A message from Octus: The Era of Easy Deployment Is Over. Here's What's Next for Private Credit.

If you've been following the private credit conversation this year from the software stress, the headlines on private credit cockroaches, to the maturity wall building toward 2027,  you know how hard it is to find one resource that actually maps the full picture without either panicking or cheerleading.

Octus just published that resource.

Opportunity, Stress, Resilience: The Matured Private Credit Mandate is a data-driven walkthrough of where private credit actually stands heading into the back half of 2026. Not vibes. Not headlines. The numbers are pulled from the most comprehensive BDC dataset in the market (Octus tracks over 170 public and private BDCs–100% of the space–not just the marquee names everyone else covers).

Here's what's inside:

The real nonaccrual picture. $7B in nonaccruals, up 12% and 6% in the last two quarters, respectively. 23% nonaccrual rate in IT. Only 15% of nonaccrual loans exit cleanly. The data to actually size this stress cycle.

The $800B AI infrastructure opportunity. Banks aren't touching large-scale data center construction. The traditional loan market isn't ready to step up to the table--but private credit is.

The maturity wall and secondary market boom. $3B+ in nonaccrual loans mature through 2027. Meanwhile the secondaries market hit $20B in 2025 on a 70% CAGR. Octus maps both.

The stress is real. The opportunity is real. The difference between the two is the data, the players, and your strategy. Download the whitepaper here. 

Welcome back!

We’re going to talk about the Broadcasting industry today. This is an industry that is extremely reliant on political ad spend cycles, as well as how the NFL elects to distribute primetime and playoff games.

Let’s get into it.

Introduction:

TV broadcasters transmit video and audio through over-the-air radio waves, allowing anyone with an antenna to receive transmissions for free. Station groups such as Nexstar, TEGNA, Sinclair, Gray, and Scripps, own local TV channels that act as affiliates for major networks such as ABC, NBC, Fox, and CBS. They earn revenue from retransmission fees and local advertising. These companies are regulated by the FCC, who enforces ownership caps that have grown to be a little antiquated as tech giant new entrants swooped in.

The TV broadcasting industry was at its prime in the early 2000s as linear TV’s viewership and wallet share of ad spend reached its peak. During this period, broadcasting companies increased leverage to be serial strategic acquirers of television stations to increase their reach and concentration. Since then, the rise of streaming services and other digital alternatives has resulted in cord cutting and a subsequent mass migration of viewership and ad spend. The shift away from cable accelerated rapidly during the late 2010s through early 2020s.

The traditional TV broadcasting industry is now a permanent fixture of the distressed credit scene, with a slew of out-of-court transactions taking place over the past few years as a function of a revenue profile in secular decline, elevated debt levels, and an increasingly fixed cost structure. With FCC approval of the Nexstar-TEGNA deal pending, the industry is now at a crossroads. Approval would open the gates for further consolidation, and rejection would crank the heat up on the already melting ice cube.

In this week’s piece, we will be taking a deep dive into the historic industry, its key players, the competitive dynamics, and where the industry is going from here. We will then describe the loopholes companies are already using to circumvent FCC regulation regarding ownership concentration. From there, we will turn to the contemplated Nexstar-TEGNA transaction (which is currently set for an appeals court trial).

Industry Structure:

The TV value chain is broadly composed of three types of companies: national networks, broadcasters, and distributors. National networks produce high-budget content that will be broadcast to households across the country. The largest networks (ABC, CBS, NBC, Fox) are collectively known as the “Big 4.” This classification will be important when we discuss relevant FCC regulation. Moving downstream, broadcasters (e.g., Nexstar and TEGNA) operate local TV stations that air both national network content (via affiliate agreements) and local news and advertisements. National network content typically occupies primetime slots when viewership peaks, and local programs occupy the remaining time. The traditional transmission model entails a TV station paying a transmission fee to infrastructure providers to send its signal over-the-air (OTA) directly to TVs with antennas.

More recently, retransmission (“retrans”) has been more relevant since multichannel video programming distributors (MVPDs; e.g., Comcast, Cox, DirecTV, etc.) stepped in, resulting in the Cable Television Consumer Protection and Competition Act of 1992. This amendment to the original Communications Act of 1934 mandates a retransmission consent agreement which contains a fee paid to broadcasters by distributors in exchange for effectively “plucking” OTA signals to send to cable or satellite subscribers. Today, virtual MVPDs (vMVPDs; e.g., YouTube TV and Hulu Live) sit outside of this regulation and transmit content over-the-top (OTT), bypassing cable and satellite infrastructure. The lack of regulation here crucially allows vMVPDs to negotiate directly with national networks who negotiate a single contract on behalf of all their affiliate stations, excluding broadcasters from having a say in dictating retrans fee terms. After negotiating, the network will present a “take it or leave it” deal to its affiliates that the affiliates effectively have to accept.

Naturally, as you can imagine, the static regulatory scheme, plus the innovation and ease that vMVPDs have, made it extremely easy for YouTube TV and Hulu Live to quickly take share from the more-regulated and constrained incumbents.

Nuts and Bolts:

Revenue

A pure-play broadcaster's revenue is largely bucketed into two main categories: Distribution and Advertising.

Distribution revenue is made up of the aforementioned retrans fees earned from MVPDs and vMVPDs, making up 50-60% of total revenue in odd-numbered (non-political) years and 40-50% in even-numbered years. Political revenue is extremely accretive, driving vastly different EBITDA margins by year.

• Retrans fees from MVPDs are paid directly to the broadcaster. These fees are governed by three-year agreements that calculate fees based on a contractual monthly rate per subscriber. Broadcasters enjoy significant leverage when negotiating fee structures as distributors rely on them as their only source of national network content.

  • Zimmer Radio v. FCC (July 2025): Without getting too into the weeds, the ruling repealed a longstanding regulation that limited broadcasters to only owning one station that is affiliated with a Big 4 network in a given designated market area (DMA). Now, broadcasters can own up to two, significantly increasing their power over distributors.

• Regarding retrans fees from vMVPDs, cash first flows to the national network who then passes down a residual portion of the total amount to broadcasters. According to S&P, broadcasters across the country were projected to receive 47% of total retrans fees from vMVPDs in 2025, down 1% from 2024.

Advertising revenue results from the sale of airtime to local, regional, and national businesses and political advertisers. Rates vary based on factors such as the size of the market in which a particular station operates, the program’s popularity among viewers the advertiser targets, and the number of competing advertisers for a given time slot. Ad revenue is largely seasonal as i) even-numbered years, particularly every four years during presidential campaigns, see elevated political ad spend, and ii) Q2 and Q4 of each year see increases in certain seasonal and holiday-related ad spend.

COGS (“direct operating expenses” or “programming and production expenses”)

The most direct expenses are as follows:

Programming expenses

• Reverse retrans fees: The largest direct expense. Paid by local TV stations to the national networks for the right to carry their programming. This expense is driven by demand for a certain network’s programming and is often viewed in comparison to the retrans fees broadcasters collect from distributors.

• Amortization of programs / license fees paid: While reverse retrans fees make up the cost to air national network content, license fees and the subsequent amortization are the costs to air programming directly from the production studio. These tend to be reruns of iconic shows, such as Seinfeld, called syndicated programs. The production studio syndicates the right to air a specific show or movie to hundreds of stations across the country. The licensing fee paid is amortized over the life of the right.

Production cost

• The third major type of content is in-house produced content, notably including local news. Associated costs can include direct news gathering costs and other direct expenses related to the production and airing of news.

Direct SG&A

• This item largely consists of the ‘selling’ portion which represents commission paid to the advertisement sales force and the cost to schedule ads. Some more ‘direct’ general and administrative costs may be included depending on specific accounting practices.

OpEx

This category contains corporate SG&A, asset impairments related to FCC licenses, goodwill, and programming rights, depreciation, and non-direct amortization. Programming rights can be quite expensive given exclusivity and the potentially premium nature of the programming.

Headwinds

TV broadcasting’s decay can be attributed to a few key drivers:

1. Cord cutting: The shift to direct-to-consumer (DTC) streaming services and vMVPD linear TV constitute a loss in viewership and contracting margins, respectively. Streaming services exist outside of the traditional TV value chain due to their on-demand nature as opposed to scheduled distribution. This issue is magnified by streaming services acquiring rights to air major live sporting events (e.g., Super Bowl LX being aired on Peacock). The shift to vMVPD linear TV is not as bad, as broadcasters still collect retrans fees. However, the margins on programs directed to vMVPDs are contracting due to aforementioned reasons.

2. Networks creating their own streaming services: Take the example of Super Bowl LX on Peacock. NBC owns the rights to air the Super Bowl, among other high-value programming like the 2026 Winter Olympics. By offering these programs on their own streaming services directly to the consumer (DTC), networks completely bypass broadcasters. This dynamic also significantly reduces the negotiating leverage of broadcasters as DTC is a more convenient avenue growing in adoption, shrinking margins for broadcasters.

3. Ad spend shift toward connected TV (CTV): The term “CTV” describes devices, such as Roku, Apple TV, and Amazon Fire TV. Since these devices are connected to your home’s WiFi, they have access to search activity, allowing advertisers to target specific households rather than just casting a wide net at a given state or region. To combat this shift, traditional MVPDs have begun to sell their own CTV devices (e.g., Comcast’s X1). However, the linear TV capability still uses the MVPD’s private network.

4. Political season dependency: With corporate ad spend on traditional TV in decline, broadcasters are increasingly reliant on political ads to buoy revenue and turn profit on a T8Q basis. This creates a hyper cyclical business model that can be harder to invest in / lend to. Additionally, it seems like political broadcasting spend may have hit a ceiling, with future spend increasingly moving towards digital. 

5. Political risk: While the current Trump administration and FCC chairman Brendan Carr have been deregulatory regarding broadcasting consolidation, who’s to say the same can be said about the next administration.

Key Players

The TV broadcasting industry is moderately concentrated with the top five players taking up around 54% of US revenue (ad + retrans) market share as of 2024. At the top of the list is Nexstar with 16% market share. In order, Gray (GTN), Sinclair (SBGI), TEGNA (TGNA), and NBC follow with 10%, 9%, 9%, and 9% market share, respectively. Nexstar (NXST) covers 70% of all 125 million TV homes, while the other four each cover around 37%.Other notable players in the space include The E.W. Scripps Company (SSP) and Allen Media.

Further concentration has historically been limited by FCC regulation; however, recent deregulation has opened the door to consolidation.

TV broadcasting has high barriers to entry due to its upfront capital intensity, the need for FCC licenses, and the need for scale economics when it comes to contract negotiating leverage. These factors effectively limit competition to top players.

Financial Profile

Multiples for publicly-traded broadcasters are quite low given the pressures facing the industry.

Coupled with a poor top line outlook, the average net leverage of top players is 6.5x, with $13 billion of debt coming due through 2030. The reality, however, is a "K-shaped" credit profile. While leaders like Nexstar and TEGNA (~4x each) operate with relative flexibility, the rest of the field, including Gray, Scripps, and Sinclair (~8x each), is operating under a debt load that leaves little margin for error. 

As maturities come due and assuming the NXST-TGNA deal is approved, the narrative lenders employ will likely emphasize how scale and industry consolidation will lead to a better cash flow story. A blockage would likely result in amendments with even more restrictive terms, creditor fights over the shrinking value base, and aggressive LME structures.

What are Key Players Doing?

Management teams are reading the writing on the wall and trying to move away from the secular decline of their legacy core businesses. Some moves are buoying retrans revenue in the short- to intermediate-term while others are positioning for long term viability. 

Nexstar

Aside from looking to acquire TEGNA (which we will discuss in more detail later), Nexstar has acquired / built out its own networks and is restructuring the content they offer. After acquiring a 75% stake in The CW, Nexstar has gutted its expensive scripted teen dramas (which can be found on Netflix, anyway), clearing the way for high-margin unscripted content and live sports. Nexstar also owns NewsNation, a political news network that is trying to take a moderate and unbiased approach towards news coverage. The firm has increased the number of live hours on NewsNation and is leveraging its expansive local news infrastructure to feed the national network. Nexstar, by doing this, has improved program economics and positioned itself for upcoming political years.

Gray

Gray is increasing its presence in live sports, snapping up local broadcast rights from distressed regional sports networks (RSNs), namely from Diamond Sports Group. For quick context, Sinclair essentially conducted an LBO of the RSN in 2019. However, with the rise of more focused bundles on vMVPDs and sports DTC platforms, viewers cancelled their expensive cable subscriptions, as it simply wasn’t worth it to buy access to all games to watch none or only a few. Hence, the math for the Diamond Sports LBO simply stopped working. Gray, among other players in the space, saw a window to acquire some regional sports rights deals back when Diamond Sports filed for Chapter 11 in 2023, Gray saw an opportunity to buy regional sports rights for cheap. To avoid the same issue that caused Diamond Sports to file, Gray is offering sports for free OTA, earning revenue through ads rather than fees.

In an effort to diversify into real assets, GTN bought the 127-acre former General Motors site in Doraville, Georgia, converting the site into a full-service studio complex called Assembly Atlanta. In 2022, the company signed a long-term agreement for NBCUniversal to lease and operate new studio facilities at the site; and in 2023, GTN announced the completion and opening. However, this has gone horribly and the market was appalled by how little cash flow generation there’s been from Assembly Atlanta, especially compared to the massive initial capital outlay.

Gray buying Meredith’s Local Media Group for $2.8B and spending $925mm on Quincy Media at “the top”, while also having this horrible capital allocation policy with Assembly, has driven a -75% selloff from cycle highs.

However in July 2025, Gray agreed to swap TV stations with Scripps across five markets, creating new duopolies for both parties and taking advantage of the Zimmer ruling. With the stations being considered comparable assets, no additional consideration was exchanged. Gray acquired the Fox affiliate in Lansing, Michigan and the ABC affiliate in Lafayette, Louisiana. The Lansing acquisition creates a top-four duopoly alongside Gray’s existing NBC affiliate, while the Lafayette station completes Gray’s presence across every market in Louisiana. In exchange, Scripps bolstered its Western regional footprint by acquiring the CBS affiliate in Colorado Springs, Colorado, forming a duopoly with its existing NBC station. Scripps also acquired the NBC and low-power ABC affiliate in Grand Junction, Colorado, as well as the CBS and low-power Fox affiliates in Twin Falls, Idaho (low-power stations are exempt from the FCC’s ownership cap, as they have shorter signal ranges and are meant to serve remote areas).

Even if the deregulatory pendulum doesn’t fully swing, one of the levers these companies have to pull are station swaps, which can help these stressed broadcasters create local duopolies to get some form of margin expansion/less competitive pressure.

Sinclair

As of late 2025, in a GoodCo / BadCo scenario, Sinclair has been weighing a separation of Sinclair Ventures from its legacy Local Media broadcasting business. Ventures, which includes private equity and real estate assets, network coverage of the Tennis Channel, and the ad tech segment, has become a growth bright spot as opposed to the legacy broadcasting segment. While all of SBGI’s debt burden is guaranteed by the legacy subsidiary (STG) and its affiliates, there are a couple massive hurdles:

• Restricted payments: A corporate spin-off requires dividending the subsidiary's stock to the parent company's shareholders. Because the parent is bound by its credit docs, it must use its Restricted Payment (RP) baskets, as set out by the 2025 TSA, which likely lack the capacity to dividend an asset of Ventures' size.

• Fraudulent conveyance: Even if management found an RP loophole, they face the threat of a clawback lawsuit. If they spin off their only growing asset and leave the highly leveraged STG to default, creditors will sue to legally unwind the transaction and pull Ventures back into the bankruptcy estate.

More generally, any liability management will be incredibly difficult following the post-February 2025 LME tightening of credit docs. A potential path forward might be a minority monetization of Ventures and a subsequent consent solicitation to spin out the rest, on the condition that new debt will be raised to pay down legacy debt at STG—but this is just high-level speculation.

Tegna

Before the Nexstar deal, Tegna was focused on expanding into ad-tech with its launch of Premion in 2016. Premion operates in ad sales and operations automation, acting as a middleman between advertisers and CTV and vMVPD platforms. Tegna had a prior deal to be acquired by Apollo’s Standard General a few years ago blocked, and since then they’ve been sitting idle, buying back some shares, and waiting for the next try at consolidation. Whether Nexstar is going to be able to buy them is another story.

NBC

In January 2026, Comcast spun-off Versant Media Group, effectively quarantining its secularly declining, subscription-reliant cable networks (USA, CNBC, MS NOW, and SYFY) from its core business. By offloading these linear assets, Comcast is explicitly doubling down on the OTA NBC broadcast network and its Peacock streaming engine. A leaner NBCUniversal is now focusing its capital on premium live sports rights.

EdgeBeam JV

The launch of EdgeBeam Wireless, a joint venture between Sinclair, Nexstar, Gray Media, and Scripps, represents the industry’s pivot toward data utility. By utilizing the unused data capacity in existing broadcasting infrastructure through the ATSC 3.0 (NextGen TV) standard, broadcasters can "datacast" information, such as software updates for autonomous vehicles, precision GPS corrections, and localized IoT data, directly to the end user. The long-term value lies in creating a recurring, B2B revenue stream that is separate from the secular decay of linear advertising and the risks of cord-cutting.

Existing Ways to Create Value

Broadcasters utilize specific regulatory mechanisms to expand their national and local footprint while remaining technically compliant with federal limits. The primary constraint is the National Ownership Cap, which prohibits any single group from owning stations that reach more than 39% of all U.S. television households.

The ultra-high frequency (UHF) discount

The UHF discount is a legacy accounting rule that allows stations broadcasting on UHF channels to count only 50% of their market’s population toward the 39% national limit. While originally designed for the analog era when UHF signals were weaker, its retention in the digital age allows broadcasters to effectively double their legal reach.

• Nexstar: Actually reaches around 70% of U.S. households, but remains legally compliant at 39% due to the UHF discount.

• TelevisaUnivision: Actually reaches ~45% while legally only reaching ~24%.

• E.W. Scripps: Actually reaches ~71% while legally only reaching ~39%.

Here’s the source for that data.

Sidecar agreements

Sidecar agreements allow a broadcaster to have de facto control over a station technically owned by a nominally independent shell company (the "Sidecar"). Through Shared Services Agreements (SSAs) and Joint Sales Agreements (JSAs), the Parent manages the news, ad sales, and, most importantly, retransmission consent negotiations for the station.

Sinclair’s relationship with Cunningham is the industry’s most established sidecar arrangement. Over 90% of Cunningham’s stock is held in trusts for the family of Sinclair’s founder, allowing Sinclair to effectively operate in markets where it is legally capped out. In February 2026, the FCC approved Sinclair’s direct acquisition of five stations previously held by Cunningham and Roberts Media, citing the Zimmer ruling as the catalyst for consolidating these "virtual" duopolies.

Nexstar utilizes Mission and White Knight as its sidecars. In a challenge to this workaround, Nexstar recently faced a Notice of Apparent Liability regarding one of its stations in New York, where the FCC ruled that its control over the Mission-owned station constituted an ownership violation.

Gray historically utilized sidecar relationships to manage regional clusters. In March 2026, Gray’s dominance was a focal point in retransmission disputes with DISH Network, causing blackouts for DISH customers and highlighting the leverage gained through consolidated market control.

Where We Are Now

While the secular decline of legacy broadcasting is fairly ubiquitous, a shift toward a more permissive regulatory environment could be the key to extending the industry's lifespan, providing a more durable foundation of legacy cash flow to fund long-term growth plans. 

The spotlight is currently on Nexstar’s pending $6.2 billion acquisition of TEGNA. Nexstar got their financing locked up, and FCC and DOJ approval, but a federal judge blocked the Tegna acquisition a month ago until an antitrust lawsuit is resolved. Eight state AGs (California, New York, Colorado, Illinois, Oregon, North Carolina, Connecticut, and Virginia), as well as DirecTV, were among those arguing against the deal. The Judge’s line of thinking followed the belief that there will be higher broadcast fees, lower competition in local markets, and that stopping the merger is “in the public interest”. These California venues have historically leaned more consumer-friendly.

Further, while the Zimmer ruling got rid of the prohibition on duopolies within DMAs, it did not completely open the floodgates to any and all duopolies—as made evident by the FCC’s deliberation of Gray’s $80 million tuck-in of Block Communications’ TV stations. This situation is particularly interesting as it overlaps with a retrans fee dispute between Gray and DISH, resulting in blackouts of 226 local stations in 113 markets across the US. Gray argues that the dispute stems from DISH’s insistence on "unprecedented and materially adverse" contract provisions. Conversely, DISH claims that Gray is abusing its market dominance to extract "unreasonable" rate hikes while using the pending Block acquisition as a last-second bargaining chip.

What’s to Come

While it’s hard to say whether the Nexstar-TEGNA deal will be approved, there are serious problems ahead for the industry if consolidation can’t occur. The window for a favorable consolidation window could close in 2028 depending on electoral events, but the advancement in technology spurs broadcasters to reach their endgame sooner rather than later. The big “make or break” point that’s nearing is whether the NFL could exit its NFL broadcasting rights such as 2029. Sports are becoming increasingly DTC and Streaming giants are paying a pretty penny to have games be exclusively on their platform, as opposed to on a broadcasting channel. Why take the risk? Now is the window to try to consolidate.

The waiver of the 39% national ownership cap will not automatically green-light every subsequent broadcasting acquisition. Rather, similar to Gray-Block following the Zimmer ruling, deals will continue to require lengthy regulatory approval processes. When faced with looming maturity walls, the execution risk associated with long lag times between announcing and completing deals is almost as detrimental as being flat out rejected.

For credit investors: 

• We are arguably now in the long tail of traditional TV consumers, meaning it will take a long time for the remaining consumer base to phase out. This means there might be a decent cash flow story for senior secured positions with lower LTV.

  • What’s keeping many of the traditional TV consumers glued though are sports, and particularly the NFL. If the NFL continues moving to streaming and discontinues broadcasting almost entirely, then this will likely drive significant churn from holdout customers.

  • The other caveat to remember here is age. While there is a long tail, viewership from older demographics isn’t a perpetual thing.

• Be careful of lender efforts to isolate high-growth segment revenue from legacy debt, especially if the merger is rejected.

• Be wary of nearing debt maturities and Companies getting too cute.

• For the time being, broadcasters are probably more of a trade than something you’re excited about in 2029 and onwards

On the risk side of things, parties against consolidation will continue to push back on any rulings in favor, in addition to sidecars and the UHF discount. Future administration changes could manifest these arguments into actual legal action, interrupting any pending deals and potentially clawing back certain assets, similar to the pre-Carr FCC’s order for NXST to divest WPIX.

Ultimately, there’s a lot of potential catalysts within broadcasting at the moment, but they need to consolidate and have a clear path towards deleveraging to remain more than just a trade.  

That’s all for now. Until next time.

My Latest:

• Wall Street’s Largest Comp Report: Access the extremely detailed Compensation Report that myself and the Buyside Hub team put together here 

• Our Job Board: Find Buyside and Sellside jobs on Buyside Hub 

• Recruit for Credit Jobs with HYH Premium - sign up below:

Access our latest HYH Premium pieces below:

• Spirit Airlines: Crash-landing into Chapter 22 here.

• Portability Provisions: When the Debt “Travels” With the Company (and Why Everyone Suddenly Cares) here.