Nexstar Media Group (NXST) Q3 2026 earnings review
Election ads lift Nexstar profit and cut its debt early
Midterm election spending lifted Nexstar, the largest US local television broadcaster, while everyday commercial advertising shrank again. Total revenue rose 78% to $2.1 billion on the March purchase of rival Tegna, and by our math sales at stations owned a year ago grew 14%. Chief executive Perry Sook pointed to a third-quarter record $317 million in political ads, which pushed cash from operations to $680 million and let the company pay an extra $525 million of debt after quarter-end.
| Sales from stations owned a year ago | +14% +78% total reported with Tegna |
|---|---|
| Political advertising revenue | $317M record third quarter |
| Non-political ads at legacy stations | -4.5% from a year ago by our math |
| Post-merger debt repayment | $1.28B topped the >$1B full-year plan by Nov 5 |
⚖️ Verdict: 🟢 Bullish
The story got better because midterm political cash allowed the broadcaster to beat its full-year debt reduction plan nearly two months early. Retiring $1.28 billion of debt since the merger close lowers total net debt to 4.04 times profit and trims future interest bills even while a court injunction blocks Tegna cost savings until a July 2027 trial. One caution: by our math, non-political advertising at legacy stations fell 4.5% from a year ago, marking a second straight quarter of decline.
The question now is whether everyday advertising rebounds once political campaigns stop buying up airtime, or whether local businesses are permanently shifting budgets to streaming television. If the drop was just election displacement, core ad sales should stabilize in early 2027; if viewers and advertisers are leaving cable and broadcast, revenue will fall while Tegna integration remains frozen. First-quarter 2027 non-political advertising will settle it.
🐂 Bull Case
Midterm Cash Clears the Full-Year Debt Target Early
Nexstar, the largest owner of local television stations in the United States, promised to pay down more than $1 billion of debt between its March purchase of rival station group Tegna and the end of 2026. By our math, that target required at least $563 million of debt paydown in the second half of the year, and the broadcaster has already beaten that goal by more than $300 million.
- Third-quarter debt repayment: $350 million from cash on hand and operations
- Additional debt repaid between October 1 and November 5: $525 million on secured credit facilities
- Total debt repaid since the March merger close: $1.28 billion by our math
- Total net debt to profit ratio: 4.04 times at quarter-end, down from 4.22 times in June
Rapid debt reduction matters because borrowing costs nearly doubled from a year ago to $186 million this quarter. Every dollar of election-year cash used to retire loans lowers interest bills before political advertising dries up in 2027. What to watch: year-end total debt in the fourth-quarter report, which will show if peak November election cash pushes total leverage below 3.8 times.
Political Ads Lifted Operating Profit Margin by 10 Points
Chief executive Perry Sook highlighted "all-time high third-quarter political advertising revenue" of $317 million as midterm election campaigns bought local broadcast airtime. Because airing a political spot adds almost no extra production cost, that revenue flowed straight into profit and lifted the operating profit margin by 10.3 percentage points from a year ago to 24.9%.
By our math, stations owned a year ago grew profit before interest, taxes, depreciation and one-offs by 43.3% to $513 million, while Tegna added $243 million. Direct operating costs, the expense of running stations and producing news, fell 3.0 percentage points of revenue to 43.9%, and selling and administrative overhead fell 2.1 points to 14.8%.
What to watch: fourth-quarter political advertising revenue, which historically tops the third quarter. Based on management's past statement that 75% to 80% of election money arrives in the second half, fourth-quarter political sales should land between $358 million and $583 million by our math.
The CW and NewsNation Keep Growing Viewership
Nexstar's national television networks continued to attract larger audiences through live sports and news. The CW, its broadcast network, ranked ninth among English-language ad-supported networks, and an August college football game beat three major broadcast networks in primetime. NewsNation, its cable news channel, grew total day viewership 9% from a year ago.
To keep viewers coming back, the broadcaster added two college football bowl games and signed a multi-year deal with the National Hot Rod Association to air seven drag racing events starting in September 2027. Nexstar also renewed station affiliation contracts with FOX in 41 markets, ABC in 13 Tegna markets, and The CW in 74 combined markets.
What to watch: fourth-quarter profit or loss for The CW in the full-year report. Management previously promised the network would reach profitability in the fourth quarter of 2026, which would remove a multi-year drag on company earnings.
🐻 Bear Case
Core Advertising Shrank Again Outside Election Spending
Headline advertising revenue more than doubled to $1.02 billion, and Sook praised strong advertising performance across the company. However, stripping out Tegna's $405 million contribution and the $163 million jump in legacy political ads shows that everyday commercial advertising is still shrinking.
- Non-political advertising at stations owned a year ago: $445 million, down 4.5% from a year ago by our math
- Second-quarter non-political advertising at legacy stations: down 4.8% from a year ago by our math
- Total political advertising across all stations: $317 million, up from $10 million at legacy stations a year ago
Nexstar said non-political advertising fell "due, in part, to crowd-out from political advertising", as campaigns bought up commercial slots that local businesses otherwise use. That explanation gets tested after Election Day, because non-political ads also fell in the second quarter when political spending was less than half as large. What to watch: first-quarter 2027 non-political advertising, when election displacement disappears and underlying demand stands alone.
Antitrust Lawsuit Blocks Merger Savings Into 2027
Nexstar bought Tegna in March expecting $300 million in annual cost and cable-fee savings, but a federal court injunction after an antitrust lawsuit forces the two companies to operate separately. In October, Tegna chief executive Patrick Paolini appointed "new operating and sales executives" to run Tegna's leadership team independently during the court freeze.
"Given the limited time between the resolution of the trial and the Outside Synergies Date, we have removed the projected anticipated synergies from the leverage calculation," the company wrote. The trial starts July 6, 2027, just ten weeks before the credit agreement's September 19, 2027 deadline to count cost savings, while legal and restructuring bills took another $30 million this quarter and $125 million over nine months.
What to watch: the federal appeals court ruling on Nexstar's request to narrow the hold-separate order. Without appellate relief, the company enters the 2027 non-election year carrying $11.4 billion of debt and two separate corporate staffs.
TV Food Network Income Dropped to Zero
Nexstar owns 31.3% of the Television Food Network alongside partner Warner Bros. Discovery. After taking a $381 million write-down on that stake at the end of 2025, Nexstar's share of profit from equity investments fell to zero this quarter from $5 million a year ago, and dropped to $7 million from $24 million over the first nine months.
Cash distributions from the cable network also shrank to $100 million over the first nine months from $131 million a year earlier. The partnership agreement hits a specified liquidation date on December 31, 2026 unless the partners renew it. What to watch: a renewal announcement before year-end, because losing or resetting those cash payouts would slow debt reduction in 2027.
Risks this quarter didn't answer
Four standing concerns could not be checked from the earnings release alone and await the conference call or the quarterly filing.
- DIRECTV carriage renewal: DIRECTV previously refused a routine extension through November 30, 2026, and the release does not state whether a blackout was avoided.
- Tegna cable-fee trends: legacy distribution grew 4.2% by our math, helped by "the impact of a one-time charge in the third quarter of 2025 which did not recur in the 2026 period", but Tegna's standalone rate is not in the release.
- The CW dollar losses: the release omits the segment profit table, leaving The CW's third-quarter loss unreadable until the 10-Q filing.
- 2027 debt covenant headroom: the first-lien leverage capTightens from 4.75 times to 4.25 times after December 31, 2026, just as election cash fades.
💲 Other KPIs
Cash from operations rose nearly sixfold from $117 million a year ago and more than doubled from $298 million in the second quarter. Higher election profit and $258 million of working-capital collections drove the gain, lifting free cash flow excluding one-offs to $443 million.
Fees paid by cable and satellite providers rose 53.9% from a year ago, as Tegna added $352 million. By our math, fees at stations owned a year ago grew 4.2%, up from 3.1% in the second quarter, because last year's third quarter was depressed by a one-time dispute charge.
Diluted shares rose 1.2% from a year ago and were flat from the second quarter. Management spent nothing on share buybacks for a fifth straight quarter, keeping the quarterly dividend at $58 million while sending all surplus cash to lenders.
🔮 Guidance
Exceeded early. Management previously planned to repay over $1 billion of debt between the March merger close and year-end, which by our math left at least $563 million for the second half. By paying $350 million in the third quarter and $525 million more by November 5, the broadcaster has already retired $1.28 billion since closing.
❓ Key Questions
Did Nexstar renew its expiring DIRECTV carriage agreement?
DIRECTV is suing Nexstar over the Tegna merger and previously declined a routine contract extension through November 30, 2026. Because the two largest distributors each represent about 12% of revenue, a blackout would hurt fourth-quarter cash flow.
What was combined non-political advertising growth including Tegna?
Management previously forecast that combined non-political ads would fall mid-single digits but improve on the second quarter's 5.8% drop. The release only gives figures that let us compute a 4.5% drop at legacy stations.
Will the TV Food Network partnership be renewed by December 31?
The partnership agreement with Warner Bros. Discovery reaches a specified liquidation date on December 31, 2026. Equity income dropped to zero in the third quarter, though nine-month cash distributions still totaled $100 million.
How much did The CW lose in the third quarter?
Management committed to making The CW profitable in the fourth quarter of 2026 and cutting full-year losses by more than 30%. The earnings release did not include the segment table that shows quarterly network losses.