TEGNA Inc. (TGNA): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at TEGNA Inc. (TGNA) at a pivotal moment, navigating a media world where the digital tide is overwhelming traditional revenue streams, and frankly, the pressure is on. As a seasoned analyst, I see a company whose dual revenue streams are being squeezed: Q3 2025 saw Advertising & Marketing Services (AMS) revenue fall 12% amid a local ad market undergoing an $89 billion digital transformation, while distribution fees dipped 1% as subscriber erosion continued, even with 45% of those traditional subs up for renewal this year. To counter this, TEGNA is laser-focused on its $90 million to $100 million cost-saving target for 2025, having already achieved 80% of that goal by mid-year, all while waiting for the $6.2 billion Nexstar acquisition to clear regulatory hurdles by mid-2026. Below, we break down exactly how these forces-from supplier leverage with major networks to the threat of substitutes like streaming-are defining the competitive landscape for TEGNA Inc. right now.

TEGNA Inc. (TGNA) - Porter's Five Forces: Bargaining power of suppliers

You're looking at the core dependency TEGNA Inc. has on the major broadcast networks-ABC, CBS, NBC, and Fox. Honestly, this is where the supplier power is concentrated and where you see the most immediate financial pressure.

The major networks hold substantial power because they control the exclusive national content, like primetime shows and marquee sporting events, that draws the audience to TEGNA's local stations. Without that content, the value proposition of TEGNA's local stations plummets. The cost of securing these network affiliations is a major line item; the cost of network affiliation agreements represents a significant portion of TEGNA's television operating expenses. For context on the scale of these relationships, consider the revenue TEGNA generates from carriage fees, which are closely linked to the value of the content they carry:

The constant negotiation risk is front and center because these agreements have hard expiration dates. The renewal of the Fox affiliation agreement in 2025 is a perfect example of this. While TEGNA announced a comprehensive multi-year agreement with FOX Corporation in the second quarter of 2025, this deal only covers six TEGNA markets, representing approximately 7% of TEGNA's total television households, which is their smallest affiliate portfolio. This highlights that even a renewal can be limited in scope, forcing TEGNA to negotiate piecemeal.

Here's a quick look at the current state of the major affiliation agreements, based on recent renewals:

• NBC programming secured through early 2027.
• CBS programming secured through 2028.
• ABC programming secured through 2026.
• Fox renewal completed in Q2 2025 for a smaller set of markets.

Also, increased investment in local sports rights is actively driving up programming costs and, consequently, supplier leverage. You see this pressure reflected in the operating expense reports. In the first quarter of 2025, non-GAAP operating expenses were flat year-over-year, specifically because the increase in programming expenses associated with sports rights deals offset core operational cost-cutting initiatives. Similarly, in the second quarter of 2025, non-GAAP operating expenses decreased only 3% due to cost cuts, partially offset by an increase in programming expenses driven by local sports rights. This trend is clear: securing local team rights-like TEGNA's partnerships with NBA, WNBA, NHL, and MLB teams-is becoming more expensive. For instance, TEGNA's Denver stations renewed with Altitude Sports to carry 20 Denver Nuggets and 20 Colorado Avalanche games, reaching nearly 3.5 million viewers. To be fair, these deals help anchor viewership, but they come at a rising price, as evidenced by industry reports suggesting some local rights fees TEGNA aggregates can be around $10 million per season for a single team.

TEGNA Inc. (TGNA) - Porter's Five Forces: Bargaining power of customers

The bargaining power of customers for TEGNA Inc. remains a significant force shaping its financial outcomes, driven by the dual pressures from distributors (MVPDs/vMVPDs) and advertisers. You see this leverage clearly when looking at the recent quarterly performance, where both revenue streams showed sensitivity to customer demands and market dynamics.

The power held by distributors, which include traditional MVPDs (Multichannel Video Programming Distributors) and vMVPDs (virtual MVPDs), is a constant negotiation factor. Based on TEGNA's Q2 2025 commentary, the renewal cycle for traditional subscribers was a near-term focus, with approximately 35% of these subscribers coming up for renewal at the end of 2025. This concentration of renewal dates gives these large distributors considerable leverage in retransmission fee negotiations. Furthermore, the ongoing trend of cord-cutting directly erodes TEGNA's subscriber base, which inherently weakens its position when seeking rate increases, even with contractual escalators in place. For instance, in Q3 2025, distribution revenue slipped 1% year-over-year to $358 million, as subscriber erosion offset contractual rate hikes. That small decline signals that distributors are successfully managing the subscriber base down, limiting the growth potential from retransmission fees.

Advertiser power is equally evident, particularly in the non-election cycle. The Advertising & Marketing Services (AMS) revenue stream is highly sensitive to macroeconomic conditions and content scheduling. In the third quarter of 2025, the AMS revenue fell 12% to $273 million. This drop was attributed to weaker macroeconomic conditions, the absence of the Summer Olympics, and the loss of a major reseller for their Premion platform. This demonstrates that advertisers can easily shift spending when value propositions change or economic uncertainty rises.

The cyclical nature of political advertising further highlights customer sensitivity, as it creates extreme volatility in pricing power. As 2025 is an odd-numbered year, the expected drop in political ad spend materialized sharply. In Q3 2025, political ad sales totaled just $10 million, representing a staggering 92% plunge compared to the prior year's election cycle. This massive reduction in a high-margin revenue source immediately shifts pricing power away from TEGNA and back to the remaining advertisers who are operating in a non-election environment.

Here is a quick look at the Q3 2025 revenue performance that illustrates customer leverage:

The combination of these factors means TEGNA's customers-whether they are the distributors paying retransmission fees or the local and national businesses buying ad time-have significant ability to dictate terms or withhold spending, forcing TEGNA to constantly manage costs. The leverage points you need to watch closely are:

• The upcoming renewal cycle for the remaining traditional subscribers heading into 2026.
• The ability of AMS to recover from the 12% Q3 2025 decline as macroeconomic conditions evolve.
• The impact of continued subscriber erosion on the $358 million distribution revenue base.
• The timing and magnitude of the political ad revenue rebound in the even-numbered year of 2026.

Finance: draft 13-week cash view by Friday.

TEGNA Inc. (TGNA) - Porter's Five Forces: Competitive rivalry

You're looking at a marketplace where scale is everything, and TEGNA Inc. is fighting hard to maintain its footing against behemoths. The rivalry here isn't just about who has the best local newscast; it's about who can absorb the structural shifts in media spending most efficiently. Honestly, the competitive pressure is intense.

The most immediate rivalry comes from the large national station groups. Nexstar Media Group, for example, announced a $6.2 billion deal to acquire TEGNA Inc.. This kind of consolidation signals that scale is the primary defense against market fragmentation. Sinclair is also actively pursuing scale, having made a bid for E.W. Scripps Co. at $7 per share. This drive for size means TEGNA is constantly measured against the combined might of its largest peers.

Here's a quick look at how TEGNA's current footprint stacks up against the potential reach of a combined Nexstar-Tegna entity, keeping in mind the regulatory 39% household reach cap:

Rivalry heightens because local ad spend is rapidly migrating. Advertisers are following audiences to digital-native, non-broadcast platforms. The shift is stark: local Connected TV (CTV)/Over-The-Top (OTT) advertising spending (excluding political) saw a year-over-year increase of 29.09%. Conversely, traditional television ad expenditures are forecasted to decline by 2.5% in 2025. You have to win the digital dollar to offset the linear loss.

The industry sentiment reflects this digital imperative:

• 83% of local media executives project digital ad revenue will increase or hold steady in 2025.
• Digital revenue growth is led by video-focused efforts and subscription strategies.
• TEGNA's own Q2 2025 results showed its owned and operated digital products delivered strong double-digit growth year-over-year for the third consecutive quarter.

Still, TEGNA's existing scale provides a competitive advantage in the traditional space. The company operates approximately 60 television stations in 51 markets, giving it reach to nearly 40% of U.S. TV households. This footprint, which includes being the #1 NBC affiliate group and #1 CBS affiliate group, gives it leverage in distribution negotiations and a broad base for local news delivery.

To compete effectively on efficiency against these larger rivals and the digital transition costs, TEGNA is executing a focused operational plan. The company must execute a $90 million to $100 million annualized core non-programming cost-saving target by the end of 2025. As of the second quarter of 2025, management confirmed they had already achieved 80% of this total savings goal. This discipline is crucial, especially when Q2 2025 total company revenue was reported at $675 million. Finance: draft 13-week cash view by Friday.

TEGNA Inc. (TGNA) - Porter's Five Forces: Threat of substitutes

The threat of substitutes for TEGNA Inc. is intense, driven by the fundamental shift in how audiences consume video content and how advertisers allocate their budgets away from traditional linear television.

Digital video ad spending is now eclipsing traditional TV advertising for the first time in terms of share of the total video ad market. In 2025, digital video is projected to capture 58% of all TV/video ad spend in the U.S., reaching $72.4 billion. This represents a 14% increase in digital video spend year-over-year. Conversely, linear TV ad budgets are expected to decline by 13% in 2025, falling to $51 billion. For context, TEGNA Inc.'s Advertising and Marketing Services (AMS) revenue for Q3 2025 was $273 million.

Streaming services represent a major content and distribution substitute for linear TV, evidenced by viewership data. In May 2025, streaming accounted for a record 44.8% of total TV usage, narrowly surpassing the combined share of broadcast and cable at 44.2%. Furthermore, when content is available on both platforms, 67% of viewers choose streaming. U.S. households now subscribe to an average of 3.2 streaming services. Major players continue to command significant revenue; Netflix alone is forecasted to earn over $17.12 billion in U.S. subscription revenues in 2025.

The local advertising market, a core area for TEGNA Inc., is undergoing a massive structural change. The total local media revenue is projected to reach $171 billion by 2025. Within this, the digital transformation is estimated to account for $89 billion.

Social media and short-form video are strong, low-cost substitutes for local news consumption, particularly among younger demographics. For the first time, social media displaced television as the top news source in the U.S., with 54% accessing news via social media and video networks, compared to 50% for TV news. YouTube is a dominant platform, with 35% of U.S. adults using it for news in 2025. Short-form video platforms are key, with YouTube Shorts leading as the most popular destination at 56%. For teens, a whopping 63% regularly get news from the short-form video platform TikTok.

Here is a comparison of the advertising spend dynamics that illustrate the substitution threat:

The substitution pressure is also visible in news consumption habits:

• Proportion accessing news via social media and video networks in the U.S.: 54%
• Proportion accessing news via TV news: 50%
• Share of TV viewing on streaming platforms: 44.8% (May 2025)
• Combined share of broadcast and cable: 44.2% (May 2025)
• Short-form video consumption more engaging than articles: 61% of consumers
• Teens getting news regularly from TikTok: 63%

Finance: review Q4 2025 AMS revenue projections against the $89 billion local digital transformation trend by next Tuesday.

TEGNA Inc. (TGNA) - Porter's Five Forces: Threat of new entrants

You're analyzing the barriers to entry for a new player trying to set up a local broadcast competitor to TEGNA Inc. (TGNA) right now. Honestly, the deck is stacked against them; the threat of new entrants is definitively low.

The primary hurdle is the sheer capital required to even begin operations. Building the necessary broadcast infrastructure and securing the required Federal Communications Commission (FCC) licenses demands massive upfront investment. For instance, while an FCC new construction filing fee might be as low as \$5,100.00, the infrastructure costs are staggering. To give you a sense of scale for transmission, the transition to the newer ATSC 3.0 standard alone can cost existing broadcasters between \$300,000 and \$600,000 per site. For a brand-new venture aiming for satellite distribution, leasing capacity could start at \$1 million to \$5 million per transponder annually. New entrants face the reality that starting a TV station can cost anywhere from a few thousand dollars to billions.

This capital intensity is compounded by regulatory scarcity. Spectrum is not readily available; most markets in the US are saturated with as many stations as can fit without causing interference. Furthermore, the existing regulatory framework, which grants licenses for fixed periods, like eight-year terms for broadcast licenses, protects incumbents like TEGNA Inc. (TGNA). The current national ownership cap, which prohibits any one entity from reaching more than 39% of U.S. television households, shows the government's historical intent to limit consolidation, though this is currently being challenged in the context of the proposed Nexstar acquisition of TEGNA Inc. (TGNA), which would reach about 54.5% with a waiver.

Established local brand loyalty and trust are defintely difficult for new players to overcome. TEGNA Inc. (TGNA) itself emphasizes its strong local brands, noting its reach across more than 100 million people via its 64 local news brands operating in 51 markets. While general consumer loyalty remains relatively high-with 68% of consumers loyal to certain brands in 2025-the deep, trust-based connection, or True Loyalty, has recently declined to 29% in 2025, suggesting that even established players must fight to maintain that connection, making it even harder for a new entrant to build it from zero.

Access to distribution channels (cable/satellite) is controlled by existing, powerful Multichannel Video Programming Distributors (MVPDs). Historically, MVPDs needed consent to carry broadcast signals, a right that has been a revenue source for affiliates. While virtual MVPDs (vMVPDs) initially lacked these obligations, the regulatory landscape is constantly shifting, with the FCC seeking comment on mandatory carriage rules for new ATSC 3.0 signals. The established infrastructure is deeply entrenched; for example, one network saw a nearly 60% reduction in distribution costs by migrating to an IP network in 2025, showing the cost-efficiency of the existing ecosystem that a new entrant would have to match or beat.

Here's a quick look at the scale and cost factors that create these barriers:

The high barriers manifest in several ways for a potential competitor:

• High initial capital expenditure measured in the millions.
• Difficulty securing unencumbered FCC spectrum licenses.
• The need to overcome years of local audience trust.
• Existing players achieving significant distribution cost savings via IP migration.
• Licenses are granted for fixed, long-term periods, like eight years.

If onboarding takes 14+ days for regulatory approval, new entrant risk rises, but the current system is designed for slow, capital-intensive entry.