voters to hear directly from the candidates seeking their support. Last month, Nexstar's local news operations earned a total of four national Edward R. Murrow Awards including a national award for the exclusive series of special cross-platform stories about immigration and everyday life along the border of the United States and Mexico. And earlier in the year, 30 Nexstar stations received a total of 50 regional Murrow Awards. Nexstar is also proud to be honored with 61 Emmy Awards in 2020. And finally, in October Nexstar received the 2020 Catalyst Award which recognizes a communications company that creates strategic programs to advance meaningful social change. We look forward to catching up with you with another positive report in February, highlighting our Q4 results. And on behalf of the entire Nexstar nation, our board and our management team, thank you for your continued interest, support, and for joining us today. Let's now open the call to Q&A to address your specific areas of interest. Operator?

Thank you. We'll take our first question from Dan Kurnos with The Benchmark. Please go ahead.

Thanks. Good morning. It's a new one for me. First off, just publicly congratulations, Tom, well-deserved, obviously. And then maybe to Perry, your core commentary is a lot more optimistic, better frankly than I think the peer group right now. You explicitly called out auto. I'd love to hear more about kind of pacing and what's driving that outperformance and optimism right now?

Well, I think it's the fact and the facts are that we have seen sequential monthly improvement in core advertising results since the low ebb of April. And that continued uninterrupted through the third quarter with every month finishing better than the month before in relation to the prior year and that is continuing in Q4 with the exception of October. Obviously, half of our political revenue for the year came in the month of October, so there was displacement there. But even with all of that, our fourth quarter auto pacing is better than 20 points, better than where we exited auto for Q3. So, the sports betting category is now a double-digit millions per quarter business for us, an eight-digit category on a quarterly basis. That didn't exist last year. And Tim Busch and his teams have done a great job of generating new-to-television revenue which is up substantially as we just reported on a year-over-year and quarter-over-quarter basis. So, our teams are really hustling and I just can tell you that the results I think indicate that.

That's really helpful. And then, obviously, there's been a lot of noise, I think, around net retrans lately. This timing (00:34:41), I think you were pretty clear, Perry, unless I misheard you just in the call that you still expect that to be a source of growth even with a smaller footprint coming up at the end of this year. So, I just want to confirm that you're still anticipating strong net retrans growth in 2021?

Yes, we are.

Yes. And we don't have any mismatched timing contracts. If you go back and look at our 10-K, you'll see that we have approximately 18 – we have a 154 big four affiliates and we have approximately 18% of those coming up for renewal in 2021. If you look at – and we have approximately 18% of our subscribers on the retrans revenue side renewing between now and year-end. So, we've got a much better match of the renewing revenue and the renewing expense contracts. So, we don't see any material impediments from that perspective.

And there are also annual escalators in our existing contracts that by and large reset at the beginning of a calendar year.

Perfect. And just...

And the short answer to your question is yes, we expect continued net retrans growth.

Yes. Thanks, Perry and Tom. Just quickly, just I don't know, Perry, I know you spent a lot of time discussing capital return. You guys are probably going to end the year within spitting distance of your original free cash flow guidance despite all the noise we've had this year and with the incremental cost savings...

Wait a minute. Dan, say that again. Say that again one more time.

I'm pretty sure you're going to end the year within spitting distance of your original pre-COVID free cash flow guidance unless my math is wrong. So, feel free to correct me, Tom. But with your incremental cost savings here, you guys have incredible optionality at this point. And I know Perry there's the SEC, Supreme Court case and there's some things that you could do. But at what point – how do you just view the balance here? I mean you guys have this tremendous amount of flexibility. So, when do you get more aggressive on either the dividend or the buyback and I know you're focusing on debt near-term but just any incremental color there would be really helpful?

Well, I can tell you that, again, because it's factual and timely, Tom and I talk about this literally every day. I mean there are some small accretive acquisitions in the digital space that we're looking at. There are the occasional in-market television opportunities. I think we're waiting for clarity on the Supreme Court activities, which probably will come in May or June of next year as to what that landscape looks like. And in the meantime, we have been very aggressive in reducing leverage and paying down absolute dollars of debt, while spending a fair amount of money on buying back stock. And obviously, our dividend is constant and constantly increasing on an annual basis, something north of 20%. So, we think maintaining that option value is right now the right thing to do, but we know what all the options are.

But, Dan, I would also point out we bought back almost 3% of our stock this quarter – in the third quarter. So, if you annualize that, that is a substantial amount of the stock. And we see – at current levels, we see that as being opportunistic and a potential going forward as well. So, I know a lot of people (00:38:41) when I say this, but we can walk and chew gum at the same time. I've been quoted on that several times. But I think this is going to be an example of that because again the free cash flow in the fourth quarter, because of the great work that we've done on political, is going to be massive. And so, we have some great optionality and it's interesting and I guess I really never had a great appreciation for this, but the timing of the TV Food Network distribution in Q1, Q1 is traditionally in the broadcast business, your low point of a year from a seasonality perspective. Well, we don't have that problem anymore, because we get a massive infusion of cash from TV Food Network in February of every year. So, Q1 is going to be another good quarter from a free cash flow perspective. So, as I've said before, I think we've got really good visibility and it gives us some great options and we'll be able to, I think, execute in a number of different aspects simultaneously.

And you get the Super Bowl in 2021 on CBS, so that doesn't hurt you either. (00:39:51)

Congrats, guys. It's just – it's a great all around print. Thanks very much for the color.

Thank you.

Thanks, Dan.

We'll take our next question from Kyle Evans with Stephens. Please go ahead.

Hey. Thanks. I'm going to push a little bit harder on the Supreme Court stuff. I appreciate the timing there, the May, June. But if we get from them what was originally kind of on the books for end market, could you put some brackets around the opportunity there? I know you have – pre-Tribune we had a good understanding of what your duopoly contribution was, and I'm not sure I have that today. Just some help there will be appreciated.

Well, Kyle, as you know, the Supreme Court – the case before the Supreme Court would deal with end market ownership restrictions and it has nothing to do with the national cap. So I would call your attention to the major market CW and MyNetwork stations we have that are tremendously successful. But our stand-alone operations, that the opportunity to combine with other stations in the market is something we would certainly take a look at if the opportunities presented themselves. But again, approximately two-thirds of our markets operate – derive (00:41:08) an economic benefit from more than one station. So it's the other third and now the way the portfolio is constituted, many of those opportunities are toward the top end of our market list.

Got it. You mentioned sequential improvement in core since April with a little bit of displacement pressure in October. Could you put some brackets around kind of what you saw intra-quarter 3Q and give us a number for October?

I would say generally speaking, Q3 as a quarter was down mid-teens on a same-station basis core. And with the exception of October, I would say it's going to be down mid to high single-digits so far in Q4.

Thank you. And then Perry, you riffed through those network renewal metric numbers for 2021 and 2022. I'm sorry. Could you replay those again?

I'm sorry. What was that?

You're talking about retrans renewals?

You gave the network. I thought there were network renewal numbers for 2021 and 2022. Maybe I misheard that.

Well, it's not so much renewal; it's what we have booked. And again, this is on page – it's either page 14 or page 16 of the 10-K where we list out by the big four affiliates. One is coming up. And if you do the math, through the end of 2021 we have approximately 80% of our affiliates done. If you think about that, that's call it 20% up for renewals. Well, we have 18% of our retrans renewals up between now and the end of 2021. So that's the synergy and the lack of any sort of arbitrage with regard to the retrans revenue and the affiliation. And then through the end of 2022, we've got 70% of our network affiliations under contract. So really, the bulk of the renegotiation affiliation comes in 2023 and beyond.

Got it. Last one. Is WGN's core material to the model today and what would it look like in 3Q? Thanks.

Are you talking about WGNA?

Yes.

WGNA's advertising revenue is a nine-digit number. Fairly low in the nine digits.

I would say its high single digits of total core advertising.

That's fair.

Great, great. Thank you.

We'll take our next question from Jack Silver (sic) [Zack Silver] (00:44:10) with B. Riley. Please go ahead.

Okay. Great. Thanks for taking the question. Just a high level one for me. We've had a huge political cycle in 2020. We've got maybe a couple more cycles of really healthy rate step-ups on the retrans side before you sort of reach the viewership and dollar share parity that you talked about. It'll be really interesting to hear from you guys what you think drives the next leg of growth for Nexstar. Thanks.

Sure. Well, we're not done with political for this year. There'll be one, potentially two runoff races in Georgia for the runoffs to be contested on January 5 of next year. I think you're going to see from our One Nexstar approach, I mean, we spent literally a year putting this together where we brought digital and broadcasting and cable and everything under one roof and one P&L, one silo if you will. And the synergy is not only financial but operating and sales, go-to-market synergies of this one company multi-platform approach. While it may be a little wonky and in the weeds to talk about with investors, but that is really what we see being the next leg of our organic growth. And again, we think we have opportunity to make some select accretive acquisitions in digital. I will tell you that in terms of ATSC 3.0, we have a dozen markets on the air and operating or will by the end of this year. And our target internally next year is to launch another 20 markets with ATSC 3.0, and these are some big ones, Los Angeles, San Francisco, Dallas, Houston, Cleveland among others. So we hope to have by the end of next year approximately a third of the US covered with Nexstar ATSC 3.0 signals. And again, the business case for that is both offensive and defensive. It will allow us to put a 4K signal out over the air, and that's a noticeable to the eye difference over even current HD. And it also is an IP-based transmission standard which will allow people to ultimately seamlessly go from device to device, and we think that that is the next leg of growth for the business. But we think the monetization period is probably still four or five years off before that becomes meaningful. So again, if you look at the free cash flow-generating power of this machine, this platform, it's going to give us optionality in terms of how we want to create value just with the amount of free cash that will come out the process here on an annual basis for the next several years.

When we – after we did Tribune and prior to really the Supreme Court agreeing to take up the FCC case with regard to end market ownership, we are singularly focused on improving the operations and mining additional value from the assets we have. You can – I think the poster child for that right now is NewsNation on WGN America, taking something from nothing, reruns and turning it into a product that clearly has value from our perspective, and we do from an advertisers' perspective. If you go back and look at the political coverage, the largest advertiser in the political coverage on WGN America NewsNation was Facebook. So kind of strange bedfellows, I know, but they clearly see the value in this. And also, Perry mentioned it before. It's these large market CWs that are – have historically underperformed. As a matter of fact, The CW underperformed to such a degree that in a number of the large markets we're really more about local news than we are any sort of secondary network affiliation with either The CW or MyNetwork. So it's really taking those assets that we believe to have substantial value and are just underperforming from a financial perspective and to make that realize – and to realize that on the income statement in terms of greater potential and greater cash flows contributions to the financial side of the business. So there are strategic, there are tactical areas that we're all working in both long and short-term to create value.

Got it. That's really interesting. And then just on NewsNation. Apologies if I missed this. But in terms of viewership and engagement with the NewsNation offering, any numbers you can give? Or if not, is viewership and engagement meeting your expectations given that it's early days?

Sure. Well, I guess the headline is that 12% of America knows that NewsNation is on WGN America in primetime seven nights a week, so that is job one, is increasing awareness. As you know, the project basically finances itself other than the initial CapEx outlay which is now in the rearview mirror. Not renewing rerun contracts allows us to invest in NewsNation's launch and now going forward in expansion, and we have plans to do that. So I'm very pleased with the product. I don't know if you happen to see any of it on election night. I tend to watch a little bit of it just about every night. And we are working very hard and staying true to our mission of balanced, not biased and facts, not opinion. And we have 35 correspondents from around the country from our Nexstar Nation stations as well as correspondents that NewsNation employs directly reporting with more live shots than anybody, any other news organization in the country providing news from the states and localities where it was happening, not a roundtable of pundits talking about what was going on. And that's our point of differentiation. And again, I can't tell you. We've never had political revenue on WGN America in its existence, and this year that was $1 million. Facebook has never done business with WGN America. Pharma has – I mean, financials have never done business with WGN America, and they're all now advertising clients. So we're in it for the long haul and very pleased with the early results, but obviously awareness is the number one issue that we will attack as we continue to expand the product into more day parts as time goes on.

Got it. Thanks, Perry. Thanks, Tom.

We'll take our next question from Craig Huber with Huber Research Partners. Please go ahead.

Great. Thank you. I guess a housekeeping question first. Maybe I missed this, but the retrans subs. How much was that down year-over-year? I think you told us three months ago it was down 5% to 6% in the second quarter.

Yeah. It was down mid-5% and it's down slightly less. The most recent quarter was, on a trailing 12 basis, the best of any quarter. Seasonally, it's that way anyway. But I would say if it was down between 5% and 6% on a trailing 12 basis, last quarter it's down between 5% and 5.5% currently on a trailing 12-month basis.

Okay. That's helpful.

So slightly better.

Okay. Appreciate that. And then I think you guys said for the month, except for October, the fourth quarter of core advertising is down mid to high single digits. Do I have that correct?

That is correct.

Can you give us a sense? I mean, there's a huge amount of political displacement in October. But can you give us a sense how October ended up dealing? Near-term question.

I would say low double digits.

So held up pretty well in the scheme of things. Okay. Appreciate that. Big picture question. Within your various markets, what percentage of viewers you think consume your content for your big four TV stations over-the-air as opposed to MVPD?

It's approximately – it depends on the market, but the average across the company over-the-air viewership is approximately 15% to 16% of TV households. I mean, that's in terms of distribution. But because the over-the-air viewers have fewer choices, necessarily the viewership in those homes to the over-the-air stations would be higher just because there's – it's not a 500-channel universe; it's maybe a 40 or 50-channel universe.

Great. That's all I had. Thank you.

We'll take our next question from Bryan Kraft with Deutsche Bank. Please go ahead.

Hi. Good morning. I just had a few quick ones. First, any update on the relationship with Peacock? Has that evolved at all yet? Wanted to ask you also on the balance sheet. Just how are you thinking about the mix of bank versus bonds? Does it make sense to refinance more of the term loans into fixed rate debt at this point given where interest rates are? And then last one. Are you seeing any impact from – I know the ad revenue trends are very encouraging. Is there an underlying, any kind of negative impact there from the lack of full broadcast schedules on your viewership? For example, is it hurting the lead-ins to evening news or anything? Thanks.

I'll answer the first and the last and leave the middle question for our CFO, COO and President who now has more titles than me. Obviously, the networks through September and October did not – were patchworking together schedules. I'll remind you that network primetime revenue that we generate here at Nexstar represents between 15% and 16% of our ad-supported revenue where over half of our ad-supported revenue comes from local news. And those viewership levels have continued to be up year-over-year and they've come down from probably the high increases in second quarter but were still up virtually across the board with our local news products. So if anything, it's been a net positive in the areas where we make the most of our money. But there's been no real effect in terms of the networks' patchwork, closing their schedules so far. But as you know, the big four are rolling out even as we speak their originals and return to their series programming over the month of November, and I think it'll look a lot more normal going forward. And the first question was...?

Peacock.

Was about Peacock. No. There's – I mean, Peacock is what it is and currently doesn't include the local affiliate stream. That's not their model. It's really kind of a video-on-demand model. Discussions continue as to whether involving the affiliates is a good thing or not. But it's in such infancy at this point, it's not been a focus of NBC or Comcast at this point. So life goes on without the affiliates being a part of it. That could change at some point, but I don't know that it's necessarily material.

And with regard to the debt capital structure. We look at opportunistic refinancings all the time. Obviously, we did that. We upsized the bond deal slightly above and beyond what was required to take out the $900 million of notes. But look, the debt capital structure is driven by the strategy and the strategy continues to be at this point to look at acquisitions. I would say ask me that same question this time next year and I'll have a better feel for where the strategy is taking us just with regard to acquisitions versus return of capital to shareholders. If we go towards more return of capital shareholders, I could definitely see a higher percentage of fixed rate debt. I would just say it's probably a little too premature to go there right now. But clearly, I can say that would be in the playbook going forward.

Got it. Okay. Thank you.

Well, we also need something to pay down with our free cash and it's hard – it's more expensive to pay down fixed rate debt, so I think you'll continue to see a mix here. So we have optionality as to what to do with our free cash.

Fair point. Great. Thank you.

We'll take our next question from John Janedis with Wolfe Research. Please go ahead.

Janedis. I've got a follow-up coming from (00:57:23). Coming up on the top of the hour guys, just with the headlines around COVID continuing, are you seeing any change in advertisers' willingness to commit into or out of the holidays? Doesn't feel like it, but just wanted to confirm. And has the improvement in digital engagement or changes you spoke to accelerated demand for the digital offerings?

Well, obviously engagement on our digital offerings is up. So yes, we're focusing on that and Karen Brophy and her team are building out additional offerings and updating our websites to continue to make them even more user-friendly and improve the engagement, time spent on site. That's standard operating procedure but, yes, all of that is going on. We've not seen a reluctance. At this point, our pacing is solid for post-election through the end of the year here. And again, you look at the categories that outperformed in Q3, medical/healthcare, home repair/home improvement, as we mentioned lottery and gambling, sports betting and the various service categories. And again, this 20-plus-percent increase in pacing of auto for the fourth quarter, and we're into the second month of the quarter now. So it's not a timing issue; it's absolute dollar quantum being spent that's better than 20 points better than where we exited third quarter and results versus the prior year. So we're not back to flat yet, but we anticipate our exit velocity from fourth quarter being the best that it has been all year and the closest to flat that we have been. Now, we'll have a leg down in first quarter as Tom mentioned earlier because that's the only unaffected quarter for COVID in our LTM. But after that, I think you'll see substantial increases over prior year because of the low base of Qs 2 and 3 in terms of core revenue performance during the – what we hope is the worst of the pandemic.

Sorry. Just one last thing on gambling. It feels like it's still early days there. I mean, does that have the potential to be a, say, top 5 or 10 category or materially higher here in terms of the $10 million-plus run rate?

Well, yes. I think if you look at lottery and gambling all-in, it is a top 10 category, and you've got state lottery business and all of that is ongoing. But for example, if it was a double-digit – if it was high teens all-in, the sports betting probably made up 70% of that in Q3. And after we have more dollars on the books for Q4, the we exit Q3 in that category. So I see it growing and I can tell you that we're talking to all of the companies involved in that business that want access to our distribution, might like to produce long form and short form content for us in addition to buying advertising, and those discussions are ongoing. So I think we're fully engaged in the category. So I do expect that we'll continue to grow because it's not fully built out now. And again, it's on a state-by-state basis where gambling is permitted. And as that footprint continues to grow, we think the category will continue to grow.

Thanks a lot.

We'll take our next question from Steven Cahall with Wells Fargo. Please go ahead.

Thanks. First, maybe just trying to understand some of the benefits of the reorganization. It seems like this is a pretty big deal, so I'm sure this is a lot bigger than just the back office savings. So I was hoping if you could just expand a little bit on what the potential long-term revenue benefits are from that new initiative, and then I've got a quick follow-up on the guidance.

Well, I would tell you there are a number of them. But one area that we have not participated into a meaningful degree historically has been national partnerships where, again, with 1.5 billion page views and broadcast signals that reach 70% of the country, we have the reach that they're looking for and can tailor-make information. Most of that are obviously consumer products, whether it be autos, used auto sales, could be direct-to-consumer. A number of areas where we can do multi-platform delivery of really good demographics and reach to some categories that really have kind of escaped us because our focus has been and will continue to be local. But these are areas that we now, with the addition of the assets from Tribune and the large markets we have substantially more reach than we did before, and those partnership agreements can be quite lucrative and large contractual dollars. I would say that's job one and that's immediately in front of us.

Great. And then a comment on the outlook for next year. You kind of said like Q1 would look a lot like last year, Q2 and Q3 would be up, then Q4 you comp against political. Was that top line or could we think that also being the same for EBITDA or free cash flow or all of the above? Thanks.

Well, the comment was specifically geared towards revenue. And obviously, we're going through the process right now from an entire 2021 budget perspective. But I would say a lot of it could be attributable to EBITDA as well.

Great. Thank you.

We'll take our next question from Jim Goss with Barrington Research. Please go ahead.

Okay. A couple of them. First, there has been talk about additional fundraising at the national level regarding potential challenges to the election results. I'm wondering if you think that can add to your political dollars in the fourth quarter.

Yes. We have a (01:03:43) request pending as we speak.

Okay. And secondly regarding NewsNation. I'm just wondering about the relevance of it beyond the presidential election period. It probably does pay for itself just in terms of viewership as it does not require the content costs with the rerun payment. But are you in process of refining the programming and do you think there will be any letdown as perhaps the attention to news dips a little bit perhaps after the election?

Well, Jim, I'd kind of turn the question around and say if there's a democrat in the White House, what is MSNBC going to have to talk about? And our focus has been on news and no opinion. We're talking about expanding shows into other day parts which would be personality-driven like a morning show. We're talking about potentially launching, to borrow a PBS term, a Crossfire show to have people on opposite sides of an issue debate that issue every night. And we have some other things in the works, and I don't want to tip our hand there. But again, I think that we've got a swim lane here which is give me – don't tell me what to think; just tell me what's going on and I'll make up my own mind which we think is the largest swim lane potential rather than being to the far left or the far right and it's also the right thing to do, so we will continue to mine that. And we are obviously a lot smaller than CNN or Fox at this point, but therein lies the opportunity and we're pleased with the launch and the start and we think our prospects are good. We're again opening up a whole new category of advertisers that buy news, that don't buy reruns of Blue Bloods. And then it helps us validate our distribution revenue stream. And quite frankly, when I look at the distribution revenue or affiliate fees that Fox and CNN generate, that is our largest opportunity, even greater than the advertising opportunity which in and of itself will continue to grow. So we – as Tom said, we spent 24 years assembling this portfolio and now we are laser-focused on maximizing organic growth from this portfolio, and this is one example of it. And we think as awareness grows, NewsNation will continue to grow. And again, we've got a long way to go until we have the operating profit of CNN, let alone Fox News. So I would say just stay tuned.

Okay. Well, you did say half of your ad-supported revenues are from local news, so I guess it would be the same sort of opportunity there. One other related area, ATSC 3.0. Can it have some implication for NewsNation in terms of maybe having certain very localized content be done in part of a program that is unique to that broadcast area versus all of it being the same across the country?

There is some potential to localize it through either diginets or through the app. Quite frankly, that's a little further out on the horizon. We just got started two months and four days ago. But yes, I think there is opportunity there. And I'm glad you brought that up because it does bring up another area. But right now, we've got folks coming out of the woodwork that would like to partner with us for our distribution potential in linear to develop new diginet concepts. I mentioned sports betting and esports, and we made an investment in an esports company recently that you probably read about. But there are other folks who are talking to us about our distribution platform. And I bring that up in that right now, we can probably squeeze no more than five streams out of our current signal. But with ATSC 3.0, that can be three times that, not that we need 200 diginets out there. But there are opportunities for ancillary uses of our spectrum in ATSC 3.0 in addition to being the wireless connector of the Internet of Things which I think is our highest and best value creation opportunity. But there are a lot of things given the scale that this company has uniquely in linear television to generate ancillary business opportunities. And we have one diginet now that we own. By this time next year, we might have two diginets that we own and a couple of others we partner with in addition to the folks that lease spectrum from us to get their diginets distributed throughout the country. So it's not a huge revenue and profit category. It is double-digit millions, into the 20s of millions of revenue already. And with the folks that lease spectrum from us, it's into the 40s and 50s millions of revenue and has a nice profit margin with it. But that's in the scheme of a company that did over $1 billion in net revenue this past quarter. But it is an area for growth and, again, we're mining all of those organic growth opportunities that we have given the size and scope of the company we've assembled.

Okay. Thanks for your perspective.

We have no further questions in the queue. I would like to turn the conference back to your speakers for any additional or closing remarks.

Well, thank you very much everyone for joining us today. We look forward to reporting in early February our Q4 results. And at that point, we'll give you a perspective on guidance for 2021 and 2022. So thanks for joining us and have a nice afternoon.

Ladies and gentlemen, this concludes today's conference. We appreciate your participation. You may now disconnect.