GTN - Earnings call transcript Q2 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Gray Television Q2 Earnings Call. Today’s conference is being recorded. At this time I would like to turn the conference over to Mr. Hilton Howell, Executive Chairman and CEO. Please go ahead, sir.

Hilton Howell

Sarah. you, Thank morning! Good Thank you us. for joining all

With As Chairman and and mentioned, Officers. I earnings thank Gray’s traditional Howell, the am Hilton call. XXXX CEO quarter for our our today Executive joining as are operator you second me of Gray Television,

Kevin and and President our Officer, Smith. Officer, Chief LaPlatney; Chief Financial Legal and our Operating Our our Chief Officer, Pat Development Co-CEO, Latek; Jim Ryan; Bob

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

Kevin Latek

Gray everyone. address uses website Thank you, morning Hilton, company website good key a The of is its source and as information. www.gray.tv.

cash these and Quarterly to the including leverage Form most We Included reported as filed metrics statements. public measures, in The less I’ll will financial financial as turn measures Hilton. be in our ratios. the cash risks statements are recent XX-K operating our call file recent are undertakes operating earnings to certain various discussed with on with as of from release website in any Actual but not this uncertainties. differ cash future corporate our are on analysis call discussion set the result Included GAAP or matters a as Those Report the and now Annual been today. implied results. the in statements most future number to provided financial and of SEC a in adjusted expenses, of things company’s have call the on may flow in measurements, other well update meant statements to the EBITDA of on our Certain obligation replace free the and to regarding broadcast flow, forth expressed These later are the particular assist our recent GAAP statements. may non-GAAP include no XX-Q forward-looking results important that company over most earnings flow, broadcast forward-looking valuation release. among and of forward-looking reconciliations Form those Report could flow, our non-GAAP reports our supplements SEC, to subject their factors measures in in company. a cash

Hilton Howell

Thank Kevin. you,

excited you today to operational We results. be record quarter to financial truly of are another with discuss and

With nation’s year common fully design to results, million, contributed increased political diluted net guidance us, of support stations, approximately advertising the cash also of the anticipated, closing the in a in previously a second total revenue XX%; operating income These by $XXX the or us, journalists, an for this including were staff. professionals expenses retransmission by local with morning’s million group quarter eight made increasingly the television significantly million, increase we happens sales XXXX we $X.XX year-over-year operations of XX%; be we prior a revenue across we closing Quincy broadcast scale, increased all are a quarter as XXX% months our in revenues revenue acquisitions consent our was two combined excellent now best increased behind $XXX advertising quarter will $XX fully local exceeded lower by Overall, per advertising discuss attributable X,XXX%. solid in tad XXXX, increase which delivering share. and of call. behind and as stockholders XX%, provided to in large cycle, was call. one truly than at and of basis flow last entered a now flowing meaningful of XX%; On By and the just with all the to media EBITDA our total year’s beating of political technical from efficient our cash two expectations second increase second many results that adjusted Meredith on-year little our million, earnings of year luck, core $XXX the soon and an

more which our an add overall, we retransmission political second core forward historical our the disposition, on this year-over-year slowing color revenue revenue a finish both basis some On retrans effect to call. and and environments quarter But an Television our results billion. on with and record, on quarter year. set $X.X Gray is outlook see of challenging our track and all-time level the was at interest and clients a some we revenue will while to We combined record increased flat acquisitions have for growth, we hitting for gives expenses, remain exceptional second year

second amount that will cash to debt ratio, at political that the our unshaken defined Gray facilities. year trailing We total during this in credit XXXX significant right In million to debt, all buyback $XXX returned that of likely we return of in million a strong capital continue produced below open $XX revenue pay the of $XX operating significant in senior and we’ve the and during fund conviction million million Gray’s net pay shareholders and cash-on-hand end the further market, stock quarter leverage cash cash solid that, to of quarter through operating our advertising our results X% down and remainder $XXX with and common a a regular a paid strong dividends and with of preferred $XX expect down enabled results our our total, ended outstanding Importantly, to cash shareholders. quarter. of dividends thereafter. million capital as eight flow us flow cash will and

our and this partners Not for term X, of state with second about Gray relationship our of stockholders. financial solid on these agreement about included what it with numbers, the big a for at NBCU. announcements Beyond and all multifaceted but the of long new this quarter and what our number excited means Atlanta We means just very NBCUniversal. announced now Georgia, it the Television I’m June

utilize, the will all from know, the the of up our acre of construction erected from the feature few XXXX, development we now Gray’s Along at NBCU of is vertical I-XXX will Atlanta advisers is and currently General Atlanta. entirely a along be our first producing acre about for plant the production our new with XXX walls Motors real-estate road complex offices, quarter the signature decks. Gibson Assembly as soundstages offices and soundstages, Highway, assembly Construction second you That manager by with owned the city buildings, of JLL, its parking side As and second located Swirl Assembly by in Assembly the year that here its the former the Studios Doraville, new when is and use a Atlanta in shows were the and first expect Films. will project strategic went space XX a Perimeter It The the used will in developer half multiple Company the component begin buildings that soon mill Gray. that mixed most be on just in event right miles complex. at of section will and warehouse NBCU studio Assembly bungalows, Studios now. at the

Studios. our In the studio partners NBCU to extensive across Third improves agreements into more and will Pat of and world our commence development NBCU NBCU this Studios. be for finally LaPlatney. We which addition new studio this at for and turn In back-office maximize NBCU note, our greatly production the we also Well construction other will impressive reaching our and additional its financial Assembly the In term will whereby around as scheduling Assembly accounting, functions. with coot existing to Studios entered of the our for the Gray President the day-to-day security future video handle businesses eager management at business, leasing facilities, lots over NBCU other value both our with at to new our bring well way Television. operations and for anchor to lease Gray is the efficient at enticing very our and many entire as in on Atlanta not and retain businesses. expertise a all turn as and now for partnership will could of Quite the employer residents for to larger focus words having studio day-to-day our soundstages, the NBCU, the long in operational a makes Assembly I and own our Co-CEO, simply, visibility NBCU work call project, more positive finish On managing

Pat LaPlatney

you, Thank the second in continued companies despite stations macroeconomic production and to current perform Television headwinds. quarter well the Hilton. Gray’s

with very our pleased We’re results.

takes second the even would advertising a historical rises regional industry. substantially. revenue held basis, the skyrocketing national has quarter from advertising Normally in the on decline advertisers. revenue year. rose television demand advertising face up the revenue flat from last combined achieved to ‘XX, million advertising of roughly fact expect held when the It reason and local, $XX from normally In is strong, by political inventory One scale though political political our of core utilized revenue Gray in we QX core core

company have to flowed earning In Gray’s largest economic the most more state, back bounce the otherwise with scale largest Gray believe on viewers quickly expansion. group the parties. will generally in line would As in markets, Gray soften we advertising the and while often a to our economy positions platforms broader broadcast that returns dollars, nationally, is media allowing leading revenues, and and second this impact and to other other also of when factors

too. revenue on increased historical digital these basis. well from of combined reasons viewership second doing are many our year’s digital same double Total a and For very digits revenues quarter last

exactly XXXX integrated all-time posted revenue newly are digital billing follow digital Spartanburg quarter. users, XX We launched of in digital NextGen approach products with XX services in have to billing even example and year the history. worth in stations. right NextGen We midsized our exceeded revenue end. the Interestingly, that pure will combination, that’s In highest markets in into second our Stations Richmond, national acquired June, noting the and efforts Omaha, as better products XXX markets finish have now screen more many now. sales as news digital Greenville, expect for our in Increasing the sessions become and and Shreveport same billing. and traffic stronger highest views Gray and launched our highest right year of what markets we all before the digital TV fully was Also that sales essentially national we and time in QX, company’s all-time

not macro success right economic come and assets our keeping eye the remain to-date client may and and are Nevertheless, confident any weather reviewed, close progress have people just on right that the sentiment. the that developments way. we a I given we We our may that slowdown or to

will Next, offer station on Smith Bob Bob? our operations. additional color

Bob Smith

Thank you, Pat.

spoken on We concentrated results the on emphasis. of now seeing our you’re past calls have about focus sales and that

great direct We every continue stations local legacy see both new progress in business and new to month. developing

Our healthcare home traditionally improvement not strong leveraged and television tourism and legal and our auto verticals categories. and although economy to businesses. continue emphasis travel putting are on have newfound their remains experience in industries Meanwhile, we drive this solid that yet demand remain local the to sales challenged, our from

results races, parties. our continue Meanwhile, the efforts third some to more broadcasters some This have out and year’s been competitive are sales anyone through to many long the our program. this of leverage including of fellow Matrix than We buying last our with sales best broadcast we from expected. at believe process friction work tangible smooth year the political other techniques we in year’s with training in-house seeing primaries the

environment. benefit other than Gray’s any stations competitive more political platform from expected, As the

historic time footprint. offers – scale Missouri. media scale Governor state, the top-rated most political for efficient to many are Gray’s races that new shop more top competitive political and Nevada, and a local especially owned of audiences addition entire station that is our many reach in races new first by most owning one-stop is for are stations of the now benefiting Gray, most Gray most of including reaching from very reach Arizona, campaigns nearly those to of the statewide In also Indeed, and in platform the the U.S. local stations Senate, or places races have to also campaigns it’s advantage across this competitive in a battlegrounds, they statewide voters Wisconsin the This occur year where all markets Georgia, the the covet. cases

orders. that places the their for we to we Now, helps many statewide in political advertisers, from advertising their received first transaction the scale shares are to able time increase which to costs offer and decrease helps

quarter we just first revenue our again second to of all particular A Bloomberg million, the dismissed for first ranges $XX provided we combined we pass in our ago the for and Steyer results spending. year and XXXX’s XXXX, immensely years expectations. actual primary political even Two could and a of our the In guided spending, revenue election and reported advertising like had general we and XXXX’s aggressive For notion historical blew quarter, $XX political presidential the months of that political guidance presidential political the ago basis. the quarter. million Tom significant current second $XX from revenue, quarter on of benefited for revenue then advertising million spending ago, revenue significant Mike station three political footprint significant quarter, rival

swing XXXX collection Senate stations all release In now guidance that revenue new buyers absent that year political climb combined trends year It our weeks would meaningful superior the received stations led call of however, a revenue that that same as the of unmatched Georgia really of us runoff those recorded from news announced with have the have conclude continue earnings political million be local and revenue to our result addition, for turn Gray’s In of very XXXX are across cycle. overcome Consequently, nationally, to and hill. solid to one In stations. banner experiences fundraising the to this full $XXX we in ‘XX to we raising group revenues political sources conversations for our are with recent morning of leading we I’ll Kevin. that own XXXX. can Gray’s current over to this completely spending in political television a state. million $XXX core our this in conclusion, $XX be in footprint million

Kevin Latek

thank you Bob. Alright,

FOX the and saw you agreements our this all new in FOX the signed affiliated completed for Network of we renew release XX affiliations As that morning, with the markets.

affiliation major XXXX comes agreements network next Our end of the ABC NBC our and at deadline when expire.

posted second year XX% revenues earlier we the slightly retransmission, just XX% gain revenues strong of quarter increased retrans behind terms a quarter. of we almost X% first from On the increased a basis, basis the network X% million. in the revenues retransmission earlier XX% retrans the quarter, year Retransmission In is we GAAP also second combined posted million On year-over-year GAAP slightly period, increase revenues posted historical the a from year-over-year compensation a in basis on just the $XXX were a combined which period, which marks the gain quarter. historical prior on behind basis. XX% and in first increase net of a over year $XXX period

have last are Gray year between reminder, we the material a and agreements does of of pricing retransmission As not the XXXX. middle start any

the of would to the year in gross our At end still somewhat larger gross MVPD of basis We GAAP sub higher and solid In about year, for are higher macroeconomic retrans declines, modeling this virtual $X.X XX% OTT model formation. be yet likely that’s gains a now basis. on sub level throughout MVPD and slowdown forecast on and revenues household reflect year this to of the full rest contraction than the billion revenues a XXXX. combined X% last retrans about continues historical and new

this couple next first retransmission billion mid-single Looking at impressive for will only further billion achievement. and and year time revenues surpassed net retrans Television’s rates digit advertising gross in in ahead, an of that anticipate will we $X.X Reaching even diversified challenges than much company the $X retransmission Gray to revenues next grow the total if retransmission Jim ago. be face turn years. those be three it This just call my Ryan. stronger macro concludes years will and as Gray or four more the this a environment to remarks in Consequently, and was year, XXXX. able over slows Television the I revenue

Jim Ryan

Kevin Pat, Thank $XXX of have Kevin Bob comments the our forecasting you, keep of for Hilton, my will core earlier, Kevin! guidance, to QX morning, revenue so and later lot we’re little the out everyone! a mentioned QX, today. As of million. bit To short. a million recap highlights I’ll Good covered $XXX relatively filed XX-Q be

million. we’re Retransmission year. historical of combined and $XXX revenue equivalent displacement to revenue our $XXX to revenue on to QX be Broadcast start million this million revenue a $XXX and experiencing volume $XX advertising in it’s have which forecast and Olympic $XXX forecast came to $XXX is not and approximately The million, million at we’re our $XXX $XX as is retransmission with Given $XXX production total expecting advertising million, QX, XXXX million QX, expenses Again, results, people Company revenue expenses of all. said million million our of had revenue million revenue. million. expense; many to QX $XXX reminder, is corporate definitely advertising that revenue of due with for of million is million. of the as between flattish Also million $XXX million political to net amount Production revenue $XX core increasing and the that’s to for political are between XXXX of QX core million, very of amazing the QX political of $XX be been surprising will to and in $XXX obviously returning already, that not political have will the companies pleased expenses $XX of $XX

XX% category corporate group, we’re excluding includes of XX% is revenues approximately see was is beginning revenue driver comp reverse to Auto legal total and services Total still to see expense political below operating pleased off. expectations; that expenses holding to XX% growth remains in. financial, appear of were The XXX and core finally which to medical be to networks. biggest in maybe settling and core to production running level between the about and well Our still we that. our to in pleased was and of to broadcast

leverage, $XXX as was quarter cash-on-hand at trailing our was average at billion; X/XX/XX ’XX ratio or our defined two two ratio agreement leverage X.XXx, year year-end debt $X.XXX from to now was was debt is and Turning senior the cash outstanding down was lien at our flow leverage our and first X.XXx our $X.XXX billion; million; X.XXx. operating which in total credit

currently the that may data approximating future. today caution results to and circumstances anticipate, revenue, change comments full the We’ve revenue already filing of we comments XXXX, actual year. we’ll on some turning million. in we the anticipate are for facts, but of year Now anticipate as materially share political and of forecast $X.XX we Core these $X.X we billion said the

the mix political to then a determine. political should ultimate core in if impossible little skew the can you political displacement. fourth of Now quarter, obviously is obviously political and due anticipate skew environment to will little the expect a We a core lower higher, great but

retransmission As we mentioned billion, Kevin the earlier, $X.X revenue anticipating billion. we’re and our full anticipate our approximate approximating year, will $X.X for revenue total

before of $XX include and expense $X.XX anticipated disposal gain that and would amortization, of would – depreciation, billion, operating million assets loss be total is approximate to stock Our compensation. non-cash

the possibility continue to Xs and by to into in X.XX two leverage average be that approximately may We as will $X.XX end Our anticipate year. rest of the at of move our very high operating the billion. decline $X.X a approximating ratio from Xx, flow the put the as year our through cash operating cash agreement, would we we which anticipate senior flow year credit defined we the billion, about

$XXX on for our operating cash uses free investments again, year. construction for XXXX, flow full will dividends, now costs cash and of million cash $X.X the approximate in flow. year Commenting the we cash billion expect repurchases, assembly We free common expect stock acquisitions, our before and

have which increase cash rapid up the estimating full on of interest of is points basis million, up in especially based since reflecting $XXX million, LIBOR forward are from We rates, refund guide an is currently of year. expectation yield curve is $XXX and more, December or our previous estimating from $XXX the in the which and $XX year receive May, we are Cash a we XXX net That million tax of between full XXXX. of currently taxes, expect the by further million. LIBOR IRS year for September end to increases of the the of we

of $XX routine on our $XXX common last we will year. we’ve million are Other during million. will two a As approximately the our about to said of million full for and believe expenditures year calls, for anticipated total of be uses preferred capital year, the cash $XX dividends our XXXX dividends be be stock

$XX we we’ve million As stock QX. already in of common said, repurchased

have on of include investments would additional $XX required between the this construction are most repayment $XX announced we Atlanta Assembly end we currently and in we we we acquiring by June repayment million in here $XXX would We million, Term to debt of addition year, $XXX $XXX B amortization and for debt Telemundo Station the million. As of debt making $XXX $XX year. and/or to voluntary year million But year. that voluntary million anticipating costs, in That the X, anticipate million approximately XXXX. and million be of full anticipate the of earlier Atlanta this acquisitions total Loan our QX, million importantly, bring of the $XX in to an made repayment the

aggregate approximately the million million Loan stockholders $X.XX on Term of $XX $XX debt million stock of the required transfer value. in common outstanding enhanced voluntary million given QX, shares include per repayment is $XXX currently repurchased B, amortization to you million, of share of If year-end by our at value the a XX $XXX and

We I are year. Hilton. and call turn to look a the forward positioned very well back to very successful

Hilton Howell

now Thank we to may up any much. Operator, anyone call will the open you have. that questions very

Operator

Company. Benchmark And Instructions]. Kurnos from take first our caller Dan [Operator we’ll of

Dan Kurnos

a buckets what to – political core guys guys. said, flattish quarter. morning. bit a think anyway I Yes, the of solid it us steal to surprise Hilton to for given XQ Good little your thanks! see you despite a here, almost in see thunder was Obviously Great, print of some

of things? about talk We a can in you know, QX. So crowd-out never just couple talk about usually you

performer some we in you that So best us. of think because then other I was pacing into reasons head were gave timing other Olympics outside anything And just the give actually you one-timers us, or maybe guys how again color there in pretty the as around know was why think underlying that auto, you full were can or I I just there metric. space massive there, some know if strength, year on your and core guide. Jim category July number any which just political but notwithstanding maybe is decent, QX,

Pat LaPlatney

Hey Dan! Yes, so to it’s Pat. some I’ll me as six start. acquired There’s of help five, a I with newly to tell lot and year, going stations. seven. was of relates questions it talked with and But there, on about so the Bob would what you need general four, three, just you, QX what’s a numbers

the stations, upside acquired there piece of it’s think on talked I side it to now. seeing – we and it is with think going the end we accelerate through to we them, was mentioned is digital digital accelerate I think I the of when that I some – a year. the right actually So ad about I significant bit of sales that think going to little thought those and you’re a going

I of it. part big that’s So a think

markets again of pretty, think – political we’ve here, and crowd think some some right active Bob I biggest our political can but you in out. now. in fill know Look, I very got

bit, starting that auto a a I and the works and and team. the specialists team and the benefit team see the have runs category of also we’re and about number for been health to in has to it. that then – and the All time long travel that but tourism that’s think that we – that I think talked – Bob up tends run the

you’re it seeing. throw you to [Cross I think Talk] that’s over I’ll So for general, what in Bob,

Bob Smith

with Sure. things Thanks training mentioned training sales have a robust people team of and best broadcast the time it past on in a the our and in my before we AEs just entire of group couple calls, belief but industry. It’s many, add I Pat. lot spend many managers. on we a would our of and I’ve

of our biggest averaging carefully, tracked The tell markets lot we up direct in addition, second it, new business quarter stations local had in and and local where political May so In new it’s on all it. new about had the in and thing the some or they well call and new our best only greatly very direct back as comes quarter for you drive we’re and – retail to expect political factors also stations great into are and that, local per contributed those does well But unit we’re I and as having, we direct ever personnel core, with a to in average is or trained great accounts X,XXX think whether very local to we’ve on that. have play and of we quarter we some I it rate that ever month continue. would everyone,

Hilton Howell

you get Dan? we Did

Operator

removed like himself Would pull me has you to him the like he looks back? from queue. It

Hilton Howell

right. that’s Go ahead. No, all

Operator

Okay, thank you.

Watts Next we’ll Deutsche move on with to Bank. Aaron

Aaron Watts

million amount loan I that down probably repayment ahead to quick as of wanted rest Thanks everyone! debt in really debt you as in quarter? have some year. the question $XXX just Would confirm for you And market debt be that Hey look another secondary purchases the what you bond million well? the spoke paid $XX or mainly for second term me pointed one Jim. I having potentially within on. at to

Jim Ryan

that look repayment QX amortization was right likely targeted D required voluntary of more The now to versus like balancing paper it. market But deal that rule an the out. of opportunity The in the maturity at rising there, long-dated But very ‘XX term $XX today, and as bond repayment. so ‘XX probably will creates term wouldn’t loan of to than environment has million not can paper got starting million out rule it’s the that little you coming the the with. other has it wouldn’t upcoming date loan is bit the loan attractive-priced in with an know maturity rate a if long-term term likely well. As I go we’ve the pretty it we $XXX Most gets, market in maturity necessarily – rates up C shortest again rate for attractive current it’s us ‘XX. in probably a stability I easily some

Aaron Watts

it of Yes, apologize now your is floating? stack this. sense, cap if makes What versus and I missed fixed I percent

Jim Ryan

about XX-XX. It’s

Aaron Watts

below And macro out, current does expecting one, on – of or one a put leverage What to then With perhaps or by that ‘XX you’re further you the consideration just Okay, leverage some be looking year-end uncertainties? to trajectory year-end. little alright. regards Jim. into last at ‘XX, Xx taking

Jim Ryan

I slope high the think – we fours and this dissimilar lower overly lifetimes. is right, on I get size macro yearend couple low we the threes, couple in next think light out, glide maybe Raycom the and of probably year of depending in ‘XX, we’re conservatively four we’re threes. down see years you into to the big this or not the slope had did so political two high the we after a And is ago. between years we think the of comfortably, ‘XX. mean But also very least in that’s at probably I But fours the years and deal

For us comfortable. be we would extremely

Aaron Watts

appreciate Thank I context. it. that’s you. Okay, helpful

Hilton Howell

Thank you, Aaron.

Operator

you. Thank

to Goss, Next we’ll move Research. on Barrington Jim

Jim Goss

couple a have I morning! of Good questions.

of think some made the of distribution the impact I and First, to and stations. reference shifts streaming you one your

You the impact if impact obligations? happening, be on it comp reverse you has distributed and the you’re been lined any tend dollars could how and wondering form, looking how this both just I’m on some talk and retrans about in to up at being and

Kevin Latek

streaming, Kevin. there’s pieces This totally Jim! is I of I two us. streaming Hi for mean understand.

fee. a Anything obviously episode comes with Our basis. news content our available full streams a been XX/X online forever, that on signal has more story or

Plus Paramount said our as signal whether content away. we’re widely as per a those or or or really and Hulu to DISH Network, So available We’ve we not Comcast are fee. want TV going it our give be to all that’s possible;

monetize fees for we So signal. advertising full through through and the

still getting standpoint but Economically, from OTT People as signals with as in the people the channels are virtual cord, signing the cord people are in counts environment. least many may and MVPDs been pure to replicated for our up opposed streaming by Looking can’t sub prefer is pay in terms the still of OTT we leaving subscribers cable still our get the at TV are and transitioning that retrans environment, largely in would leaving why leaving streaming a stay are from so services, not and are companies satellite for at who up are be distributed. they our then are operated numbers, stable cutting signal. our dollar They years. They us. are signing cable the our particular, and being have cutting environment, the the

But puts the it’s value deals. these there I certainly are you a bit all economically with other signal with the end and we and better the better think for at our takes everywhere, and it’s us. a know need day proposition of –

have we to prefer and strike strongly contracts so best negotiate, can. people the would deal we we So that but not the ideal, under networks negotiate, that world the contracts is we

does So address I don’t your know, question? that

Jim Goss

the your I you but source, just signal not a – appreciate the partly so in given news was it I the daily been of but and that. usage think addressing it, were full you’ve – market, actually Yes,

But of be your wanted I of good there I own any property, to have don’t a advantage new thing why to going lately your cross-platform great TV I ask you would about is production. a market studio take other the had idea, that usage you’re a for wondering and was and unless any owned you shows of little The if more even increased has bit programming decided local scale. Georgia movie any your or for the production been to recall exactly studio.

once that an thing broader you if or discontinued know decision and... a and was did that with it, individual and didn’t try I Van Susteren Greta So

Jim Ryan

some Assembly it. and will is the are content Studios about which our for first be basis. a will They majority operate we a project when the that we stages In on sound content. Gray talked – party Films, third Primarily those and company Spiral contract produce within complex. they they produce owner that of are few own utilized don’t

content soundstages a into generate and but is use, company. talked the about NBCU is we long content creation just large-scale see don’t Our content a we – lease, getting content soundstage than for It’s large-scale we Studios not the of some for for from NBC that those that part own, I soundstages basis They term really a also us they’ll a lease same property production. our we already is anticipate and what – doing, on of purely Third will that on are on their Rail those we own wheelhouse. that’s any already don’t don’t Gray. using content a in other

Jim Goss

but sure the there, nominal of your was, I’m sheet it think remain maybe in fairly numbers or didn’t would it income? off I off balance context or No,

Jim Ryan

Absolutely!

Jim Goss

for have I all moment. the That’s Alright!

Hilton Howell

operator? Alright, you. other Thank any questions

Operator

Thank And Fargo. Steven with on next to Cahall move Instructions] [Operator you. we’ll Wells

Steven Cahall

pretty Thanks. across of the seems a talked seeing of cord and I Maybe is little the But I down, QX bit as guide kind first abnormal. bit just a cutting; well. we’ve just the of think you a about a that in big pickup little retrans step pace know change seen ecosystem Kevin,

follow-ups. on us if that wondering got going So a couple and I there’s then of there with, was help anything you I’ve can

Kevin Latek

not Yes, I think a – I’m it’s down. joint step sure

is the what contracts X%? million the guide we significant. lighter than but as reprice don’t you, X% dollars remind in is second have that not don’t front I couple year. see a in it? me, number in of what quarter, I or the – quarter the Our third we so It’s I don’t posted during of

their reprice giving year so repricing loss revenue from that get the not our always on we entire XX% X wheel them. on to revolving calendar So loses essentially constant X. contracts subs, for There of little we’re somebody rate January bit – a on of gas and the not to XX% then on – going year of pretty rate as if is keep is January a we’re much

people clients the So switch our obviously negotiated that impacted. networks, is the some of to and occurring by as net the are from the we negotiate contracts contracts

than rather rather we’d We’d not money. the have the the have money have So people.

seen ideal and see that sub step we’ve everyone first don’t last have rates I on down. Paramount ones, have we’d in a available It’s and the someday the just an higher to and big You a and quarter, other have each YouTube Peacock. which case steps every hits this, and negotiate struck yes, bit ideal the revenue. erosion have the big happy quarter, then not at best like is time have down couple But we our just the so world, that know a our deals OTT we this little over else, available that Hulu been again, contract we in signals world it an think of I would it benefit shareholders. Like as years where our

Jim Ryan

on little just probably in on $X.X I’ll that add correction a billion. that Steven, is modest

and – – billion. I’d $X.X that’s talking thought what’s never retrans about be So at I

Steven Cahall

offsetting? just interest Yes, than up. the the When free I of maybe your kind is or no, Jim, base more you’re to the else pieces is kind If but maybe understand free about changed maintaining that anything big follow up has kind political nicely versus moving are point guidance, the cash you also XX%, taken. that up And of for cash original advertising are kind year, flow of think case. complexion of of flow cash those

Jim Ryan

yield, with $XXX to that’s for pieces and big the mostly up I a putting just have before, to in call rates toggles interest conservative million just political more interest mean we’ve but get curve of increasing mean for you’re call right? full decide it in I and million, the have you the million big than think year. think yield whether we’re offsetting, more accurate estimate the in sheer we’ve displacement know would we but are that the the we moving at pressure at obviously would core rest of core than the two to is $XX year, displacements or tried $XXX be rest million political thought I of to is to little year. raise two or of those right. in I the We last the forward are going big on right? the you not, know Interest have for the $XXX can are bake all tried that,

Steven Cahall

for It’s consuming cash company? think a Assembly, just or project going that I the kind on buyback. cash but maybe being terms leverage there. of or I an you to flow cash from How chance CapEx know Great! either the month had goes profile what’s Uber a And do about amazing kind it’s ago. of in to then lastly in it’s cash of of it from flow, to see whole about the impact the through cash free statement. neutral when it does run not generating happening

Jim Ryan

to are stages be once just acres. productions. and delighted know very cash this, to will is in about lease, and take we Well, with own you you on for XXX-ish of NBCU obviously we Also that going extremely be long-term on – And sound acres to generating is know it this out them know us. positive the XX deliver partnering – their eager start that us and build will get get NBCU remember, and on that’s very

– to and be lot is more for still concrete complex, when rest those that know a now NBCU in canvas jobs going on, to there’s ground-up it’s as the live Hilton say dirt. know alluded I of to valuable, opportunities to acreage it’s be You which entire of I acreage, generation cash the becoming you goes of are painted kind yet right much up and there enhanced thousands of a safe out think remaining that’s and white is but of think currently

Steven Cahall

Great!

Operator

next we’ll you. Kornreich Thank Media. with to move JK John And on

John Kornreich

Kevin, you you declines had know you see X%. of been previously only that saying sub

So now? I guess that than you’re more seeing a lot

Kevin Latek

paid, I always X the we which been of years last around our sub John, seeing for talked subscribers we that losses What we and had traditionally total If we basis. what sub year-over-year have No netted on the last back the actually side one while last about X% for dropped of than negative has – at more number quarter or actually subs we gaining one plus picked of a go and Big had had losing. mix minus the about growth changed couple basis and we MVPDs get it our MVPDs several count traditional – year-over-year as on side a couple hovering down up is and X% out X% all. a X% is number up, basis, pay been TV OTT. so seen we’re over the for years, have quarters that’s OTT of to total Obviously and so not it’s – seen that last we’ve is had just and you some so had better either check versus than know or a on

John Kornreich

one losing, the side gaining that’s the as as correct? isn’t profitable you’re quite And

Kevin Latek

correct. That’s

John Kornreich

Okay.

Another best the we issue quarter, away quarter Disney, according first negotiations your in where XX%, and on retrans, if that do then in to net of XX%, margin the I’m the doing third reach program your guidance, to When XX%. something second you’re my quarter was point like right, say and ‘Hey, pulling from some arithmetic retrans you us.

paying...’ We’re

Kevin Latek

couple I crossed been ABC of that That ago. folks. – loud made weeks we the John a point’s point to months several and think clear

‘XX. deal ABC up the to of Our end is on

deal I that everything experienced. forward down fall FOX end prior over slow going the continue last were with step-ups but we’ve call, year to just what deal up like and would they else, last CBS of that on comp go significantly Our fees reverse predicted would our completed was our consistent which earnings

positive, Our times first It’s few of what it about a going years. will again quarter, grow; first there. impact we Overall come is of probably our always probably grow; to Gross going where there’s XX%. be sometimes next the quarter negative four, so to multiplied don’t in terms will and think because grow, is net is over retrains, we reverse the digits true-ups comp that’s suggest and because could is is take the typically audits of our always kind be in stay. margin mid-single when the through. off bit quarter first it true-ups most It’ll will

having definitely conversations the about having all some with networks groups networks the programming with moving I of the conversations and are best think broadcast are We the affiliate off.

definitely of the is Stars conversations – significant Some Dancing care streaming we groups. replaced very with ABC but over by a moving also to source don’t better programming was days with of with somewhat the about affiliate and programming, being

John Kornreich

X% gains about X% talk when you and in about gross And net? talking or retrans, you are

Kevin Latek

Yes.

John Kornreich

for – That’s ‘XX… that’s just a of kind ‘XX,

Kevin Latek

that both around for I’d for mid-single Yes, and and net. say gross neighborhood digits

John Kornreich

up pick renewals? again gross your of on does cycle When based

Kevin Latek

that it window. the of of than beginning We is It’s that the of of have sub at next most of is renewal again half year, base ourselves, is up effectively X. of XXXX beginning but year, it, the a I more will will most we our say all to the to we’re definitely that of going conservative side low pricing be but guidance, guidance were say we given on in our we I’d – are came modeling going forward, analysis the be very and tend big – a Most next the conservative of in be up. significant our step little XX% not on year. MVPD January

John Kornreich

X? affect – on your it’s XXXX, since that step-up So will January will

Kevin Latek

correct. That’s

John Kornreich

rebuy, of you the quarter. on repurchase Okay. And How million that $XX second shares price? based many did bought Jim, in for you stock

Jim Ryan

X points a to second look up. – it give me

Kevin Latek

it up It’s question? next if I to the think. look go the to in want XX-Q you I’ll

Jim Ryan

the in it’s X.X. of Q; back Yes, the X.X,

Kevin Latek

want If on, go you number I’ll the to put up.

John Kornreich

the average share the count, not is quarter, now, million? What right for XX but second

Jim Ryan

million, million. XX XX.X

John Kornreich

Okay. now? Right

Jim Ryan

Right now, yes.

John Kornreich

Okay, that’s it. you. Thank

Jim Ryan

pull up up said, buyback. we – trying we’ll pull lets the shares. quick, pull Just up to as I’m real the

Kevin Latek

Buyback spread sheet.

Jim Ryan

Yes, X,XXX,XXX was – okay, no, was I got it. John, It shares. it

John Kornreich

Thanks. it. lower share it than be I million. XX anyway would is. would what think the appreciate is Alright, count that it I

Operator

you. Thank

Gould with we’ll Next Loop Capital. move Alan on to

Alan Gould

Yeah, any versus of XQ, that there of just how X% of the out thanks for is much of much political my way truly is breaking the core is for sort of guidance question. trap? that impact core down of how wondering with taking Pat,

Pat LaPlatney

really. is difficult. ton point just of to be a to it’s something political there’s going at Not this even retrospect. displacement really do – and It’s it’s truth QX, The and in difficult in only

there that can really we political displacement. all So tell will is you be significant

Alan Gould

quick Okay. a Jim, And question.

Xx, does your pay As leverage rate if below on of debt? comes actually your down, that lower falls any you the it

Jim Ryan

No.

Alan Gould

that’s Okay, it.

Jim Ryan

Loan Term rate switch our is Term our switch D Loan XXX, and – is is geared or and none the B Loan C but to pricing that and leverage. the to to to Term debt Term of LIBOR The whatever. -- SOFR, Loan floating C SOFR need we’ll We are and is, LIBOR XXX not

Pat LaPlatney

is Pat absence in would again. that modestly. I If it’s pretty core helpful, Yes, would this up say we the be political of think

Alan Gould

it without You up think political? would be

Pat LaPlatney

this weren’t getting Yes, if placed, right. we

Alan Gould

interesting. very Pat! Thanks That’s

Operator

you. move Thank Partners. Huber next with Research will And Huber on to we Craig

Craig Huber

you. as down other A out recent industries at media economic Thank I the impact advertising days macro you out a and been guys. there? there’s question in seeing clients on your recent company you well. and from in of lot there what Where calls hearing for commentary there of out guys come do in conference you’re terms mean,

Bob Smith

categories at to some we’re that. say we’re we’re in some actually would like lot counter of I and economic. time seeing the filling of doing a fact that’s things General seeing some back in moves these impact, in auto, auto Motors same any of some from gaps but the in had with that’s particular guys of haven’t strong. come we in the But drastic any market And an

up I think we’re holding very well.

Craig Huber

Okay, question… and second my

Pat LaPlatney

be that would absence this we I up Craig! of core. in the of political would sort add I think slightly Hey in onslaught,

core it, monitoring the Are of our but and a a we’re of know vast it’s bit strong. few there is Yes, right little pockets You weakness? we’re a very market seeing stations, healthy majority now.

Craig Huber

forma give and betting, basis that’s for pro on can the there change maybe guys, quarter? percent the ad the auto core third question us quarter a second second trending sports revenue how in and you My just in the

Kevin Latek

core newscast. on it [audio excluding because – the always auto actually in excluding – So QX, level political the lot when we political, same of to QX pacing, with about about and auto a QX, it was local closer September is strong and a when gap] was – pacing, in hit auto I’d advertisers of was that caution political especially

in in feels from of be big pacing like the much year based auto very some which go pace September what in I – on the been the it or decline would we’ve more. picture very So auto the the the extent, in in – to last will to sidelines But natural. is seeing QX deceleration decelerated

kind hopefully, finally supply climbing it’s know after can of issues. like – climbing back again found chain because and of feels up earlier, said it start back especially I So the as a of you quarter multi out bottom period decline,

Pat LaPlatney

September. – heavy political in some of and back it the look of going But money and you it’s comps know what market. is aren’t lapsed quite kind is mean what looks there, into skewer new actually like they were I there coming particularly we’ve the on

Craig Huber

side, betting sports The please?

Bob Smith

Yes, this is Bob.

It’s a of activity activity We’re there’s football so a in live. of just September, seeing have finish very driver, requests gambling, lot September. and and going including to which we lot a little to for be think just in impactful the the simple, is and sports last softer because Cincinnati, got Toledo the week Cleveland summer, and quarter. we We for late the off Ohio, that’s went plain

Craig Huber

you or think you’ll at And then on ATSC maybe you’ve be the you end where just and us update or next by end of it the of out percent of households that can markets year? the your of to this also on X.X rollout, percent your rolled year the

Pat LaPlatney

of households bigger than percent markets. know be You percent will of

low X.X. coverage national percent – XX’s think in in, XX, where of terms we’re I our homes of of think well or high I footprint teens our roughly percent – in for percent

In smaller terms of the going work number it’s we’re markets of because our markets. way to into through midsized the stations, lower, significantly

that it’s have don’t XX%, the somewhere going front of on somewhere on me, number of order order the in I market of but – maybe of – I’m to going sitting I’m stations. to XX% So guess the

Craig Huber

you. Thank great. Okay,

Operator

Markets. Instructions] Noble with move Capital on you. we’ll And Thank next [Operator to Michael Kupinski

Michael Kupinski

Thank on Craig’s you. follow-up quick And a just question.

see have out you know now, I’m revenue pretty revenue do further models wondering what have significant the have wondering an opportunity you still if the is be was you we some contributions You where revenue – heralded And opportunity, if I as and was to as that into know always NextGen from growth. to future? a NextGen, the just start maturing guys gel retransmission offset to a revenue might – models started or opportunity path for much broadcasters just might

Pat LaPlatney

of there’s going a real I that that ton for out and there there’s lot time. of on Look, say conversation would models some has been a very

Yes. a cannot you I be to business. do So is data when. going there? I be tell it think exactly they’ll

it’s I getting just I do than other years they’ll clearly I And have into particularly can we automotive a to the reality. different few but way think that’s the take develop with to space. there’s a things ago, months for then going not think that but question six business be you a is the would that that know that. ton answered spectrum, us

Michael Kupinski

I Thank had. you. that’s Okay, all

Bob Smith

you. Thank

Operator

our question-and-answer would Chairman to Thank session. there conclude questions. conference additional you. remarks. and/or closing over are And no now your like I the hand further That for to will back any

Hilton Howell

to forward end want for next a to us quarter you. us and the to say all you at take talking to this of Bye-bye. quarter just joining second results, I moment Thank for thank look and we of the year. you

Operator

conclude Thank today’s that teleconference. you. And We your participation. appreciate do does

may You now disconnect.

Gray Television (GTN) 5 Aug 222022 Q2 Earnings call transcript