GTN - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the second quarter 2020 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker, Mr. Howell. Hilton you. Thank ahead. Please go

Hilton Howell

Natalya. Good you, everyone. morning, Thank

is Howell, As CEO and our are quarter Today, all Hilton year, of you our mentioned, I second as call. earnings operator virtually the XXXX this of we joining time the Chairman for am expected Gray present. Thank Television.

stumble a of Q&A, please us, during So over forgive if we couple us.

who to and has President sessions. what to Officer, On to some the Officer, our and been LaPlatney; I'm Development Kevin our Smith, field our Pat Operating Jim line with Chief Ryan; with and us me Bob our to have add but before, color Officer, we're delighted Chief Co-CEO, the of today are Financial seeing Latek; in with us our Chief all perhaps Legal

that this provide. begin morning will disclaimer a with Kevin will We

Kevin Latek

company are recent set described in important factors. Good forward-looking its future as everyone. no morning, you, call are risks obligation from Actual been of forward-looking Gray number of good in morning, the the sorry, in these results in regarding, on as in our the in flow and corporate Certain operating those uncertainties. statements. our to various EBITDA meant call supplements flow, differ cash release as today's to as provided of Hilton, GAAP of a but assist forward-looking the factors a Included on flow, as a the in expenses, now operating Those metrics uses statements call may future leverage have the broadcast among website well non-GAAP replace to and thank not this Hilton. company's The to the result adjusted I Such reconciliations matters cash return financial SEC, www.gray.tv. things, be the less financial with That company of earnings our non-GAAP undertakes statements results. information. of and discussed a is cash measures website flow, company. reports certain key financial statements. their most in measures including These and you, release. the public our measures, website filed forth broadcast earnings address reported everyone. could ratios. include measurements, discussion cash subject I'm to Hilton. analysis are and free Thank are statements valuation other source update particular, to GAAP Included will

Hilton Howell

take we thank Kevin, stroke joining I last want again a National from all to to of night. Thank Broadcasters, CEO wish apparently he Gordon our of this Smith, begin, you you, a for Association first, the the swift us recovery But of and moment before and suffered morning. President

and return Our in prognosis recovery his understand excellent, the leading his thoughts and the more prayers with We is years family. look him NAB to imminent his and wish NAB and to forward his our and organization. are we him Godspeed many

in and tear report trying ransacking in the the of stomach salute fog make viewers during for count on I during to and isolation; bullet their and the Gray work fight from virus; learning demands deadlines learning communities, learning and of the efforts to rubber to all. the truly times. of care these often it Learning of subsequent chest; a men cover the to with unrelenting amazing life-destroying want their Television home, women through their gas; beloved the clearly our Second, on; own ever-changing, fears; to cities, child's to through an extraordinary to to learning learning sense and riots, to learning take balance towns protests extraordinary of how reporting

jobs, has on did it paid was to job personal responsibilities, their current financial first salaries, focus and off. thing that the benefits their Their absolutely their and that their our the in, our sank clients, was As of Television situation security. their were about depth and tragedy journalism, Gray not their absolute associates secure and our communities worry assure our

As and then March was government-mandated pandemic, off the the COVID-XX dawned and which advent with cliff. compared It in were the and quarter announced, of second the approximately lockdowns month matured, But to worldwide and the quarter. was a better unknown. early last business declined formal quarter our fell deep declared, as year's than revenue XX% got end, In each total second the last. the

Our In silver second lining. revenue, revenue, the approximately excluding there political decreased total XX% of we revenue, total combined compared broadcast cloud, national XXXX. every and quarter core to local which call a our is

business less we than feared, hoped. it and we than slowed Our recovered faster

or, core improved most pre-COVID revenue budgets declined beat in plummeted but fact, XX%, quarter. markets, stations in our total But XX%, improved, but throughout a met year-over-year our in of their decrease in still cases, by importantly, the April of June was by XX%. individual June. some second sequentially In the only many and May

to as Adjusted temporary, important more. positive that maybe no challenge It tours, this million XXXX second reach million through per $XXX $XXX million. and We Of revenue declined in EBITDA businesses, political dominant in more no course, been even attributable bus Broadcast duration, cash political our remain common more or remained mired is at a concern, XXXX great remain shareholders to or In the advertising will is Television more were no a itself And will loss similar that these that at whistle-stop just share. unknown at million. basis second train in flow conventions, on stages will was Net particular, our and more be of $XXX year-over-year results live of immediate of healthy more keep amounts. of form impact. as more has political anticipate to rallies, in not visits. quarter our million mind stay on no our allow indeed the and this with between than never Total entertainment theater follows. and at safer health country less increase dramatic, quarter revenue home, total was sports. million. various $X.XX home and though schools, revenue $X historic restrictions $XXX was $XXX

Importantly, spent by difficult Gray repurchasing common Directors be this stock stock very of a our in price common am the and track X.X the in flow more times. XX,XXX,XXX optimistic during robustly Gray's several of and Board I common our the Class bit price We cash quarter confirm an shares over have million common significant therefore, value of our $XX And XXXX. than free of XX the first a the X,XXX,XXX half in XXXX, of November we stock and average total took $XX.XX was our rock-solid mismatch remain positive these to of particularly position A months stock shares balance per a enabled continue further We, shares that strong to adopted of shares which share, of repurchase shares business. and we we sheet company's at approximately about remains Currently, purchasing quarter. year. In the million a approximately X% outstanding at have between cash to each prudent first under pleased the believe of we including on Gray by in in a Television us outstanding. with has advantage second grow authorization common of X.X million to traded commissions. past million management quarter slightly total, what

spending year-end quarter the to first represents beginning the our XX.X% $XX stock almost we following imaginable. XXXX at cash million worst the $XXX Over despite year, a This by $XXX the $XXX cash half at on the in the of at million, increase of increased in end on on hand repurchases. quarter million hand bank, second million

bank. leverage total was facility quarter our a in credit cash netting of defined on in ratio as Our basis times all X.X trailing senior X our the

million facility not no drawn and have any have revolving $XXX funding do credit we so. our from to intention We

earnings have also Kevin program funds recovery Jim also any or intention received color to to today's have and add no release. We so. not now do any from will Pat, additional and stimulus government

questions. the will line I open Pat? Thereafter, for

Pat LaPlatney

forced to and and a those and changed games society. of us to confronting but days our Gray work impact you, we the surely XXX some related personal anticipated continue many played, has have for of us remote policies protect Thank shortcomings its since frankly, and not remainder good the and of coronavirus a are lives ways in ourselves only others. country crisis also our It's the outbreak strengths, quite we all Hilton, been as NBA Meanwhile, our adopted and cancel each time. the policy roughly being lasted all will ago. it Since And for than are The XXX season, COVID-XX the longer morning, days then, Television coronavirus work everyone. an to employees.

responses XXX days stand the challenges to past constructive the all have been easy. before at encouraged are not We largely historic The us positive today. that

We nevertheless as of that more be extraordinary optimistic a or all as humbled a make colleagues society these the experiences has doubled has members in eerie how the this local everyone events other the us the company, stronger virtually could great community. past to harming physically a news we some messenger are Shooting our covering remote, and protect and but our of attacked not all uncomfortable work just of will as year, We of as distant their reconfiguring by the not media of cover as local and social customers, our individuals. rioters proud permit tirelessly country, simply new are called and and down verbally for more and to socially that taken super of facilities in environment. both serving systems, attacked work work and for intent XXX also the recur covering routines new advertising communities which call all. to on events, the often to been on serving have And media, all they a to Unfortunately, on police, on the is benefit who unacceptable, on and a journalists meaning news on community, respect days. by group

environment. business landing as We're advertisers return encouraged April. success the by we business continued the to our of Turning past in move and new

time we still the Our in forecast the saw year-over-year, showed at this but off quarter. levels at business not second

be our is of simply by One teams. and predict - very to whether closely or the country, performer, to revenue. creativity encouraged meet ingenuity though the course, randomly not political revenue we will are number strong we flare-ups of how able advertising future the continue sales our of With virus occurring expectations, around

at altered we've guide As Hilton $XXX year our $XXX million. noted, million to political full now

the campaign front, has base on presidential buys laid their Clinton in par Trump had in the pace the through On XXXX. the that Biden with spending election. campaign, remains however,

campaign overall spending is his Trump Importantly, versus XX% XXXX. up to currently in be spending the on track

in it is, spending early only PAC course, slightly center strong issuing far, advertising. X% the races in Carolina, expectations most or So Michigan seeing coming democratic are presidential still toss-up states races. XXXX Gray spending race and But relatively of category in for the presidential up competitive And cycle we next lean has center We're in states of rates X is the the for in higher-than-expected levels. the X below at lean is in Kansas. from in seeing category, very republic. South demand Alaska, currently. the

the races, parties competitive with PAC up Rounding originally be toss-up Gray up groups In from in category, candidates the levels. has supporting out X the anticipated. is than fall Senate to house addition, X from spent more and races XX% that shaping both party XXXX from races major

increase Carolina, year for this North To campaigns in try pre-book We seen for we this nonpresidential significant races rates. governor footprint ad only in pre-bookings a our to in spending on races have seen number commit lock in with of same versus only We've dollars early the to record revenue X% time to date, one, an X as cycle for have level us. and lower expected their across XXXX. generate

roughly yesterday cash that learned million at had July, of same we campaign Biden the number as hand of on Finally, the $XXX essentially the end the which is Trump campaign.

to on next turn over spend of well We television. buy that every months record effective bodes used and point the are I'll data they will for campaigns confident raise will also dollar both call most ads raise to Kevin. the X the back more with year. money that This a spending now

Kevin Latek

Great. Thank you, Pat.

agreements of first in with year. largest completed Turning well as to half operators a We retransmission. small number additional our MVPDs as of this the of X now

respectfully and did As outcome noted were as those faith crisis of by negotiations, public not health our the conducted, impact quietly, good in parties. call, which the usual, prior in all

contracts distributors pleased carried We the retrans have declines contracts revenue by however, retransmission we as retrans full unexpectedly with have continued This of encountered non-renewing are sub in include as we year. escalators specific our in content the and well as all our counts. nature been to continue value large growth for annual push retrans that renewals year, terms renewing for ensure recent every

market, perhaps this more paid by had in quarter The the of the first of subs fewer of other first OTT our last as that year. the quarter OTT paid in in hand, XXXX and quarter the second with quarter MVPD of second of appears than subs continue year total, providers, of quarter the in as fewer X% in quarter of subs to the year. X% It this subs last year. fourth had XXXX In much quarter had XX% the we between declined our the XXXX. subs paid quarter nearly X% fourth second fourth have on MVPD

declines that experienced in XXXX. context, half sub of decline we For first all to equals roughly this

of MVPD our distributors contracts, rates, among all second increased increased sub retrans last year's over in retransmission a have subs stable revenue and over low escalators different quarter the XXXX. would X% double-digit migrations rate muted OTT losses, who combined in quarter environment gross our growth. particular, number. and In second The retransmission the our retrans growth yielded revenues Given with have sub

Our XXXX. retransmission half revenue first the of X% increased over half first

among migrate distributors, revenue this XXXX half of X various Looking retransmission for a than depending year. we ahead, if revenue of revenue accelerated half in retransmission retransmission second latter less If the somewhat rate, somewhat subs be at the sub an the of how could for year of the to would than April rest the sub in the renewal XXXX half on year, of count the half on losses continue due remains first significant booked the higher the stable that priced of first be the year.

significant XXXX, that increase Those rates X our appear we roughly year. in agreements rates expired some for comp comp, replaced in experienced Throughout a higher X favorable to the also increased as we've release repricing higher that all reverse we refer network In were in entire at time. pretty us, new agreements but start today to XXXX. also now. our reverse to time reverse you are those renewed of the whilst payments which network Rates proactively of typically for at networks Gray see comp large year, significantly alone have I agreements that X been rates, increased. times various We and want forecasting number last in big with XXXX, of XXXX, than payments, retrans our all for our those locked In of affiliation as XXXX. same in a course again affiliation remind hindsight MVPD agreements we at market with the years. agreements

to of Thank Ryan. MVPD negotiations subs. In stations demonstrate and call MVPD value renewals will again Our in roughly television the and forward our next approximately renewals, turn January of your of we cable now you fourth look round XXXX. where our I'll XXX retrans set begin next renewal time. the occur satellite quarter, leading total of We our partners, group most the covering of XX% retrans platforms. of the to over can Jim for representing we

James Ryan

Thank will you, a be XX-Q morning, The filed deal Kevin. provide great that today release later Good and earnings information. of everyone. the

no we present is longer that This on dispositions starting acquisitions XXXX with collectively individually and combined the in results historical a basis. occurred and the need reminder, first release late were XX-Q, a and quarter's As to immaterial. because

an as-reported results presenting therefore, generally are, only basis. We on

our began the for with in results we overall are Given QX. that March, events dramatic pleased

sequential already reflecting little our previous revenue the the the higher of we month core than comments Hilton on each in was made as quarter a mentioned. call, earnings has improvement total Our

$XXX and lower Our ratio times million decline anticipate we net leverage currently the that cash of year. by Xs of end the the in was this will X.X into it

million we of During of QX plus our by have $XXX revolver hand hand XXXX, increased undrawn million. $XXX we mentioned million. earlier, as And on cash cash an on $XX

amounts remaining cash we free So very Moreover, of position. we this liquidity continue at each are in a during generate this year. to expect significant we will strong of quarter that time,

relatively our maturities debt one are to generation emerge we free the are liquidity of and in position Given we and we the just strongest thrive and local today leverage believe position, low strong cash XXXX, a very no until as as broadcast in companies good country.

QX all are Given uncertainty COVID-XX, XXXX. our year around we've the full formal guidance previous for withdrawn and issuing not guidance

full the about I However, political revenue of retransmission still you and $XXX political range. we and Currently, ad expect revenue QX. our ad remain to grow to more low-double-digit bullish should revenue a allow in revenue political all to anticipated million. on range XXXX to $XXX know know and want in high-single-digit total between year increases million

in As with and declines are is limited. peers, our understandably experiencing visibility core revenue our in total we QX,

again, but is visibility today, limited, in sequentially improving is still saw to we believe total total month core as at of of we QX. XX%, fluid to least of range As a XX% will appears QX that cautioning QX, decline in for each the be revenue revenue situation and core our

for While in dramatic that how unfold. our still are current it We these in internal a pacings. system predictions forecast figures decline, is QX on realize on QX. over and We reiterate, pacing guidance. based as any current and To regard not kind everybody do will forecasts our is improvement of eager a whether

our as we So of about increase current We to we reflecting XXXX exclusively optimistic can anticipate revenue. $XX we currently potential reverse XXXX advertising in to declines all a with forecast the networks. approximate remain QX quarter direction discussing will through the Naturally, in the will guidance. increase an QX do internal compensation We expenses mitigate as cautiously range, work million over our and closely a formal work as mid-single-digit our these point, not we're clients. data still core total broadcast

and approximate of Our expenses our reflecting in aggregate those production the companies seasonality anticipated part of the in single millions upper will QX levels, to in expenses dollars, businesses. total corporate of in XXXX the QX are QX

key Again, to cash year a expected update liquidity items. some be Now million. to interest on currently $XXX full is basis

estimate $XX will decrease $XXX decrease and million full and LIBOR. year basis reflects expenditures a on million, the year for Capital original the the $XX range between Our million. in was

between million, At Our million. point, $XX original $XX on $XX $XX turn are estimated and was our the full Cash this for the the million. to estimate original million year call year currently estimate was I'll Hilton. taxes back and

Hilton Howell

The Television Thank like you, companies employees, Gray Jim. the else witnessed historic stations, challenges last few everyone production and has months. over

water, proud above to are employment environments. only that we We high maintain full our safe and our employees, heads working we not kept managed morale for

already importance and local and community important broadcast ratings the the by news our in reestablish stations along community information demonstrated exceptional support. have highest stations Our That has covering highly-rated value stations been decades. seen support with of

Operator, Gray will our Nevertheless, our on even continue ask Results of very the quality we to fondly than questions. at challenges wisdom ours As time, flow to prepared for we of further now our that we as positive local the finally also when a you lean the normality call will operating and our we audiences returns. more institution what to highest seems what and of when owning well cash away and a be we as this. serve confirm today posted sizable historic free customers the management to this line these the company, we The like anticipated face as grew Television reported value cash convinced day succeed reserves. in return open structure. normality remain remember previous that

Operator

with first the is Kurnos Benchmark Your [Operator line of Instructions] Company. The from question Dan

Dan Kurnos

eagerly color. crystal morning the subs. you're Kevin, Good already appreciate I'm Thanks. Great. ball all on question and anticipating sure

outlook? been guess, of your kind just kind So, you strong, wants core, to how might maybe, in then obviously, on back-half from hearing of any the peer to it what I relates well take to and there comparison thoughts in of Jim, And the the and relatively I start whoever is net and really terms Roku year guidance others. as visibility we've and retrans of it especially your or QX in group, think actually

can you So that pre-COVID seeing maybe continuing early levels And of sense sequential us do to kind pockets just we're you strength? the give a XXXX? until anticipate of Thanks. of where why back you're outperformance, improvement

Kevin Latek

sub-losses, is on first Dan, obviously, X%. down

not is nowhere what also companies were were and seeing half last we X acceleration is First expecting, announce public what of over quarters. the we year near the the its

that in the the country a if moving towards of economy that going normal. be kind stabilizing. hotspots today's or little forward, seems bit Looking is is the to recovering, headlines We're it

mitigate the round is seems piece It another get first year. checks of should the to and saw cetera. in that solved] [ph], cetera, the stimulus returns, declines certainly sub et You half [UI confidence we us et of what

grace didn't We and also as given number on and bills is some bill, jobs or showing end folks a circumstances. change when may that, up again suspect there's end jobs losing especially up return in otherwise And stimulus paying their their periods of money past as provided. pay cable subs again, the who they

it think first remain we the half the guess declines of see how to did that I sub that we're but for saw year us. we not surprised of second going much were we the anybody's decline So really, the at the that the it's half year, first half optimistic

that here So just seems, I optimistic. even ago. It X we seem cetera, the economy et than we as weeks more remain be saw or hopeful the in of surprised. pointing things virus, to can direction today, X be We sit bit Jim? a

James Ryan

give Pat bit I'll probably far the little as that. more As let on color a forecast, and Bob

goes I deep and the first we foremost, markets the is strength, in penetration have to key it, our a factor. think

get in that's mean, in core to us political. more. bit get is a realize always going wildcard. I the downward obviously political The years followed then core little It thing we a strong political, But to especially bit September everybody is, a bit. we outperform skew obviously, could super of for that's is other when a squeezed little little

happens. problem to indeed have if high-class a that that's So

more Pat you So little we're what I'll and/or color on give seeing. a Bob let

Pat LaPlatney

Sure.

do Pat. Particularly times in It's trusted but So that their same. I'll advertisers real viewers tend jump these, on it's not only the lean stations, X in like to quick. number

So mentioned, years. now. our work that having X team, done of X to is they've strong a significant training also benefit our It as us I'd for Jim past really is stations portfolio for great right add the our huge sales you've development great on groups. strong our a they've impact general, that done XX and from in already And digital the particularly but force, last a business over then seen look excellent also, work. months, say

So, Bob, if jump you want detail, to add any in.

Robert Smith

clients' and money going of huge Pat. trust Pat they're station. stations in for year-in/year-out, with Certainly, mentioned. along make get Sure, And are I portfolio market. down. nothing, contributing for clients when we're find number enough a as have X, bought. but some of some stations, to our us. that, X we're dominant our digital verticals addition to the Often and how doing, budgets can't But But there that, they you can impact X has efforts going in dominant to may to those the The are get we're emphasize

so, XX - has the that's But SVPs resources and lot example, that markets one but region, this I divided. phenomenal. run the and morning, competitive And I evenly way selling they then, to had pretty right e-mail which And say, they from different would had since the March, lot for different salespeople certainly lastly, is, they've events, new phenomenal. that a the somebody that all is got of been oversee the a with had is we somewhat in enough. business our can't of created helped. XX training have And his at a factor of group. the provided jumped groups XX, a in mentioned And grand fact that regions. direct people, program, that And well. XX That is, up group that they an Pat sold, as let the X oversell And I grand least certainly sold me things,

dollar rock that point find, doing can look for every we're we're under we the good pretty to and So it. every job trying that of a is

it, really it aggressive the the for are Now, but of up doesn't across make front all sales on company. we

Dan Kurnos

appreciate helpful Got everyone. it. I it. That's color, really

Just, or quickly, the you benefit dates get Kevin, I major renewals kind of that expiration might XQ nuance in of their full extended before past were I accounting there did off, the QX? just be know some in X jump

Kevin Latek

big reported contracts we rate. in resolved as time had X X the we to May, the By of

and was one checking think one I schedule. was signed

numbers rates applicable So that X, and QX. we When after would knew posted we April those QX last was the be finished would with the in - what deal be. rates had we

our do So if actual accrual. not. April agreed of sort the have the the not accrued for by rates even has we reflect check sure arrived - actually the the new rates. new the although I'm or parties, are the Once down, has, the is the It rest in for probably to but we of rates contract not nailed

see be for the rates based are effect and QX in would periods. those that revenue what QX for So you on

Dan Kurnos

Perfect. very Thanks much. it. appreciate I

Kevin Latek

Sure.

Operator

next is from Research. with of line the Wolfe John question Your Janedis

John Janedis

of you again message know based over the the lower And in I digital? time. the then any incremental on to that can Kevin, what investments into can related you're decline, tick you for expectations spoken but in comes in on you lean X the past will X, there. was me, curious much seeing guys. you've or small Yes, the think is just But And incrementally retrans extent to margins market? about from I primetime? your how remind pretty what ad revenue it's I talk programming may there us to comments networks?

James Ryan

question. Let me start with prime the

Kevin Latek

Yeah, ahead talk... you go and

James Ryan

and comes sports, is answer local all maybe syndicated sports. from the from prime, to XX% normal that our including Our else, from question news, programming historically everything of has roughly that XX% comes XX% comes other been XX% revenue

is a basis, general, I haven't it's teens anyway. offsetting it, the historically percentage probably relative for to QX, in run and down high XX% probably little numbers a up news somewhere, bit But call prime for on We our has would specific that. but suspect prime run

Kevin Latek

Our couple rates? those up understand contracts Yeah, those, in at as do over if well I next network we market the and question. the we What renewed XXXX the pick in sure years. We network early I'm our actually point of renewed XXXX. in locked not are this on

those So a out few we've endpoints years. taken

don't middle of change the in So the rates the term.

So question us I'm today. might not sure in the what is, market hitting what the be but

John Janedis

the based of around not you seeing Are that case? question you've the moving million little is than just incremental lower. you're that Yes, a margins so the and, know what will is, or $XX margins reverse. comments I bit about on the your guess, you lower talked forward I messaging be expect maybe going

Kevin Latek

Well, networks, margins retrans not know, half - our our comp other - X and you reverse rates reverse do fees. of fixed as networks are fixed, half X by have network of

go the as subs in and in networks down, sharing the are sharing So the X and not of somewhat pain. pain, the of networks the X

than but all importantly, sword. upside, of our that in comp we the go higher the subs if fixed then more negotiation. fee mean so for flipside painful. absorb function, percentage a as that But benefit. expected, double-edged are superior a I all it's the of the is, the - declines the sub-losses, we fees, X if would we or a those that's we subs I just programming, up that X normal negotiate if So formulas. pain other fruits In with favor And And fact more enjoy larger are rates stabilize, words, of those, sharing switches say we more sub have keep back a network it's fixed down. of than network, go reverse a is little right? and little the the of If network we

and or share you it the drive fee have don't strong money. if a MVPD, station you out that So particular can network collect with higher as extra set rate We a we a fixed of stations a network. of with really

So with network there sharing does to and network. your drive approaches. pluses are line the more minuses a both is question in increase The sub-losses the favorable reverse the bottom bit to percentage

John Janedis

you. Thank

Operator

Kyle line with next is Stephens. the Evans Your question from of

Kyle Evans

roughly political. that, the How Hilton, it. forget your thanks us thanks. easy Hi, human It's element thanks of speaking, And our much for on for crunchers, kind number midpoint? touching midpoint, to to off peeled of [ph] guide the keep detail is XX] for appreciate should business. Also, the of on for eyes be on then which [two versus expected that races of kind the presidential movement we down of market?

Kevin Latek

going it's and want XX%, need have past, answer I'm XX% percentage I to go to addressed back. about presidential in the the say that to check. today. Kyle, to but I later have to We've I'll

have and spend campaign On campaign the of strong remember, we had, nominating early in map to every X the to Hampshire, states, presidential, them presidential, we Trump all of money political campaigns, to the obviously, but benefit we stations South from really we actual to expect Iowa, is Nevada, not Outside the year, changing ads them did Carolina. addition having We in. - the New in spend in expect of we seems weeks, be buying spending see we money see states Biden in. did couple in not states this

earlier year. this field that has we have were we expecting So gotten than - than wider would

race. Senate competitive couple that of I Senate the get next the with are gubernatorial of gubernatorial spot only any Pat far to the change gotten other mentioned, bright don't but was can going more Obviously, there's competitive. races, sort this that see have more races weeks, of calendar. it races a that seems. never any over us As for indications

really X such those year. this those are to on North mentioned, ones very the As were radar certainly Maine, be are states be as we Carolina, expect hot Georgia, such Pat fire. I expecting absolutely, as absolutely not yeah, Arizona on And did we to in the mean we that the particularly have strong, X - Arizona. that

expanded. Senate this there. has seen morning, to won money that the U.S. as Remarkably, where state one a for and of went may XXXXs. Democratic more challenger that are you the Democrat the campaign Representative is Kansas, state. than Republican Marshall Kansas not primary certainly as have Senate the Dems more. since I Republican states Actually, on this field center it's So a an up of raised morning eye the The field keep ads. has expanding with challenge

have So expected which year. would that's we radar certainly on earlier the this not screen,

Democrat state the raised South a incumbent. incumbent more Carolina's has another money well-known and where the challenger very than

say and in what Senate more candidates of past, races competitive sometimes the a in sort years. as on way typical, of than up play. Senate seem house usually handful seems kind Houses Also PAC based be that spending the the of and that primaries and interest are So there's house over big in It as do. in be mentioning to more not to the races, races. changes is the it's Senate races group but is a prior stuff, competitive, of driver today,

Kyle Evans

that material then, because I XQ. was market your budgets if head. scratching me some their hit that's the by have in off, particularly Hilton, in hear counts difference any helpful. said I that of have pre-COVID were underlying in And did results? And that quarter? That's true, you think stations right, more one guess, sub or first my what driven I strong Then size I I was those And Great. there conditions follow-up. core

Kevin Latek

Kyle, He QX. not said June,

Kyle Evans

Okay. June, okay.

Okay.

Kevin Latek

Sorry.

Kyle Evans

there market there That's smallest have numbers across with follow, difference the decline of curious part second or added some You that some you. your material Raycom, underlying, the the sizes? what gives core that that that you helpful. just we large, the you and loss Then the numbers was of of was different sub-count of question, saw then saw kind markets addition perspective guys in

Kevin Latek

that? take talk, to wants Who

Pat LaPlatney

might In better answer small perhaps to - terms And or have - across Jim that. large loss I to there. Kevin the candidly, of relative I markets markets, can't don't know input sub did

market it's market, In large really advertising, revenue, small of versus it's - the portfolio. not terms really again, quality a more not function it's of of about advertising

Hilton Howell

was I Kyle, But quite lot that - mean, There only started sort over thing that are that of to of happened, markets difference was are in the was it's a But people June it board. anecdotal because that okay? positive, thought between just it and it's stuff all the down some in see in June. Well, June. an up. I pick

lot board, at were. and down have done down things. It shut all over it's quite they well time are were from that were the markets a that have do that numbers on consolidated Our But where depends or we various because period. it not on depends

great. and those then in were Say, And may slowed and Georgia July took down in in June, sort have of virus some areas the things. doing off some pretty back of here

state. really So by it's anecdotal and and market by

Kyle Evans

X one, your trends repurchase as the see balance kind last to we you sure with close M&A back broader just towards And the activity. for end about the like times, I'm One a by How by of down how for balance of this half - and next? year holders, should of outlook think love this Great. year? kind to your X the times of there M&A sheet the Thanks. intentions

Hilton Howell

are Bob, When continuing Gray Jim Well, few grow. Kevin, let Pat weigh upon makes remains about and I a of some this TV net moving things of more it and down, viewing households. up But prime on will or own anybody in to that. numbers talk and to remains function difficult. under company. the We make just right a XX% comments basis your intent a M&A reach

And so grow. we have to room

cash being We think that balance very sheet at I it's and said, That a price a strong and right right time. is is interested requisite. are the very at clear the king

to proud cash world of its be double fell our levels. off more buy at the of keep able or to the very we're ridiculous cliff were going X% to that. We cash so deploy and company. position trading really at - generate first businesses and And about sort can that say company the of million $XX the to lot of than ability back and a sort And - foremost. when still I'm absolutely to of to

so want sufficient - support storm, circumstances, any again, something to was long to to the our happen position stock we But going - price. And however we're we it lasts. like cash want again, if be that a it because weather doing to should that never under maintain

Kyle Evans

you. Thank Great.

James Ryan

just to on large markets. count, versus follow-up sub middle versus small Hey, your Kyle,

significant Our There's jumping nothing data that's us. any out didn't differences. at really really show

of uniform. tight a So it's fairly kind in range, pretty

Kyle Evans

Jim. Thanks,

Operator

question line Deutsche the Your with Bank. is next of from Aaron Watts

Aaron Watts

on. here. in I really Thanks guys. me for have just lot one Covered Hi, a left. ground of having Q&A the

able that about if think auto is to seeing back it seeing you're a bit Or core, improvement recovery? I guess, you're category in the auto the how trends participated still has represent far. Just, in in in? has about sequentially, the As curious and click I so upside auto some lagged

Hilton Howell

Okay. Bob, to want do that? handle you

James Ryan

ahead. Go

Robert Smith

Great. you repeat that, Can please?

Aaron Watts

sure. Yeah,

been question is pick improvement And you're into was up in on later? you from core the to participating in recovery far? XQ How the and Just the that just laggard that XQ. so a the that much category. expect advertising seeing Has sequential category auto

Robert Smith

- Yeah. got laggard, while they bit Well, a laggard, the actually. a get what's that's when a held somewhat been optimistic on supply up. Obviously, it been product And of it's we're has chain finally ground. the

sales have any September. September. bit a inventory. they for think right inventory you I FXXXs, at one that see you'll we that they hot our to, once you think And side really they list, because And national ones little if all going impact they're to indications or huge on sales getting can that's that of now, of car going tell not on we're Ford the get well. healthier as opens lot, to sell those going business. a to lack based through - it's And But spigot - products certainly dealers, But can from that's going on with lot up, make is that if again, tell beginning and a the and come our it negotiating for like of the a are a values month example, happen they have have a they feedback get and this as certainly, here make not almost business. and uptick doing going new see managers of tell that's in first you you're they'll driving through August any then thing car and certainly only used advertising, on significant we'll get so inventory a And later some lot really, see I the up dealer part talk in our they got limited are here the they obviously, to on of - our they'll the loosen in product, but reps can't think cases. clients I it well the dealers that but air, some of to remarkably

Aaron Watts

for Got follow-up it. And one helpful. That's Okay. maybe Jim.

local not perspective? how this do how to or football, on a news no doesn't outcome delay syndication majority an this audience on your of it's indirectly, extent from really directly But the pro we drive that I get in the Understanding revenues? football think an or we fall, touched and revenues. You about hope ideal your college happen. the impact

James Ryan

of All sports our of revenue. is single-digit a total percentage

delayed So it's we'd the to needle. not further, God it, see doesn't it's and really happen but forbid if to going love it move

Aaron Watts

Thank for guys. time, Okay. the you

Operator

of from the Goss is Your line next Jim question with Research. Barrington

James Goss

the Thank help is among Gray a in moving was, other it And overcome a X Xs now few inability things. at acquisition opportunities match more normal to number into inertia? if the it than or they mix. any versus the there political traditionally X your all ranking in least you. number to dislocations - greater and its And current I'm Raycom the from to X typical number drive stations as have markets move positioning the Are more focuses number having on introduce more did up to the wondering been might time? improve

Hilton Howell

Do you to that, handle Bob? want

Robert Smith

Yeah, sure.

question. an it's interesting - So

I the some civil of create But and number relative of unrest we've COVID-XX XX and last X. number the viewers the opportunity of does markets excellent an other things, number you're you So months. to given to to if growth the you X. correctly, to challenges that X move that would all in that Generally, understand some lot potential our seen larger default asking, a I for is in tell go to sort

stations solid number gone they've X/number from in made Cincinnati XX is a X. - have New X last now And New Cincinnati our Orleans number So months. is over moves and really a to the X. Orleans And number significant

and I encouraging to of I see. But happened you the that's And seen will a very in of some markets, we it's what's have in X months. you tell function can't tell movement encouraging, that our last larger so some

Hilton Howell

Louisville me of Well, is bit in market. expectations our let a Richmond a add WAVE because improving. our just up dramatically NBC exceeding little way as that station, moved and has bragging

happier the we're really we couldn't And not I be with all seeing tremendous could you, fronts. all so will tell see be overall what we on with And portfolios. happier, upside of direction

James Goss

it the doesn't pricing in might that second Has are go reflect it terms moves? political, of in any - of up seeing quarter, shown you movement any at in all out but typically those

Pat LaPlatney

Sure.

charge So more to their for they're as able their audience, spots. stations grow

degree, and if it's news Now rate. supply doing were last business. is, higher get year you're clock But reality to demand some this you rating a X and to doing a you're a a X in the the X'o year, going

James Goss

cost I'm could sure, do Okay. to you Jim are little benefits more extent that And had is the that be create of sort clumsy, it thing? a savings, but to, from Maybe finding but some you've margin more remotes might a awkward, question. any this

James Ryan

we've I think had a manage our always overall, expenses of tradition tightly. them

natural So Maybe I not being a being barely don't cost think significantly travel or - to us used, entertainment just are being significant used not give the budgets, remote stuff, going savings. used. really some is being work

So save some that. of

in or have stayed it needed didn't timing a is home QX, I access health especially that, necessary. services our in seen probably was savings as and just absolutely difference think, plan, unless people, although We

manage continue some prudently. our to We'll think eventually. don't around that I I come know will of exactly when. costs back

attributable in I really comp. the As broadcast cost increase is QX, the reverse mentioned, to overall in solely increase

So we're good there. job doing a

some of amount literally There's are Some We're being dollars, save there, your work in was huge. bought it cost by XXX,XXX, cases masks, protective pieces offset of we sanitizer, it, of spending the individual overtime. was we some not costs equipment. in huge shields, more some name remote whether smaller by XXX,XXX what excess, have not but

think a bit of the dramatic will tradeoff but there, any cost anything savings be don't remote working dramatic of - little a it's directly there situation. So because I

James Goss

HBO One the for Prime, CBS you grouped Netflix, Disney+, the stream all seems continual Thank there's Okay. Access, that. to Peacock, into thing. All new Hulu. of entrants addition Max, It flow Amazon a last like services, and in

to you package of come the cable of whatever your might think other sub might As of a have be occur, do needs in sort basic things continuing trend that a of programming there your that satisfy addition might these networks in to along? terms like just groups Or a is factor counts? destabilization sort to get specific

Kevin Latek

good Hi, a Jim, Jim, Kevin. question. is this that's

certainly the cobble kind of of cable, use to of think cetera. depends offerings too, able own for spending the these access, try streaming But a bundled the more Peacock, I cable et pay the from Tubi, you you'd be your to order Disney+, products. be can together broadband were services pay, you'd of on of package answer you course, the to get handful bundle. same channels company than for Plus to buy to if you in

there the the appeal classic original of can the to which whether get it. content that be content. get good show bundle. on OTT as subscribing it original the to cable afford concerned could available extent, cable X broadcast the and consumers and X as cable people seems could So providing more bundle, would for part X afford paid help OTT of lessen bundle who some of of value it concern not about providers should are us But be everyone's to be the different today, If about whether can bundles to those

the it sponsoring shake to the was people subscribed will to and across TV different hopefully, but that more probably of the pay to out, package. have think So try these you programming - which for first where which probably drive I scenario economic of a fragmentation better it's a kind go bundle, all needs separately back, on is bundles little

James Goss

share out taking antenna is bundle that versus And get or bundles one strip of one factor of the those part Are - in might of how is with it? you able broadcast cables? a who stations the of to the that

Kevin Latek

are know. our a people don't are OTT therefore, from and are people who I not a that that being signals are bundle, subs, carried I report getting numbers getting distributor our OTT paying paid. Yeah, who we're I who those are our OTT in mean, - don't

Disney+ of are know don't example, would air. we over how the that. I and for So won't taking, quantify getting a signal people if be our There record

James Goss

Thanks, Kevin. Thank right. All you.

Operator

line the Fargo. final with of Wells Your Steven from question Cahall is

Steven Cahall

comp. about fixed you thanks that reverse Kevin, sub of agreements? moving X Or think maintain your and mix the about If in half the all color do there. year, do helpful of of of comp back of fee that would a just trend declines deals on that first, follow-up Maybe reverse you base? subscriber talked for a sub based kind you like onto more Thanks.

Kevin Latek

academic an charge formula to the ability a to It's have to they're to way that you need network question. their us charging affiliates the tell change other different the charging or don't than We say you're folks.

have and essentially I'm all their with anybody having network plead broadcasters all think not formula Fox everyone for over that's one up the scale stuck formula formula, fixed CBS affiliation aware Fox NBC different they attempted which I period. answer, at formula. of still all started but around its XXXX, last had and the is met same period. its their own has network XXXX, period, comp cycle, has changed years came a they broadcasters, a each it. cetera. all networks formula it's different et for broadcasters with system, with for its its have when in several - The have fee. charging reverse point the with a has negotiations into to broadcasters, formula

go what you So - back and will current us worth charge I to don't It's it's counts. us not see that it's to a say, a really sub better possible imagining for network for under be just differently. system

Steven Cahall

Yeah.

given Like that some as a basis? see year-on-year. expect have sales should to dollar up we start with maybe buyback stock. cost Is move comp a going made a on reverse you continue come any it start start the on side, in expense trend fixed for broadcast of couple your Or then to particularly interest reduction? be stock excluding on down common And like expense, that's there then to non-reverse the looking is a to broadcast ad at back bit to Okay. the we we Jim, And the Is you expenses coupon comp back, that preferred should focused improve? looks Jim. a little see, the on that? to

James Ryan

next on We of in obviously, decline as probably said back be seeing year. integration companies. our our benefit again with things some little year-over-year the our can. up structure people that. not mean non-reverse might both challenging. of been so XXXX although - on expenses, come We're a a focus but on more very Hilton increase expectation here the they side year-over-year recall wouldn't supporting bit I - slightly, talked on to can every deliver The right successful the flip be If up, there that it were but will of second We've at is dollar to our still very a always they I perpetual. there was little comp commissions a getting mean, either. beginning, work of of commissions, I as cost did I But part we would don't ramp the we've very lot think it. been question, we've I And decline expect much part is a the

Steven Cahall

Yeah.

the on preferred. was Second

amount any to potential If or the of you the preferred appetite reduce - at if there's point? any

James Ryan

that. a little down about I we'll - be some farther place the think down road thoughtful

right say I the probably is counted least not mean, think in preferred the but at I now, not now, not or calculation. never likely, never. right leverage

out, that. our taking we has of up all leverage, the start leverage sense we'll some be been if something our course, bringing we So on will situation about for and some X hear it. last years with our thoughtful At monitor stated do to decrease or of be to you make and, it to the our rate. goal continue would so point, I probably it

Steven Cahall

Thank you. it. Got

Operator

will closing for turn any I questions. host further no remarks. the are the back call There to over

Hilton Howell

year just I to for all going joining - worst today. to all be of QX for us. of this, us we Well, want thank the you the quarter knew the is

I'm for I QX of can XXXX you, positive tell for looking So news. rest a QX of to lot and the already forward

our next time look I to with forward teams and you look your to around. Thank for talking talking, guys you so attention. And forward all

Operator

today's for Thank participation. you concludes conference call. your This

You may now disconnect.

Gray Television (GTN) 9 Aug 202020 Q2 Earnings call transcript