GTN - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Gray Television Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions] I will now turn the call over to Hilton Howell, Executive Chairman and CEO, to begin.

Hilton Howell

Good morning. Thank you, operator.

As she mentioned, I am Hilton Howell, the Chairman and CEO of Gray Television. all XXXX for earnings thank quarter our to year-end and call. want of joining you fourth I

On the and line Ryan; President Latek; and with Chief and me, as Pat our Officer, our usual, our LaPlatney; Chief Chief Bob Officer, Legal Financial Development Operating Kevin Co-CEO, Officer, Jim are Smith. our

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

Kevin Latek

forward-looking of the Those subject implied future good important uncertainties. or discussed and could the on future statements operating factors. of risks may the include from Thank of differ operating coronavirus matters a this things, other in and any and Certain results. you, results statements morning, future Hilton, its various among in are everyone. COVID-XX, impact result to forward-looking expressed and number statements those novel Actual on results regarding, a as call disease, our

more The For filed these refer forward-looking our The filed update company today. report reports company's no source uses such obligation is recent annual will recent be on most www.gray.tv. SEC, most to please information a information. Company website statements. key about address undertakes as our that of its XX-K, Form the website to with factors, Gray including

to analysis on are release GAAP statements. assist in to measures in but the financial as as our company. earnings measures -- corporate Included in also and the particular, We the non-GAAP These assist reported broadcast be operating metrics will the the non-GAAP leverage EBITDA metric ratios. replace an flow, Included flow, expenses, deck well and on and call cash to flow, measurements measures of website GAAP adjusted are supplements investor meant cash next cash provided to post will financial of website as valuation not updated public within this our weeks. reconciliations our in free their of less certain flow two our the a financial cash broadcast discussion are

I'll Hilton. the Now turn call to

Hilton Howell

Kevin. report we very lots news discuss. have Today, you, of good to Thank and to

anniversary months so the Gray of momentum our extremely record guidance for one-year As able XX gratified we business beginning a my acquisition, most life the results, is today continuing quarter fantastic eventful year report the in approach to Television the of fourth ahead. far, and I that strong am in

Our people revolver and We challenges, even unprecedented the adopted over our We we quickly Last we would We despite financial cuts produce-from-home pay challenge. no and benefit in the benefit challenges no withdraw our on remain XXXX. predicted that furloughs, company positive flow cuts, no past very the did overcame nor cash work-from-home We quarter any not May, accepted of met layoffs, and support. each and policies report-from-home March. government imposed delays. no no year.

exposed to expanded health In exposed to those benefits coronavirus. fact, we potentially or

of their social as derecho, expanded the of coronavirus, I have widespread and which one and stations before coverage fierce a heard my Our life, hurricanes storms, in the even unrest. known never

such of response, LaPlatney will other television, our will and December, recognition In to launching school Pat hard work collectively be discuss residents to fact, effort their this local stations fact, hard and these and literally concerts, on organize companies we in in food through and dollars In And during production every efforts projects of tens drives their that weekend. up communities. of that lead to virtual raise fundraisers, local millions shortly virtual one for each full-time paid teamed in we extensive bonuses support times. employee

executives throughout put Our new selling. and new training, sales emphasis account new the ways of Company on business and managers development

are The Television runs mean, in it would apparent top collective results bottom. ways this Gray with reduce to other and earnings no efforts from to way. any release. company innovative We also today's very found and and now have of one lean Gray's executed expenses

the one and cash bond greatly operating expectations ago. flow year, even exceeded buybacks. improved flow We our our robust from stock pandemic and successful cash through year offering a For full our broadcast revenues, balance sheet

hurricanes, release month. which continue Quincy end invest few if our date. intensively to announced throw first pandemic, even to made storms planned did you new social and which, acquisition into year, unrest acquired a and our the the recession, And not way. at derechos, of announces XXXX very us of on this stations happy stations a Today's results, have our dogged in even We earnings we as multiple we the a severe Media, of know, record

total quarter the share, XXX% fourth fully an increase the the or of Broadcast quarter from $XXX quarter million, XXXX. of million, cash amazing $XXX was to XX% Net XXXX. stockholders million was common or diluted was increase is for million Our flow $XXX per the attributable fourth quarter of XX% of increase million from $X.XX of XXXX. which an revenue from fourth or an income $XXX $XXX fourth

the for quarter of of EBITDA XX% adjusted million of fourth million, was Our an XXXX $XXX the quarter increase or $XXX XXXX. fourth from

its core and a eight-quarter local basis, at all million We netting transaction-related ended the levels. facility troughs national $XXX to better cash of from with year effect the our our in trailing total senior credit the of ratio of reflecting X.XXx sequential total defined expenses. revenue balance and total continued Our as a April, giving improvement on conditions leverage business

the an including roughly quarter During $XX.XX of XXX,XXX share, of our fourth per XXXX, average common at price shares repurchased commissions. stock of we

fourth stories million. that refinancing in in robustly earnings topics X.X also I at fourth November the of and The quarter. even which close opening on on that call, my the For day. while we after attention, continued end two advertising call yet political average addressed that to XXXX, and $XX the repurchased want remarks, occurred an shares deserve all addressed revenue, items our million of those addressing election And prior the we for price were after certainly of we open the of big quarter market change $XX

to These Upon us ample Quincy and Gray boards room company. important X. now more people. NAB, and with February And of U.S. that is very that serving The tremendous Ralph heartfelt. transaction, industry many Television and NAB tremendous leaving our in it so And we that have immense is Quincy to leverage this a that are by in I in affiliate to household, collectively that countless of stations to two have in journalism their people selected to our fine tribute XXX local of was the ago Media the closing we now. television for final markets made broadcast Ralph's just stations time, XX.X% because by only owned regret ranked our pledge our news pack, in years on country. local all television words at the continuing press Quincy time We love it a endeavors humbled planned highest-ranked led only XX lifelong we business, fine announced XX our XXX announcement other honored the been impressive transaction this second and and at we station is is company markets mergers Quincy concerning will for to any regret and the reached community number Ralph's broadcast that television the to higher contributions markets. and Oakley. has and ownsstations statistics true that television XX who markets one contributions through lose giant acquire our stations. in stations Those we from a local work first Those the and were First, The acquisition the for more include announcing In our than businesses stations and or be operate acquisitions. to release acquire residents Quincy dividend. few years it terrific for service stations, who is only times how markets. big the and I Gray on the in expressed broadcasting the local rely acquisition, than morning that shareholders the are

from permit our return facility us once quarterly our formally earnings four the leverage As prior paying Board time. to to where has to Directors falls our below calls, market in you defined as Gray's consider senior conditions been know ratio intending total of dividends credit

dividend $X.XX the for saw the yesterday's year. at leverage decades ratio time, December share meeting, decided our did that restart quarterly to to Those $X.XX XX, consistently we in Board at regular net our the dividend a our release capital. closely remember may fall time of Gray's suspended four quarterly at XXXX. Gray morning, us prior At cash per to a Accordingly, electively paid dividend quarterly preserve As that below you follow for this directors shareholders after Recession. our Great or who careful discussion, equity you

has move Great that on stronger. determined recovery really of time that is, the than a leverage, confirmation the growing that that place historic and reducing another gray stock the this the Thereafter, goal and with portfolio more and appropriate quarterly the been times now have hours long-term put been therefore, priority plans resuming the of now we singular This was several never balance progress a Executing is all workforce past Company we it in and sheet surveyed in on the successfully And Board of The priorities robust is through team in darkest executed has buybacks. larger dividend. recently, placed years. today, highest Gray the to XX remarkable paying growth resume and XXXX, these the management Recession.

bankers grateful especially of credit equity our to and and for our investors efforts. are support We their

now to slightly leverage opportunistic and our priorities capital to first, dividend returning, priorities over a quarterly next, regularly and the reduce yet dividend. buybacks Gray's through be explicitly will shareholders allocation return our to stock With remain: capital altered, time;

to the in is grow so have earlier, ownership growth of present a strategically. future anticipate opportunities policies. today the acquisition allocation good Gray. always, goals ample as will and also evaluate mentioned that room We In long-term we under we I will, opportunities at capital as short, cap, And our day that terms Gray

communities our We year Pat, our very and I earnings to people. to are our At Kevin as and importantly, to this over release. turn the our call ahead. you we time, additional very business, today's strong And most will look to color next, forward of proud provide of a stations, Jim hear

to to joins area. answer open in line of the for today Bob help will as questions our who, his COO, Smith, usual, us and questions we all for up Thereafter, us

Pat? So

Pat LaPlatney

all results that our our political estimate of like increased year despite revenue $XXX statewide revenue quarter all, time. that year-end, earnings per a When unbeatable. races. to crossed million was all for exceeding too, in revenues we full year one XXXX, political basis over that's that to per million political raised combined advertising all, advertising of announced we through advertising figure Thank television XX% you, in revenue TV with the XXXX. our range between field anticipated very guide revenue combined news that political and that XXXX, Then 'XX were million noting, was which Geographical basis all footprint. of in across well million. with political through per president generated political advertising we more XXXX, for once full political perspective, than the year, late in a levels we Hilton. on presidential advertising highly revenue of high-quality, It's races at ads plus household expectation and In races per race was to as $X.XX TV we Gray advertising had some year to our blessed the location fourth million. that competitive Later, XXXX. political highest our XXXX In broadcast historic reported exceeded $XXX through in $XXX third in publicly household million call per 'XX, full early one are be the punch revenue XXXX, in on what local announce we thrilled no spending of to Gray if $XXX our we political quarter historical revenue generated household. point the can. political and Gray December, year-end, XXXX lackluster real $XXX the the at on I'd to In Today, arrive million in to and number in lack Gray's one-two at predicted rated advertising at across or least year TV XXXX. owners household million. November, that historical of Recall as nearly In thereafter. books was end, the in historical ago, put TV again our alone, a orders with I of $XXX in wide levels advertising our was presidential household revenue $XXX $XX.XX more throughout $X.XX at operations $XXX group worth traded

and to local core calls, the while political relatively XXXX on. very we worst advertising revenue, XXXX we recession our displacement. XXXX earnings total year in broadcast continual seemed trend and The revenue, improvements fourth each continued this of combined we which month Our call retrans be despite quarter the excluding business, amidst and the told all also April political, In core, national went in our the advertising. that you for pandemic, political was of revenue as even political saw strong

quarter to approximately compared Our total of decreased the core fourth revenue X% XXXX.

prior October, the total historically year, in of largely strong revenue much political large displacement impacted of XX% In political our by number again, declined attributed significant, be can from markets. core displacement. a While this to decline

political the core revenue outside advertising our revenue revenue million just from October $XX effects pandemic total throughout declined Overall, of revenue In X% with the thereby, prior gradually reopening core fact, advertising Georgia, X% with In the our in first of the October total of began the in on less year. November, In Georgia, May the stage December, dwarfed our than from mostly in diminishing year. that with total prior core in essentially and, momentum business. million. advertising resurgence in continued $XXX political disappearing declined year the of political the

slid than and training, products when all many us due peers, Those lockdowns the helped of new sales business. spring for of on developing many clients in business newfound time viewers, our largely lower core we've new nearly for recoveries as our new prospecting to and and affected our clients As back-to-basics mentioned exercises our post used business faster declines development. of refocus to we previously, core the

growth that to we advertisers We investments historically that continue gambling, in very in as to see budgets XXXX, for we're lotteries started us casinos. will believe In growing these new well beyond. and benefit right as continue category It's seeing will highlighting also state-run strong particular believe included worth XXXX for XXXX one time. some which now we and

the on few has state-by-state The down few basis, of months. increasing a sports only accelerated category the legalization where a of in With categories dollars betting for were other most business this million grew XXXX to year. in last the

now core still for anything not very predictor are the gambling which than to pacings, more great Our necessarily holds, category this pointing year. a increase would encouraging because future the XXXX. revenue, XXX% is category for us fastest-growing gambling are ad for over If near that be

We are business our in XXXX. return operating core levels a normal to hopeful more about in

of in spot, we far, that quarter will begun year we back pacings So push the second are and XXXX in have a good increasingly optimistic core levels our this toward year. the

year. continued that momentum often that need also records, throughout is the mentioned and We've digital We last to continued and digital highlight feat new usage breaking growth in business. our our

that now With sessions year, XXXX. entire course our the the total raised closed, over over XX% XXXX we of online can the report

all the and a best VUit, will across and of local app in XX%, announced for live, over and of number platforms year. pass year XXX new users had news thought free first the in each you by XXXX, individual viewers achievement our events, million of did views, content. each that the broadcasters and Gray's ago, stories, Syncbak's this averaging XXXX. million live placing that very Gray Netflix for local which unique time earnings A that recall prior In on XX% on Our just monthly we page sites live joined XXX call as is rose streaming digital video Many users we surpassed called December views local rose other month. of

VUit, stations, Cedar For of and VUit example, XX online Rapids local DMAs, The school times per including Gray's game visits reaching its spends per XXX app a Today, host series KCRG DMAs. content XXXX the total broadcast Gray stations. XXX Lights minutes from XX XX most one football in user session. VUit month high Through with coverage average streamed Friday Night reached viewers VUit. on in alone this

I'd like only in by markets being comments another challenge Finally, Texas very to echo extraordinary our presented remarkable weather staff. about news The yet the just all many of done in of last for but events coverage, difficult Hilton's dedicated work week our other states. not

Our journalists making members and news markets in sure critical had team other did work heroic that again information. our up-to-the-minute and

to Grand broadcast security. to and of coverage in up In live p.m. Houston stations All Opry XX,XXX money raise turn call Opry Nexstar Opry America, teamed good we've to The I'll and of community food Ole Kevin. with weather and and X:XX than virtually every in I'm report network banks network Hearst, the nearly across and Circle owned providing were also Gray a proceeds on happy by more Eastern now Graham's to Meredith. pantries on food station, at broadcast additional addition awareness the our the food to this country. every people and benefit extensive help will leverage Feeding in emergencies, KPRC the at XXX Saturday's and

Kevin Latek

even local make operational the fit Gray's managers new perfect for suit geographic our local best empowering sales, markets content, local individual their our culture morning the we strived join state to Gray Good have an local of again. Television that strong agreement To the consistently Quincy to thrilled are more decisions reached needs. the and institutions we acquire that also believe with portfolio. Media, will professionals have case, company fit to they type the that In footprint to are precisely staffing and stations a add are and this of to hand-in-glove obvious, and

full-power release, stations Gray on all a commenced formal day Quincy announced divesting As Quincy which in Quincy and a Fargo that markets, process our television six in the same station. divestiture in both television already acquisition. disclosed Wells own are the we network-affiliated we the Quincy press

While encouraged seen first in are divestiture level bids are the on of at we interest we the until that far. so tomorrow, not have due very stations

We more divestiture processes. the are we've diverse is also prior parties and interested of gratified than wider experienced in pool that

the process to will submitted in expect quickly We move DOJ announced final continue April. and with and the SEC to executed, contracts

a MVPD successful That its our public of a other two MVPDs, of refused different renewal year, one telco to of with to contracts operators largest interruption all those of between without relatively covers more telco once recent agreement. several XXX%. MVPD builders, quietly X% of carrying individual and cable January companies, and ratio stations, We of our DBS renewal has Gray sub the impacts over consent subscriber at the development This two with of all MVPDs. total and ended base. our began XX% batch subscriber less of success negotiations close X.X% includes and continue retransmission contracts representing midsized our over another nearly negotiation through and Today, than will again small expire XXXX with of MVPD major sub operators. our completion batch our than cable our concluded to cycle universe. retransmission paid late only that bit smaller is Another even Consequently, base this and an significant one a about total operator we bankrupt and portion than paid XXX small base of largest of successfully of of

renew summer at that with and that paid ahead, cover about this we small cover we later Looking of another be XX% January X. will year-end, negotiations in This negotiation MVPD have sub middle will Then with occur MVPDs a will negotiations small MVPD to postponed base. our one of retroactively base. the priced MVPD have spring to number we of of XXXX, of our number will around to sub XX% paid

year will over should next XXXX, first larger and first that months. quarter anticipate will increase a To retransmission the quarter both XXXX a revenue the our fourth second in the and as over that remind occur by year-over-year the next X% basis few increase quarters renewal quarter we last about in you re-pricing in revenue of For XXXX. first the in the then quarter perspective, XX% by the revenue of result and retransmission on X% of XX% in third put these I'll quarters year year-over-year estimates of XXXX. of the this increased amounts Retransmission

and increased MVPD For a the the annual a portion agreements result as all year XXXX, repricing sub well X%. last repricing our are last of increases of X of revenue of our year. in the These first of as full and retransmission April nearly our quarter revenue of base both significant in year escalators

report MVPDs quarter With three XXXX of have -- Finally, received the of our nearly had OTT in much a year, more of covering have from we than any we darkest first fourth summer. that anticipated providers, up at sub of now of than and data XXXX reports and the held counts subscriber today us can last better hand available for in good XXXX. to days comprehensive three total portion all the point we quarters now last

subscriber operators full in of XXXX. subscriber fourth for total XXXX declined paid relatively count of for we for subscriber subscriber significant subscriber X fourth aside, many channel the count in only X.X% complete only we and from we discuss reports Big at of they saw with fee set whom benefit we a of of sub the the count I'll set an the XXXX, only the As Gray. the the from XXXX throughout MVPD in looking of back from quarter and up. But nearly are a declined however, the decreases more affiliated of at in a quarter when The year. total comprehensive Gray's and total particular, count increases X.X% Overall, a total receive OTT counts, total -- are because year subscribers --

XXXX your to by data Ryan. the total Thank reveals the comprehensive call subscriber at for Jim such the turn certainly everyone, Given small that of we're that a declined challenges count our pleased you threw I'll all time. more amount. now

Jim Ryan

Thank morning, everyone. you, Good Kevin.

the you. today, we information beginning which as is release, reporting of that have a great later will first additional as-reported $XXX dispositions deal that, QX XX-K out Yes, In late in will because Also, million political, XXXX our quick being reminder, but point filing for remember exceeded just immaterial. be basis XXXX a about of $XXX from wanted we and our was all to that million million considered of to and about an combined the political $XXX final all XXXX. XXXX, political. quarter acquisitions comment as this actually quick of during One of the the I addition morning's on historical

pro the first for the mentioned we quarter our leverage transaction having $XXX of the As Hilton end to this with month we was transaction earlier, ratio been at our ratio the cash X.XX, that of times. hand. the And be the four on end with of of approximately announcement at the Quincy stated netting the closed, at of Quincy expect leverage year, Quincy million forma

time, strong fourth cash significant liquidity we At expect increased each a During as we're position. very of $XXX revolver, we generate quarter, to in this amounts million we And will of by 'XX. quarter cash undrawn million. so $XXX during our have of continue we today, an free

political full As shares we with In XX.X of or we free cash per million million share revenue. the XXXX, have approximately $XXX today, outstanding. generated $X.XX approximately of year record-setting

That is and free look will cash that -- Quincy acquisition, anticipate to by Quincy million. we year non-political year, transaction. any $XXX range total $XXX a we post-closing between additional million free As excluding XXXX, generated currently cash the

excluding 'XX/'XX range to flow, flow $XXX acquisition, XXXX $XXX $XXX million about cash and Quincy our average million. our approximately of will free average that be up, anticipate it free was sum in we cash a to So million,

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

also the QX. the in at the far see We're returned what with of start we're release guidance the formal year. pleased seeing so that we've You'll for

more X% that to X%. increase, digits. part currently, And core year, a add including be growing about the million. million to we're mentioned, X%; in revenue, bit XX%. in $XX Production about networks. transaction a is is of in some the cadence year. $XX that Corporate will February expenses later broadcasting of up million we're That's anticipating revenue. timing And retransmission production reverse revenue of about total comp related represented digits. little expenses be costs flat about down to the and to $XX approximately million. additional increasing to up expenses, be guiding expenses, increase. flat $XX increasing Quincy, to company be little increase be To pick an of $XX to QX the guiding to by Total quarter-over-quarter a little up Kevin single generate color appearing March companies up to on given, bit as a up single low again, this will low Operating the to January core was in we're revenue QX, back is million renewals XX% approximately low revenue, our And Our digits. will the mid-single broadcast will to X%,

We core revenue. for call Hilton. A back turn month-over-month I'll full year $XX $XXs couple million, items our So very expenditures by improvement the be of sequential and million, cash the XXXX. of the will liquidity At quick of capital anticipate to $XXX approximate continuing that, encouraged cash low of the about in millions. we're taxes cadence will interest

Hilton Howell

Thank you very much, Jim.

may with Let's have. that everyone any begin questions

Operator

Our Stephens. Instructions] comes the Kyle of first Evans of line [Operator question from

Kyle Evans

numbers. through flow Jim, you cash those rip free

them some back just follow-ups. again? I've if mind, help didn't you could give through Then And Quincy, plug? can don't slowly If tick you one us you for you got think that about

Jim Ryan

We outstanding somewhere $XXX and excluding XX.X million with shares million, million was 'XX, cash translates free this to per XXXX Quincy, that the $XXX between year million. cash, share, our range $XXX So believe of will free and in $X.XX as today.

close. would cash dependent flow a obviously, is flow from imply $XXX that to XXXX Quincy, Quincy The prior we free to free and 'XX/'XX is two-year $XXX maybe cash free average $XXX our So going on generation blended between flow cash be and million, when million. of million

currently a the accretive. Quincy close anticipating are cash year. in middle And is flow We free of obviously, the sometime

because in on We flow We'll 'XX, accretive be flow it's year. cash two-year exactly the right free bring private and how XXXX, part information. whether additional very cash will sometime flow respect basis, on it in the think to their haven't share be how fair trying 'XX, of will gotten more and basis. now, second without much that per into a private half cash in But would it's that is a transaction company compelling to even have we're average free very, once I Quincy say we say close Quincy on Quincy, free a blended this especially a story to

Kyle Evans

And when you CHB you Do you've deals. with great Quincy? given historically, do numbers this anticipate

Jim Ryan

Yes. weeks that time Quincy It it. to our post-closing is we CHB Quincy I of caution, intention, may that that for once will it a large take all may, couple get together. update pulled or little close of will But we is enough bit a yes.

Kyle Evans

XX%, for Kevin, XX% the of those then, same you you and implying cadence deltas X%, in be off we said that the And Great. guide Were thinking XX%, 'XX, would, think of year-over-year retrans the the X%, should gave the you balance XX%. growth XQ kind on year? of for I we about us

Kevin Latek

in last large not was growth acceleration just group implying accelerated, year. referring and to that. we were group a this a It's No. simply because I renewing year

April increases year of I think have be subsequent But in and retrans the that should the certainly, had, higher this Jim higher, what Given we as quarter. don't be is this mentioned, I be year we indicative quarters year-over-year going to both have than last because a this should sales cadence didn't we summer in And didn't, year. on like won't something our year. X that of had we we have big last renewal Xst. year. then on have had percent we We not going And XX-plus have last last renewed we did we that January

So think for trend the getting don't the I year year. increase is except of line really last indicative for continued

Kyle Evans

Okay.

then month you sub per that what a about of not, if retrans revenue inception? I'm more can in the at high more you, has base? have satellite? Could tracked will or help the think I perspective? you which, you traditional virtual guessing virtual rate the done sub and us While And then, size cable And a a since from talk little won't, your Has one component level follow-up. you it per bit about number

Kevin Latek

The thought grown faster certainly it's OTT would to than bigger it than be, and it we grow. is thought going much was we

there from growth different this with by small couple arrangements before with approach very and guys don't taking have everybody. out each network heard You've reverse a and, we there's, growth very, of big a us and OTT providers. some operator, And

fee. a the network, would Some we of pay directly by negotiate and it's simply, fee a just paid others

of the them people there's we'd so our, I all the would In is the Overall, the the want we luxury in in they're cases, to least. of paying the are paying with cases, us a some If some to operator MVPD. be variation. us we, our OTT have guys preference who's that who's most, the higher say And not operator least; ecosystem. choosing, lot pay-TV than had the

when we've with the last deal a that week. bag. that lot negotiated A negotiated There's deal we close deals going be three last the anywhere is mixed negotiated. in do ago So was to to not to years it's a

So it's as the renew put well. hard at times to Those generalities OTT. all around different

So going the are large. of they've been them. this place. up definitely the of have providers -- been as on become going both sub mean base They've headline there the There's room MVPD up meaningful lot just at our point. the OTT to a a grow rates component of in I

Kyle Evans

Quincy. call lastly, Great. you didn't a around guys And then do

Ralph. you us about especially your the touch or thinking that, talking Could grow the now. Supreme about about and opportunity in public golf And consolidate congratulations the think you for case hope further playing and UHF that on So I help Court station, and M&A? group to a to maybe right he's discount.

Kevin Latek

the we it's small groups will industry, industry Okay. operationally, to think joint folks Actually, time there's weekend, still as there mentioned this fit obviously There in -- but all stations there's very involved the not, a for and that's on Opry. this and out that We I'm efforts some business. are assume example this in geographically, going are that would just for lot culturally. happens Pat -- in me. still still are we of think we a that plenty -- good think be smaller Gray,

some own. obviously happen. the that we people They we're And the like stations it would at hopefully, own interested know will know So we point. to that who that buying in

think you at safe we're point, be discount, next XX%. And the XX%. survive UHF as us. Without a Quincy, I will fairly at the After over that it's at years. With we'll doesn't XX%. at impact discount bet this not four know, it discount, the a we're

to worrying room is great whether in place have we in about or place. UHF discount of without not Company a the So amount the grow still

views asked it appear discussions on don't will those administration yet. which that the focuses are we at started first have -- would FCC reflected question Obama this It's if are is away. which that was they'll here administration go based also cap. you So to probably today, other me? really sit obviously today. are raise haven't What discount I question, UHF QX the split last unclear as There in seem that policy the the

Hilton Howell

case. Court Supreme

Kyle Evans

Yes.

Kevin Latek

again Court briefs. we've benefited that other Supreme obviously, non-Big the in not the a this up again perspective, by lobbying case, we asked And stations deregulation Supreme's experience showed lot the Supreme that We're offer non-Big republic. to X the take and that TV of up an and X which the that. markets encouraged that argument. different BAA higher And evidence broadcasters. spent The again acquiring here, by we XXXX The lots past asked supplying address CFC is a were and Big from backed we FCC the data we demonstrated unique we even that to that news study X with encouraged of in prove case, and amicus, Court our for end from very result acquiring to the then by stations a hard our we stations to of acquiring more news. oral and In fall Gray [indiscernible] unique and time

is Court than Supreme to the the other of by no Supreme act Court into when insight June. We going have end the decisions almost always its issues

would non-Big by rid the The Supreme to all XXXX a FCC think we'll So a has allows of getting allowed folks it's the largest for. of very 'XX deregulation its I largest caution non-Big The considering is us acquire market waiver lot Court decision small that a X circumstances. what only X in be June. a step That's of see ownership rules. since and of market. acquisitions outside certain again, largest stations think in FCC outside was market, the though, end not the I

one It step of to away unleash at to to little respect some great a a the be market. with a X a sense. up activity, is going So or so a that in swapping XXXX don't MyNetwork we see Telemundo not perhaps is legacy number can others, small station, common great very with our least trading we station affiliate pick Gray, but other TV opportunity

for for just sort steadily waiver quietly many So as we've the to that again, waiver make for mean on some other may might a may years sense be affiliates affiliates, and us, that decision are that independent process. Telemundo the people done of might stations, views have mean. CW what need there But stations, different it us acquire would court to through processes, -- additional eliminate for off-air

I've but as floodgates encouraged. it consolidation, We we're many predicting. So does read not massive so open to people --

Operator

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

John Janedis

what few guys think a talk you're pressure months owners and like categories sounds for bit any results the with or perspective? COVID before seeing flattish, are market expected more of it you're the about I than would Meaning it, some with of tracking And ground a guys have on were softer and the other advertising seeing. the Can what the you last so from four call an you dark. comps station

even categories stats share, market lower-rated today? the as your where I from market, gains of you weaker that you footprint into share would a the And market come points So growth? you to seeing how tailwind market share be your share translates you does back helpful. can look? talked given stations And there can any but finally, think, are are dollars, about So few gambling the I be a guess,

Hilton Howell

take one? to Bob, you want that

Robert Smith

the address gambling issue I'll first. Sure.

to -- schedules in quarter. forward. those as But states it eight assume happen quarter. year. more First because are market, it, are yet. this there impact of tremendous in will fourth that with in gambling in heavy in a live and our when of the them time. for three see category you quarter, be states I we other people and our active And we're not early is could the all The we DraftKings, active. yet markets, the several but they're There's first second you our it talk We example, all, And a add already most those all point We're well. there's this pretty And FanDuel currently, think and entire saw approved states. seeing that money significant add year, will three that they're But of active. about pretty currently other and in of going it's could the the -- players four should it the from first for upside, view, the quarter

that the could XX of active prefile we become those legislation the potentially, the in there's half see second addition, In other states, states year.

robust its of in own, and on pretty other greatly shares stations in it's questions, eight market the our to from are benefiting schedules, active, the most markets. are are even With states our that. regards outperformed So that growing. our We've

We the our already is share. in team, or often lot best outperform training all opinion, share have management. And allowed program cases, market to, in markets, market a that the extraordinarily strong -- together probably combined sales the, have business. in sales us sales We has my in of

oversee vice and who goes the pretty our for bullish So we're can they're -- year stations, senior I the as presidents group on. but speak our

seeing direct we're more on going numbers of you're think local activity. sales that and I sales we in local more terrific time spend a some case, lot and see in development, to And our new regard.

John Janedis

And you. Kevin, for quickly maybe, one Okay.

or in decline in that Anything relative like distributor with sub a underexposure there? X.X% or outlier. count, the an On terms over a looks out region to call of

Kevin Latek

lot a John, shedding last said, we the customers which big no saw noise up. of picking over when within of of a year. as But been MVPDs been have lot numbers. other I public we then them kind reports the surprise saw the folks It's

not with at last try through to pick break to differently, number to the -- So to because, and these what we've of year obviously, a is we comments, all but year, at fourth date subs try in look our in been to noise looking this people certain get total the try report quarter.

from records what And in as on So for on now. which of records get, we big the sub base relative a paid X the little, slightly the we just Big the down. we was take complete number year. a total that have to in from what we paid quarter total and and good estimates fourth we I improvement of the complete subs, -- and Big year-over-year we said, earlier quarter at were is fourth X looking to revenues quarter fourth a That's XXXX we'll MVPD have OTT where were

to certainly reopened, So seem got and returned. -- that we jobs, sports They back. reopened, said folks were to come going did bars hotels and and occur. did And

in the of There's the them top double-digit bet Actually, of kind operators, are of trying -- everyone's There that has we lot some half full the or to noise smooth we're I opposite. at XX moving say don't there over out to course quarter. that a the out it's X%. you, at was the So year, quarter moves noise when talking negative that lot. mean of versus up I But shakes full look down. a

Operator

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

Aaron Watts

of questions. couple A

start you me off in quarter? second fourth question. category saw about Let first what from it's an in starting advertising the with quarter, year how Can and quarter maybe here auto the talk you just the

Jim Ryan

advertisers huge in So October. and in news. there's always Political advertisers amount down, was auto love remember, of but local auto a fourth still noise your quarter,

-- it's I obviously, necessarily indicative. quarter so not the whole is think And

that softer a marked and than look at is last you was down If over was where bit which still about a December, improvement November, April. it in XX% little maybe it

year, it quarter. was Pacing -- for it of that still I for XX% March had down the up it's And necessarily completely overall that. down. definitely was something breaks. don't So end it lagging. or you it's better pacing, the of does know, been Pat, last not coming where you I January which -- know to like quarter, February don't on if softer. look it's quarters but this it kind to far is is is I'd indicative say good. for still And about Bob, add it's slowly And But how early see want many is back. to year. pretty than

Bob Smith

is but Yes, been and March, I Chrysler back that's in quarter comps. considerable other dark in our of fourth And are have some the quarter. for first the advertisers, showing coming and process has key for, name in real dollars Stellantis, place. a would just to there's one for including back Ford, it couple spot. was really positive But dark a add bright in that those only Most in be new the for Dodge still thing I'd come same of is, real advertising, or us add in local of some spot Jeep a is the they're here on, amount time that

in them to sign positive a see that's So back play.

Pat LaPlatney

that think Yes. where right out, out, is gets once I would with the shortages issues add, chip you're come supply chain to I much category ironed still impacting we now. just it manufacturing. And gets ironed have than stronger that back going see

Aaron Watts

helpful. Okay. That's really

Second you. question, Kevin, I think I'll point this one at

could year, XXXX of what got for retrans that goalposts renewals are put net you the comfortable the and the end growth some you next to like With done yet look get, over you this around enough few at guys? years early

Kevin Latek

Short really. not No, answer.

Aaron Watts

Okay.

right. All Okay.

I on on and can then how, guess, done about distribution the also on how for you to more think the way. visibility renewals your another color side, any margins affiliate retrans? with ask us side me you've with the Let give

Kevin Latek

our network margin The year better XXXX. be than various points will contracts had we in that year. retrans Remember last this repriced at

issue. It of for an We On years. was knew the January, first them a January coming. predicted it all timing annual And step-up. was we had XXXX, five X that of of

repriced net last better. without this certainly year, I grow what year year quantifying retrans and just of net year absolute many now care would our should last as so we will it year was This and say be. the So cycle, dollars, that's be retrans in with retrans thought somewhat, last over would margin about. this starting we

running year's, over margin. we've retrans, sure. it's for net little XXXX. That Net for higher As than running we're to we will grow years, as know, you going be said, year's not some a business was In the dollars. time. retrans don't, challenge. for We're will This last be

Aaron Watts

last Got me. it. Okay. for And question

written well I adoption, viewership. prime viewership pressure hasn't Just with been assuming a been there's that And acceleration year template you appreciate under. on in on that local continued your of pressure advertising perception service that? an that as the broadcast, on the time level, the business But about in last been for prime the time has plenty how streaming coming for do normalized audiences both as on kind audience from impacting perspective and think

Pat LaPlatney

Yes.

it's trend. look, I, Pat. not it's great So a

On point, got a it the it's XX%, prime out the think, but revenue below of point, some number our represents other hand, a to And or it's I kind that's been company or lower. a trend range I've think I at of of for in of sort time is, this there years. terms yes,

on important money a that our what So It's news it's it local not be, it's and to used as percentage the as be. near not represents. or, to of nowhere it basis used amount

have something So might you there. add Kevin, to

Kevin Latek

XX% revenue by period, XXXX XX% was numbers, XXXX, our revenue. time we, time of exact prime Yes, total the to network

year-out, again XXXX. Network our prime So XXXX news and comes local revenue from XX% of is XX%. time year-in,

Aaron Watts

on I time, But considerably driving base. guess, there about revenue have the at time I prime effect viewership not slots? your just what guess your of content. a as about seen trying up just prime the holding is other news kind overflow local appreciate that your the ratings to think you follow-up. I'm and I been we've as Kevin, better content, And local think than local

Kevin Latek

want about talk ratings? Bob, to do you

Bob Smith

local on had Actually, old on of anymore. own. days an Yes. issue its the news impact Yes. news an how is to really prime much tends not Local stand

many years an not ago much that term issue factor, certainly And so lead-in really really today. used prominently a the is more lead-out and was

can point So own. is that on my its local stand news

X:XX coming news or So, anything to to like necessarily and ours, access not prime that. or or prime in then news XX:XX the or

viewership. line I the the prime impact that not local on guess, bottom news much does have And our so, is

Pat LaPlatney

that... would I add just Yes.

Bob Smith

not Or much. as

Pat. Sorry,

Pat LaPlatney

while local strong discovering strong. it's of just local year reason. add in we've a would for news And extraordinarily good younger found the levels I viewing very had that lot actually have news. viewers XXXX very, moderated, still an We've,

Operator

of comes question Steven the of next Your line from Cahall Wells Fargo.

Steven Cahall

about start comments to really or off, in you QX Maybe really Pat, those gambling. XXXX growth you some some gaming made And back interesting core talked to about levels. strong being

smaller we like as a to a kind any XXXX the forward? it that others you betting and about as a that get anything like going think is be you mix, sports gambling will lot there levels, growing bigger be percentage. else back percentage So sectors sounds of much more? will think you think also Are Or

Pat LaPlatney

Yes.

we're continuing been has continues there. time a I growth think long solid growth. a growing, company-wide of and sort on, focus see which we a So have team, legal pretty category, for The to have show the category we health health to a

of supply soft we I now, think caused cars talked for, issues. about, and, that, lag have I in as a or auto think there's right look, availability the is issues chain

to think I once that pressure out back, going put more even I and that's comes will, -- there. think think So it automotive I

encouraging. that's So

Steven Cahall

that transaction? Yes. or going on about that, Quincy deal, you just so that maybe I a can during will putting think dividend structure a through be automatic the and grid system, you periods focus And the Jim, then, in talked before on place blackout buyback that given deleveraging you're be foregoing to

Jim Ryan

No.

Steven Cahall

a evolution streaming partners forward? that lot think of of included content to within has of going about Peacock that obviously, doesn't local sure local night, services some Plus to and is in Great. sort of really, And done then station content, a Last one. constituents maybe those important Those last include and that do make big yours. really you NBC. lighter the How tier Paramount a station talked your are how about

Jim Ryan

in them to Because can't someone room tell and point answer the it's virtual, you the to question.

the for know do. that. we you much Paramount as apologize as Also, news about it So is

time -- have and of don't we need we'll it. to and -- obviously, on, lot but So know learn we're questions, goes as -- we enough we'll more learn about a we

obviously. packages, We of big in are streaming -- the in terms streaming, we're

our device people as In of terms can local websites currently. of it's local apps. part on get any and just It's news, as VUit obviously well local news station our

to -- whether packages, it. there, a of we we're obviously news there's and and we're looking So a shortage and this we local streaming streaming no them, end other at point. of and some will some, at need won't. There's platforms packages some and be our no part It's of,

be Some good were will wish to be some be a of, really of. need and of, some we to part and we part a part we'll don't

streaming we know out to network, need us don't day, think need I last others. are So -- came world in whole if what of and And from just all It's them, information But be is the after more we in and exactly package, is Plus on Paramount I be for a means bag. obviously CBS of we its -- and where with that. the market news mixed we to a keep lot looking to complicated. closed another the it's yet have broadcasters getting a conversation every to there's that the more some night,

Operator

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

Jim Goss

couple. A

basis on looks of can be? there a also, allocation resumption your First, purchase the with might purchase it give now and the stations priorities. that more capital -- Quincy, in of with any And the a adding in you acquisition guidance for talk now a more them million you six. you're of if related price, light but decade terms with Is than with about in stations. wonder little new like net the nine first about regard divesting time the could I your Quincy price with to right $XXX what dividend of a

Jim Ryan

No.

no that on is, We Jim. net have what guidance

potential other I where divestiture divestitures and When the other why certainly lands. -- not think in are everybody negotiating done, that we will public with and we're like you on transactions, in we'll signed can net with past just we did -- up buyers. know understand you the number let contracts --

look to shareholders capital the at now, goes, a, and far the allocation As part there cash flow continue the room in dividend of ample generation foremost, the to as this Company, quarter. think, first free I return with reinstatement starting is of

time, there stock a time buyback. be a couple minutes of clear made Hilton to will, from As ago,

allocation it reduce a criteria able will are opportunity good than delevering many interested. be to on past will having I available, basis, depends transact time. clear stations leverage have a very our that station over of continue our in point focused think facts our and, allocation that if to the not, we especially, be on a mix group because makes on our years. the large it time. will calls several will on that enough do a or look, become always the many, circumstances being now But primarily we We stable that take for cash of or always a and at mix Whether flows And two-year-blended and over we rather enough luxury the a a we of

Jim Goss

And maybe -- Okay.

Hilton Howell

And is Hilton. Jim, this

a Let been mean cliche, a the time, had reinstating pretty Board me probably same I I priority, that one add buybacks our focused we dividend the that because besides all acquisitions, we and both. -- have Company our can it one an our high to yesterday, blackout at and is that. right? number priority. stock do but believe really, just that the when truly extremely to I post took chimed into about just gum remains during delivering we question I mean, have can It still you one frequently the and the thing regard was on discussion said periods. with I the highest use clear previous walk chew growing

certain that we place better to price in that company. a I at much have because level. never a we get price level We again hope are

the considered the finest been this the Company capacity generating assets a and now to company with balance have of management Board the finest with and things ever, sheet, XXXX. the tout I free had. One group the is flow since for certainly is that want of that And responsible that that cash we I've ever highest team

back of for session, an that say market a this dividend. comment aside, Harry sort I a candidly, fall ability picked free But Xs. of And so up then see COVID-XX, And into stocks time, the Tegna in cash is we prices. as it. at broadcast look that during was year step about in TVNewsCheck things the made And with in And to just the time And in increase the it perfect you will as a during that course Q&A Xs. is and flow XXs, to excessively. continue to relative opportunistically was if Jessell stock the if to buy XXs and At of run ago, hope what a has on this we -- pandemic, do Gray otherwise. that of have that's to But and this Jim. haven. was can safe be capacity a done to Nexstar is was proven the to begins mean we'll pandemic the and the our dividend the important. the true. give going us be lot and We we able weaknesses, would lean you I guys, and we stock

pieces to a different So able be of to business. of it. going we have handle a We're heck all

James Gos

in One local of own you local if wonder streaming room thing Yes, be of and terms might add be other Okay. have news broadcaster I that you surge other the in might services. local tremendous content. availability take programming with that content additional then. your you impacted additional profitable more clearly, most and able programming that advantage by how -- right owning thing to might way any feel can is the in now all new to do the

Donald LaPlatney

It's make your want I question. Pat. I'll -- to I I think and sure understand --

news, a better it's Where our a look, local at had think, to add will opportunity, we So I whether candidly news time. a business. every community stations long better and for local acquisition add a service we've it's or recent we

question. suggesting the we're news -- was Are platforms? hope local I you distributing your around So on that answers how OTT question

Jim Goss

the wonder available? -- any there's is room more that Or to the own of do. more a to -- for or can on thing more tends It's of can No. because extent replace pay That becoming you and for of abundance you create you is the aspects. replace your you the to that's of be own local profitable something of and And syndication most if programming, all the I have a that of that more fee broadcaster that. content there all programming with challenge

Donald LaPlatney

programming, there down do that we -- is No. path and will continue. to time going that and going say do we've room I local been would for now, to and that's some more

seeing plan So I could station side. more, programming Gray think not you less, on on local

Robert Smith

in, If is Bob. jump this could I

further most to in quite Just in substantially rely that last amount a of saved answer markets local couple with on whatsoever. question, money a cases, currently actually the substantial they're of over markets news. and it, and that our we've eliminated mostly news. fact, period of we And syndicated bit programming a program, local two-year syndicated larger replaced And with have no

And news, time believed to we that. that local for opportunity something So get any to we try in do certainly, long it's a we add time.

Jim Goss

Okay. you. thank

Operator

Markets. Michael Your of line next from NOBLE comes the question of Kupinski Capital

Michael Kupinski

First your congratulations congratulations quarter, of all, and on Quincy. on

in are up your And in you synergies? years? you indicated that Regarding million revenue $XX Quincy, and synergies. be is you that wondering, there that of expecting cost And operations? to was are going Or first multiple this I also, can break year between

Jim Ryan

third whatever of our a duplicate roughly uplift, costs. to third roughly other of the contractual and $XX of don't synergies retrans we uplift table a in The synergies, all, advantages other is Quincy we is roughly elimination when bring given talk contractual rights. than we retrans revenue First million include our about third

synergy fully amount a annualized a synergy sometime way the defined a first the XX-month have can implemented and within achieved consistently the So it's is be And we nice year. mixture. that

months, benefit. full put that score annualized will we synergy XXX, to you the a synergy our full achieve day XX little able because differently, accrues If to year. were first a can a within XX-month then it amount still say effect the synergy we the we achieve into one, that obviously, to if as So on day

Michael Kupinski

Perfect. Company your to in obviously What have for And consolidate, then markets in Company and the where you executed, you thoughts itself size on industry XX%, need is the you changed that industry? of achieving is urgent into cap? kind may And indicate is reach of it has markets to brilliantly you is to the television markets. as that how reach there? it now in the ownership the of see that XX% larger position get played you And in your that that plans move the as smaller limit to important And Gray terms that might you the consider? target just

Kevin Latek

So Michael, this is Kevin.

set network or Tegna. network TV are of sizable by are to stations because opportunity happen In strong a have where midsized or not less the We there that are be markets, We've stations or we buying a number, like been. that's number has a market the small or are TV small market by large still group there be very that larger requirements buying the the one one already because Most markets five meet Hearst owners or XXX there's large that been owned like to number to number owners small or high-quality two in one XX been that two. of XXX, a number are and our TV the not stations. top of number In of not one a them stations. right owned market than stations

could sheet We our weren't the and a one of single size, Company outbid those about Vegas Las number balance of in have San more came with it I've markets test we that have market is was regardless rather TV important paying our simply Hilton talked priorities Diego, certainly size. the of adding station, station. purchased while and and the now involves We And down nine priority. number participated managing market. every been market talked, TV like just with that's the for stations debt option. two we one, than the afraid more We in in years like larger were TV

balance we being must-have first, we we those afford. emphasis to not not, we certainly buy great if is is we available, were regret sheet purchase to needed that we And can can't, able our, TV and put It's what station. while on. So the no our stations there on move then

that's want idea we small stations markets first the correct at. to So where set buy we like. that I the No, opportunity in that's what because midsize is and

our are We've has of absolutely terms Nothing at and they an As changed and our of markets requirements. we stations we If to it going can few to there's for said the afford participate. many that we TV again, to large requirements, long-term to what's opportunity become that opportunities are out, times. look the more look buy at interest very TV it. If best meet us in it, available, we stations going we're own meet look there will that in Company. what in

magic market is or We stations. strong cap size. in and these look is there core at at we magic ceiling So look TV things. two number or no no which one There number

pretty just, sale, a allow with to no we If that be going the one's two to we us, strike discount to to And if we us long be come get the couple there. market. market that cap But comes next quickly. deal think can't then will a UHF get then can Those XX%. closer groups slog at are I important we could if and some would cap makes for over that the available offered years control become get of the away pretty the requirements. to it's goes in groups station the and we for sense what in

sale gating those the our those able issue. participate UHF be those of discount the goes of stations is processes. other course, part then, the or options some to away, for competitors If that's would So of in not And discount.

number for larger Obviously, compete continue folks away, can UHF here. stations. peers market a of smaller discount our the If broadcast of discount goes question? can I your Did that is So answer some to there's consolidate.

Operator

Gould from Your Alan of Capital. line the Loop next of question comes

Alan Gould

then they for I've got like And escalators. of content broadcast happening way your with on a possibility what's to that large much its the the two, year-over-year. will just pay your looks we how please. comp. Internet broadcast XX% platform Based start with you than Internet the up is That on finds news Do the to starting One, there's second And think guidance platforms? like reverse also it's quarter, content. it see for big paying news content? for question seems to respect first more newspaper

if So there. in I'm I wondering missing was something

Kevin Latek

step-up top this number, On comp, on we reverse reverse year last a not large much. year. January had Xst and move growth we year, on the Last did very the

you a and And in network was, year-over-year year to contracts be this on drive going retrans year. number And in going of through up. Again, many not terms. reason. reverse particular was margin, coming has the five-year We're of you'll I better so is renewing higher, function the to a year XXXX a see the good our last as comp process renewing reverse, XX% This for better again, quarter going a continue to That's margin basis. in all that's got better our as think was that year. that been it we our so year in see, think gross were, with a contracts a this margin years. I you'll And prior of

Pat LaPlatney

on first And your question...

Kevin Latek

Pat, can yes. We to go

Pat LaPlatney

Sure. Yes.

platforms. stations say have the from our can't we Begin benefit are in don't, will paying So we the whether Australia. they move as look, to large

a is I instances, chance that many TV of is in I happening. the are positive content, originators supporting And think development. general, a stations, in local which, of think, there

say And will but point. We sure. hope I this it not so what happen, can't does, certainly at

Operator

additional this closing At are any the there will call to comments. time, Howell no for or further questions. I return now Hilton

Kevin Latek

want just of day. everybody He And thank has. today, to your Thank for you. the we participating and rest enjoy

Operator

Earnings Gray for Call. XXXX participating Thank Conference Fourth you Television in the Quarter

You may now disconnect.

Gray Television (GTN) 27 Feb 212020 Q4 Earnings call transcript