Merger With Tegna Would Create Value for Nexstar, but Also Brings Risks and Regulatory Uncertainty

We expect that industry headwinds faced by linear television (the traditional form of TV that is watched at scheduled times) and the continued transition of advertising to digital mediums will result in ongoing challenges for Nexstar Media Group that lead its business to decline. The firm has agreed to acquire Tegna, which should produce significant cost savings but does not change our overall outlook for the business, as it increases current reliance on linear television, something Nexstar will need to get away from if it hopes to grow.