Good day, and welcome to Nexstar Media Group's Second Quarter 2023 Conference Call. Today's call is being recorded. I will now turn the conference over to Joe Jaffoni, Investor Relations. Please go ahead, sir.

Thank you, Maria, and good morning, everyone. Let me just 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, 2022, 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 others. 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. We appreciate you joining us today to discuss Nexstar's second quarter results. With me on the call today are Tom Carter, our President and Chief Operating Officer; and Lee Ann Gliha, our CFO. I'll start with a summary of recent highlights and developments followed by Tom's operational review and Lee Ann's financial review. Recently, some media executives have made public comments calling into question the future of linear broadcast. We respectfully disagree. What can't be questioned is that literally all of the video profit and 80% of the video revenue of the major integrated media companies are generated by the linear model today. Said another way, DTC strategies are reliant on the profits of the linear model to exist. We don't expect the DTV business to go away. We expect to coexist with them and for broadcast to continue to thrive. Linear is not going anywhere. Broadcast television continues to reach the largest audience with the highest amount of daily time spent of any video media and remains the most influential media for consumers purchasing and voting decisions. Our proprietary news content is widely consumed and valued by our audiences and our content partners, particularly those in live sports and our advertisers understand the power of the reach of the broadcast media. Our confidence that the broadcast model will continue to thrive is supported by our financial results. In Q2, we further extend our record of outperforming consensus expectations across all key financial metrics, including net revenue, adjusted EBITDA and attributable free cash flow. Our strong performance reflects the combination of the benefits of scale in our company-wide business relationships and our decentralized local and business unit management model which focuses on delivering exceptional news, sports and entertainment for our viewers and proven…

Thanks, Perry, and good morning, everybody. Before I dig into the operations review for the quarter, I want to thank Perry and the Nexstar Nation for allowing me to be part of the growth of this tremendous company. My time at Nextar building the business in good times and in bad and developing lifelong friendships has been the most rewarding professional experience in my life. I'm very excited Mike Biard was joining Nexstar, and I know I leave the company in good hands. I will be here through the end of the year in my role as senior advisor working to make sure the transition is as smooth as possible. After that, you'll find me on the golf course or in Colorado sitting by the fire, enjoying a nice cool mountain air. Something we haven't experienced in Dallas in quite a while. Now turning to the operating review. We generated another quarter of strong operating performance with net revenue of $1.24 billion, reflecting the benefit of the CW acquisition and strong quarterly distribution and digital revenues, offset by a decline in television advertising due to the absence of midterm political advertising and continued advertising softness overall. The continued impact of the removal of some of our partners' carriage related to continued negotiations with certain MVPDs also contributed to the quarter's decline. Core television advertising, which includes both our station group and our national network, but excludes any digital advertising revenue declined 2.2% year-over-year, including the CW core advertising was down 8.4% driven by double-digit rates of decline in national spot advertising, which accounts for 27% of our core TV revenues and is responsible for approximately 63% of the decline and a mid single-digit rates of decline in local advertising. This performance is consistent with the expectations we shared on our…

Thank you, Tom, and good morning, everyone. As always, Tom and Perry gave you most of the details on the revenue side, so I’ll provide a little color on the CW financial results and then jump to expenses. In the second quarter, the CW generated $75 million of revenue and $74 million of adjusted EBITDA loss, exclusive of $3 million of one-time expenses comprised primarily of restructuring charges, all of which was in line with our expectations. Moving back to our consolidated expenses. Together, first quarter direct operating and SG&A expenses, excluding depreciation and amortization increased $32 million, primarily due to the inclusion of the CW. Increases in affiliation fees and the expansion of the local news at our Washington, D.C. Bureau and other local markets, as well as the expansion of our news programming at NewsNation were offset by reduced variable costs related to lower revenue, the gain on a depreciated asset for which we received insurance proceeds and even further offset in our adjusted EBITDA and free cash flow calculations by reduced programming costs at NewsNation related to reduced reliance on syndicated content. Q2 2023 total corporate expense was approximately $49 million, including non-cash compensation expense of $13 million compared to $50 million including non-cash compensation expenses of $13 million in the second quarter of 2022. Q2 2023 depreciation and amortization was $262 million versus $143 million in the prior year quarter due primarily to the acquisition of the CW. Please note that the CW’s programming costs, which are included in our definitions of adjusted EBITDA and free cash flow are accounted for in this line item as amortization of broadcast rights. For more information about this amount, please refer to the schedules in our earnings release. Second quarter CapEx was $41 million and in line with our…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Dan Kurnos with Benchmark. Please proceed with your question.

Great. Thanks. Good morning. Perry, first let say, Mike, great hire, you probably grabbed one of the most respected, toughest negotiators out there. He clearly has some big shoes to fill. Few people in the broadcast landscape are as respected person and professionally as Tom is. And I know you’ve earned your retirement, Tom, but obviously I wish you the best. Perry, just can you give us your thoughts on moving up in AAB around content spend? You called it a Moneyball strategy, it’s definitely a bigger step up in terms of what we’ve seen in broadcast from willing to spend on upfront licensing costs. So could you just kind of talk through sort of your willingness to kind of continue pursuing that and sort of the monetization strategy going forward?

Sure. I think that it’s consistent with our acquisition strategy just generally is that we’re going to take smart bets and some calculated risk with the thought that if things go according to plan, that these will pay out over the length of the agreements. We know what the market was with NASCAR for the Cup Series, which was out of our reach as we’re just now taking over this network, standing up sports on the weekends and we chose to make a considered bet for the Xfinity Series, which actually having the whole season gives us 33 weeks of weekend programming that rates right behind the NFL in terms of regular season versus regular season delivery. And the same with the ACC that was opportunistic and we moved quickly and we’re able successfully to jam it into the upfront selling season and monetize some of those matchups in the upfront. And so, it’s just like the entertainment programming that Dennis Miller and Brad Schwartz are putting together. It’s got to be something where we can own the backend, we can participate financially in the backend and not just be a barker channel for content that ultimately ends up on Netflix. And so that influences the programming that we go after, the programming we put on the air, the price we pay for it. And we were able to renew some of the incumbent series that have historically been on the CW at substantial discounts to what the predecessor owners were charging themselves or paying themselves. And that’s because we couldn’t get all of the rights that we want. So everybody’s cognizant this is a 15 year old network, but now has a startup mentality. The entrepreneurs that Dennis has brought in to run the various divisions, whether it’s digital, entertainment, unscripted, I mean, these folks are out there. They know the mandate, they’re on a mission, they see exactly the opportunity and they all will participate in the upside. So I say it’s Moneyball. We’re competing in the same league as the Big 4 networks but obviously we’ve got to do it on a budget and we’ve got to do it smartly and we’ve got to crawl, walk, run.

Got it. That’s helpful. And then just, I know Tom said you’re going to update us next call on the ongoing negotiation. The loss is kind of a new tactic. You’ve got NFL looming, I guess maybe Perry or Tom, just how do you think about resolution of these outages? You have a big chunk coming up in the back half of the year or two of sub renewal. So has anything really changed given the environment right now?

No, and if you look back, I think it’s instructed to look back four years in our renewal with a certain MVPD satellite company that we went off the air in July and we were able to reach agreement by the end of August, which is coincidentally about the time college and professional football kicks into high gear. I’m not going to predict the outcome here. I can tell you that our negotiating team has been in Los Angeles since Sunday, and we’re having meetings with our counterparties. We fully expect that we’ll be able to reach an agreement as we have historically with every other significant MVPD both past and future on commercial terms that are acceptable to both parties.

Got it. Super helpful. Thanks guys.

Our next question comes from Steven Cahall with Wells Fargo. Please proceed with your question.

Yes, thank you. And first just want to echo my congratulations as well, Tom and certainly good luck on the golf course. We’ll miss you a lot. Maybe just first on retrans to kind of follow-up with Dan’s line of thinking. I think folks are curious what you thought about when you started the year with the retrans guidance. There was always a range in there. I think cord cutting was part of that blackouts both previous and new might have been part of that. So is anything from your opinion occurring sort of outside of what you would’ve expected? July and August are pretty light for sports, so it’s probably not a huge surprise to most of us that you’re in a blackout right now. But we’d just love to get your context around how we should think about the current retrans guidance.

Yes. I mean, look, I think when we put the guidance together, we take into consideration the fact that we know at that point in time, and I wouldn’t say a whole heck of a lot has changed other than now we are in a blackout. And when we look at our guidance, we only take into consideration what we know at that point. And at that point I think we thought we would be able to come to some kind of agreement. So we’ll have to provide future updates on that as we go forward. But there’s nothing that’s sort of materially changed other than dark.

Thanks. And then on the Food Network Group distribution, I know it’s a little choppy quarter-to-quarter that’s been a really stable provider of cash flow and EBITDA historically. It maybe does face a little more cord cutting and advertising risk as a cable network. Just curious, from what you’re seeing, do you expect it to sort of remain at prior levels for the next year or two, or any change you’re seeing there?

Well, I think they’re not immune to some of the same factors that are national businesses most notably direct response. I would say, generally speaking that they’re having not any more luck than we are in that regard. So you might see a modest deterioration, but I think the good news is Warner Bros. Discovery has started to really prove themselves out with regard to the operating strategy that they have and specifically deleveraging, which doesn't necessarily affect us because there's no debt on the partnership. But just in terms of their ability to continue to allocate resources to new programming. And we believe, and they have told us that the Food Network is one of their three most important channels, at least from the discovery side, maybe not including HBO NOW, but they're very bullish on Food Network, and we are as well. So you may see some variability in the results, but nothing material from our perspective.

Thanks. And then just lastly, some of the media conglomerates have suggested that there may be linear networks – national linear networks up for grabs, that can include ABC, that could include some cable networks. I certainly won't ask you to speculate on anything specific. But just based on the possibility of a lot more coming to market and after having done the CW, do you find national networks to generally be a good fit given the strength you have in distribution or just any way to think about kind of bigger long-term M&A? Thank you.

Well, I think we start with the supposition or position that there are only five English language broadcast networks, commercial networks that operate and reach virtually 100% of the country. So that's a scarce resource and something that is special. Obviously, we feel as the local distribution partner, our link in the chain is obviously the strongest. So, I would say it would be totally situational, what was available at what price, what other assets come with. And – but I will point out that as it relates to the CW, it is not considered a Big 4 network for purposes of the Big 4 network exclusion rule at the FCC, which means you can't own two of the top Big 4. So legally, technically, it would be possible, but it would have to be the right deal at the right fit for us. And we would do with everything else. We look at everything.

Thanks a lot.

Our next question comes from Craig Huber with Huber Research Partners. Please proceed with your question.

Great. Thank you. Perry or Tom, can you just update us, if you would on your long-term plans for alternative uses for your spectrum?

Well, we are in two different business development arrangements, one with Sinclair called BitPath and one with Scripps. That is unnamed at this point, but both are going after different applications and uses of the spectrum, I think it's worth saying that particularly if you look at Scripps, and its spectrum assets and Nexstar with its spectrum assets, we reached 92% of the United States population on an unduplicated basis. So, we think that holds great promise. And we are in – we have – are in tests and in discussions with HPE. We have had discussions with the Hollywood studio as well as a major automotive manufacturer regarding uses in the car. We also are involved in with BitPath and trying to develop a technology that currently exists in South Korea that is enhanced GPS, which think of anything, any vehicle that needs to know where it is or you need to know where it is from a news fleet to a truck fleet to UPS trucks that we can provide 5G like location-based services at a fraction of the cost of the current 5G proposition. So that's just a handful of things that we're involved in. As an industry, I think one of the more interesting things to follow is, there is a mandate out primarily from the Department of Defense agencies to develop a GPS backup for the country because if GPS goes out, not only do navigation in your car doesn't work, but the gas pumps don't work because they rely on GPS to put that time stamp on your receipt. The ATMs don't work, I mean all kinds of things. So it has been deemed to be in the national interest to provide a 5G backup. And our industry because of its ubiquitous reach has the ability to provide that service. And we are in very preliminary as an industry in formal discussions about trying to fill that mandate as part of our transition to ATSC 3.0. So a lot of moving parts. I don't want to say there was one killer app, but I do think it is an opportunity for us to, as we continue to build out 3.0 presence around the country. Nexstar is the leader in terms of percent of the population reached with the 3.0 signal under our own power. We will continue to be that and continue to put markets on the air. We hope to have an announcement about New York City before the end of the quarter that would go on air before the end of the year. We think that's important to both regulators, set manufacturers and investors to understand that we're committed to 3.0. So a lot of things in the works, Craig, but those are the – some of the current thoughts on monetization.

And Perry, what are you thinking on that front? When you might see the first significant material slug of revenue? And when does it get really large for your company at the end of the decade? Both goes according to plan?

I think it will – I've been saying five years. So five years takes us into – toward the end of the decade. I think we will have proof-of-concept and revenue from counterparties as early as next year, but I don't think I would characterize it yet as significant. So I think, again, it will be kind of a crawl-walk-run scenario where those that have deployed 3.0 spectrum will be the first beneficiary, which I think will encourage others to move quicker to get to that point. Obviously, if we can do away with the simulcast requirement and not have to have too substantially similar signals on the air, one in 3.0 and in 1.0, if that and the whole 1.0 can sunset at some point, which will give us free up spectrum for more ancillary uses. So, we're working the legislative and the regulatory front there as well. But I do think that this 5G replacement could motivate a lot of folks to move faster, quicker.

And then my last question, if I could, just more near term. Just go through for me again, just some clear. Your 2Q core ad revenue, excluding the CW, what was that percent change year-over-year? And more importantly, what are you expecting to be for the third quarter, core, excluding CW, please?

I think it was in Tom's commentary that the, I believe the Q2 revenue, excluding CW was total revenue was what, down – you're talking about core advertising?

Core advertising, yes.

Core advertising was down 8.4%, and that was primarily driven by double-digit decline rates in national spot. And also, we are also impacted by the fact that we've got a lot of CW affiliates in those big markets that tend to be more national type focus. I think for the third quarter, we're seeing a slight improvement to the rate of decline, of our overall core television advertising revenue related to the second quarter, and that is due in part to the fact that there's a lot of displacement in the third quarter of last year because of political [ph].

Great. Thanks a lot guys.

Our next question comes from Benjamin Soff with Deutsche Bank. Please proceed with your question.

Hey guys, thanks for the question. I was wondering if you could elaborate a little bit on the issues with current measurement tools and how much you think they undercount your audience? And then you guys are standing up a national advertising platform, just wondering if you could elaborate a little bit more on how that initiative is going and where you see that opportunity going? Thanks.

Sure. Well, it depends on what service you want to use as your baseline. If you use Nielsen and compare that to Comscore, the audience under count is north of 20%, almost across the board. It's interesting when we look at our NewsNation national numbers and then we look at NewsNation delivery in the individual markets that we're in, that we get overnight numbers, they often add up to a number just in the metered markets that's greater than the number we reported for the whole country. So obviously, there is an issue in undercounting. We – with the CW measured sports on the weekend using the iSpot technology, which was a completely different measurement experience to what the incumbent provider would have provided. And so we have decided, as our – all of our measurement contracts expire at the end of this year that we put out an RFP to the measurement community saying, this is what we want you to design for. We'd like to see what you can present along these lines to bring measurement into the 20th century. We're currently operating with such outmoded and limited data that sometimes the margin of error is greater than the number we're discussing. So we'll see what comes from the RFP. It's a pretty quick turnaround. And it may be that we go with more than one measurement service to try and write this one for our national assets, one for our local assets, we will negotiate with our incumbent providers of Nielsen and Comscore, but they're invited to submit under the RFP as well and made the best company win. But in terms of standing up this One Nexstar is what we're calling it, which will be a unified sales force selling all of the assets of the…

Great, thanks.

Our next question comes from Nick Zangler with Stephens. Please proceed with your question.

Hey guys, congrats on the results, and congrats on a great run here. Thinking about your initial plan to shift the CW from scripted to non-scripted content did your original plans account for all of the sports content that you've accumulated thus far? Or has the shift to sports been a more favorable outcome post that acquisition as a result of acquiring the CW, which may potentially lead to a faster and higher profitability assumptions for the CW in the coming years?

I would say that we had sports in our mind's eye when we bought the CW. We were the only top five network that didn't program on weekends and we knew through our experience with the Clippers and in a larger context with the NBA that because of the collapse of the RSNs, there was a first for wider distribution. And I would say that the deals we made were opportunistic contracts that were up at the right time that we're the right size for us. We began a long cultivation of relationships at NASCAR that began literally at the time we closed the CW. Obviously, LIV was very opportunistic for us. They wanted a partner. We wanted to introduced sports on the weekends. And the simple fact is the first weekend LIV was on the air, our prime time on Saturday and Sunday, live telecast are our prime time ratings at those nights were up 20%, and I told our team and said, well, that's one of the reasons you buy sports. So you can recirculate audience and new audience into your other products. So, I would say that it was like a lot of acquisitions we've made opportunistic, but I feel good about the deals. And on paper, both ACC and NASCAR make money for the CW over time. And we feel good about where we will end up, and now it's all just about getting to the starting line with both of them literally and figuratively.

Understood. Thanks. And then just on the core revenues here, obviously, down 8%, excluding the CW. I'm wondering, in your view, if there is an element to this softness recently that could potentially reflect an acceleration of national spending to alternative channels such as Connected TV, in particular. And if so, obviously, maybe that would potentially limit what’s available for the broadcast channel and really resulting in what could be a secular – just secular pressure I guess, for core revenues for you going forward. Just your thoughts on that, whether you think that national advertising, in particular, is accelerating to...

I wouldn’t try and read too much into advertising as a cyclical business. We’re in an economic downturn and National is the most volatile piece. I mean, if you went back and look at 10 years of our earnings report, I think you hear us talk about National being the most volatile. So, I don’t see a sea change. I just see an economy in cautious advertisers and National are the first to pull their budgets. Those that are closest to the cash register, still see customers buying. They may be buying different things, but they want to capture that share of wallet. But Tom, you want to amplify some?

Sure. I was just going to refer back to the category information that I kind of quoted in my comments with regard to the top declining categories. Radio, TV, cable, newspaper, obviously, we’ve been in a dispute and been in disputes with various other media companies for some period of time, and that’s reflective of that. Medical healthcare obviously, we’re coming out of a couple of years of heavy government and medical spend from a COVID and a post-COVID perspective, and that has started to return back to more normal levels. Gaming and sports betting, again, a big rush to the door early on in the process on a number of large markets and now we’re seeing a more measured approach going forward in those markets where sports betting is already the case, and there are fewer large states left outside of Texas, Florida and California, when those hit, I think you’ll see sports betting take off again. Bank and savings and investments, obviously, it was a tough first quarter for banking in general, and I think that showed up in some of our numbers as well. So really, if you look at the categories, you can see why those categories may not be performing up to prior year’s dollar levels, relative to some of the particular sequencing and situations that they’re in as well.

Yes. And I would just say, I think also, we’re starting to see like slight lessening in terms of the rate of decline on the national side. So that just kind of goes back to what you’re seeing in the overall economy, which is everything seems to be getting better.

Really appreciate the color there. Thanks, guys.

Our next question comes from Alan Gould with Loop Capital Markets. Please proceed with your question.

Thanks for taking the questions and let me dito my congratulations to you Tom, on a terrific job and on your retirement. First question, there was no comment on the annual guidance, the 2023, 2024 cycle. Is that because of the lack of visibility due to the distribution agreement? Or can you reiterate that guidance? Well, I’ll take a few more, but I’ll stop here.

Look, I think we obviously have a situation here being dark on one of our MVPDs. And so we will kind of revisit all of this in the next quarter, as Tom indicated.

Okay. And in the wording, the ongoing negotiations, that was specifically with that one MVPD correct?

Yes.

Okay. And on the CW, this investment in sports, does that have any impact on your near-term profits? Or do you think the incremental ad revenue and affiliate fees potentially will offset the incremental sports costs?

There’s no material change in our near-term expectations for the CW with respect to the sports business. I think that we’ve made those decisions, I think, as Perry mentioned in the Moneyball type fashion, and are looking to generate more revenue to offset those costs.

Okay. And last question, how was the CW upfront this year?

CW upfront, I think, was pretty good in terms of the overall performance. Dollar volume basically flat with the prior year. Unit rates were up mid-single digits. And again, the money, the absolute dollars are not going to change our style of living, but it’s an important marker, I think, for us. The reaction to the new programming and the sports, obviously, with sports dollar volume was up. But Lee Ann, if you want to provide any more color on that, go right ahead.

Yes. Look, I think that the overall upfront market was down overall. I think that the CW has fared in line with what our expectations were for that business. And so I think, I also think that there’s a little bit less sold in the upfront and, yes on a calculated way because then they will provide us more opportunity with the scatter market as we’re seeing the – hopefully, the economy will continue to increase as the national market will come back and that will benefit us on the back end.

Okay. Thanks for taking the questions.

Our next question comes from Barton Crockett with Rosenblatt Securities. Please proceed with your question.

Okay, great. Thank you. And your retirement plan sounds great, congratulations, and thanks a ton for all the help. I wanted to ask a question about just beat a dead horse, but you’re not at this point, saying anything about your former guidance on retransmission. You’re kind wait until you get clarity on the distribution deals. Is that correct?

That is correct. Yes.

Okay. All right. And then in terms of the sports, the new commitments, are you thinking about the recoupment being you cover the sports rights cost on advertising alone? Or is there also an idea that this can give you leverage on affiliate fees for – yes, retransmission fees?

Yes. Look, I think absolutely, the focus is not only on advertising, it’s on retransmission fees, distribution fees or affiliate fees as what you would characterize that. It’s difficult to compete for sports rights without having a distribution revenue stream.

Okay.

And if you think about it, the timing of this has worked out really well because ACC sports begins this fall, September 9. So we’ve proven to the affiliates that we can deliver on this. And NASCAR starts in early 2025. So we’ve got some time from a NASCAR perspective in order to prove out sports with ACC and then be able to take that to the affiliates with a value proposition that we think is appropriate at that time to include sports. And let’s be honest, we’re going from sports weekends, something or in weeks, where we have sports something like 14 hours of programming from the CW to 25 hours or 30 hours of programming from the CW given Saturday and Sunday. So there’s a significant value proposition improvement that we want to put forth to the affiliates.

And I’ll just add as it relates to guidance, and we haven’t been specific, nor will we be, but the CW is in affiliate negotiations with a number of sizable affiliate groups, and there will be affiliation fee revenue upside to that, which is in our current guidance. So a lot of things, Lee Ann and I sat down yesterday, listed all the things that will happen between now and our next call. We may buy a business, we may sell a business. We’ve got the affiliate negotiations. We hope to settle the MVPD and virtual MVPDs that were off and increased our distribution. There is opportunity for increased distribution of NewsNation as a byproduct and a not insignificant way. So there’s a lot of ingredients that go into baking the cake. And so our thought is if there’s an update to guidance, let’s know as much as we can. And right now, we don’t know enough to change our guidance and don’t expect it will change in a material way. But in any event, there’s a lot of things that go into running this company and a lot of things that go into the guidance that we deliver, and it’s a multivariable equation, not a single variable equation, I guess, is the point I wanted to make.

Okay. I appreciate that, and that’s good for me. Thank you.

Our next question comes from Jim Goss with Barrington Research. Please proceed with your question.

All right. Thank you. And I’ll be the broken record and thank Tom. I congratulate you for a successful career and your important contributions to Nexstar. Might I ask about NewsNation going into the political year, I wonder if you might talk about any particular things you might be doing incremental to the network? Are you going to be doing a number of debates again? And will these be economic or reputational? And do you have plans to take that path to the next step of 24/7 now that you’re 24/5?

Sure. And I don’t want to give our playbook to any of our competitors, but we do plan to be as active in debates as we were last year, and those that have national implication and national interest will be offered to the cable channel as potential programming as those were wildly successful in 2022. And we will expand. We will be 24/7 by September 1, 2024 because that’s when the last of our syndicated programming commitments contracts will run out. So those plans have already been made, and we will begin to execute those here, staffing up for 2024 in about another month. And yes, that’s already in the model that we use for guidance. So – and I think you’ll see our panel show The Hill expand to the weekend, probably weekend mornings that will allow us more access to the movers and shakers in Washington. So there’s a comprehensive plan that includes more debates. We’re doing Town Halls. We’ve won with Kennedy. We’re doing some with the Republican and Democratic candidates as time goes on and opportunistically as they make themselves available to us. And those will be prime time events well promoted. As far as debates go, we don’t make any money on them. Those are all at the local level for – as a public service to our voters and at the national level as a service to those that, again, might be interested in the national implications of such because the debates, unless we find an underwriting sponsor are offered with no commercial interruptions for the full hour or more. So expect us to be as active, if not more, in 2024 on the political side.

Okay. Thanks. And one other one. Regarding CW, maybe the actors and writer strikes have come at a good time for you because you’re just redefining what your programming should be, but are there any strategic implications or workarounds you’re going to need to do with regard to the strike?

We have four shows that were planned in the 2023, 2024 season that we renewed from Warner’s and from Paramount that are all scripted shows that currently appear on the network. All of those are pushed at least now until 2024, and the farther the strike goes on, they get pushed further and further into 2024 and so those the only four shows affected everything else on the schedule is acquired programming that has already been produced or reality programming that is being produced. So we’ll have the most scripted as a percentage of our schedule with the commitments that we’ve made of any of the big five broadcast networks going into the fall. We also have a lot more high profile and noisy reality shows, which I think will bring attention to the network as well. So we kind of like our chances in this chaotic environment. And when others are afraid is when we tend to take some big swings. So I think that we’ll do well vis-à-vis our expectations, and hopefully that will help us prove in the scatter market that tech that we’re on is the correct one to grow the network.

All right, thanks very much.

There are no further questions at this time. I would now like to turn the floor back over to Perry Sook, Chief Executive Officer, for closing comments.

Thank you, Maria. Nexstar posted another strong quarter of financial results, and we continue to execute on our strategy focused on levering our linear digital, mobile and streaming assets in new ways to drive increased monetization and growth across our entire portfolio. While we are performing well now, we are very optimistic about 2024 as we will have the wind at our backs with what we anticipate to be an economic recovery, the full year impact of our 2023 distribution contract renewals, moderating losses at the CW and what is expected to be a record-breaking political year also in a declining interest rate environment. Our strong free cash flow allows us to return a significant percentage of that to shareholders in the form of dividends and share repurchases, while maintaining very modest leverage and pursuing strategic opportunities to further enhance shareholder value. Thank you, everyone, for joining us today, and we look forward to speaking to you again in November when we report our third quarter results. Maria, I’ll turn it back to you.

This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.