[Call starts abruptly] …which is made by management during today's conference call other than statements of historical fact may be deemed forward-looking statements for the 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 this 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, 2019, and Nexstar's subsequent filings with the Securities and Exchange Commission. 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 CEO, Perry Sook. Perry, please go ahead.

Thank you, Joseph, and good morning, everyone. Thank you all for joining us to review Nexstar's record Q4 results, including net revenue, profitability, and cash flow that all again surpassed consensus expectations. As always, Tom Carter, Nexstar President, Chief Operating Officer, and CFO is on the call with me this morning. It's been an active and productive time at Nexstar, and I'm proud to report that in Q4 and over the course of 2020, we achieved or exceeded the most important of our operating, financial, and return of capital goals despite the challenges presented by the pandemic. I'll touch more on each of those items in just a moment. Today, Nexstar Nation is comprised of more than 12,000 talented team members across America united by a common commitment to localism, integrity, innovation, and growth. We credit our results to the resiliency and adaptability of our outstanding teams, as throughout the year, they dynamically managed our operations for continued free cash flow per share growth. I'm extraordinarily proud of Nexstar's dedicated employees, as they rose up to address the unprecedented headwinds created by the pandemic and worked tirelessly to deliver on the value of the 2019 Tribune Media acquisition, while providing essential services to our local communities during a difficult time for our country. We believe what we've accomplished since closing the Tribune transaction in late 2019 and throughout 2020 sets us up very well for 2021 and beyond to leverage our scale, our focus on operational excellence and the growth of our digital properties, all generate significant free cash flow, reduce debt and drive further total shareholder return. This is reflected in the guidance, we initiated this morning for pro forma average annual free cash flow for the '21, '22 cycle of $1.27 billion. Simply put, Nexstar had an outstanding…

Thanks, Perry, and good morning, everyone. As outlined in this morning's press release, the actual results for the three months ending 12/31/20 and the comparable three month period ending 12/31/2019 reflect the company's legacy Nexstar Broadcasting and Digital operations and a full quarter of results from the Tribune Media stations, which we acquired on September 19, 2019. Q4 2020 revenue for WGN America, also acquired in the Tribune transaction, is included in core television advertising revenue and distribution fee revenue. A full quarter of contribution from Nexstar's 31.3% ownership stake in TV Food Network and other investments acquired in the Tribune transaction is included in the full income statement under income or loss on equity investments net and in the cash flow statement under distributions from equity investments. All actual results reflect the impact of $14.3 million and $29 million of one-time transaction expenses incurred in the respective quarters of 2020 and 2019. I'll now review Nexstar's Q4 income statement and balance sheet data, after which I'll provide an update on our capital structure and some points of guidance. Q4 net revenue increased 25% to $1.38 billion. Total TV advertising revenue increased 37.3% to $772 million, reflecting more than seven fold increase in political advertising to a record $298 million, which more than offset a 9.9% decline in core advertising to $474 million. Distribution fee revenue increased 18.4% to $528 million with growth partially offset by one -- the one-time impact of outages relating to carriage negotiations with an MVPD. Digital revenues declined 12.5% to $65 million due to our de-emphasis of lines of business that produced higher volumes without substantial margins. As a result, digital profitability was up substantially over the prior period. As Perry mentioned before, I think it's important to note from a core advertising perspective, October…

Thank you, Tomas. In our more than 25 years of business and our 17 years, as a public company, Nexstar's management team, board and employees have weathered the dot com bust 9/11, 2008 financial crisis and the recession that followed, and now the pandemic, and even last week, the snow apocalypse here in the Texas. Each time, we've worked to support and sustain our employees, local businesses and the communities in which we operate. This has always been a good approach to business and is more important today than ever before. In each case, Nexstar came out on the other side, stronger and better equipped to deliver outsized returns to our shareholders and our long term record of value creation supports this, and this is also the case today. Our 2020 full year free cash flow of approximately $1.3 billion or about $30 per share, and our guidance for pro forma average annual free cash flow for the '21, '22 cycle of $1.27 billion underscore the strength and resiliency of our operations, and our ability to continue to deliver free cash flow per share that is among the highest in the market. Our strong free cash flow generation is allowing Nexstar to meaningfully increase its return of capital initiatives, as reflected by our recent authorization to repurchase up to an additional $1 billion of shares, and our eight year track record of dividend increases of 20% annually or more. At the same time, we are paying down debt, investing in our business, operations and people, and completing select accretive opportunistic transactions. We look forward to reporting on our continued growth and accomplishments throughout 2021, and on behalf of the entire Nexstar Nation, our board and our management team, thank you for your continued interest and support and thank you for joining us this morning. Now, let's open the call to Q&A to address your specific areas of interest. Operator?

Thank you. [Operator Instructions] We'll take our first question from John Janedis with Wolfe Research. Please go ahead.

Thanks. Good morning, guys. Tom, you spoke to this in your remarks, but can you talk more about uses of cash. I think the free cash flow outlook is probably around $30 a share and absence of some large scale M&A, what are the priorities, as it relates to either reducing leverage or buying back stock. You've been doing a lot of both, but is there a preference? And then separately, can you talk more about expense trajectory, as the core revenue comes back this year, should we expect to see some of those costs restored. I'd assume that they are being down mid singles isn't [ph] the run rate? Thanks

Sure. As I mentioned in the call, in -- 2020 is a significant year in terms of making a down payment on deleveraging. We took it from roughly 5.2 to 3.6 [ph]. Obviously some of that was because of digital, but we paid down $800 million from operations from our free cash flow from our $1.3 billion in free cash flow. We paid down another $200 million from the asset sale to Fox in Q1. And then, we -- as I mentioned before, a high almost $400 million of return of capital. I could see those numbers almost swapping places in terms of amount of debt repayment versus return of capital. Given the substantial amount of deleveraging that took place last year, we don't feel the need or don't see the need currently to pay down $800 million more of debt this year. If yet -- if then -- if that amount came down to something approximately $400 million, which is kind of what we return to capital last year, that would give us on a non-presidential year probably somewhere between $400 million and $700 million to return to shareholders. Part of that is coming in the form of a 25% higher dividend, so that's $125 million a year, but the rest of it will come from either acquisitions, which are somewhat muted right now on the broadcasting side. We still have a lot of irons in the fire from a digital perspective, but the rest of it will come from stock repurchases. So long winded way of saying, you can almost flip the two with regard to how we allocated our free cash flow in 2020 comparing to 2021. With regard to expenses, you'll see some of them return probably primarily in Q2 and to a lesser extent in Q3. Q4, our expenses, we started adding back expenses in Q4, and you can still see that -- that was down substantially over the prior year. And keep in mind that 7.4% also includes the synergies that we were taking out in Q4 of 2019 and 2020 relative to -- to Tribune. So, I would say on a comparable basis for the entire year, I would imagine our controllable fixed expenses would be down low single digits, maybe not 7.4 for [ph] the entire year, as we start to add things back, particularly in Q2, which was the quarter, where we really tightened down the screws to the greatest degree because of the uncertainty in the pandemic at that time. Is that responsive to your series of questions?

Yes. It's very helpful. Thanks, Tom.

We'll take our next question from Dan Kurnos with The Benchmark Company. Please go ahead.

Great. Thanks. Good morning, and I can see why you guys wanted to go first. Your -- the free cash flow, I guess, Perry, Tom, this is really kind of high level here. The free cash flow guide and Tom based on your remarks a second ago feels like it maybe $100 million ahead of us. We're already $100 million ahead of the Street. Your 2022 implied guide then [ph] still double digits over 2020. So I guess, I know -- I know retrans and net retrans are underpinning that. You've talked about that in your prepared remarks, Perry, you can't find, you know a CTD [ph] company saying that the world is ending for linear and that's clearly is not the case. So, maybe if you could just give us some color on the confidence you have in advertiser conversations going forward. We've been believers, but just help us understand what gives you the confidence on core -- on some trends [ph]. And then obviously, you have a big bogey in political, but you have to sort of write in a number that's ballpark-ish, you maybe 10% down or something from 2020 levels to really get you to where you want to be in 2022?

Sure. I would say, first of all, you've got a pretty good back of the envelope going. I would say the one thing that may be lost in all of this is the acquisition and integration of the Tribune Media assets the -- on the broadcast side, Tim Busch, and his team are -- have worked those stations into a situation, where new businesses -- business development is now a part of the culture, ad picks into that which we had for two days in 2020. That will have for the full year of '21 and beyond. And I think the execution there is something that is -- is maybe not to be dismissed, as we're growing our shares in these marketplaces and some of the major markets, where we're just running the Nexstar playbook across a larger portfolio. Also on the digital side, I mean lost in all of this is that our digital business if it were a separate business operated at a 30% margin in 2020, Karen Brophy and her team, she has assembled a great team, and we're operating now and converting revenue to EBITDA at a -- at a much higher level than ever before. And that's before the acquisition of BestReviews, which contributed marginally in 2020. We'll have for the full year of '21 and '22 and beyond. So obviously, we like where we sit with our renewals on affiliation agreements. We have over 85% of those locked through the end of 2022 and nothing remaining. Now, the early 2021 expirations have already been dealt without through 2024. And so the Dana Zimmer and her distribution team has done a tremendous job of not only gaining carriage and monetization for WGN, but for all of the -- the assets under the now larger platform. So I do think execution is a part of this. Having said that, one thing I've told our teams is listen if you see substantial double digit pace in the second quarter, you know, if you're up 20% in pacing, if you're down 40% last year, we've got a long way to go to retrace our steps. And I'll say that if you look at our guidance, we're still retracing our steps in 2022. We don't anticipate being back above 2019 levels there. So I think the guidance is very well constructed, if anything. You know this company to -- want to be in a position to over deliver on our promise. But we feel very confident in the numbers we put out this morning.

Just a couple of comments, and I'll turn it over to Tim Busch, he can comment some on the political environment for 2022 and our early kind of analysis on that. Don't dismiss WPIX admission. Perry worked long and hard to get an option to buyback WPIX because of its size and scale. There are substantial synergies coming to the combined entities with Mission's ownership of WPIX. And as Perry mentioned, BestReviews and WPIX both closed, I want to say on the 28th and 29th of December of last year. So none of those results were in 2020. But all of those results will be in '21 and '22, and those are healthy contributors. So Tim, do you have any comments just generally on the landscape for political?

The landscape for '22 political is, you could probably assess, we have approximately 370 house [ph] seats of the 435 across the footprint of the company. The Senate races, we're going to have approximately 90% of those, as there are 34 seats up. I think we've got about 31, and on the gubernatorial side, we've got about 85% of the 36 seats, which is a strong footprint. Everything portends to be yet another robust race probably starting a little earlier in '21 all the way up through '22.

Great.

And having said that, we're not forecasting in 2022 a return to 2020 political revenues because we think that was in and of itself a somewhat extraordinary event in ad spend. So I think you're -- the back of the envelope that you spotted [ph] early on in your question is pretty much on point, as it relates to political.

Thank you so much for all the color, guys, and congrats on another excellent quarter.

Thank you.

We'll take our next question from Kyle Evans with Stephens. Please go ahead.

Hey, thanks for the color on the month-to-month core. Could you talk a little bit about what you're seeing in pacing in -- for this quarter?

Sure. I mean on core ad revenue and digital ad revenue in January and February were already ahead of our budgets, as the same for networks. Now having said that in core and networks we did budget to be down in the first quarter versus an excellent first quarter of 2020. But in terms of billing [ph] our internal numbers, which we obviously used to make your forecast, we're ahead of plan for January and February, as of this morning and anticipate that trend continuing throughout -- throughout the quarter.

It's flattish a word that we can use?

To the prior year, no. I -- that's a little out because again, you'll remember, we made our first quarter numbers in 2020 even though March fell off the -- a cliff. So this is the toughest comp of the quarter. I'll say that we're showing mid-single digit growth over our budget. But I would also tell you that, that is a decline to the prior year, but that's the expectation that we -- that we set, and obviously we're delivering ahead of our internal expectations, as of now.

Great. Maybe just to recap on sub counts for 2020 and specifically what you're seeing on the virtual side as well?

Sure. I would say that we ended 2020 Kyle [ph] slightly better than we had originally projected. I would say that the moderation in sub decline continued. If you look at our sub decline in the first half of 2020 compared to the second half, the second half was approximately -- 50% of the sub decline in the first half of the year and we continue to see growth, albeit growth from a total subscriber perspective that's comparable in the V-MVPD universe even though that relates to substantially lower percentage growth because obviously we're -- we're operating off of higher numbers, but growth continues in the -- in the V-MVPD. And I'll tell you that the entire year came in at a mid-single digit for total subscriber attrition and that includes the virtual add back to the traditional decline.

Got it. And then lastly, maybe just a recap of how -- how News Nation, how that performed, maybe your strategic outlook there. And are we going to talk -- are we going to call that WGN or News Nation going forward?

Well, as of next Monday, WGN America will be renamed News Nation and that is concurrent with our expansion of programming adding additional hours to our primetime slate. So that will be our first expansion will be next Monday. There will be a second expansion later on in the year. And again, if you look at 2020 performance, WGNA/News Nation performed well ahead of budgeted expectations and has performed ahead of expectations in January and February as well. Having said that, the baby will be six months old on Monday, and obviously for us increasing awareness is job one. We feel we've got solid content, and I can't wait for the nation to see our new shows at 6 o'clock, 7 o'clock and 10 o'clock that they view on Monday wrapping around the News Nation broadcast. They are -- they are very well produced, going to be very well done and but raising awareness is our number one -- number one opportunity here for -- for continued growth on the ad side. On the distribution side, again, in Q4and some of this triggered in the first quarter, but Dana Zimmer and her distribution team was able to gain 8.5 million subscribers, OTT subscribers for WGN America that where we had no distribution before and approximately 200,000 linear subscribers through the year end renewal of distribution agreements, where WGN was not carried. So it's important to be important in distribution, and you can use your scale, as a company to accomplish our objectives, which we have certainly done. So very pleased with the progress. Obviously, we want the numbers to continue to grow, that will grow as awareness grows. And we -- we are dedicating substantial internal resources, as well as external spend to make that happen throughout 2021. We think it will be a good year of growth for WGN America. Again, rechristen News Nation, as of next Monday, March the 1st.

Great. Thank you.

We'll take our next question from Jim Goss with Barrington Research. Please go ahead.

Thanks. Perry one further clarification on News Nation. To the extent that the political season, as passed or at least taken a new shape, has that made any difference in terms of your sensitivity to the viewership patterns or when you're in an early growth phase, you really can't see the short trends in the midst of longer trends?

Well, our focus, as you know is on being down the middle unbiased presenting both sides of an issue balanced coverage, and I think we've accomplished that. There is something called the media bias chart, which was put out monthly by an organization called Ad Fontes Media. And in January of 2021, we were exactly on the middle of the unbiased line. And it has every news organization from left to right, and so, third-party observers think that we're holding true to our mission of being down the middle. I'll tell you from a revenue perspective, WGN America had political revenue in 2020 for the first time ever approximately $1 million. And -- and I think that was due to having intellectual property that people and political advertisers and campaigns wanted their message associated with. So we see that as -- as an opportunity going forward. But at this point, our number one job is growing the awareness. Approximately 85% of America does not connect the dots between WGN and News Nation. And -- and so our job is to make that easier. We think the rebranding will be a big part of that. And -- and that we'll -- we'll see not only -- growth, but continued advertiser growth, a reminder that advertisers are paying a substantial premium for placement in our editorial and news content to what they did in our syndicated content. So the more of that we have, the higher our ad revenue base can go. And again, our distribution base is pretty well -- pretty well locked in, and we'll be growing from a -- from a yield perspective as well.

And just I want to add one thing, as it relates to News Nation. It continues to be the story that as our syndicated programming rolls off, we're funding the expansion of the news product by repurposing those dollars that were previously expensed and paid on programming product into the news programming. So it's really a self-funding venture from our perspective and one, financially, that continues to make a lot of sense.

Okay. That's great. One other thing in terms of political, a local broadcast -- television broadcast tended to own political historically, but digital has become increasingly large component and I know you're in both sides. But I wonder if you could talk about the shift in political to incorporate more digital and the impact that might have and you've had excellent results. But has -- has there been any shift in their balance in favor of digital much you have seen?

No. I would tell you that from a -- from a political perspective, we had virtually no political revenue across our digital platforms. All of our ad spend was on the cable network, as well as our broadcast stations. So despite that which is written, I think increasing percent of budgets are being spent on digital, as a fundraising mechanism. But as it get out the vote mechanism, it's still, -- it's still television that -- that captures the lion's share.

Okay. And then finally, you mentioned some success with new to TV revenues that you -- you achieved in the fourth quarter. Can you give some examples of what sort of categories have -- have begun to emerge through -- through your efforts?

Sure. And I'll let Tim Busch comment a bit more on this. But this is a metric that you hear me talk about on every earnings call that we have, how much new to television business that we generated in the prior quarter. It's a part of our culture. Managers and account executives are highly incented to develop new business and -- and that's the lifeblood of our -- of our company and what will drive -- drive our growth. So Tim, do you want to talk a little bit about categories, I would say, it's a long tail, right. It's a -- local advertisers going deeper into a market, as well as developing new sales programs and promotions that will gather larger -- larger spends in the marketplace. But in terms of new business, it is purely developmental. It's -- it's going through the -- the Yellow Pages, going through the -- the folks, who are advertising locally on Facebook and trying to convert those. But Tim, do you want to add some color to that.

So, the -- we spent a lot of time on targeted training of our account executives. And to the categorical side, we'll spend about two to three categories a month in training on how to develop and how to further that influence on the local market level. Medical has been a big growth category for us, as well as furniture and retail, where we have seen a drop off on digital use in retail locally. Bricks and mortar has been a big focus on the category side, as well as Tier 3 auto, and of course, integrating both digital and broadcast as well. But as Perry had noted, we also have projects that are geared unified across the company, about a dozen projects a year that will be specific to exclusive and unique projects we run inside that the each market across the entire platform that develop additional new dollars, new to television dollars.

For example, we're in -- in Black History Month, and we have a substantial company-wide project around generating stories that are unique and individual and exclusive to us. Hispanic Heritage is another area, where we'll lean into. Remarkable women is our franchise for Women's History Month. And -- and again, these are used as tools to attract new advertisers, as well as increasing spend from other advertisers, in addition to just showing 30 second or 15 second commercials in our news, in primetime, in -- in other programming. And so giving people a reason to interact and transact with the television station, and on a purpose-driven basis to promote some of these franchises has helped our -- our developments. And so again, not lost in this should be that this is a culture that we have introduced to the Tribune acquired stations, and they have been -- nothing breeds success like success. And the pandemic was a perfect opportunity if regular advertising spending is down or advertising agencies are closed, we have to go after the bricks and mortar operations that are open. And -- and the team really did I think a superlative job of generating new to television business in a difficult environment. It was also a way to make sure that, that they were able to generate commission income. So, those things they get compensated tend to get measured and tend to get done. And so our whole compensation system at the local market level is pays a premium commission and incentives for new business development, and that's -- that's again a part of the Nexstar playbook.

Okay. Thanks for all the color. I appreciate it.

We'll take our next question from Aaron Watts with Deutsche Bank. Please go ahead.

Hey, Perry, hey, Tom, covered a lot of ground today. I appreciate all the detail. Just one question from me. There has been plenty written about the pressure on network primetime viewing. As we embark on a new year hoping you can give us the latest on what you're seeing in terms of themes and trends for audience ratings on your local programming? And how confident you're in maintaining stability there? And in your ad base, even if that erosion in prime continues?

Sure. Well, again, first of all, I would caution anyone using the fall season to-date as any kind of a marker because of delayed programming and new episodes being slow to come online and back into establishing regular viewing patterns. So we anticipate that will -- will level off at a -- at a certain point when production is more consistent at the national level. But I would tell you locally, obviously, we saw tremendous increases in our linear and digital platforms early on in the pandemic, March, April, May, June, and then a bit of a leveling off, but we're still above, I want to say by a 15% to 20% margin kind of average across the board above the pre-pandemic levels for local news. And it varies kind of by market and day part [ph], but we're seeing more interest in local news, more interested news during the day if people are home and our -- our late news has been -- has been growing, as well as kind of a recap of the day's events. So -- and again, it's tough to give an arithmetic average across our 197 TV stations, but I would say roughly high teens to 20% increases over the pre-pandemic viewing levels, whether we've leveled off at this level or whether it will be another leg down later on, I don't know. Our job is to try and hang on to as much of those increased viewers. I'll tell you during the -- during the pandemic, I'm sorry, but during the snow apocalypse last week, while all of our stations were running on generators and diesel, I mean, they were providing the lifeline and people did not go to Apple TV to find out when the water crisis was going to be dealt within in Dallas-Fort Worth and within the local broadcast television, who was in some cases providing continuous coverage interrupting primetime. And it just proves that local journalistic organizations that provide solid reporting and coverage on broadcast, it's really the only place to go because of the demonization [ph] of newspaper, the demonization of radio people -- people do not go to streaming services to find out when the water is going to be safe to drink and things like that. There was a substantial bump across our Texas markets, at least as those that have been measured in an overnight basis. Viewership to the local news during the last week of atypical weather events here in Texas, and as that storm moved across the -- the mid-South, and on up into the Northeast that the viewing patterns increased there as well at our owned and operated stations, and I'm sure others. But I think that our goal is to try and maintain as much of that increased viewership that we can. Where it ultimately settles out, I don't think anyone really can -- can have a perfect handle on that.

Okay, great. That's really helpful. Thanks, Perry.

We'll take our next question from Craig Huber with Huber Research Partners.

Great. Thank you. Maybe I'll start with this, I mean, you touched on this earlier. And what -- for the first quarter, the TV ad pacing number, if I heard you right, I think you said, you were tracking mid-single digits better than your budget. Was that comment for just January and February or for the whole quarter? And also just be curious if you could just touch on the month of March? And I have some follow-ups. Thank you.

It is common for the whole quarter. I'm telling you, we're already mid-single digits ahead of our budget numbers for January and February. Obviously in March, we're knock wood [ph] anticipating having March Madness back on our CBS affiliates, and that was a substantial hit to our revenue in the month of March last -- last year. So yes, we see this continuing on in -- in our -- in our revenue. And obviously, we had a substantial amount of political. I think it was over $60 million [ph] in political revenue in the first quarter, which was almost unprecedented and -- and more than 10% of that this year. So we have that inventory back. There won't be any -- any displacement to speak of. So again, we budgeted down versus the prior year because it was the pandemic unaffected quarter in 2020, but we're performing handsomely. And I'll tell you that on the national side of our core revenue, it's double digits ahead of our -- of our budget. So I think signs of life out there. And as the vaccine gets more fully disseminated, businesses are opening and -- and restaurants open to a higher capacity, I think all of our -- all of our markets are kind of seeing kind of that renaissance. And the other thing is sports betting, which was nearly a category single digit millions in 2019. And the first quarter 2020 has now become a double digit millions category for us. So that's -- that's relatively a new category, but certainly, a substantial growing category for us, which we think we'll -- we'll see throughout 2021 continued growth in that category as well.

I appreciate that. Can you also just comment a little bit further about what you're seeing in the auto category this quarter and also retail, please?

Yes. Growth. I mean -- and I'm not going to go down to the category level and give specific guidance, but we're seeing sequential growth over the prior quarter. And as we did in the fourth quarter, we're seeing growth over fourth quarter. It's not at the 40% category. But we're -- we're still seeing -- seeing growth across -- across auto and retail as well. And again, a lot -- some of that retail development is through our new business development efforts. But we're seeing growth and -- and positive comps to -- to the prior quarter. And I think come second quarter, you'll begin to see positive comps to the prior year across the board.

Also I want to ask guys on net retrans for the year, maybe I missed this. But you -- you said in the past, you're expecting net retrans up this year. Are you willing to quantify that at this point, maybe just touch on that please?

It's exactly as we have said previously, which is up low single -- low double digits.

Okay. Very good. And it's really…

No change -- basically, no change.

No change. Okay. I appreciate that. And that -- is that in your minds a -- with a similar decline in subs that what you experienced in the back half of last year. What's the -- embedded in that number, please?

It is embedded with a marker oriented subscriber attrition amount.

Okay.

So I'm not going to get in -- I'm not going to get into the inputs into our budget process.

Okay, fair enough. Thank you.

We'll take our next question from Steven Cahall with Wells Fargo. Please go ahead.

Thanks. Maybe first on digital also. You've done some restructuring here combining Tribune and legacy Nexstar and now you've got BestReviews, and you talked about shedding some of that lower margin revenue. Could you just talk about maybe what this means for the next year or two? Is there a big EBITDA outlook that you expect to come from digital? I mean, you also talked about the new commissions for new businesses and how that may pulled in there. So just trying to kind of understand what the growth path in that digital business looks like, and whether that's a meaningful driver of some of your free cash flow growth? And then, maybe, Tom, just one on retrans. I know you're renewing fewer subs this year than you did last year, but I think a lot of your retrans agreements are now longer in term. Does that mean that the pricing is spread a little more evenly over them, so that results in a little more steady growth in retrans. And I got one quick follow-up after that? Thanks.

All right. Well, let me…

I think there was [ph] five questions.

Let me -- let me hit digital.

Yes.

I mean, you'll see -- we'll see that the first quarter we'll lap ourselves in terms of the businesses that have -- we've either shut down or de-emphasize because they had revenue and no margin. But as I -- as I look at digital now, I think you'll see significant growth for digital on a percentage basis on both top and bottom line over what we produced in 2020, which again, as a reminder swung from marginal profit to a 30% margin, which was double digit millions profit in 2020, you'll see significant growth there on a percentage basis. But as it relates to the overall enterprise, double digit millions and significant percentage growth on that, it's not going to drive the -- the needle of the -- of the consolidated enterprise. But our job is to -- to take what we have and what we've acquired and make it better. And in digital, we're doing that. I feel very confident in our digital projections for the year across all the lines of business, and it's a growing contributor to our profit pie. But -- but again, it's today, the smallest part of our -- smallest slice of that pie, but it will be growing.

I'm sorry, I mind-numbing, and I didn't write down all the questions. What's next on the agenda?

Yes. I think Tom [ph], the retrans question was kind of basically that you've got fewer subs renewing this year, but is your kind of pricing spread a little more evenly, so is the cadence of retrans revenue growth a bit more even now that you're doing longer term deals.

I would say we still are subject to the renewal cycle, and the kind of the peaks and valleys, as it relates to that. So it is somewhat more, more muted and just generally leveled out, but you still have large renewals. The next large renewal for us will come at the end of '22 which is the three year cycle after the 2019 renewal, where we'll have a substantial amount of renewals there. So it is a little bit more leveled out, which is also helped by some pretty healthy interim step ups on an annual escalation basis. But I would say, we're still subject to some of the -- the sign wave associated with the renewal highs and lows.

Yes. But let me just clarify, we're not doing longer term deals on the revenue side, those are all two and three year deals. We have been able to execute three and four year deals on the affiliation side in -- in the past year. But all of that adds up and we continue to reiterate double digit top line and margin growth from distribution revenue. So from that perspective, nothing has changed.

Great. And then, just a last follow-up. We're seeing some news of auto shipments being delayed on supply chain issues. Do you see any risk there to auto advertising?

Well, they shutdown the GM plant here in Arlington last week, where we can -- that's where all of your Escalade's and Suburban's and Yukon's are made in the country. I think it's a short term blip. If there is a blip that they are rushing to bring more capacity online to produce the chips that will allow for that if anything, it drives up demand, I see, where supplies are lower, which means prices will be higher and -- and the used car market continues to be very robust, which is where most of the dealers make most of their money. So I don't think it will be a risk factor to automotive over -- over an exemplary time. I think it's a short term blip.

I'd say it doesn't remove the demand. It just may shift the demand slightly out. So the demand is not going to go away.

Yes, great. Thank you.

And our last questions in the queue is from Alan Gould with Loop Capital. Please go ahead.

Thanks for taking the question. Perry, I've got a question about the NFL. Looking out a little bit longer term, they're asking for plus or minus a doubling of the rights fees. Now, I know, you said 85% of your affiliate agreements are -- are locked into the end of '22, and you don't get that many ad spots in the NFL games. But what impact would a big increase in NFL rights have on your relationship with the networks going forward?

Immediately nothing because you only negotiate your affiliation agreements -- when you negotiate your affiliation agreements that are up for renewal. I think -- I think that's lost in all of this is that -- and don't look -- there's a lot of negotiation in the press that goes on. So I wouldn't be surprised if the price increase over time comes in at less than that. But at this -- at the same point, we're talking 10 year deal. So hopefully that -- this will remove the question for time and memoriam or at least the next 10 years of what happens to the NFL. They're going to have homes for up to 10 years. It's either an 8 or 10 year deal. And yes, could -- could prices double over 10 years, well, everybody remembers the rule of 72. So I mean maybe that's manageable, as compound annual increases to get to that number. So, again, more to be written. I think the deals will be done before we report again to you in April, but -- or early May. But I do think that the good news is, is the question will be settled at least for the near term investment horizon about where the home is. But I anticipate over time the networks will say to all of the affiliate groups, we're paying more money, we want you to pay more money. The affiliate groups depending on the network defray maybe 10% of the cost of the overall rights deal. So could that go up over time? Yes, it -- it might. But again, it will be a byproduct of negotiations, and we'll see where we all end up. But I do expect that you'll hear announcements on the -- on the deals before you hear our first quarter earnings announcement, as the year goes on.

Okay. Thanks a lot.

At this time, there is no further questions in the queue. I would like to turn the conference back to Perry Sook for any additional or closing remarks.

Well, thank you very much for joining us. Obviously, we're very proud of the results that we were able to deliver for Q4 and 2020. We're proud of our return of capital to shareholders, and we're very confident in our guidance for the '21, '22 cycle. So we look forward to reporting back later in the year on our first quarter progress. Thank you very much for joining us, and have a great day.

Ladies and gentlemen, this concludes today's conference. We appreciate your participation. You may now disconnect.