While most station groups reported major declines in ad revenue in the third quarter, thanks to a steep decline in political advertising compared to a year ago, this week’s earnings calls with analysts were generally bullish. Most station groups beat expectations, reporting better-than-expected year-over-year results for core advertising sales that exclude political and the Olympics.
A close review of those earnings calls also provides a snapshot of the state of the industry in the latter half of 2025 and its prospects for 2026.
Station executives offered bullish comments about next year, thanks to the prospects of heavy political advertising and the likelihood regulators will relax ownership rules and allow a wave of dealmaking.
For the moment, though, all the station results were heavily impacted by the absence of political revenue in Q3 2025 compared to the record spending during the 2024 presidential campaign.
“Advertising revenue of $476 million decreased $146 million or 23.5% over the comparable prior year quarter, primarily reflecting a $145 million year-over-year decrease in political advertising,” Nexstar Media Group President and Chief Operating Officer Michael Biard noted. “However, nonpolitical advertising was essentially flat and better than our expectation of a low single-digit decline.”
Sinclair also reported year-over-year declines in total revenue, thanks to the absence of significant ad income in Q3, but reported revenue that was generally better than expected. “We delivered strong performance and met or exceeded guidance across all key metrics,” Sinclair President and CEO Chris Ripley said on the company’s Q3 earnings call. “Total revenue of $773 million came in higher than the high end of our guidance range. Core revenues were up 7% year-over-year on an as-reported basis.”
Likewise, Gray Media generally beat analysts’ expectations and while overall revenue was down 21% YoY, Q3 2025 revenue was above analyst expectations.
Hilton Howell Jr., Gray Media’s chairman and CEO, said: “Our results for the third quarter of 2025 compared favorably to our Q3 guidance for both revenues and expenses. Total revenue in the third quarter of 2025 was $749 million, at the high end of our guidance for the quarter.”
Pat LaPlatney, president and co-CEO at Gray Media added: “Q3 continued the theme we’ve been describing throughout 2025, with advertisers remaining somewhat cautious due to the macro environment. Through the quarter, though, we saw core activity strengthen more than we had projected back in August, and we ultimately finished on the high side of guidance. Remember that the Olympics on NBC provided about a $20 million uplift in July and August of 2024, of which about $16 million was core ad revenue and $4 million was political. Factoring that in, our third quarter was up about 1% over 2024.”
E.W. Scripps reported that third-quarter company revenue was $526 million, down 19% or $120 million from the prior-year quarter, mainly due to political advertising. But its Local Media division reported that core advertising (excluding political) was up, due to the services category and ”overall growth in national advertising due to strong sales efforts and Scripps’ sports strategy.”
“During the quarter, our Local Media division revenue was down 27% due to the absence of political advertising revenue compared to the prior year,” Chief Financial Officer Jason Combs said. “Core advertising revenue was up nearly 2%. We grew national advertising revenue, driven by an increase in our largest category, services. Our sports strategy helped drive that Q3 performance as well. Local Media distribution revenue was flat."
‘We’re Very, Very Optimistic About 2026’
While broadcasters haven’t released detailed guidance for their 2026 revenue expectations, executives offered generally bullish comments for the year ahead in terms of the impact of political advertising and the prospects for deregulation.
“I would say that we’re really optimistic about 2026,” said Gray Media’s LaPlatney. “We have some early Q1 numbers that are encouraging, in fact, very encouraging…As we sit here today, we’re very, very optimistic about 2026.
“We think broadcast is going from strength to strength at this moment,” explained Perry Sook, founder, chairman and CEO of Nexstar. “In the near term, we see a decreasing interest rate environment, the reset of the majority of our distribution contracts at the end of this year, the acquisition of TEGNA and an election year in 2026, all of which we expect to drive shareholder value. Longer term, we expect to accelerate our CW and NewsNation network growth strategies, our deployment of applications for ATSC 3.0 and innovation around how we go to market and the products and services we bring to benefit our viewers and our advertisers.”
As expected, M&A activity was a major topic of discussion.
‘We're Operating in the Wild Wild West’
Sinclair’s Ripley noted that “the broadcast sector is facing secular challenges within linear TV while having a unique opportunity for significant consolidation. We believe the industry is at an inflection point where scale and operational efficiency will increasingly separate high-performing companies from the rest. … Against this backdrop, in mid-August, we launched a strategic review of our broadcast business and an evaluation of a potential separation of ventures to optimize value creation across our portfolio,” that has already led to “several transactions, including partner station acquisitions and select acquisitions and divestitures.”
“One potential path for industry evolution could involve consolidating into two similarly sized scale broadcast groups," Ripley continued. "[C]reating another group comparable in size to the large broadcast combination announced in August [i.e., the proposed Nexstar-Tegna combination], could unlock an estimated $600 million to $900 million in annual synergies through mergers and subsequent portfolio optimizations. This level of consolidation would strengthen the industry's financial footing and position broadcasters as more capable competitors to big media and big tech.
“While we present this as one potential industry scenario rather than a prediction, the fundamental point is clear,” Ripley added. “The regulatory environment now enables transformational consolidation that can benefit Broadcast Group shareholders, creditors, employees and the communities we serve. Sinclair is well-positioned in this environment, and we're actively evaluating how best to participate to maximize value for our stakeholders.”
Scripps’ discussion of M&A opportunities was more modest. “As I've said from the start, we are totally focused on optimizing our portfolio of stations to structurally enhance performance and economic durability in service to our vision to create connection,” Scripps President and CEO Adam Symson sais. “We've already announced a station-swap deal with Gray where we are exchanging two Scripps stations for five Gray stations, a transaction that improves our market positioning and creates immediate efficiency opportunities. We also announced station sales in Fort Myers, Fla., and Indianapolis for cash. The sale prices represent premium multiples for the industry. These are quality stations we agreed to sell only at strong valuations, and the cash we receive will go directly to delevering.”
Deregulation Continues
In the Q3 earnings call, Nexstar’s Sook reiterated his previously expressed belief that the industry should see significant deregulation of broadcast ownership rules.
“The 8th Circuit mandate was issued on Oct. 21,” he said, refrencing the 8th U.S. Circuit Court of Appeals’ decision to vacate the Federal Communications Commission’s rule barring a station group from owning more than one of the top-four stations in audience share in a given market. “That eliminates the top-four ownership rule, that will go into effect as soon as that order is published in the Federal Register and it's effective 30 days later. … And we, again, continue to believe that this administration, the Trump administration and Brendan Carr at the FCC are focused on deregulating business, allowing businesses to breathe, allowing businesses to compete and that we’ve been spending a lot of time in Washington to reinforce at the regulatory agencies and on the hill that we are indeed here to help meet the regulatory moment."
While Gray Media has already announced a number of potential acquisitions and station swaps, including an agreement to acquire stations from Allen Media Group, Howell also expressed a note of caution during the analyst call. Reacting to a report of a possible merger or deal with Sinclair, he said, “there is nothing that we are in deep negotiation with at the moment.”
“We are in a period of time in our industry where things change faster than I have ever, ever seen it,” Howell added. “For the first time in the history of our business, we are really operating in the Wild, Wild West. No one knows what the rules actually are. Anybody that tells you that…they just do not. They cannot.
“I don’t want to…do any deal that would put the basic company in any kind of risk,“ he continued. “Now, there’s a lot of big opportunities to grow. Unlike perhaps some of our competitors, I don’t believe, and my management team unanimously does not believe, that Gray actually has to do anything. I mean, we’re just fine where we are, and we can carry on our previously announced efforts to just reduce our debt and pay it down and then return more to our shareholders.”
