Has the 'hold separate' order provided any insights into how Nexstar would approach operating TEGNA together if the litigation is resolved successfully?

Perry Sook explained that the 'hold separate' order requires TEGNA to operate under its prior interim operating covenants. While Nexstar can have conversations and appoint management to TEGNA's board, day-to-day decision-making is separate. Lee Ann Gliha reiterated that if the issue is resolved, Nexstar will execute its original integration plan. “I think if and when we get this resolved, we will be executing on our plan as we had originally intended. So subject to whatever comes out of the process in the interim.”

Where is the softness in advertising coming from in Q2/Q3, and what is the messaging from ad partners?

Lee Ann Gliha stated there isn't one specific category to flag, but a general overall weakness, with about two-thirds of categories decreasing and one-third increasing. Perry Sook added that a large home improvement advertiser went silent, some pharma advertising hasn't returned, and macro factors like higher gas prices and delayed tax refund spending might be contributing to consumer conservatism. “I think there's just a conservatism at this moment in time, but I don't think there's anything overarching beyond that.”

Can Nexstar elaborate on what arm's length collaborations are possible with TEGNA under the 'hold separate' order? Also, can Nexstar use TEGNA's excess free cash flow for debt repayment, and are there any limitations?

Perry Sook confirmed that arm's length commercial agreements are possible, citing an example of contracting for news production with a TEGNA station. Lee Ann Gliha clarified that all of TEGNA's excess free cash flow, beyond minimum operating cash balance requirements, can be used for combined debt repayment, as all debt obligations are joint and several. “All of the debt obligations of the company are joint and several between us and TEGNA. So all the debt -- excess cash flow that we see fit will be used to repay that debt.”

NXST

Nexstar (NXST) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Communication Services· May 7, 2026

Source: earnings call transcript

Executive summary

Nexstar Q1 FY26 — Strong Financials Amidst TEGNA Litigation

Nexstar delivered strong financial results in Q1 FY26, including record revenue and robust adjusted EBITDA and free cash flow, bolstered by the partial inclusion of TEGNA operations. The company is actively navigating complex litigation surrounding the TEGNA acquisition, which currently mandates a 'hold separate' operational structure. Despite near-term advertising headwinds and the legal uncertainties, Nexstar remains focused on strategic growth initiatives for CW and NewsNation, capital allocation, and deleveraging, while maintaining confidence in the merits of its legal position.

Highlights

Record net revenue of $1.4 billion, an increase of 13.1% year-over-year.
Adjusted EBITDA of $470 million, up $89 million from Q1 2025.
Adjusted free cash flow of $420 million, compared to $348 million last year.
NewsNation was the #1 fastest-growing network in prime time in March 2026, growing 85% in total viewers.
Returned $56 million to shareholders in dividends and repaid $182 million in debt through April 30.

Concerns

TEGNA acquisition is subject to ongoing litigation and a 'hold separate' order, preventing full integration.
Second quarter nonpolitical advertising expected to decline mid-single digits due to a weaker advertising environment.
Corporate expenses increased by $54 million, primarily due to $38 million of one-time costs associated with the TEGNA acquisition.
TV Food Network's lower revenue led to a $4 million or 50% decline in income from equity method investments.

Guidance & targets

Category	Target	Timeline	Confidence
CW Profitability	Achieve profitability high materiality	Q4 · FY26	High
Legacy Nexstar Distribution Revenue	No material change from original guidance medium materiality	FY26	Medium
Nonpolitical Advertising Revenue (Combined)	Decline mid-single digits medium materiality	Q2 · FY26	Medium
CapEx	$45 million range medium materiality	Q2 · FY26	High
Cash Taxes	$152 million range medium materiality	Q2 · FY26	High
Run Rate Quarterly Interest Expense	About $187.5 million medium materiality	Ongoing	High
Programming Payments vs. Amortization	Payments in excess of amortization by about $5 million low materiality	Q2 · FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Consolidated Includes 13 days of TEGNA operations. Primarily due to $106 million of revenue from TEGNA and higher advertising and distribution revenue from legacy business units.	$1.4B	13.1%	—	—
Distribution Revenue (Consolidated) Reflects revenue from TEGNA, increased rates, growth in vMVPD subscribers, and CW affiliations, offset by MVPD subscriber attrition. On a combined basis (assuming TEGNA owned for entire quarter), distribution revenue increased 1.6% year-over-year. TEGNA revenue: $54MLegacy business growth: 2.8%	$837M	9.8%	—	—
Advertising Revenue (Consolidated) Primarily reflecting incremental TEGNA advertising revenue and higher political advertising revenue. Combined political advertising was up 89% vs. 2022 and 19% vs. 2024. TEGNA incremental advertising revenue: $51MPolitical advertising (reported): $46MPolitical advertising (combined): $78M	$548M	19.1%	—	—
Legacy Nexstar Nonpolitical Advertising Flattish and in line with expectations, as growth in digital advertising offset declines in nonpolitical television advertising.	—	0.4%	—	—
Combined Nonpolitical Advertising Benefited from TEGNA's NBC affiliations broadcasting the Super Bowl and Olympics.	—	1.2%	—	—
Combined Digital Advertising Revenue Driven by strong local digital revenues, offset by declines at TEGNA's Premion segment due to a major customer loss in 2025.	—	mid-single-digit percentage	—	—

Product announcements

Product	Type	Timeline
CW Sports on ESPN App and Website	expansion	Beginning this summer
CW Entertainment Programming on The Roku Channel	expansion	Beginning with the broadcast season this coming fall
Mountain West Conference Sports Programming	launch	Beginning this fall and continuing through the 2030-2031 seasons
Banana Ball Games	launch	May and June

Deals & partnerships

TEGNA Acquisition of TEGNA following FCC and DOJ approval.

Transaction closed on March 19, 2026. Currently subject to litigation from DIRECTV and state AGs, resulting in a court-ordered 'hold separate' operation. Nexstar made concessions including increasing local news programming in 9 markets, divesting stations in 6 markets within 2 years, and extending retransmission agreements through November 30.

ESPN Multi-year broadcast partnership for CW sports streaming. multi-year

ESPN app and website will be the exclusive streaming home for all CW sports, starting summer 2026. Fans with ESPN unlimited subscription can stream live CW sports.

Roku Partnership to bring CW entertainment programming to The Roku Channel.

CW entertainment programming will be available for next-day streaming on The Roku Channel, starting fall 2026, through a dedicated CW-branded vertical hub.

Mountain West Conference Multi-year broadcast partnership for sports programming. through 2030-2031 seasons

Beginning fall 2026, CW will televise Mountain West Conference football and basketball games.

Risks & headwinds

TEGNA Acquisition Litigation Ongoing

Multiple legal proceedings underway (Ninth Circuit Court of Appeals, U.S. District Court for Eastern District of California, D.C. Circuit Court challenge to FCC approval).

Mitigation:Engaged Beth Wilkinson of Wilkinson Stekloff and formidable antitrust counsel at Morrison Foerster; confident in merits of the case and ability to bring process to successful conclusion.

Hold Separate Order Impact on TEGNA Integration Until litigation resolved

TEGNA operating separately, under its own retransmission agreements, and not under Nexstar's day-to-day management.

Mitigation:TEGNA is operating as it did prior to the transaction; Nexstar can use excess cash flow for combined debt repayment and perform financial reporting/internal control oversight. Nexstar will execute original integration plan once resolved.

Weak Advertising Environment Q2 FY26

Q2 nonpolitical advertising expected to decline mid-single digits (combined basis).

Mitigation:Focus on expanding reach and unlocking new monetization opportunities across portfolio, leveraging sports programming, multi-platform distribution, and digital partnerships. No specific category outlier, but general weakness and conservatism in spending (e.g., home improvement, pharma, macro factors like gas prices).

Nielsen's Transition to Big Data Measurement Near-term

Near-term advertising headwinds related to the transition.

Mitigation:Improved distribution from 2025 affiliation renewal cycle will more than offset those impacts for CW.

Premion Segment Decline Ongoing

Continued declines at TEGNA's Premion segment.

Mitigation:Primarily due to the loss of a major customer in 2025; digital advertising revenue overall still increased mid-single digits driven by strong local digital revenues.

What to watch in Q2 FY26

TEGNA Litigation Resolution

Next quarter / H2 FY26

Current Multiple legal proceedings underway, 'hold separate' order in effect.

Target Resolution of litigation, lifting of 'hold separate' order, or clear path forward for integration.

Why it matters

The resolution of the TEGNA litigation is critical for Nexstar to fully integrate the acquired assets, realize anticipated synergies, and provide clearer financial guidance, significantly impacting the company's strategic direction and financial performance.

While we don't have control of the various courts time lines, in the meantime, in compliance with the court order, Nexstar and TEGNA are operating separately, and we are proud of both teams continuing focus on execution and their local community commitments.

Find out whether NXST delivers this. Inve re-checks your case every morning.

Q&A highlights

Are there any other foreseen rulings or events that could influence the TEGNA trial? And is there any difference in day-to-day operations or focus on incremental cash preservation while this process unfolds?

Perry Sook stated that the company has provided a complete list of all known litigation and is not aware of any other pending actions. Lee Ann Gliha clarified that CapEx was slightly delayed due to anticipated strategies with TEGNA but will catch up. Both Nexstar and TEGNA are focused on executing their respective plans, and no longer-term guidance will be provided for either company at this point.

“I think you can think of Nexstar as continuing to execute on our plan, doing as an excellent operational job as we normally do on a go-forward basis. We're completely dialed in and focused on executing on the Nexstar plan.”

asked by Daniel Kurnos · answered by Lee Gliha

3 min read 6 chapters

Detailed narrative

TEGNA Acquisition and Litigation Update

Nexstar successfully closed the acquisition of TEGNA on March 19, 2026, after receiving all required regulatory approvals from the FCC and DOJ. However, the transaction is currently subject to litigation from DIRECTV and several state Attorneys General, leading to a 'hold separate' court order.

This order mandates that TEGNA operates independently, including its own retransmission agreements, and Nexstar cannot integrate day-to-day management. Nexstar is confident in its legal arguments, citing the public interest in a stronger local broadcast industry and has engaged a formidable legal team to pursue appeals and trial proceedings.

Strategic Growth of CW and NewsNation

Nexstar continues to build and grow the CW and NewsNation as national networks. NewsNation was the #1 fastest-growing network in prime time in March 2026, with an 85% increase in total viewers and 100% among adults 25-54 year-over-year. The CW network improved year-over-year profitability in Q1 and is on track to achieve overall profitability by Q4 2026, with full-year losses expected to improve by over 30%.

The CW is expanding its sports programming with new multi-year partnerships, including the Mountain West Conference and additional Banana Ball games, significantly increasing its sports-related content hours.

Digital Strategy and Partnerships

Nexstar is evolving its digital strategy through key partnerships rather than solely building its own platforms. The company announced a deal with ESPN to make the ESPN app and website the exclusive streaming home for all CW sports, significantly extending reach and monetization opportunities.

Additionally, a partnership with Roku will bring CW entertainment programming to The Roku Channel for next-day streaming, enhancing digital footprint and monetization capabilities by accessing over half of U.S. broadband households. These collaborations aim to expand reach and unlock new revenue streams in a rapidly evolving media landscape.

First Quarter Financial Performance

For Q1 2026, Nexstar reported record net revenue of $1.4 billion, a 13.1% increase year-over-year, including 13 days of TEGNA operations. Distribution revenue grew 9.8% to $837 million, while advertising revenue increased 19.1% to $548 million, driven by TEGNA contributions and higher political advertising.

Adjusted EBITDA reached $470 million, and adjusted free cash flow was $420 million. Legacy Nexstar's nonpolitical advertising was flattish, with digital growth offsetting TV advertising declines. The company noted a general weakness in the Q2 advertising environment.

Capital Allocation and Balance Sheet

Nexstar returned $56 million to shareholders in Q1 through dividends and repaid $182 million in debt through April 30. The company's outstanding debt at March 31, 2026, was $12.1 billion, reflecting the TEGNA acquisition. Net first lien covenant ratio was 2.94x, well below the 4.75x covenant.

Subsequent to quarter-end, Nexstar repaid a $150 million short-term Term Loan A and refinanced $1.725 billion of senior notes. The company prioritizes debt repayment with excess cash flow, maintaining its historical focus on deleveraging.

Regulatory Landscape and Ownership Cap

Management expressed strong views on the antiquated 39% national ownership cap for broadcasters, arguing it hinders growth compared to other media and tech companies. While the TEGNA acquisition was approved via a waiver, Nexstar believes the FCC is still on a path toward regulatory deregulation, potentially initiating a rulemaking to eliminate the cap.

The company asserts that the current litigation against the TEGNA deal focuses on antitrust concerns, which are distinct from the FCC's purview regarding the ownership cap.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.