Nexstar's third quarter saw net revenue decline 12.3% to $1.2 billion and adjusted EBITDA fall $152 million to $358 million, reflecting the expected absence of even-year political advertising. The headline event was the definitive $6.2 billion agreement to acquire TEGNA, adding 64 stations and creating a combined entity with over $8 billion in revenue, roughly $300 million of expected synergies and a deal seen as more than 40% accretive to free cash flow. Operationally, non-political advertising was essentially flat (beating guidance), CW Sports delivered its best quarter since launch, and NewsNation ranked as the top basic cable network for year-over-year growth. Management pointed to the October 21 8th Circuit mandate and prepared FCC applications as clearing the path toward a second-half 2026 close, and Perry Sook extended his CEO tenure through March 2029.
Thank you, Carrie and good morning everyone. Let me read the safe harbor language and then we'll get right into the call. All statements and comments made by management during this conference call other than statements of historical fact may be deemed forward looking statements for 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 31st, 2024 as filed with the U.S. Securities and Exchange Commission and Nexstar's subsequent public filings with the SEC.
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 my pleasure to turn the conference over to your host, Nexstar Founder, Chairman and CEO Perry Sook. Perry, please go ahead.
Thank you, Joseph. Good morning, everyone. Thank you for joining us on our call. Mike Biard, our Chief Operating Officer, and Lee Ann Gliha, our Chief Financial Officer, are both with me this morning. During the third quarter, we made the milestone announcement of our definitive agreement to acquire TEGNA in a cash transaction valued at $6.2 billion. The proposed acquisition will strengthen Nexstar's position as the nation's leading local media company with high-quality broadcast stations, award-winning news operations, and innovative local programming, all of which collectively demonstrate our commitment to trusted, community-focused journalism. Operationally, TEGNA will enhance and expand Nexstar's scale, geographic reach, and community impact by adding 64 top-performing stations, primarily in the top 75 DMAs, to our growing portfolio of media assets. Excuse me.
Financially, on a combined pro forma basis, Nexstar and TEGNA generated over $8 billion in revenue and $2.56 billion of adjusted EBITDA. Taking into account expected after-tax synergies and incremental interest expense, the transaction is projected to be more than 40% accretive to Nexstar's standalone adjusted free cash flow. With roughly $300 million in anticipated synergies, we expect only a modest increase in pro forma net leverage. We're making good progress on our path to closing. TEGNA filed its definitive proxy statement and the shareholder vote there will take place on November 18th. We submitted our HSR filing on September 30th and, as expected, we received a second request letter from the DOJ on October 30th, as well as a handful of inquiries from state AG offices.
Our FCC applications are ready to go once the federal government reopens, and our expectations for closing the transaction by the second half of 2026 remain unchanged. In the meantime, as previously announced, we are taking a disciplined approach to capital allocation, conserving cash that would otherwise have been used for share repurchases in order to fund the more accretive TEGNA acquisition. As we enter this next phase of Nexstar's growth, I've never been more confident in our strategy nor more energized about the opportunities ahead. This is a defining moment for our company, our industry, our shareholders, and the communities we serve. When I said on our August conference call that I'm deeply committed to seeing this transaction through, I meant that. That's why I was pleased to extend my employment agreement as chairman and chief executive officer through March 31st of 2029.
Together with our teams, we will continue our mission to build a stronger, more competitive local media company and expand Nexstar's impressive record of success and shareholder value creation. Turning now to our third quarter financial results, Nexstar delivered another solid quarter of net revenue and adjusted EBITDA, reflecting stable distribution and non-political advertising revenue as well as strong expense management. It is clear that broadcast television remains the bellwether and the most profitable segment of the media ecosystem, delivering the most watched content and most valuable programming. According to Nielsen, time spent watching broadcast TV increased 20% from August to September, representing the largest month-to-month gain since 2021, and more time spent watching television on broadcast than the entire universe of cable networks. September's results were driven by a strong start to the NFL season as well as college football.
Through Week 6, the NFL averaged 18 million viewers per game, the highest average viewership since a record 2015 season, and similarly, the average total audience for the first two games of the NBA season. Newly launched on broadcast network NBC reflected a 36% improvement versus the first two games on TNT last year and double the total audience of the games on ESPN and 3.6x the average total audience of the games on Prime Video. First week of the season last year, and of course November started with a bang with game seven of the World Series delivering over 25 million viewers, the highest number for baseball in nearly a decade. These results underscore the enduring power and reach of broadcast and our consistent ability to aggregate mass audiences in real time, something other platforms just can't replicate.
Major sports franchises continue to value the unmatched reach and advantage of broadcast television, and sports programming continues to complement Nexstar's popular local news programming, which accounts for almost half of our total household viewership. In terms of The CW, Nexstar's own broadcast network, CW Sports delivered record performance with the best quarter since the launch of live sports programming in Q1 of 2023, driven by continued strong viewership of the NASCAR Xfinity Series as well as a strong start to the ACC and Pac-12 college football season. In fact, last Saturday night, our final Xfinity race of the season on broadcast in primetime beat college football on CBS in total viewers, adults 25-54, and adults 18-49. In addition, solid results from our entertainment programming lineup drove The CW's sixth consecutive quarter of primetime ratings growth year to date.
The CW has surpassed competitive big four primetime telecast 250 times across total viewers among the 18-49 and 25-54 demos. That's an impressive increase over the 45 times we accomplished that for the full year of 2024. The continued success of our long term strategic growth on high impact news and sports programming further validated by the performance NewsNation, which ranked as the number one basic cable network for year-over-year growth in the third quarter. Continuing its trend from Q2 on a year to date NewsNation surpassed MSNBC 57x and CNN 39x in head to head telecasts across total viewers and in the adult 25-54 demo. That compares to 2024 when NewsNation surpassed MSNBC 4x and CNN 2x in the head to head telecasts.
These results reflect the fact that NewsNation's programming and unique fact-based reporting is resonating with viewers who are looking for a refreshingly balanced and impartial reporting and analysis. In summary, the continued strength and consistency of Nexstar's financial performance reflects our stable, diversified revenue and operating base, our disciplined expense management and continued execution across our portfolio. Our proposed acquisition of TEGNA meets the deregulatory moment where it is and sets the stage for an incredibly bright future ahead for Nexstar, our industry, our shareholders, and the communities we serve. With all of that said, let me turn the call over to Mike Biard. Mike.
Thanks, Perry. Excuse me and good morning everyone. Nexstar delivered third quarter net revenue of $1.2 billion, a decline of 12.3% compared to the prior year, primarily reflecting the year-over-year reduction in political advertising. Third quarter distribution revenue of $709 million was flattish compared to the prior year quarter, down 1.4% and primarily reflects MVPD subscriber attrition and the resolution of a non recurring disputed customer claim, offset in part by increased rates and other contractual commitments, growth in vMVPD subscribers, and the addition of CW affiliations on certain of our stations. Without the impact of the resolution of a legacy customer dispute, distribution revenue would have been slightly up. 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.
However, non political advertising was essentially flat and better than our expectation of a low single digit decline. Growth in national advertising, including at The CW and NewsNation, strong growth in local digital advertising and the absence of political crowd out that impacted last year's third quarter offset soft local advertising driven by the absence of the Olympics in the third quarter. This year, no advertising category materially moved the needle in the quarter and we have not observed any negative impact on the pharmaceutical category from recently introduced regulations. As a reminder, the pharmaceutical category represents less than 3% of our total non political advertising. Speaking of political, we generated approximately $10 million in political advertising revenue during the quarter, primarily driven by spending related to statewide elections in Virginia, including the governor's race as well as California's redistricting ballot initiative.
Looking ahead to the fourth quarter, non-political advertising is currently forecast to decline in the very low single digits area on a year-over-year basis, benefiting in part from the absence of political crowd out in the quarter, but offset by advertising revenue softness and tougher year-over-year programming comps. At the CW and our national digital business, political advertising is expected to be consistent with 2021 fourth quarter levels. Turning to the CW, we are consistently delivering favorable results from our programming investments, especially from sports, which continues to account for more than 40% of the CW's programming hours, and we continue to build our CW sports portfolio.
During the third quarter, we expanded our relationship with the Pac-12 Conference through the 2030-2031 season to include 66 annual events including 13 regular season football games, 35 regular season men's basketball games, 15 regular season women's basketball games, and the semifinal and championship games of the new Pac-12 women's basketball tournament. During the quarter, we also completed a new multi-year agreement with the Professional Bull Riders to be the exclusive live broadcast partner of the PBR Team Series on Saturdays and Sundays, which began airing this last August. The NASCAR Xfinity Series transitioning to the NASCAR O'Reilly Auto Parts Series next season is now firmly established exclusively on CW Sports, delivering strong momentum and benefiting from the scale and audience engagement of our broadcast model.
Xfinity races delivered an 11% year-over-year increase in viewership for the first 30 races of the season, with more than 1 million viewers for 20 of those races. By comparison to last season, only 8 of the first 30 races broke the 1 million viewer mark in 2024. Audiences are consistently showing up for our live sports lineup. Ratings for ACC & Pac-12 college football games on the CW have more than doubled year-over-year among adults 25-54. While WWE NXT continues to climb since moving to the CW from USA Network, up 12% year to date, that momentum is translating into progress toward our financial targets. In the third quarter, we reduced losses at the CW by $5 million, or 24%, year-over-year.
In the quarter, growth in distribution and advertising revenue virtually offset lower licensing revenue and lower operating expenses net of a small increase in programming amortization drove the improvement in losses. Our outlook for the year for the CW remains unchanged as we continue to project 2025 losses to be lower than 2024 by about 25%, and our expectation of achieving breakeven sometime in 2026 also remains unchanged. To close, I want to reiterate our confidence in our long term outlook and the enduring strength of Nexstar's business model. Our programming strategy, anchored by live news and sports, continues to deliver results for the CW and NewsNation, and we remain committed to unlocking even greater value from these assets as our audiences grow.
Our local programming strategy is similarly anchored by our unrivaled live news product, and the proposed TEGNA acquisition will create substantial and immediate value for shareholders while advancing the public interest by strengthening local broadcast journalism and providing an expanded range of competitive broadcasts and digital advertising solutions across our portfolio of local and national assets. With that, it's my pleasure to turn the call over to Lee Ann for the remainder of the financial review. Lee Anne.
Thank you, Mike, and good morning everyone. Mike gave you most of the details on the revenue side and on The CW, so I'll provide you a review of expenses, adjusted EBITDA, and free cash flow, along with a review of our capital allocation activities together. Third quarter direct operating and SG&A expenses, excluding depreciation and amortization and corporate expenses, declined by $23 million or 3% primarily driven by our operational restructuring initiatives taken last year. Q3 2025 total corporate expense was $68 million including non-cash compensation expense of $19 million compared to $53 million including non-cash compensation expense of $19 million in the third quarter of 2024.
The $15 million increase is primarily due to one-time expenses associated with the expense portion of a non-recurring settlement of a disputed customer claim and the proposed acquisition of TEGNA, offset in part by the release of certain reserves. Q3 2025 depreciation amortization was $190 million, matching the amount in the third quarter of 2024. Of these amounts included in our definition of adjusted EBITDA is $72 million related to the amortization of broadcast rights for Q3 2025 compared to $70 million for Q3 2024. The increase in amortization of broadcast rights by $2 million was primarily due to slightly higher programming on the CW versus the comparable prior year quarter given the mix of programming.
Q3 2025 income from equity method investments, which primarily reflects our 31% ownership in the TV Food Network, declined by $12 million versus the comparable prior year quarter, primarily related to TV Food Network's lower revenue on a consolidated basis. Third quarter adjusted EBITDA was $358 million, representing a 29.9% margin and a decrease of $152 million from the third quarter of 2024 of $510 million, due primarily to the election cycle. Moving to the components of free cash flow and adjusted free cash flow, third quarter CapEx together with payments for capitalized software costs, net of proceeds from asset disposals, were $34 million, an increase from $31 million in the third quarter of last year. Third quarter net interest expense was $94 million, a reduction of $19 million from the third quarter of 2024.
On a cash basis this compares to $93 million in the third quarter of 2025 versus $110 million in Q3 2024. The reduction in interest expense was primarily related to a reduction in SOFR and Nexstar's reduced debt balances. Third quarter operating cash taxes were $33 million compared to $10 million last year. As expected, our cash tax payments primarily in Q3 2025 and expected in Q4 2025 benefit from the one big beautiful bill act through the immediate statement of bonus depreciation on CapEx and the ability to deduct amortization of internally developed software. The low cash tax in the third quarter of last year was due to the change in the timing of our tax payments.
Using the annualization method, cash distributions from the Food Network were $6 million in the third quarter, which amount is still captured in our free cash flow and adjusted free cash flow definition. This amount reflects our pro rata share of distributions to cover tax from our proportionate share of the income of the JV. Included in the third quarter's adjusted EBITDA but excluded from adjusted free cash flow is $22 million of income before amortization from equity method investments, which is primarily our pro rata share of Food Network net income in the third quarter of 2025. In Q3 programming amortization costs were lower than cash payments by $17 million as certain deferred programming payments were paid and certain future programming was paid prior to airing. As a result, consolidated third quarter 2025 adjusted free cash flow was $166 million compared to $327 million in last year's third quarter.
A few additional points of guidance with respect to adjusted free cash flow. We are currently projecting CapEx in the $32 million range and capitalized software payments in the $6 million range in Q4. In addition, we will acquire one of our buildings subject to a long-term lease for $21 million. Based on the current yield curve and our mandatory amortization payments, Q4 interest expense is expected to be in the $88 million range. Q4 2025 cash taxes are expected to be in the $45 million range. In Q4 2025, cash distributions from the Food Network are expected to be in the low single-digit million dollar range compared to our share of adjusted EBITDA in the low teens millions. Payments for programming are expected to be in excess of amortization by about $30 million due primarily to prepayment of future programming payments and payment of deferred programming.
Turning to capital allocation in our balance sheet, together with cash from operations generated in the third quarter and cash on hand, we returned $56 million to shareholders in dividends, repaid $25 million in mandatory debt repayments, and did not repurchase any shares as we are conserving cash for our acquisition of TEGNA, which we expect will be more accretive than a standalone share repurchase strategy. Our cash balance at the quarter end was $236 million, including $13 million of cash related to the CW. Our debt balance was $6.4 billion. Because we designate the CW as an unrestricted subsidiary, the losses associated with the CW are not accounted for in the calculation of leverage for purposes of our credit agreement.
As such, our net first lien covenant ratio for Nexstar as of September 30th, 2025, which is now calculated on the last eight quarters annualized basis was 1.73x, which was well below our first lien and only covenant of 4.25x. Total net leverage for Nexstar was 3.09x at quarter end. These leverage statistics are calculated pursuant to the description in our credit agreement. With that, I'll open up the call for questions. Operator, can you go to our first question?