Nexstar 傳媒集團 (NXST) 2026 年第三季法說會：營收創新高與政治廣告成長

重點摘要

• Nexstar 媒體集團公布 2026 年第三季淨營收創歷史新高，達 21.3 億美元，年增 78%，其中收購 TEGNA 貢獻了 7.65 億美元。若以合併基礎計算，營收成長 15.4%。
• 調整後 EBITDA 達到 7.56 億美元，高於前一年同期的 3.58 億美元，利潤率為 35.4%。調整後自由現金流增加至 4.43 億美元，高於前一年同期的 1.66 億美元。
• 第三季政治廣告營收為 3.17 億美元，較 2024 年第三季合併數字成長 15%，並較 2022 年第三季合併數字成長 44%。管理階層表示，2026 年合併政治廣告營收達到 11 億美元。
• 分銷營收成長 53.9% 至 10.9 億美元（依申報基礎），依合併基礎計算則成長 2.1%。虛擬 MVPD 與串流營收目前佔分銷營收約 10% 出頭。
• Nexstar 在第三季償還了 3.5 億美元債務，並在季度結束後又償還了 5.25 億美元，使年初至今的債務減少金額達到 13 億美元。總淨槓桿率降至 4.04 倍。
• 管理階層仍預期 The CW 將在 2026 年第四季實現首個獲利季度，而第四季合併非政治廣告營收因政治廣告的排擠效應，預計將出現高個位數百分比的下滑。

關鍵財務數據

業務與營運表現

政治廣告是主要的成長動能。Nexstar 與 TEGNA 在 2026 年合計創造了 11 億美元的政治廣告營收，主要受惠於涵蓋了超過 80% 的激烈選戰市場。俄亥俄州、德州、加州、密西根州與緬因州是表現最強勁的市場之一。

管理階層表示，為政黨擴大實施的最低費率保障措施，似乎反倒增加了地方無線廣播電視的廣告支出，而非減少營收。該公司亦認為，其內部管理的政治廣告銷售團隊透過改善協調與執行力，成功擴大了市占率。

分銷營收受惠於費率提高、虛擬 MVPD 與串流訂閱用戶成長，以及增加 CW 聯播網附屬電視台，但傳統 MVPD 訂戶流失抵銷了部分增幅。Nexstar 與 TEGNA 在本季完成了數項多年期電視聯播網附屬協議，期間未發生服務中斷的情況。

合併非政治廣告營收下滑 5%，部分原因在於政治廣告排擠了其他廣告版位。FIFA 世界盃的相關營收以及原 Nexstar 強勁的地方數位業務表現提供了部分抵銷。博弈與運動簽賭、銀行、儲蓄及投資是表現最強勁的類別，而醫療保健、居家修繕、製造業與汽車產業的表現則相對疲弱。

The CW 的全天收視率年增 9%。其 8 月 30 日由新墨西哥州立大學對陣佛羅里達州立大學的大學美式足球賽，平均觀眾人數達 196 萬人，為該聯播網迄今收視人數最多的體育賽事。The CW 計劃每年播出近 800 小時的體育賽事，體育內容約佔其節目播出時數的一半。

NewsNation 於 2026 年 9 月的總收視人數年增 9%。年初至今的全天收視率成長 34%，管理階層稱這是主要新聞聯播網中最強勁的觀眾成長。

管理階層財測指引

• 2026 年第四季合併非政治廣告營收預計將下滑 高個位數百分比，反映政治廣告的排擠效應。
• 第四季資本支出與資本化軟體支出預計約為 5,800 萬美元。
• 第四季現金稅預估約為 1.2 億美元。
• 第四季利息費用預計約為 1.83 億美元，較高的 SOFR 抵銷了部分因債務減少帶來的好處。
• 第四季節目版權款項支付預計將超過攤銷金額約 2,000 萬美元。
• 管理階層仍預期 The CW 將在 2026 年第四季迎來首個獲利季度，並使全年表現改善約 30%。但未承諾 2027 年能實現全年獲利。
• 多餘的現金將持續用於償還債務。管理階層表示，相較於 4 倍，股東更偏好槓桿率接近 3 倍，但公司尚未設定改變資本配置優先順序的具體門檻。

值得關注的風險與問題

Nexstar 仍受到阻止其與 TEGNA 整合的初步禁制令限制。該公司正在提出上訴，試圖將禁制令範圍縮小至兩家公司同時擁有四大電視網附屬電視台的 53 個指定市場區域 (DMA) 中的 31 個，並正尋求將各州從該案中剔除。本案實體審理預計將於 2027 年 7 月 6 日進行。

由於預期的審理判決時間與其授信協議中實現綜效的 2027 年 9 月截止日期之間相隔過短，該公司已將預期的 TEGNA 綜效從其槓桿率計算中剔除。

其他指出的壓力包括 MVPD 訂戶流失、政治廣告的排擠效應、更高的利息費用、訴訟費用以及特定廣告類別的疲軟表現。管理階層表示，世界盃在第三季帶來的效益將不會在 2027 年重現。

全國所有權上限廢除命令目前正等待在《聯邦公報》上刊登，預計將於刊登 60 天後生效。管理階層坦言，反對者可能會在刊登後對該規定提出法律挑戰。

分析師問答重點

• 政治廣告：管理階層認為無線電視上的強勁政治支出可能成為新的基準線，理由是政黨與候選人之間的協同更緊密，以及無線電視在地方市場的高成效。
• 廣告展望：管理階層表示，在剔除排擠效應後，潛在的非政治廣告表現優於預期，但目前尚未有任何類別出現明確的廣泛拐點。
• 資本配置：在收購 TEGNA 後，降低債務仍是首要任務。在槓桿率降至足以維持策略與併購彈性的水準後，將可能重新考慮買回庫藏股。
• The CW 體育策略：Nexstar 仍對獲取更多體育賽事版權感興趣，但表示將維持自律且伺機而動的原則。
• 數位成長：受連網電視 (CTV) 應用程式與第三方 CTV 廣告庫存銷售的支撐，原 Nexstar 數位廣告持續強勁成長。在部分第三方合作夥伴退出後，TEGNA 旗下的 Premion 業務面臨短期逆風。
• 頻譜商機：管理階層表示，過剩頻譜的替代用途仍有一段距離，且未提供最新的商業化時程。

法說會完整逐字稿

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完整財報電話會議逐字稿

管理層陳述

Operator

Good day, and welcome to Nexstar Media Group's Third Quarter 2026 Conference Call. Today's call is being recorded. I will now turn the conference over to Joseph Jaffoni, Investor Relations. Please go ahead, sir.

Joseph Jaffoni

Thank you, Nicole, and good morning, everyone. I'll 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 today's 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, 2025, 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 otherwise. With that, it's now my pleasure to turn the conference over to your host, Nexstar Founder, Chairman and Chief Executive Officer, Perry Sook. Perry, please go ahead.

Perry Sook

Thank you, Joe, and good morning. We appreciate everyone joining us today to discuss our record third quarter financial results. Mike Biard, our Chief Operating Officer; and Lee Gliha, our Chief Financial Officer, are with me as always this morning. Nexstar achieved the highest quarterly net revenue in the company's history of $2.13 billion as well as record third quarter adjusted EBITDA of $770 -- $756 million and free cash flow of $433 million. These results reflect the TEGNA acquisition as well as continued strength in distribution and advertising revenues, highlighted by record third quarter political advertising revenue. With election day now behind us, we can now report on the results of what proved to be a record-breaking election cycle for Nexstar and TEGNA with combined net political advertising revenue reaching an all-time high of $1.1 billion, representing an increase of 31% versus 2022 and 29% versus 2026.

Our broad and diversified footprint, which covered more than 80% of the contested election markets, positions us to capture political advertising demand as spending shifted throughout the cycle. In particular, Ohio, Texas, California, Michigan and Maine were among our strongest performing markets. This was Nexstar's first election cycle managing all political advertising sales internally, and the results demonstrate that we not only capitalized on a strong overall political cycle, but we anticipate that we also gained market share through our enhanced systems, our coordination and especially our execution.

In terms of the overall industry, broadcast television once again demonstrated its strength as the most effective platform for packs, candidates and political parties to reach voters in local markets, accounting for more than half of total political ad spend in 2026 based on the early estimates.

While we heard some concerns that the Supreme Court's decision to extend lowest unit rate protections to political parties could negatively impact revenues, our results suggest the opposite. Access to UR pricing and greater flexibility to coordinate with candidates appear to have driven increased political party spending on local broadcast television.

Historically, broadcast has underindexed in political party spending relative to other media but early indications suggest that this trend may have begun to reverse in this election cycle. Moving on to the bottom line. In the first 9 months of 2026, Nexstar generated $1.1 billion in adjusted free cash flow, allowing the company to reduce debt by $786 million and returned $171 million to shareholders through dividends while continuing to fund investments in local news and sports programming.

Subsequent to quarter end, we repaid another $525 million in debt, bringing our year-to-date debt reduction to $1.3 billion as of today. Turning to our distribution business. In the third quarter, we successfully completed key distribution negotiations without any service interruptions, reinforcing the value that Nexstar's leading broadcast and fast-growing cable news programming brings to our distribution partners and their customers.

Distribution revenue continues to grow on a combined basis and legacy Nexstar's gross and net distribution guidance remains intact. We believe that broadcasters and Pay-TV distributors share a common interest in the long-term health and sustainability of the Pay TV ecosystem. We remain focused on producing and acquiring high-quality programming that viewers value and that drives engagement across the Pay TV platforms.

On the advertising side, excluding the estimated impact of political advertising revenue, third quarter combined nonpolitical advertising revenue came in better than expected, declining low single digits, reflecting the strength of our digital strategies and our wide broadcast audience.

Turning to the CW. The network remained the ninth most watched ad-supported television network in total day with a 9% year-over-year increase in viewership. In addition, the CW delivered its largest sports audience ever on August 30 with the New Mexico State versus Florida State College football game averaging 1.96 million viewers in prime time.

In fact, over the course of the weekend, the network attracted over 15.4 million viewers added by the NASCAR O'Reilly Auto Parts Series rights from Daytona as well as WWE and XT Heat Wave. With our successes to date, we continue to expand the CW sports programming portfolio with the addition of the San Diego County Credit Union Point Settable and the Holiday Bowl as well as a new agreement with the National HotRod Association, to broadcast the final 7 races of the season of the Mission Foods dry racing series beginning in September of 2027.

With these additions, the CW will air almost 800 hours of sports programming annually. The CW has doubled its share of broadcast network college football programming year-over-year, and the network now accounts for approximately 20% of all college football programming aired on all broadcast networks.

Our programming strategy centered on live sports and entertainment continues to deliver results. And yes, we still expect the CW to achieve its first profitable quarter in Q4 of this year. At News Nation, the network continues to distinguish itself through its commitment to objective fact-based reporting and balanced perspectives, maintaining its momentum with total viewers in September '26 growing 9% over the comparable prior year period.

Year-to-date, News Nation has delivered the strongest audience growth among major news networks outperforming FOX News, CNN and MSNow with total day viewership increasing 34%. The momentum at the CW and News Nation carried into a strong '26, '27 upfront, where we achieved single-digit growth in both pricing and volume and expanded our advertiser base.

Our performance reflects the strength of our diversified platform, including the expansion of sports programming on the CW, increased viewership at News Nation and our ability to leverage Nexstar's near nationwide local television footprint to deliver a national unwired network for our advertisers.

Looking ahead, we will continue to execute our playbook to drive long-term shareholder value while enhancing the programming products and services that make Nexstar a leading choice for audiences and advertisers and an essential partner to networks and distributors. With that said, now let me turn the call over to Mike Biard. Michael?

Michael Biard

Thank you, Perry, and good morning, everyone. I'll begin with a brief update on the regulatory and legal environment as there have been a few developments since our last earnings call. On October 1, 2026, the SEC released its report and order, repealing the national ownership cap and replacing it with a case-by-case review process. The order is awaiting publication in the Federal Register and Rules -- and the new rules are expected to take effect 60 days after that publication.

On November 17, 2026, the U.S. Court of Appeals for the Ninth Circuit will hear our appeal challenging the federal judge's preliminary injunction that prevents Nexstar from integrating with TEGNA Inc. Our brief speak for themselves. But in short, we're seeking to narrow the scope of the preliminary injunction to the 31 of 53 DMAs where TEGNA and Nexstar each have Big 4 stations and where the plaintiffs claim the alleged harms may occur. The appeal also seeks to dismiss the states from the case given their failure to articulate a plausible theory of injury to a sufficiently large number of their residents.

Now turning to our operating review. Nexstar's consolidated financial results for the 3-month period ending September 30, 2026, include TEGNA results for the full quarter, while the comparable 2025 period reflects only Nexstar's legacy business units. Last quarter, we posted supplemental financial information on our website detailing the historical quarterly combined results of Nexstar and TEGNA, and I will also be referencing the combined results of the company based on that information.

As Perry called out, Nexstar delivered record third quarter net revenue of $2.13 billion, an increase of $935 million or 78% compared to the prior year, primarily due to $765 million of revenue from TEGNA and higher advertising and distribution revenue from our legacy business units. On a combined basis, net revenue increased 15.4% year-over-year, driven primarily by political advertising and distribution revenue. Third quarter distribution revenue of $1.09 billion increased $382 million or 53.9% compared to the prior year quarter and primarily reflects $351 million of revenue from TEGNA and $31 million higher revenue from our legacy business or 4.2%, that's due to increased rates, growth in VMVPD and streaming subscribers and the addition of CW affiliations -- affiliations on certain of our stations, partially offset by MVPD subscriber attrition. On a combined basis, distribution revenue increased 2.1% year-over-year as growth in legacy Nexstar distribution revenue was offset in part by a decline in TEGNA distribution revenue.

Revenue from virtual MVPDs and other streaming platforms, including services such as Paramount Plus, Peacock and Fox One continues to grow and now represents a low teens percentage of our distribution revenue. These revenues are recognized on a net basis and provide an increasingly meaningful contribution to our distribution business. During the quarter, Nexstar completed multiyear affiliation agreements to extend its FOX, CBS and CW affiliations.

TEGNA also completed multiyear affiliation agreements to extend ABC and CW affiliations. Year-to-date, the CW Network has successfully negotiated agreements representing more than 3/4 of the network subscriber base on favorable terms. In addition, we migrated 8 affiliations to Nexstar and Nexstar partner-owned stations where we have more favorable and direct monetization opportunities. Inclusive of all these factors, as Perry mentioned, we have no changes to the original 2026 distribution guidance we provided for legacy Nexstar, which we reiterated last quarter as well.

Advertising revenue of $1.02 billion increased $547 million or 114.9% over the comparable prior year, primarily reflecting $405 million in TEGNA advertising revenue and a $163 million increase in political advertising revenue at legacy Nexstar, offset in part by lower nonpolitical advertising partially due to crowd out from political advertising. In total, Q3 political advertising revenue was $317 million, a 15% increase versus combined Q3 2024 levels and a 44% increase versus combined Q3 2022 levels.

On a combined basis, nonpolitical advertising was down 5% for the same reasons I just mentioned, partially offset by incremental revenue from the impact of the FIFA World Cup in the quarter and strong local digital revenues at legacy Nexstar. Top-performing categories included gaming and sports betting and banks, savings investments, and bottom performing categories included medical/health care, home repair and manufacturing and auto. For the fourth quarter, including TEGNA on an as combined basis, nonpolitical advertising is expected to decline high single digits, impacted by political crowd out. In positive news on the rating side, comScore released its inaugural score report in August which measures advertising exposure as opposed to viewership only by platform across broadcast, cable and streaming reflecting the importance of broadcasting to the overall advertising ecosystem.

The comScore report shows that broadcast represents the highest share of advertising exposure at over 43%, followed by cable at 34.5% and streaming by 22.3%. In terms of media ownership, Nexstar ranks third in terms of total ad exposure time at 9.3% behind only Fox and Google. The enduring value of the broadcast platform is further underscored by its broad reach and continued relevance to viewers. For example, now entering its fifth season of Thursday Night Football and Amazon Prime, more than 50% of the viewers in the local markets of the participating teams continue to launch the games on broadcast television rather than Prime.

It's a similar story on Monday night with more than 50% of the Monday Night Football audience watching on ABC rather than ESPN. And that phenomenon is even more pronounced on Sunday nights with only 10% to 11% of Sunday Night Football viewers estimated to watch via Peacock rather than NBC. These results again reinforce the unparalleled reach and audience appeal of broadcast television. Simply put, we continue to see broadcast as the bedrock of every successful distribution strategy that's premised on maximum reach.

At CW, we are further extending that reach through innovative digital distribution partnerships. In August, we launched a dedicated CW hub on the Roku Channel, expanding next-day streaming and monetization opportunities with more than 800 hours of entertainment content. Also in August, we launched CW Sports on the ESPN Unlimited app, extending our audience reach and enabling incremental viewership across all our live sports programming, which is already delivering an estimated low single-digit percentage increase in the CW Sports audiences.

With our local footprint, the CW's growing sports and entertainment lineup and News Nation's rising audience, it's clear that Nexstar has the scale and relevance that viewers, advertisers and distribution partners desire. And with that, it's my pleasure to turn the call over to Lee Ann for the remainder of the financial review.

Lee Gliha

Thank you, Mike, and good morning, everyone. Mike gave you most of the details on the revenue side and the CW. So I'll provide a review of expenses, adjusted EBITDA, adjusted free cash flow, along with a review of our capital allocation activities. Third quarter direct operating and SG&A expenses, excluding D&A and corporate expenses, increased by $488 million, driven primarily by the acquisition of TEGNA, offset by a low single-digit percentage reduction in recurring legacy Nexstar operating expenses.

Third quarter recurring cash operating expenses on a combined basis were flattish. Third quarter -- Q3 2026 total corporate expense was $105 million, including noncash compensation expense of $20 million and onetime costs of $28 million compared to Q3 2025 total corporate expense of $68 million, including noncash compensation expense of $19 million and onetime costs of $23 million. The $37 million increase is primarily due to the acquisition of TEGNA, increased litigation costs, certain accounting adjustments and other onetime costs.

Q3 2026 amortization of broadcast rights included in our definition of adjusted EBITDA was $87 million, an increase of $15 million from $72 million in the third quarter of 2025, primarily due to the TEGNA acquisition and timing of programming at the CW. On a combined basis, amortization of broadcast rights was up approximately $6 million year-over-year. Putting it all together, on a consolidated basis, third quarter adjusted EBITDA was $756 million, representing a 35.4% margin, an increase of $398 million from the 2025 third quarter of $358 million.

TEGNA operations accounted for $243 million of this gain with the remainder due primarily to the political cycle. On an as combined basis, Q3 2025 adjusted EBITDA, including TEGNA, would have been $496 million. Moving to the components of free cash flow and adjusted free cash flow. Third quarter CapEx was $46 million, an increase of $16 million from $30 million in the third quarter last year, primarily again due to the TEGNA acquisition.

On a combined basis, third quarter CapEx in 2025 was $41 million. Third quarter net interest expense was $186 million, an increase of $92 million from the third quarter of 2025 due primarily to increased interest expense associated with the debt incurred to facilitate the TEGNA acquisition. Third quarter operating cash taxes were $63 million. Cash programming payments were higher than amortization costs by $12 million as we prepaid for certain programming airing in Q4 and in the future, and we received a $4 million distribution from the Food Network.

Putting this all together, consolidated third quarter 2026 adjusted free cash flow was $443 million versus last year's $166 million. Looking ahead, we're currently projecting CapEx and capitalized software in the $58 million range in Q4. Fourth quarter cash taxes are estimated in the $120 million range. Q4 interest expense is expected to be in the $183 million range given the impact of increasing SOFR despite debt reductions.

In Q4 '26, payments for programming are expected to be in excess of amortization by about $20 million. Turning now to capital allocation in our balance sheet. Together with the cash from operations generated in the quarter and cash on hand, we've returned $58 million to shareholders in the form of dividends. Consistent with past commentary, we made no repurchases instead using excess cash to repay $350 million of debt.

Nexstar's outstanding balance as of September 30, 2026, was $11.4 billion, an increase from $6.3 billion at year-end, reflecting the impact of the TEGNA acquisition. Our cash balance at quarter end was $446 million. Because we designated the CW as an unrestricted subsidiary and loss -- the losses associated with the CW are not accounted for in our calculation of leverage for purposes of our credit agreement.

In addition, our credit agreement allows us to include the adjusted EBITDA of TEGNA as if we acquired the business on the first day of the period presented to add back onetime expenses related to the deal and any operational restructuring and to include the impact of the synergies we expect to realize within 18 months of the close of the transaction, which would be September '27. In early July, we learned that the trial on the merits of plaintiffs claims is set for July 6, 2027, but given the limited time between the resolution of the trial on September 27 date, we removed the synergies from the leverage calculation.

If conditions change, we can revisit this assessment and calculation. As such, our first lien covenant ratio as of September 30, 2026, for the last 8 quarters annualized, was 3.03x which is well below our first lien and only covenant of 4.75x. Our total net leverage for Nexstar was 4.04x at quarter end, a reduction of 0.18x from last quarter. Given the combined strong political year cash flow of the company, subsequent to quarter end, we repaid an additional $525 million, bringing year-to-date total debt repayment to $1.3 billion in total of debt over 20% of the debt we incurred to fund the acquisition of TEGNA earlier this year.

With that, I'm going to open up the call for questions. Operator, can you go on our first question.

Operator

[Operator Instructions]

Our first question comes from Dan Kurnos with Stone -- with StoneX.

分析師問答

Daniel Kurnos

Great. Obviously, first, congrats on the strong quarter across the board, guys. Two for me. Mike, appreciate the regulatory update. I guess now that we're post election, do you think that perhaps some of the more politically motivated parties, aka, the AGs you don't seem to understand your business are more likely to be able to be dealt with in one way or another.

And if you guys are successful in narrowing the injunction, help us think or what that could mean from your vantage point from the process from here? And then, I guess, relatedly, Perry, in your prepared remarks, you seem to intimate that a deal got done in Q3 with DIRECTV.

Now I don't know if or what you can share in terms of additional color given that they had originally turned down the November 30 extension. So just maybe if you can say anything if this was an extension, a full renewal or I know you can't go into specifics, but just any color there would be super helpful.

Michael Biard

Yes. Thanks, Dan. I'll take both of those. Let me start with the last 1 first. I don't want to comment on any specific agreements, although as we did mention in the commentary, we did renew every agreement that we had up during the quarter without any disruption. And the agreement that you mentioned in particular, we did successfully conclude. So let me move to the first question with respect to the regulatory environment. Listen, from your list to God deers in terms of the impact of the election being behind us and maybe taking some of the political pressure or various pressures and dynamics that we think have been relevant to what's going on with our case. Out of the mix, we certainly hope that will be the case.

It takes 2 to dance. So we'll see how that shakes out going forward. And specifically with respect to the preliminary injunction and our appeal of that. Again, as I mentioned in the remarks, we have -- the appeal is really a two-pronged appeal. One is to narrow the scope of the appeal. And then the other is more relevant, I think, to the question you just asked on the political pressures is to eliminate the states from the case entirely. We'll see what happens on that with the oral argument here in 1.5 weeks or so, I guess, a little under 2 weeks.

And then it will take some time, obviously, before we get a ruling from the panel on that. But we're optimistic. We certainly think that if you read the paper, both our moving papers and the opposing papers, the merits of the argument on our -- entirely on our side, and we're looking forward to resolution of that.

Operator

Our next question comes from Aaron Watts with Deutsche Bank.

Aaron Watts

I have 2 questions, if I may. The first around core advertising with the election now behind us. Can you talk a little bit more about what you're seeing and hearing from the environment, The remainder of this year and into early 2027, perhaps highlight any verticals that are moving around, including auto, given the high fuel prices, lingering macro uncertainties, et cetera.

And then, I guess, relatedly, could you help us think about the benefits you had this year from strong cyclical sporting events like World Cup and Olympics, that won't be in the cards for next year?

Lee Gliha

Yes. So I don't -- there's nothing that particularly standing out one way or the other on categories. I think it's been that way for a little while. I think we were pleasantly surprised with the performance of our nonpolitical advertising once we've adjusted out crowd out in the third quarter.

And so have -- are feeling fairly good about the outlook with respect to the political advertising. We did have a positive impact in the third quarter given our strong Fox footprint from the World Cup, which was -- I would say, it wasn't in the double-digit millions, but it was a strong number that will not repeat again next year.

And then from the Olympics perspective, that will -- we'll have to wait for another time to provide sort of specifics around that expectation. But we do, obviously, account for that when we see it.

Aaron Watts

Okay. And Lee Ann, if I could ask one more question pointed maybe in your direction on capital allocation. You've certainly delivered on paying down debt since TEGNA closed. Looking ahead, does that paydown remain a priority?

And is there any target we should think about, whether that's absolute dollars or a leverage level that you're aiming for with those efforts? And when you reach that one could priorities change?

Lee Gliha

Aaron, we said many, many, many times and the commentary is not different today. Our focus is to continue to repay debt. That's our use of our excess cash is going to go to repay debt. We're going to be focused on that. Our -- we know our shareholders like our total leverage to be closer to 3% than to 4. And so that's our objective.

There is no specific bright line test once we get to this number, that's -- we're done. We don't have anything like that. Everything will have to be analyzed at the time when we bring our leverage down, and we'll have to look at what does the market bear, what are the best uses of our capital, and where do we want to put that. And you've seen what our strategy has been historically, which is after an acquisition, we first used our cash flow to repay debt.

We continue to pay our dividend. And then once we get to sort of a leverage level that we feel comfortable and that gives us enough flexibility to do what we need to do from an M&A perspective or otherwise on a go-forward basis, we then look to redirect that excess cash flow to other uses. If stock repurchases makes sense at that point, that's what we would look to do.

Operator

Our next question comes from Patrick Sholl with Barrington Research.

Patrick Sholl

I was curious if you could provide a little bit more detail on the effect that sports is having on the ad trends and just like the -- I guess, with the kind of sequential change from the crowd out from like the minus 5% to the high single-digit decline, obviously, it's mostly driven by Croda, but like with the increase in political, is there anything kind of like sports program or anything else in there that's kind of helping to drive to support that? .

Lee Gliha

Look, I think sports programming has had a positive impact on overall viewership of broadcast television. And so that obviously has a positive impact. But I wouldn't say that -- and that's obviously a key driver of advertisers like to be in and around where there's a lot of viewership and a lot of -- in sports does drive that.

But I wouldn't necessarily say that's the main -- the main reason for the -- for our guidance with respect to advertising revenue.

Patrick Sholl

Okay. And then just again, also with the election in the rearview mirror, aside from the national ownership cap that you mentioned in your prepared remarks. Is there any sort of sense on what sort of like the priorities would be going forward on the FCC on additional deregulatory efforts around or additional rule-making around like the broadcast sector. .

Perry Sook

Sure. Well, there's an open proceeding at the FCC related to the Quadrant review that would deal with local ownership in market deregulation for both TV and radio and I certainly wouldn't want to speak for the Chairman, but I do believe his intent would be to move on that report and order coming out of the Cordero to further deregulate radio and television in -- within the local markets.

And we're hopeful that, that happens perhaps before the end of the year. I think beyond that, we continue to be in dialogue with the FCC regarding ATSC 3.0 and the transition to next-gen transmission, which would enable a better viewing and listening experience for the consumer as well as and probably more importantly for investors, ancillary use of the spectrum for non-video uses that could open up a plethora of new services to offer to businesses and advertisers and viewers in the local community. So we continue to advocate for all of those changes at the FCC level.

I don't think anything changes in terms of the commissioners intent to continue to free broadcasting from the regulatory shackles that are not incumbent on any other media provider and to encourage a continued robust local journalism, which is what we're all about as a company, obviously, and so I look for him to continue to further his aim during the remainder of this administration.

Operator

Our next question comes from Jason Bazinet with Citibank.

Jason Bazinet

I did have a legal question. If someone was going to try and challenge the lifting of the 39% ownership cap, is the right way to think about that, that it has to actually go into effect, meaning, I think you said 60 days after it's put in the Federal Register. Could they do it now? Or could they do it after it's officially filed but before it goes into effect. I'm just trying to gauge sort of what risk, if any investors should sort of think about when we might know if someone is going to challenge it?

Perry Sook

Yes. Until the -- as we say in Schoolhouse Rock, until the bill becomes law, which would be the publication in the Federal Register. There's really no law to challenge. So that would be the time at which those opponents would come out, I would imagine an attempt to challenge the challenge the rule-making. But until that time, all you have is circulation and idle chatter. .

Operator

Our next question comes from Steven Cahall with Wells Fargo & Company.

Steven Cahall

I have kind of a slew of questions on political. So just wondering if there's anything that you think was unique about this cycle. I think it's up 30% over 2022. I want to ask you to comment on 2028 but just trying to think about whether this is like a new normal for the industry or whether the growth rate might have been elevated this cycle because it was a little lower in 2022.

And also, do you think that lowest unit rate brought in more political dollars net of the core displacement. Do you think it was like somewhat neutral? Do you think it was negative? I'm getting the sense it was probably a positive, but would love to get your commentary? And lastly, the $1.1 billion, I think that was for the cycle. So just wondering if you could help us with what 4Q looks like for political?

Perry Sook

I'll speak to the macro. We -- if you follow the ad impact data not only was a record for spending, but that broadcast we project at this point has gained share, and I think that's because those that spent heavily in connected TV as their primary strategy 2 years ago didn't win.

And so we think that has -- there's been a validation of the spending on broadcast and the results in the elections. We also, as I said in my remarks, the lowest unit rate of opening that up to political parties, we think actually encouraged more money, more coordination between the parties and the candidates, which resulted in more money, which is validated by the increases over the cycle.

And I do think of that as the new normal, absent any change in laws or campaign finance reform that -- things will not be less contentious 2 years from now. Good lord. The entire house will be re-litigated again as will the White House. And so again, if you look at our geography -- and by the way, I know you live in Texas as do we, and we saw plenty of political ads.

But we actually had more political spending in Ohio than we did in Texas and then followed by California and Michigan, not far behind. So -- we think that if you look at where the early primaries will be and the geography of Nexstar once again, favorable for a presidential election and also the house selections that will be contested, for 2028 actually starting yesterday. So at this point, I think it is kind of a new normal, Steve, given that the AUR restriction has been removed, that now sets the playing field for all campaigns on a going-forward basis. So I think it is a shift that favors broadcast and we'll just favor increased spending continuing over time.

Lee Gliha

And Steve, the $1.1 billion number was actually just for 2026 on a stand-alone basis -- or sorry, on a combined basis, including TEGNA for the full year and Nexstar for the full year. There's only $32 million of TEGNA political revenue from the first quarter that was -- will not be in our reported numbers. So reported numbers will be a little bit lower than the $1.1 billion, but $1.1 billion was the 2026 stand-alone number. .

Operator

Our next question comes from Craig Huber with Huber Research Partners.

Craig Huber

A few questions. I'll just take it one at a time, if I could, please. On the CW, can you just update us on the outlook for the losses this year? I think in the past, you said it should be down 30% plus. Is that still a good range to think about?

Lee Gliha

Yes. It's still -- there's no real change there, Craig. We expect to continue to have a -- a positive number in the fourth quarter and a positive improvement by about that percentage for the full year.

Craig Huber

And then you might not want to tackle this, but thinking out to next year, if you do hit profitability here in this current quarter, you think it's reasonable then for the full year next year, assuming the macro holds together to get the whole operation to above breakeven? CW for next year?

Lee Gliha

No, no, not for the full year. .

Craig Huber

We'll not get the profitability for the full year, is that what you're saying?

Lee Gliha

I don't know that. .

Craig Huber

Okay, don't know. Okay. And then just update us on the CW. How much right now is sports as a percentage -- representing as a percentage of your ad revenue with the CW and/or the hours how should we think about that? Where is that out right now, please? .

Lee Gliha

About 50% of the hours in terms of the revenue breakdown, I'd have to get back to you. .

Craig Huber

Okay. And then you guys are still want to increase that further going forward? Are you pretty happy where it's at right now? I mean are there more opportunities out there as you kind of think out over the next year to increase that further?

Michael Biard

Yes. I think we're always going to be interested in additional rights. I mean the CW is still very much a nascent business with tremendous upside, right? Still on a positive trajectory, but it's not where we want it to be ultimately and when you look at what we've done in a relatively short period of time, particularly around sports by acquiring rights, getting them produced on air, attracting a completely new audience now on a regular basis. .

What that has done is really established our sports bonafides with really everybody who has rights to sell. So as marquee rights become available over the next couple of years, we'll certainly be in dialogue with everyone he's got something to sell, and we'll look at everything. Having said that, we're still Nexstar, and we're going to remain disciplined and opportunistic as we approach every single 1 of those conversations.

Craig Huber

And then my final question, if I could ask, please. Is there any update on alternative uses of excess spectrum out there? And do you still think it's several years away before it could be potentially meaningful like 2030, 2031?

Michael Biard

Yes. I wouldn't put an exact time window on it, Craig, but I do think that it's a ways away. And no, there's no real update on that right now. .

Operator

Our next question is from Benjamin Soff with Deutsche Bank.

Benjamin Soff

It sounds like the TEGNA CEO made some new sales and operational appointments recently. Can you talk about their strategy for running TEGNA and any changes or improvements they've been implementing since taking over? And then I wanted to ask about the digital strategy, how those assets are performing versus your expectations and how TEGNA's digital assets might eventually complement yours?

Michael Biard

Well, I'll take the first question because it's an easy 1 to answer, and that is we can't really comment on anything that TEGNA is doing from a day-to-day operational perspective. I wish that weren't the case. And we'll see what happens with our appeal of the preliminary injunction. But as you know, we're prohibited from integrating it and we're prohibited from any day-to-day operations. So that said, we have complete confidence in the CEO there, Patrick Hallen that he's doing a great job day to day, and I think the results speak for themselves. .

Lee Gliha

And then on the digital side of things, we are feeling good about our opportunities on the digital side. It continues to be a bright spot with respect to Nexstar's core business in terms of looking at our overall nonpolitical advertising, digital continues to grow at very strong rates, which is -- which is good. .

I think on the TEGNA side of things, they have a couple of different assets, including the Premion assets, which had a little bit more of a focus on National had some third-party partners. So it's a little -- that have left the partnership. And so they have a little bit of headwind against them with respect to some of those businesses. But by next year, a lot of that stuff should be cleared out. So it will be -- have like a more clean look at digital for TEGNA on a go-forward basis.

But we look at digital as really a big growth opportunity. We've been spending a lot of time and energy around developing our own CTV apps and then also just selling third-party CTV inventory, which has been a nice growth -- nice growth vector for us.

Operator

We have reached the end of the question-and-answer session. I would now like to turn the floor back over to Perry Sook, CEO, for closing comments. Perry?

Perry Sook

Thank you, operator. Thank you to everyone for joining us today. Time and again, Nexstar has demonstrated its ability to navigate a changing media landscape, outperform expectations and deliver exceptional results and today is no -- no interruption in that trend. Our track record speaks for itself. We will continue to raise that already high bar while maintaining our commitment to our core mission of serving local communities, investing in quality journalism and programming and creating shareholder value. .

Looking ahead, I remain confident that Nexstar's long-term outlook and the significant opportunities ahead of us are indeed there. We have a clear strategy, strong operating model and an outstanding team that knows how to execute.

As 1 of the company's largest shareholders, I obviously have significant skin in that game, and I remain as committed as ever to our long-term success. We appreciate your continued support and interest and look forward to sharing our progress with you in November. Thank you very much, and have a great day.

Operator

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