TEGNA Revamps Strategy with $800 Million Share Repurchase: What Investors Need to Know for 2024

Las Vegas, Nevada – TEGNA Inc., a broadcast company based in Virginia, has been making strategic moves to enhance its performance in 2024 after terminating a significant deal with hedge fund group Standard General. With a 6.04% drop in stock price over the past year, TEGNA has unveiled plans for a robust capital allocation strategy aimed at boosting shareholder value. This plan includes an $800 million share repurchase program and a 20% increase in dividends. As of February 2024, the company reported that it had already repurchased 22% of its shares.

TEGNA has been focusing on renewing its contractual obligations in 2024, particularly in areas such as professional sports, news, weather, and related advertising. Through a partnership with Comscore, TEGNA aims to expand its coverage by generating qualitative content based on data analysis. Additionally, with ownership of numerous television stations across various markets, TEGNA’s digital advertising arm, Premion, recently acquired Octillion Media to enhance its connected TV experience and drive organic growth.

Despite facing challenges in fiscal year 2023 with a decline in revenues to $2.91 billion from $3.3 billion in the previous year, TEGNA continues to emphasize its core business of linear television, catering to a significant audience base. The company has been investing in digital platforms to increase viewership, with its digital outlets reaching approximately 80 million monthly visitors in 2023.

In efforts to solidify its position in the market, TEGNA has been actively acquiring TV stations over the past decade, with a notable purchase of 11 TV stations from Nexstar Media Group in 2019 for $740 million. These acquisitions have contributed to TEGNA’s revenue growth, which has seen a 26.59% increase since December 2019.

Looking ahead into 2024, TEGNA announced the renewal of a multi-year agreement with NBC, covering 20 markets in the US and reaching over 21 million households. The company’s CEO emphasized the importance of providing premium network content alongside local news and sports offerings to consumers and advertisers. Additionally, TEGNA renewed its distribution agreement with DirecTV, resolving a previous blackout issue and ensuring continued access to its programming for customers.

TEGNA’s advertising arm, Premion, has been a key player in the company’s revenue generation, particularly in the digital advertising space. The recent acquisition of Octillion Media is expected to further enhance Premion’s market share and revenue potential, especially in verticals that were previously untapped. By leveraging partnerships and innovative technologies, TEGNA aims to stay competitive in a rapidly evolving media landscape.

However, challenges such as low cash reserves, competition from streaming services, and the need for technological innovation remain on the horizon for TEGNA. The company’s valuation metrics suggest that it may be undervalued compared to industry averages, indicating potential for growth in the coming years. Overall, TEGNA’s strategic initiatives and focus on shareholder value creation position it as a compelling investment opportunity for the future.