Dan Kurnos

Dan Kurnos inquired about the potential impact of the Nexstar/Tegna deal on Gray Media's M&A strategy, specifically regarding larger, transformative transactions. He also asked for clarity on the future trajectory of Net Retransmission Revenue, including expectations for modest growth and potential lumpiness.

Answer

CFO Jeff Gignac confirmed that modest, inflationary growth is the expected trajectory for Net Retransmission Revenue, aligning with a multi-year effort for a sustainable model. Chairman and CEO Hilton Howell expressed optimism about Gray Media's own smaller transactions closing early in 2026 and acknowledged that a Nexstar/Tegna deal could prompt Gray Media to consider larger acquisitions to maintain local news and compete with massive tech companies.

Dan Kurnos inquired about the potential impact of Nexstar's acquisition of Tegna on Gray Media's M&A strategy, specifically if it would encourage larger, more transformative deals. He also asked Jeff Gignac about the future trajectory of Net Retransmission Revenue, questioning if modest growth should be expected going forward, with some lumpiness due to renewal cycles.

Answer

Hilton Howell (Chairman and CEO, Gray Media) expressed optimism about Gray's own smaller transactions closing early in 2026 and acknowledged that a Nexstar-Tegna deal could present competitive issues, potentially prompting Gray to consider getting larger. He emphasized the importance of consolidation for local news. Jeff Gignac (CFO, Gray Media) confirmed that modest, inflationary-like growth in Net Retransmission Revenue is the right way to think about its sustainable model going forward.

Dan Kurnos asked about the potential timing and process for FCC cap elimination and the approval of the TEGNA deal, as well as the extent to which AI tools and expense rationalization are embedded in Nexstar's 2026 guidance, particularly for content cost reduction at The CW and NewsNation.

Answer

Nexstar Founder, Chairman, and CEO Perry Sook expressed optimism regarding the FCC cap elimination and deal approval, noting the FCC shot clock expires June 1st, 2026, with an expected close by end of Q2 2026. EVP and CFO Lee Ann Gliha detailed digital growth driven by local sales force relationships and audience extension, expecting digital revenue to surpass national TV ad revenue in 2026. She also highlighted ongoing operational optimization and new technologies for efficiency.

Dan Kurnos asked about the timing and process for FCC cap elimination and the potential impact of AI tools on Nexstar's digital optimization and expense rationalization priorities, including content cost reduction for The CW and NewsNation.

Answer

Perry Sook, Founder, Chairman, and CEO, expressed optimism regarding regulatory support and reiterated the expectation for the TEGNA transaction to close by the end of Q2 2026, with hopes for an earlier completion. Lee Ann Gliha, EVP and CFO, detailed that digital revenue growth is driven by Nexstar's extensive local sales force and audience extension opportunities, projecting digital revenue to surpass national TV advertising revenue in 2026. She also noted ongoing efforts to optimize operations through centralization and new technologies for expense efficiencies.

Dan Kurnos asked about the M&A environment, specifically regarding the timing and impact of FCC Chairman Carr's potential cap elimination on future transactions, and how it might change engagement in the space. He also inquired about the distribution side, asking for thoughts on the net retrans outlook given improving subscriber trends and upcoming reverse retrans negotiations.

Answer

Chris Ripley, President and CEO of Sinclair, stated that a precedent of a large transaction like Nexstar-Tegna would be very helpful for future M&A, paving the way for more deals. He affirmed Sinclair's focus on smaller portfolio optimization and a strategic review for larger transformational opportunities. Regarding distribution, Mr. Ripley expressed confidence in the business due to strong past deals, improving churn from large MVPDs, and positive trends like rebundling, streamflation, and skinny bundles, which he believes will positively impact the long-term outlook for net retrans.

Dan Kurnos of Benchmark asked about the anticipated combined synergies from the Giant and IndiCue acquisitions over the next 12 months, including cost cuts and improved Giant margins, and how these are embedded in the fiscal year 2027 guidance. He also inquired about the company's free cash flow conversion outlook now that it expects to generate meaningful EBITDA, considering the favorable convertible note.

Answer

Chris McGurk, Chairman and CEO, Erick Opeka, President and Chief Strategy Officer, and Mark Lindsey, CFO, detailed the $7.5 million in cost reductions planned for the studio business and potential revenue synergies of $8 million to $9 million from deploying IndiCue's capabilities across Cineverse's media portfolio. They stated the FY27 guidance of $115 million-$120 million in revenue and $10 million-$20 million in Adjusted EBITDA is conservative, with significant upside from synergies. They also highlighted the transformation of Giant's gross margins from low 30s% to mid-70s% through Matchpoint automation. Regarding free cash flow, they noted minimal CapEx requirements, allowing cash to be leveraged for growth initiatives, tuck-in acquisitions, and reducing revolver debt.

Dan Kurnos of Benchmark asked about the anticipated combined synergies from the Giant and IndiCue acquisitions over the next 12 months, seeking clarity on what is embedded in the fiscal 2027 guidance and the potential for further ramp-up with effective execution. He also inquired about the company's free cash flow conversion outlook given the expected meaningful EBITDA, and how management plans to utilize the generated cash.

Answer

President and Chief Strategy Officer Erick Opeka outlined $7.5 million in cost reductions for the studio business and potential revenue synergies of $8-9 million from deploying IndiCue's capabilities across media portfolios. CFO Mark Lindsey confirmed conservative FY27 guidance of $115-120 million in revenue and $10-20 million in Adjusted EBITDA, noting that these figures include over $50 million in revenue and $10 million+ in EBITDA from the acquisitions, with additional upside from synergies not fully reflected. Erick Opeka further detailed Giant's margin improvement potential from low 30s% to mid-70s% through Matchpoint automation, and stated that free cash flow would be reinvested into growth initiatives and tuck-in acquisitions, with minimal CapEx required. Mark Lindsey added that free cash flow would also be used to strengthen the balance sheet and reduce revolver debt.

Dan Kurnos of Benchmark inquired about the new MicroCo joint venture, asking why Cineverse was the chosen partner, the capital investment required, and the monetization strategy. He also requested details on the quarter's SG&A investments and the expected timeline for seeing leverage from that spending.

Answer

Chairman and CEO Chris McGurk explained that partners are attracted to Cineverse's unique collection of technology, AI, and marketing assets, which enable a cost-effective and rapid entry into the microseries market. President and Chief Strategy Officer Eric Opeka added that the plan is to build a comprehensive ecosystem for the micro-drama industry, similar to their success with Bloody Disgusting. Regarding investment, Opeka stated the venture is initially being bootstrapped with partners, with a financing strategy being finalized that may include additional equity partners.

The analyst inquired about the new MicroCo joint venture, asking for the rationale behind the partnership, the planned capital investment, and the monetization strategy. He also asked for more details on recent SG&A investments and how the company expects to achieve leverage from them in future quarters.

Answer

The company responded that partners are choosing Cineverse due to its unique collection of assets (tech, AI, streaming, marketing) that enable a smart, cost-effective, and rapid entry into the microseries market. Cineverse aims to build the 'home base' for the micro-drama industry, similar to what it did for horror with Bloody Disgusting. Regarding investment, the venture is currently being bootstrapped by the partners with the option to bring in additional equity partners later if needed to scale. The question about expense leverage was not directly addressed in the provided answer.

Dan Kurnos questioned the company's confidence in scaling the business towards its $3 billion RWP target and the sustainability of key metrics like take rate and RWP to EBITDA conversion. He also asked for thoughts on utilizing excess reciprocal surplus for 'cashless M&A' or other premium-generating deals like book rolls or renewal rights, beyond organic RWP growth.

Answer

CEO Matt Ehrlichman expressed strong confidence in scaling the business due to a fundamental margin advantage in a growing industry, proven ability to grow surplus, and expand top-of-funnel activity. He emphasized that the company is just at the beginning of its journey to become a top 10 player. Regarding excess surplus, he noted various ways to accelerate premium growth, including M&A, book rolls, and renewal rights deals, highlighting the optionality available to the company.

Dan Kurnos inquired about the current state of pro capacity given the nominal decline in the network channel and the advancement in proprietary service requests, as well as an update on the global platform consolidation initiative and any anticipated disruptions.

Answer

Jeffrey W. Kip (CEO, Angi) stated that global platform consolidation is delayed by a quarter or two due to organizational changes but expects no business disruption, focusing on a componentized rebuild of the homeowner experience. Andrew Russakoff (CFO, Angi Inc) explained that while nominal active pros are down, overall network capacity is up due to a mix-shift towards larger, higher-capacity pros, with acquired pro growth expected in 2026 and nominal network growth in 2027.

Dan Kurnos inquired about the current state of pro capacity, considering the nominal decline in the network channel and the advancement in proprietary service requests. He also requested an update on the global platform consolidation, including any anticipated disruptions and the revised timeline.

Answer

Jeffrey W. Kip, CEO of Angi Inc., stated that the platform consolidation timeline is extended by a quarter due to organizational changes but anticipates no business disruption, aiming for enhanced customer experience. The new homeowner experience is the first rebuild priority. Andrew Russakoff, CFO, explained that while nominal monthly active pros are down, overall network capacity is up due to a mix-shift towards larger pros with higher capacity. He expects acquired pro growth in 2026 and nominal network growth in 2027.

Dan Kurnos asked about Zillow's opportunity to increase marketing spend in 2026, including specific channels and reasons for the timing, and whether this implies any channel shift in their advertising strategy.

Answer

CEO Jeremy Wacksman explained that Zillow plans a modest, opportunistic increase in marketing for Enhanced Markets and rentals, leveraging its position as a category leader. He clarified that there is no specific channel shift implied, as the marketing team will continue its efficient approach of branded response to build brand and drive performance.

Dan Kurnos asked about Zillow's opportunity to grow marketing spend in 2026, specifically which channels the company is targeting and the rationale for increasing spend this year. He also inquired if this implies any channel shift in Zillow's marketing strategy.

Answer

CEO Jeremy Wacksman explained that Zillow plans a modest, opportunistic increase in marketing spend, primarily targeting Enhanced Markets and rentals, to deepen engagement and raise awareness of new offerings. He noted that Zillow, as a category leader, benefits when competitors advertise. Wacksman confirmed no specific channel shift, emphasizing continued efficient advertising across top, mid, and bottom funnel.

Asked about the potential for the NBC affiliate deal to be restructured due to regulatory scrutiny and NBC's focus on Peacock, and inquired about the company's sense of urgency regarding M&A opportunities.

Answer

The company values its symbiotic relationship with network partners and will continue to work collaboratively, noting a recent constructive engagement with Fox. Regarding M&A, they believe deregulation is coming, which will create significant profit opportunities. With a strong balance sheet, they are prepared to be a disciplined buyer or seller and are actively exploring all options to create shareholder value.

Dan Kurnos asked about rebuilding market confidence after recent disruptions, the strategy for diversifying revenue through new DSP partnerships, the company's approach to audience curation, and details on the cost optimization plan to improve profitability.

Answer

Executive Mark Walker stated that market confidence is returning, with partners remaining supportive and buying patterns improving monthly. He clarified that the total addressable market remains the same, with a focus on diversifying delivery mechanisms and expanding into new markets on the buy-side. Walker noted that audience curation will be a focus in early 2025. CFO Diana Diaz added that cost savings were achieved through staff reductions, a hiring freeze, and cuts to discretionary spending, with a plan to remain lean during the rebuilding phase.