Yahoo Finance

Michael Biard

Thank you, Perry, and good morning everyone. Nexstar delivered first quarter net revenues of $1.23 billion a decline of 3.9% compared to the prior year, primarily reflecting the year over year reduction in political advertising.
Record first quarter distribution revenue of $762 million increased by $1 million or 0.1% over the comparable prior year quarter. Distribution revenue growth primarily reflects annual rate escalators and other contractual increases, growth in MVPD subscribers, and the addition of CW affiliations on certain of our stations which more than offset MVPD subscriber attrition.
As Perry mentioned, approximately 60% of our total subscriber base is up for renewal in 2025. As the majority of those negotiations occur toward the end of the year, we would expect to see the benefit to distribution revenue beginning in the first quarter of 2026.
While we continue to see subscriber attrition across the industry, recent earnings reports from our distribution partners suggest some marginal improvement in subscriber trends. We continue to monitor this closely as we work to secure agreements that are better aligned with the value Nextar delivers to our partners and their customers.
Turning back to our first quarter performance, advertising revenue of $460 million, decreased $52 million or 10.2% over the comparable prior year quarter, primarily reflecting a $32 million dollar decrease in political advertising to $6 million as well as a $20 million or 4.2% reduction in non-political advertising revenue due to advertising market softness.
We continued to be impacted by a challenging television advertising market in Q1, with the most meaningful pullback coming from the insurance category. The automotive category were declined at the Tier 2 and Tier 3 levels were partially offset by growth in spending from Tier 1 OEMs and the sports betting category, which faced a difficult year over year comparison given North Carolina's legalization of sports betting in 2024 and no comparable markets coming online this year.
On the upside, we saw growth in key categories including attorneys, home repair, and travel, demonstrating the continued resilience of service-based and intent-driven advertisers. Further offsetting the declines was slight advertising growth in our national businesses, while our local businesses benefited from high single digit growth in digital advertising.
We also benefited from the Super Bowl airing on Fox this year versus on CBS in 2024, which had a positive impact on our first quarter advertising performance given Nexstar's position as the largest owner of Fox affiliated stations, including WDAFT, a Fox affiliate in Kansas City.
As mentioned, we generated approximately $6 million in political advertising revenue during the quarter, primarily driven by the high profile Wisconsin State Supreme Court election. This marks a slight increase over the comparable post-Presidential cycle in Q1 2021, which benefited from the Georgia Senate runoff that extended into the new year.
I'm pleased to report that with our newly created National Political sales division, we completed the process of bringing our advertising sales operation completely in-house. This strategic move enhances our control over pricing, inventory management, and client relationships during peak political cycles.
By internalizing our advertising sales operation, we streamlined coordination and work flows across our stations and centralized teams, allowing us to respond more quickly to demand, optimize yield, and maximize revenue opportunities. Looking ahead to the second quarter, non-political advertising is currently forecast to be down in the mid single digits on a year over year basis, similar to Q1 results.
Turning to the CW, as expected, the CW's profitability in Q1 declined by mid-teens millions due to additional sports programming amortization the network didn't have in the same quarter last year. However, our outlook for the year remains unchanged, and we continue to project improved profitability in 2025 versus 2024, with expectations of achieving profitability sometime in 2026.
To close, let me reiterate our confidence in Nexstar's long-term outlook and the enduring strength of the broadcast business model. As Perry noted, amid dynamic economic and industry landscapes, more than 60% of our revenues come from subscription-based revenue streams, higher than many others in the media and entertainment space.
We're staying focused on what we can control, executing our strategy with the discipline to ensure we're in the best position to capitalize on the meaningful tailwinds ahead, including our upcoming distribution renewal cycle, the 2026 midterm elections, and the Winter Olympics.
As the industry continues to evolve, we see the momentum shifting in favor of broadcasters, and we remain committed to pursuing opportunities that drive long-term value for our shareholders. With that, it's my pleasure to turn the call over to Lee for the remainder of the financial review. LeE.

Lee Gliha

Thank you, Mike, and good morning everyone. Mike gave you most of the details on the revenue side and on the CW. So I'll provide an overview of expenses, adjusted EBITDA, adjusted free cash flow along with a review of our capital allocation activities and some additional perspectives on our evaluation.
Together, first quarter direct operating and SG&A expenses, excluding depreciation and amortization and corporate expenses, declined by $9 million or 1%, primarily driven by our operational restructuring initiatives undertaken in the fourth quarter.
Q1 2025 total corporate expense was $52 million including non-cash compensation expense of $18 million compared to $55 million dollars, including non-cash compensation expense of $18 million in the first quarter of 2024. The $3 million decrease is primarily due to lower legal expenses than the prior year.
Q1 2025 depreciation and amortization was $205 million versus $190 million in the prior year quarter, an increase of $15 million. Of these amounts included in our definition of adjusted EBITDA is $88 million related to the amortization of broadcast rights for Q1 2025 compared to $69 million for Q1 2024.
The increase of amortization of broadcast rights by $19 million was due to programming costs at the CW as newly acquired programming premiered. Please note that while Q1 CW programming amortization was up year over year, we do not expect 2025 CW programming amortization to be higher than 2024.
Q1 2025com from equity method Investments, which primarily reflects our 31% ownership and TV Food Network, declined by $11 million versus the prior year quarter, primarily related to TV Food Network's lower revenue. Putting it all together on a consolidated basis, first quarter adjusted IIA was $381 million, representing a 30.9% margin, and a decrease of $71 million from the first quarter 2024 of $452 million.
Moving to the components of free cash flow and adjusted free cash flow. First quarter CapEx was $35 million, a decrease from $44 million in the first quarter of last year, primarily due to timing of CapEx projects. First quarter net interest expense was $97 million, a reduction of $17 million from the first quarter of 2024.
On a cash basis, this compares to $95 million in Q1 2025 versus $111 million in Q1 2024. The reduction in interest expenses primarily related to a reduction in silver and Nexstar's reduced debt balances. First quarter operating cash taxes were $2 million as we only have small state tax payments due in the first quarter.
Payments for capitalized software obligations and pension credits, net of proceeds from disposal of assets and insurance recoveries were $11 million versus $7 million last year. Cash distributions from the Food Network were $114 million in the first quarter, which amount is still captured in our free cash flow and our adjusted to free cash flow definitions.
This amount reflects our pro rata share of cash from operations related to the Food Network's 2024 operating results, which had not been distributed to us during 2024. Included in the first quarter's adjusted EBITDA but excluded from free cash flow is $26 million of income before amortization from equity method investments, which is primarily our pro rata share of Food Network's income, net income in the first quarter of 2025.
Cash contributions from our partners in the CW were zero in the quarter versus $19 million in Q1 2024. In Q1, programming amortization costs were higher than cash payments by $8 million as certain programming payments were deferred. Putting this all together, consolidated first quarter 2025 adjusted free cash flow was $348 million as compared to $389 million last year.
A few additional points of guidance with respect to adjusted free cash flow. We are currently projecting CapEx of $30 to $35 million in Q2. Based on the current yield curve and our mandatory amortization payments, Q2 interest expense is expected to be in the $95 million range.
Q2 cash taxes are expected to be in the $150 to $155 million range, and we have two cash tax payments in the second quarter, in addition to the deferred cash tax payment from 2024 as a result of using the annualization method for our federal income taxes.
In Q2 2025, cash distributions from the Food Network are expected to be in the high single to low double digit range, and payments for programming are expected to be in excess of amortization by about $15 million due primarily to deferred programming payments.
Turning to capital allocation on our balance sheet, together with the cash flow operations generated in the quarter and cash on hand, we use $22 million of cash to fund the acquisition of WBNX, an independent station in Cleveland that will become a CW affiliate on September 1.
We also returned $132 million to shareholders comprised of $57 million in dividends and the repurchase of $75 million of stock at an average price of $169.99 per share, reducing shares outstanding net of equity investing by just under 1%.
Nexstar's outstanding debt at March 31, 2025 was $6.5 billion a reduction of $28 million for the quarter, as we made quarterly amortization payments of $31 million, which were partially offset by amortization of debt discounts. Our cash balance at quarter end was $253 million, including $20 million of cash related to the CW.
Because we designated the CW as an unrestricted subsidiary, the losses associated with the CW are not accounted for in our calculation of leverage for purposes of our credit agreement. As such, our first lien first lien covenant ratio for Nexstar as of March 31, 2025 was 1.67 times, which is well below our first lien and only covenant of 4.25 times.
Our total net leverage for Nexstar was 2.93%. Times at quarter end, as is typical in non-political years, we expect leverage which we calculate on an LTM basis versus a two year average to increase during 2025 as the adjusted EBITDA falls in non-election years when political advertising is significantly lower.
For the remainder of 2025, assuming no M&A, we plan to optionally repay an incremental amount of debt and not borrow the debt that was repaid during 2025 with cash from deferred taxes. The additional optional deleveraging will prepare a balance sheet better for any potential M&A and should benefit us if there even if there is no M&A, as many investors value us based on EBITDA multiple.
Based on that methodology, any debt reduction mathematically increases our equity value dollar for dollar. We also plan to continue to repurchase shares, which will continue to be the largest component of our capital allocation of strategy, especially given our current valuation. Before I turn it over to the operator for questions, I'd just like to make an observation about the volatility in our stock price.
Subsequent to report in Q4 in February, our stock price rose to a high of just over $180 and then fell to the $150 area on concerns about tariffs in the economy. That's approximate $30 per share swing resulted in the loss of about $900 million in market cap.
At a 6 to 7 times multiple, this implies an expected decline of about $140 to $145,$140 million to $150 million of EBITDA, which, assuming an 80% contribution, implies a $175 million to $190 million decline in non-political advertising revenue. That would mean our non-political advertising would decline 9% to 10% during 2025.
We're not seeing that so far as our Q1 actuals and our Q2 expectations are both down low mid single digits. And Perry's comment about the 2018 tariff would further indicate this impact is overstated, not to mention the upside we see from potential deregulation and follow on are of M&A. With that, I'll open up the call for questions. Operator, can you go to our first question?

Question and Answer Session

Operator

(Operator Instructions)
Dan Kurnos, The Benchmark Company, LLC

Dan Kurnos

Great, thanks. Good morning. Also a nice job on expenses, Lee Ann. Perry, let me just, let, let's just ask one broad regulatory question. Let's say trustee hypothetically gets confirmed, I don't know, end of this month you said summer.
What would that mean for the timeline of when you think things start moving? And given all of the commentary we've now had from car, we've got the Simonton op ed now. Do we think an NRM would be shortly forthcoming? Do you proactively test the market and how much do you think the FCC can accomplish versus what has to go to Congress?

Perry Sook

Sure, Dan. I don't pretend to to speak or know exactly what's on the mind of Chairman Carr, but I would think that an NRM would be the most likely way to kick off a revisitation of the rules, both local and national, as they relate to ownership. So I would expect that could be one of the very first moves that the that the Chairman could make.
And I would anticipate, there was a letter, as delivered from House members to the FCC. Acouple of weeks ago, there's a senator letter being delivered today with 22 senators signing on urging the FCC to revisit and relax and eliminate ownership regulations as they relate to television.
And there were also notably for public interest groups, that historically have, been on the other side of discussion that endorsed the need for ownership regulations. So, we think the momentum in Washington continues.
We had a board meeting there last week and everything we heard from the administration and officials were that the path of deregulation, I think would would proceed a pace here once the fifth commissioner at the FCC is confirmed.
As to what the FCC can do, I think they can do, pretty much everything. Former Chairman Ajit and I felt that the FCC had the authority to modify or eliminate the national cap as well as the in market ownership rules we have to ascribe to that rule, or that point of view.
And so we think things could go pretty far, pretty fast, obviously any action that Congress would take would put whatever those rule changes were, out of reach of judicial review, which would be nice as well. But I also think that the Chairman has indicated his willingness to consider waivers during either the dependency of rulemaking or waivers just in general.
So, I think you'll see all of those levers be pushed as time goes on, this year, and I do think you'll see M&A activity come into focus as the year goes on.

Dan Kurnos

Thanks very much, Perry. Looking forward to it.

Operator

Stephen Cahall, Wells Fargo Securities LLC

Stephen Cahall

Thank you. Maybe first just to follow up on Dan's question and your comments there, Perry. So, if we do get an NPRM, I think there's precedent of deals, being proposed under the conditionality of the FCC's new procedures under an NPRM. Are you comfortable sort of putting pen to paper and beginning to to transact when the process is at that phase but maybe does still face some challenges in the courts.
So that's just the first one as we think about that timeline, and then secondly, and I know you don't update EBITDA guidance as we go through the year. Overall, it seems like things are really performing pretty close to the trends that you had suggested when you gave the initial guide in February.
So, we just roll everything up, the ad market may be a little bit worse, your expenses will look pretty good. The CW guidance didn't change. So, any meaningful puts or takes that you think we should be aware of in terms of how the overall year looks to be trending. Thank you.

Lee Gliha

Hey Steve, you're right, we do not, update the EBITDA guidance, as we go, but as we go through the year we will continue to sort of give you kind of the what we're seeing in terms of the current market environment.
I think as we talked about on the when I gave the guidance, the puts and takes really I think the key things that we don't have control of are really what's going on in the advertising market and what's going on with subscriber attrition.
And so those are the two things I would have you sort of focus on with respect to any adjustments you want to make to your model as it relates to the guidance that we gave at the beginning of the year.

Perry Sook

But I would say, Steve, that you're right that we have not seen, and I get questions all the time, you're seeing things just fall off a cliff and the answer is no. First of all, we talked in my remarks about the percent of our ad revenue that is determined by services advertising which is really not dependent or even related to tariffs.
And the amount that is tied to goods, whether it be automotive or furniture or others, which is a much lower percent of our ad revenue and a much lower percent than that of our total revenue. So our exposure is not not anything that we would think would be extraordinary, going back to 2008 when we were, very highly dependent on advertising support, that was a different story.
So I think that, we were very considered in the guidance that we gave, and I think that things are unfolding pretty much as we had anticipated. There might be puts and takes on the margin, but thematically, things aren't any different than what we had seen at the time we gave the guidance than what we saw last year.
And so we're not sanguine about it, but I think we're very clear eyed about it that we think things are unfolding pretty much according to the guidance that we gave. As it relates to your question, would we be willing to put pen to paper, during the pendency of an NPRM, I think that, again depends on the circumstances and having a willing counterparty that was willing to do so as well.
But I think you've seen this company take risk acceptable risk, calculated risk for an opportunity. So, I don't think you'd see any change in our behavior as we move through this this year and the deregulation of our industry.

Stephen Cahall

Thank you, very helpful.

Operator

Benjamin Soff, Deutsche Bank

Benjamin Soff

Good morning, everyone. Thanks for the question. As you guys talked about, we've seen the levels of chord cutting throughout the industry moderate again this quarter. I'm curious if and when you think that will start to show up in results for Nexstar if it hasn't already, and what does that mean for your upcoming slate of renewals later this year?
And then appreciate all the color on advertising. I was hoping you could spend a little bit more time with what you're seeing more recently. And I believe in the last quarter you talked about aspiring to get positive growth in that line for the year. Is that still a reasonable expectation? Thank you.

Michael Biard

So, I'll take the first question on subs. I don't think we've seen a material change yet. I think the commentary around it has been optimistic, certainly coming from some of the MVPDs who've reported and like others in the industry, we think that a rationalization of some of the MVPD products out there can only provide tailwinds to to those trends, right?
The rationalization, what I mean by that is the coming together of D to C with linear in ways that are more attractive to subscribers and makes sense for really everyone involved. So, in terms of impact on our results yet we have not seen any and as I said in the prepared remarks I think we're cautiously optimistic that we may see that play out in the in the rest of the year.
In terms of the impact on our deals, really no impact right now we'll approach our business the way we always do. We continue to believe that the value that we deliver to distributors and therefore, to their customers, it continues to be underweight relative to our share of wallet if you will.

Lee Gliha

And then then I guess on the advertising side, I think we're seeing, what we said in the in the prepared remarks is our our Q2 forecast at the current moment is very similar to the what you saw in the first quarter in terms of the, decline in non-traditional advertise or or non-political advertising rather, with respect to the full year, we do expect to pick up in the back half of the year given the eliminate elimination of, crowd out.

Operator

Got it. Thank you.

Benjamin Soff

Aaron Watts, Deutsche Bank

Aaron Watts

Hi, thanks for having me. On deregulation and consolidation, I'm just curious with in terms of your focus on the opportunities in the market, how would you prioritize between expanding your national footprint and increasing in market duopolies or perhaps bringing in assets that enrich your underlying spectrum holdings?
And on the in-market option, can you remind us what type of lift you get from creating a new duopoly in a given market or adding a CW affiliation to a market like you just did in Cleveland?

Perry Sook

Sure, let me try and unpack that a little bit, Aaron. I would say that the -- our focus here is first and foremost on the creative acquisitions that are more creative than buying back our stock and whether that takes the form of market, additional, stations added to our roster or expanding our national footprint, both have strategic importance to the company.
I would say growing our national footprint has more strategic importance than adding a second or third station in a market. If you look at our overall footprint today, we are duopolized or virtually duopolized in the majority of our markets already. The opportunities that remain to do that are primarily in the TOP10 markets where we operate exclusively CW affiliates.
So, that would be interesting should there be actionable, opportunities. I think that again underlying spectrum. I think, we are the largest holder of commercial television spectrum, in the country, UHF television spectrum, and so, adding to that footprint is the byproduct of acquisitions. I with rare exceptions would we do a transaction just to acquire additional spectrum.
We're focused on the operating business up top and the accretion from that vis a vis distribution, expense management, and again putting stations together in markets where we don't already have that opportunity. If the FCC were to eliminate the two to a market rule, then, I think that opens up be it any and even broader opportunity for us to look at in market consolidations and as it relates to margin list there it depends on the combination of stations.
If you put two big four together, you're going to have the opportunity I think for cost takeouts aside from the payments to the networks, because you probably have too robust news operations, too robust, production operations and while our focus would be to preserve the journalistic layer there.
There's no reason you can't take the technical and production infrastructure and and streamline that vis a vis automation and in effect running two newspapers off the same printing press. So, the margin left there can be, 20 points, 20, 25 points depending on the combinations and the status of the stations.
In Cleveland, adding a CW affiliation to an independent station gives us an immediate distribution lift in revenues and then taking a very powerful, organization and which is our Fox affiliate in Cleveland, a very good content operation and a very good sales operation and overlaying that on the assets of the CW will give us, lift down, long term down the road.
But the accretion of that acquisition is primarily through the distribution economics once it becomes a CW affiliate later this year. So I hope that's responsive to your question. I know there was a lot in that.

Aaron Watts

Really helpful. Thanks a lot.

Operator

Jason Bazinet, Citi

Jason Bazinet

I also had a regulatory question. Is there a sense that the that the industry, that there's broad agreement among potential sellers, the consolidation should happen and therefore, in your seat, you may have the choice of pursuing several different paths in terms of M&A in other words.

Perry Sook

The short answer is yes. I mean, I, chair the NAB joint Board of Directors, and prior to that I chaired the NAB television board, and this is the first time in history that the entire board voted unanimously that the national cap elimination and in market ownership restrictions be eliminated, hasn't always been that the case.
But I think that is a notable achievement in the ability to get the industry organized, under one set of marching orders, and that certainly is impactful at the regulatory agencies and on Capitol Hill that the industry is speaking with, one voice as it relates to that issue. So. I think that, the NAB television board is made up of, representatives.
Mike Barrett represents us on the NAB TV board, so a very large group, and there are very small market group operators that also have a voice on that board, and I think everyone realizes that without the ability for strategics to expand and potentially private equity to enter the space because of the deregulatory nature, that there may not be much of a bid for their their family assets or generational assets.
So I think everyone sees the need for deregulation to allow the industry to to reach its full value potential.

Jason Bazinet

Can I ask one follow up, and this may be too legal, but I'm going to try. I heard your point about the FCC potentially doing the waivers and about the NPRM. The one thing that that I don't know how to think about is, I think it was last year the Supreme Court sort of pushed back on Chevron deference, meaning robbing the expert agencies of some of the power that they've historically had and sort of forcing Congress to be more explicit about changes that take place as opposed to just pushing it down to an expert agency like the FCC to do the rulemaking.
Do you feel that that shift at the Supreme Court is a potential flying ointment that would require congressional action as opposed to relying on on the FCC as the expert agency, or is that a sort of a red herring?

Perry Sook

Yeah, well, one man's opinion is it's a red herring. We actually read the Chevron ruling as a positive for industry, meaning that there could be judicial review of regulatory agency sanctions that they couldn't just happen in a vacuum and that there could be a question for the need of those and so we see it as a positive.
I don't see that as a red herring necessarily. I think the entire administration as well as, both houses of Congress certainly are focused on streamlining government intrusiveness into private business and so, I think that at this point in time, I don't see that as an impediment and in fact there's been very little at this point reaction to the Chevron ruling as it relates to the day to day operations of businesses and the government. So from our perspective, I don't see that as as an impediment on a going forward basis.

Michael Biard

I would just add to that I think the letters that you've seen from both houses of Congress would indicate that the legislators are are encouraging the SEC to act as well. So certainly they don't see that the SEC is being limited here.

Jason Bazinet

Thank you very much.

Operator

Patrick Scholl, Barrington Research Associates, Inc.

Patrick Scholl

Hi, good morning. A question on the ad market. You mentioned the growth in the services sector in the last trade war. I was just kind of curious, how much of that was increased, penetration of getting new advertisers on the TV and just, within the various service categories where you feel TV is relatively underutilized from those, advertisers?

Lee Gliha

Thanks. I think the, from the last, in 2018, there wasn't really like new advertisers that were coming on. It was just sort of our same our same group it was just, continuation of the trend of the benefits of advertising, right?
These are companies that are really ringing the cash register because someone has heard their ad and they came into the store they hired them to, with for their lawsuit, whatever that was and so it's a very stable piece of the of the pie and and a nice, it's nice from our advertising composition perspective to be, the significant percentage of our ads.
And I think this time going around it's it's really no different. I mean, we're seeing, a definite difference in terms of the rate of decline of goods versus the services category. Significant.

Operator

Barton Crockett, Rosenblatt Securities, Inc.

Barton Crockett

Hi, great. Thanks for taking the question. I guess if I could too, but the first one is really on this regulatory question. So, I get the FCC, but I'm wondering about the DOJ and antitrust. How much of an impediment could that be?
And then kind of within that question, historically I think there's been this very reasonable thought that they should include in the market definition, these things that have been, accused by the government of monopoly like search and social. Does that need to change? Do you see any prospects that could change under this administration?

Perry Sook

Yes, in a, in one word, the folks that our GR team has spoken to at DOJ have said have not gone on record but have said in private conversations that no one can defend the current rules, that television station advertising is a discreet market, as is radio station advertising.
Nobody believes that, nobody can defend that with a straight face, and so I do not see that as an impediment to, in market opportunities to consolidate. Let's just assume you have 50% of the television revenue in a marketplace, but let's talk about the part of the iceberg that's below the water level, which is every other form of advertising that our local sellers compete with.
There's a line out the door at the car dealership or the furniture store, people in to sell digital advertising, connected television advertising, pens with your company's name on it, out of home, advertising billboards.
So, ads in the high school yearbook, I mean those are all compete for the one advertising budget that business owners have and and to believe anything other than that ignores the realities of what our sales people encounter in the marketplace every day. So I again, pretty high up the food chain at the DOJ. I think people understand that and are willing to address marketplace realities in transactions that might be proposed going forward.

Michael Biard

I'll just add that to the extent that you thought that rule or really not a rule, but that interpretation of the marketplace made any sense historically. Certain changes in the marketplace recently would really undermine it. What I mean by that is the introduction of advertising, television advertising in particular across Netflix and and Amazon Prime.
I think you can look at those and the flood of inventory that they've brought to the market as a fundamental change in the marketplace that absolutely should compel a different, a different view of that.

Barton Crockett

Now, if I could ask kind of a, an adjacent question. To what degree in Nexstar specifically in local television generally. Is this, emerging kind of form of programmatic and connected TV advertising that's part of what Netflix is doing and just a lot of momentum around that generally that we see at the national networks?
I don't really hear you guys talking about that locally or or see it that much, and to what degree is that kind of change? Should it change? Can it change?

Perry Sook

Well, and again, I don't want to open our playbook ,so everybody can read it, but I mean we certainly are cognizant of the fact that the vast majority of advertising, all digital, all national, advertising is sold on an impression-based basis, and here is television selling demography and so I think that, we are at a forefront of having discussions that would enable us to to be selling more of our inventory on an impression-based basis.
We can control the rate at which those orders are accepted and all of that, but it also, listen, advertising agencies make less money placing linear television ads than they do placing digital ads. And until we address that structural inequity, it's going to be hard to to talk about sustained growth in this business at the advertising support level.
So, we're totally cognizant of it and focused on it and discussions are ongoing behind the scenes and obviously if we have something to announce, we'll announce it but we are focused on creating, removing all structural impediments and any other impediment in doing business with our company and in our industry, I think that's where everyone should be focused.
So, we get it and are taking moves to evolve the way we sell our advertising to be as compatible as possible. Everyone understands the superior value proposition, but if it's hard to buy and less profitable to buy, we can understand why people may move their money in other places. So we're straight up addressing it ourselves and expect that the industry will ultimately follow.

Barton Crockett

Okay, great. Thank you.

Operator

Craig Huber, Huber Research Partners LLC

Craig Huber

Great, thank you. I want to ask you, Perry, about this proposal or this [oped] out there about capping reverse retrans at at 30% of retrans revenues for your companies and stuff, and you sort of think about it, I want to hear your comment on this if you could please.
We've been talking about for years and years about deregulating your stuff out there in market rules of 39% ownership cap, and all of a sudden now, there's this potential out there of a 30% cap on the reverse [retrein] side of things here.
I mean, when I sit back and think about the FCC, the Trump administration, Congress that they got involved here. They're either deregulatory, leave us alone or they're not. I mean, why does it make sense to get rid of 39% ownership cap, which I am sympathetic with in the market rules certainly on board with that as well.
But then why put in place a cap on the retrans payment side of things here surely benefit. I think you guys on the surface, but there's an unintended consequence that I think of the networks, I would think logically would just pull back how much money they spent on programming that they put on your TV stations and your peers out there and stuff.
So can you just comment on that because it seems totally inconsistent to them. I'm just, I'm baffled by the whole thing, frankly.

Perry Sook

Well, listen, we have a great deal of respect for Commissioner Simington and his approach to free markets and deregulation. I would say that his thoughts were expressed in an op ed, which I would characterize as one man's opinion. I will tell you, having spent, I think I've been on Capitol Hill seven times so far this year.
There is very little interest in getting involved in the commerce between stations and networks other than there has been an increasing interest in the asymmetrical approach to virtual MBPDs and traditional MBPDs, given that, YouTube now, promotes themselves as the third largest MBPD but yet there are virtual MBPD.
So our rules of engagement are different, and I don't think anyone feels that makes much sense, but listen, we are, largest, affiliate groups and among the largest affiliate groups of all of the big four, we happen to own the big five, and, would not be handcuffed by a 30% rule, should it come into effect in terms we aspire to a 30% distribution revenue for the CW from our affiliates.
But at this point in time, I think there would be very little traction for that taking hold. So I would take it as, the op ed that it was, but I don't know that I see it gaining much traction in Washington or or in the marketplace.

Craig Huber

And then thank you for that. And then Lee Ann, if you could just comment if you would on the CW losses year over year in the first quarter, is it ballpark maybe roughly $10 million worse in the first quarter here, because of the higher sports program I understand. And what is your outlook if you could quantify that what your outlook is the CW losses for the full year?Thank you.

Lee Gliha

Yeah, I, our our outlook for the CW losses for the full year are consistent with what we said on the last call, which was, about a 25% better or 25% better than what it was in 2024. We did see, an increase in the amortization of broadcast rights, in the first quarter which was about, a substantial increase over the first quarter of 2024, you can see that number and the losses did increase by, more than $10 million in the first quarter.
But again, we, that's an anomaly, a seasonality anomaly, and we still are on track to kind of get where we think we're going to get we we had planned to get to it for the full year.

Craig Huber

Great, thank you.

Operator

Alan Gould, Loop Capital Markets.

Alan Gould

Thanks for taking the question too, please. Parry, speaking of the fifth network, just wondering where you stand in repricing your CW, fees to your station partners, your affiliates, and secondly on advertising, just curious how big a difference there is on your advertising your sports product versus your news product versus your general entertainment product. Thank you.

Perry Sook

Well, listen, we're working on repricing our value proposition to our CW affiliates, and the way we do that is by demonstrating the value of the CW affiliation through investment and programming and most importantly that programming paying off in terms of increased eyeballs to the network.
Our affiliates are over the moon and our investments in sports programming, what it brings to them, the additional inventory that they don't have to program. And so, our discussions with those affiliates as well as our own station group, which is the largest customer of the network in terms of, we are the largest CW affiliate group.
People recognize the value we're bringing and now it's, and we told them it was coming and so they've had a couple of years now to get out in front of that with distribution negotiations on their own behalf. So, I do expect that one of the value levers to break even of the CW affiliation of the CW network for the next two years, '25 and '26 will be through increased remuneration vis a vis distribution payments to the network from its affiliate base.
So it's an ongoing process. When we first took over the network we said all the great things we were going to do and asked for big increases and they said, well, wait a minute, you haven't done anything yet. That's fair. Now we have and I think now it's our turn, and as relates to the second part of your question, I forget what that was. Can you remind me again?

Alan Gould

Sure, when you're selling advertising, how big a difference are you seeing selling advertising on sports content versus news content versus general entertainment content?

Perry Sook

Well, I would probably put them in that order, right? I mean, sports programming is of the moment right now and that's why we be added additional sports programming. There's a big demand for sports because it's live, it's leaned forward. I would say, as it relates to demand for local news, we've seen no effect in that. I mean, that is where local advertisers want to be for all the same reasons.
You're talking about my local community, people are interested in that. My ads get more attention there and I would say that unfortunately, because we produce some very good scripted programming, that's third in the batting order.
That's not, generally consumed live, it's consumed, by appointment whenever I'm ready to see it, through a streaming or on my DVR and so, that is probably the least in demand of the three categories that you talked about.
And if you look at the mix, from a network perspective that we've orchestrated at the CW, scripted entertainment programming comprises a lower percent of the total hours of prime time and total hours programmed by the network, and I think it's in addressing that marketplace reality.
It wasn't just to cut costs, it was to mirror more what the television audience is looking to consume, which is live programming, event programming, and sports programming. We still have a healthy, we will have on the network in this upcoming season a Dick Wolf police procedural.
That's kind of a watershed event for the CW when you think we're in business with one of the most prolific and successful program producers, in television, and I'm excited about that and, both hope and think that that show will do well, but we're not abandoning scripted. We're just evolving the programming mix to represent marketplace realities.
I think if you look at, right now Wednesday night is a scripted night and Friday night is Penn and Teller night and and and Tuesday night's wrestling night and with WWE and I think that, thematically that's how we're, Brad Schwartz and his team and Sean Compton are building the network and we think that it will over time pay significant dividends to both the network, the affiliates of which were the largest, and our counterparties as well.

Alan Gould

Okay. Thank you.
Thank you. We have reached the end of our question and answer session. I'd like to turn the call back over to Mr. Sook for any closing remarks.

Perry Sook

Thank you very much, operator. In closing networks, local advertising, our political advertising, and our distribution revenue streams all provide us with a stable and growing foundation across all economic cycles. Our uniquely scaled portfolio of local and national media assets continue to generate substantial free cash flow to support our value enhancing capital allocation strategy that we described earlier.
With our proven financial track record, our best in class balance sheet, and additional upside from potential regulatory reform, we believe that Nexstar offers a rare combination of consistency, flexibility, as well as growth.
Simply put, we have the platform, the people, and the momentum to continue to deliver long term shareholder value. And as Nexstar's third largest shareholder, I might add, no one is more personally committed to that mission than I am. Thank you all for your continued support and we look forward to updating you again on our second quarter earnings call in August. Have a good day.

Operator

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.