Nexstar’s Q4 Net Revenue Drops 12.3%

Nexstar Media Group this morning reported financial results for the fourth quarter of 2023 that included net revenue of $1.3 billion, a decrease of 12.3% from the same quarter of 2022. It said: “The net revenue comparison primarily reflects the year-over-year decline in cyclical political advertising.”

Excluding political advertising revenue, net revenue increased 4.3% year-over-year.

Approximately 55% of Nexstar’s fourth quarter revenue was generated by distribution and other revenue streams.

The Q4 revenue comprised:

• Core ad revenue of $449 million, down 5.9%.
• Political ad revenue of $30 million, down from $266 million in the prior year.
• Distribution fee revenue of $704 million, up 14.3%.
• Digital revenue of $106 million, down 5.4%.

Distribution revenue growth was driven by the renewal of the substantial majority of the company’s distribution agreements in 2022 and 2023 on improved terms and annual rate escalators, as well as growth in virtual MVPD revenue, offset, in part, by continued MVPD subscriber attrition and the removal of partner stations from certain MVPDs.

The lower digital revenue was primarily impacted by weakness in national digital advertising, partially offset by year-over-year increases in Nexstar’s local digital advertising revenue and agency services business and ecommerce.

Perry A. Sook, Nexstar chairman, president and CEO, said: “Nexstar’s fourth quarter financial results outperformed consensus expectations in key financial metrics including adjusted EBITDA and attributable free cash flow. Our 2023 results extend Nexstar’s long record of consistently generating substantial free cash flow, and we expect that trend to continue. To that end, in January we announced an increase in our annual dividend by 25%, our 13th consecutive increase.

“The power of the broadcast model and its ability to reach the largest audience of any medium with important news, sports and entertainment content is as strong as ever, reflected by the record audience delivery for NFL and Super Bowl, Grammys and other live sports and event programming. Validating the enduring strength, reach and appeal of broadcast, during the fourth quarter we successfully completed all of our remaining distribution negotiations without interruption, as our distribution partners, their customers and our audience value the highest-rated broadcast and fastest-growing cable news network programming we provide. The completion of these and other recent distribution agreements provide solid visibility for our distribution revenues in 2024 and beyond. As we move into 2024, an election year, we look forward to once again demonstrating the value of broadcast television to candidates and campaigns looking to communicate to the electorate through political advertising on television.

“Our strong financial track record supports our commitment to shareholder returns and the enhancement of shareholder value. On average, for the 2022-23 cycle, Nexstar generated $1.8 billion of adjusted EBITDA and $1.2 billion of attributable free cash flow. Over that time frame, we returned an average of $910 million each year to shareholders in the form of dividends and share repurchases, representing approximately 77% of our average attributable free cash flow. We expect to continue to use our cash flow to maximize shareholder returns.”

Read the company’s report here.