Gray Television (GTN) 4 Nov 222022 Q3 Earnings call transcript

Company Profile

Participants

Hilton Howell	Executive Chairman, Chief Executive Officer
Pat LaPlatney	President, Co-CEO
Kevin Latek	Chief Legal and Development Officer
Jim Ryan	Chief Financial Officer
Bob Smith	Chief Operating Officer
Craig Huber	Huber Resource Partners
Steven Cahall	Wells Fargo
Dan Kurnos	Benchmark Company
Jim Goss	Barrington Research
Nick Zangler	Stephen
Aaron Watts	Deutsche Bank
Alan Gould	Loop Capital
Michael Kupinski	Noble Capital Markets

Call transcript

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Operator

Ladies and gentlemen, welcome to the Gray Television Third Quarter 2022 Earnings Call.

Your host for today, Chairman, Hilton Howell.

You may now begin.

Hilton Howell

Thank you, operator. Good morning, everyone. here being for you this morning. Thank

Bob Jim Call. I'm Gray Kevin our Television. mentioned, you officers; joining XXXX our Officer, Hilton Gray Pat Chief are thank Legal Howell, of CEO for and Earnings Smith. our Quarter Chief Third our and President, Chairman our me And executive Latek; and Operating Ryan; of today our the Officer, all As With LaPlatney; I Chief co-CEO, to want Officer, Development Financial

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

Kevin Latek

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

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

I'll to Hilton. the call Now, turn

Hilton Howell

again better results Today, and our total Kevin. guidance. we core expenses quarter record revenue than revenues, lower than reported you, once anticipated Thank in

Our than same year political in this last third of in midterm revenue advertising election XXXX, was the much the stronger time year. quarter the

In million basis million. to To few million, revenue This XXXX in fact, was political a some With historical year. improvement political $XXX GAAP days political election $XXX year, basis. is anticipate on million, day, on a total expecting full basis. and any our our approximate a for same-station our $XXX $XXX remaining This we up year give results we're apples. XXX% just billion. were of revenue combined a on especially do you XX% advertising will idea, apples That's $X.X XXXX before nonpresidential company, amount tremendous a political total that in over

as I year already appears revenue, very by strong political mentioned, to set full revenue that exceed thrilled political XXXX's are We a very margin. XXXX's wide advertising advertising

million, core $XXX EBITDA Broadcast an XX%. XX%. avenue impressive. extremely an XXXX, disappointed adjusted third overall results basis, in On financial a of our increase flow as-reported XX%. Nevertheless, was that the of revenues third political quarter increased by cash of expectations. revenue We by and are advertising admittedly aspirational revenue consent our were fell million XX%, year-over-year Retransmission increased of increase our short quarter $XXX was

we prepayment, bringing of the flow allocate prior further in to of principal report voluntary during our significantly made robust projects debt I attributable quarter the income our shareholders net $XXX quarter to our made Swirl our $XX or debt in prepayments to year cash begin quarter. to Films am principal diluted million was $XXX to on remain at its million. our commitments X, November Consistent million common its construction XXXX. division share. Also, Our third the schedule. total per the We of leverage, our $X.XX for million a premium reducing happy in running voluntary to for we Assembly new with first that ahead Atlanta $XXX track opens our voluntary the studios studios at productions third

in largely avenues, summer and third by our Atlanta Buckhead, to particular, that time, remain movie June to in the complete X, here other other profitable on on of examine to XXXX. will NBCU of minutes or the which X campus Georgia. to the most value track we headquarters funding production have Gray's new and parties Also at of shareholders. intend and studios able pause leverage corporate be north Assembly the state-of-the-art will Gray's also project We that construction Gray and television of full time, the facilities for development we in At XXXX, a

on holding that quarter. hear core who revenue over strong this will further this quarter Pat? to President Pat our in turn in cash in call co-CEO, and At generate XXXX. I'd call has the the time, and is will and which economy, color on to fourth You LaPlatney, the this flow our strong like

Pat LaPlatney

continue our and strong political historical last quarter quarter basis, year. exceeding combined headwinds displacement. perform declining Thank X% despite production quarter, in revenue stations from the Hilton. advertising guidance third third in or to a the by well On of you, just third macroeconomic the Gray's core current television the companies held

earned than core of prior we context, losing million the while political more For $XX only this year year revenue. revenue in of period million $XXX third the quarter

from our In year this third not last Summer year. revenues stations Olympics quarter unlike the have any in did addition, the

we years time quarter. in of auto saw core the QX the our turn quarter of to revenue positive terms first of categories, percentage 'XX third number the as In to in for a of and second a 'XX. relative the category relative

advertising category, core our a strongest revenues unchanged remained the We is from which displacement last muted on quarter. sector through factors. third services combination our our year's Additionally, political of attribute

First, double-digit displacement. growth in by benefited political our core revenues advertising which advertising revenues, are unaffected from digital largely

have stations, these those particularly very the in-house larger forces teams from than available division. our Meredith, more effectively acquired recently year best industry selling the through sales of our training training sales Second, some have in as received last sales

Third, our delivering over emphasis the past business results. is on solid years three new direct local developing

our an from In been fact, quarter broadcast It's say teams competing generating the against over to new better in great tech. skilled sales by X,XXX especially competitors overstatement accounts. big in $XX have third at successfully we this our new set approximately peers never records not in or that trained area strong million and

inundated news in than of strong ads, still believe the economic displacement, advertisers, quarter, demand fog the much fourth that the may we far excluding markets core demand So this are signal we advertising are general better of currently from political in and result fourth would a core seeing with even suggest. quarter reasonably

a success However, conditions. to weather we assets to eye we have the we and developments confident date, continue macro the on sentiment. remain keep right economic With any right to that close our and client people

Bob Now I'll Smith. call turn over the to

Bob Smith

with revenues first and this shattered Pat. Thank the guidance began quarter this year. Political and advertising second of year in strong momentum you, our

that final and then were in momentum the the and it, stop rather August, campaigns several after was races. the But number immediately experience canceled key statewide weeks of began, key their of you call, completely super a in major upbeat buyers in continued to until winning as after after advertising year. some earnings and campaign. of a seen cases occurred political major than as the have the August a year couple we In trend October. August of large as we spending orders summer general ever primaries primaries, in packs races, midterm half political for a as fairly began in would As busy, pullbacks presidential unexpectedly that most first large strong of unexpected money on shortly a the any the expect our advertising Also, expensive

the close this on nearly after of of and cycle of to of That York, the Oklahoma. million first Gray, assuming now in revenue in does Oregon of quarter Gray does rival a not Meanwhile, much the fourth appears quarter the combined the Carolina, places first our were $XXX months candidate federal simply political matched third have the competitive for revenues newly the in these where the have XXXX presence advertising the that in those more very historical on with As and recorded runoff widening not seem advertising X political August, political markets million, historical XX and be to combined the election than months Alaska, at races map, with races the revenues been election million party's to presence, supporting year of for and political now newly moved basis August that state in gubernatorial a Florida we California, that $XXX have dollars $XXX Interestingly, July as a first the in states. early from of We Michigan. our expect such day. and million. half a not advertising North in historically unfortunately, political we in the of advertising year political the even does competitive, and one to basis the pullback and $XXX New the August in between Much unexpected early full September. finish as which of Senate widened advertising political year. where XXXX. diverted be revenue very election the field Despite have revenues states presidential several million In produce least to and competitive result, year races strong that political hypercompetitive XXXX a XXXX X such would XXXX $XXX air on issue no and year races years, were not or. amount we expected traditionally

presidential finish estimate our In election of that roughly words, political week. revenue from roughly expect two the excluding primaries, In that Georgia about included $XXX XXXX -- after million began races. presidential our revenue that want of to and after general races we operational political ahead Senate the runoff XXXX and sendoff X% for closing, election political announcements XXXX $XXX big the the million this presidential Georgia quickly revenue will mention I now day. runoff other our two However,

media First, new cross-platform announced on automated Admiral Gray's of Matrix across that launched gateway called all Tuesday, markets. sales its

to technology. thrilled to to the be company are this We first transition

division fine to replace served Wednesday, we outside our scale, research stations With vendors over continues I changing January team stations and in-house comprised news X. a for the services now we our our new turn in be in the ensure will of provide experts launching a time to is consulting and they local need with to best television long that have the Through Gray rapidly an both some news will serve to now that have their our the starting the on Second, to resources of new call local announced sales moves, that that evolve new business. communities. in-house Kevin. professionals of the these best marketplace

Kevin Latek

the In of slightly our which Bob. million range. guidance you, historical of a revenues, on year at results combined retransmission we Thank above recorded midpoint third basis were and ago quarter, $XXX the

expense, expected, due called . also to the agreements. which than $XXX escalators affiliation retransmission network million, our year in comp, period was was As network ago higher

in of As a repricing traditional of larger interplay paying quarter in had middle retrans our year In annual XXXX. number retrans retransmission second Currently, price subscribers. of of not the we in any of the last reflect declines start from and quarter agreements revenues all XXXX, the the the the those than generally MVPD our escalators have material of of declined but experienced up contracts the a represents and declines numbers. reminder, of which has by our subscriber XXXX, sub a our XXXX, uptick Gray total an sub TV In from subs by second made single-digit quarter were low figure flat increasing previously Most of we losses levels. OTT -- Pay bit encountered. second the between

second the We will the sub fourth to be numbers and third quarter due be sports. that conservative. sub all better Still the reports are return of quarter than hopeful quarter

our expect We the will conservative reprice year companies pay-TV retrans base. XXXX. contracts billion cover in about we are revenues major more of we full gross year, now time, the of for levels Around using end estimates for retrans our of that will sub some the this retrans approach subscriber the models. at this our At XX% $X.X MVPD

terms to expect with We favorable we contracts prior years. renew have minimal just disruption those in as

full visibility sub combined visibility With over retransmission trends, into basis, we into have That our the portion said, a uncertainty for less do around not the multiyear pricing sufficient large retrans XXXX. revenue of contracts with for confer be we increases revenues. value on net believe unlock and distribution that both we which systems, in stations the turn continue retransmission all able will in in our that gross result to to will

the turn Ryan. call I Now Jim to

Jim Ryan

you, me of required relatively Bob and Thank Good mentioned everyone. our Hilton covered short. we remind as also term quarter morning, the D. Kevin earlier -- our on year-to-date Hilton million highlights term a already little of ago, million Kevin. we've amortization key Pat, -- $XXX have of the $XX loan loans prepaid And

So our debt reduction at currently total year of X through million. this November . is $XXX

actual year before And obviously, today of forecast as get that, a year-end. say this could full outlook. things we and forecast would change Turning on I 'XX to and to is our facts circumstances

Our $X.X core revenue is approximating billion.

race revenue would Senate goes political for through Kevin revenue December is political $X.X as $X.X expect next As the If runoff billion. week Georgia additional of expect X. tuned a doesn't that approximately we've that, said, happens the election happen. or we mentioned, date Stay revenue, to Retrans billion. runoff, already we approximating

Our billion. that of disposal and number Total $X.XX stock assets expenses is approximately will total we or billion. depreciation, $X.X included approximate amortization million gain revenue, approximately And and before noncash $XX loss in comp. operating of will be expect,

debt down this goes more expect million our Our expect we at in will debt. an anticipate billion. amount assuming flow will flow total average is the year. XX/XX/XX of will will facility the additional obviously race a senior we end If billion, approximate have billion more our year, reduction better debt approximate the operating We for $X.X to cash by cash $XX credit least pay and Senate this $X.XXX runoff, a of the operating principal eight-quarter little defined to $X.XX approximately outstanding of a we Georgia at little be be cash

acquisitions, free investments cash assembly repurchases, our common will cost and before approximate We million expect year. dividends, $XXX stock construction this

with to XX% XXXX outstanding operating our free yesterday's XX.X historical was is flow expect cash 'XX/'XX cash million, the price GTN. as $XXX we historical Our share equivalent free of Again, facility, flow, 'XX, material Currently, already per combined flow combined average That's million shares cash payments we cash million, $XXX credit interest approximate $XXX of Including in $X.XX. cash billion. the our $X.X to in of full amounts of of we 'XX. used expect tax million. for of be uses cash year defined the following anticipate closing

be expenditures $XX a We end anyone million, be pending preferred $XX million, of federal Routine amortization of the our stock cash approximately $XX that, required anticipated uses $XXX cannot and refund million on but year we that to the of assure 'XX $XX for aggregating have state approximately will capital of $XX full million. Other the million. dividends of reached of common before are dividends loan million, year. term

to and Acquisitions anticipate had $XXX will approximate We investments million. and/or common our million. of currently approximately construction I'll we set cost and, of second combined in back historical that year slightly million. will than will a track basis And Hilton. to repayment cash before results the for addition As We year year $XX results voluntary million. end on in flow operating to reported this $XXX as-reported XX of we've basis debt we year $XXX a the most The pay QX, stock combined company importantly, least year ever this is to cash best year. able lower the historical more call importantly, full required Assembly done, have on of bring Atlanta its debt $XX $XX operating total million repayment best year an -- be be repurchases XXXX. turn $XX on flow basis, this million amortization of only to our debt million in down the on that anticipate again, record we ever at its to

Hilton Howell

exceeded retransmission guidance. our To to heard guidance record our than Thank displacement. Gray lower met managed third our cost and expenses total revenue you've We Television what achieve you, Jim. despite summarize tremendous today, advertising revenues posted core political quarter

ever of XXXX factors terms will total level beating year be second midterm best basis revenue us that that $XXX line year and hitting revenue to increase ever XXXX runoff our XX% end, poised guidance. this revenue, cash In keep of are are for Nevertheless, to our apples, apples hit a in the best very to advertising we we operating proud one presidential be year we revenue to is the political midterm. will Still, that of. year's for flow million In or and results. our unexpected of from a political with several only of XXXX our proud is will be on disappointed combined truly our second previous over historical

love at open operator, the for time, this So to line questions. we'd

Operator

Craig -- ahead. queue with is [Operator Partners. go instructions] Please Huber Resource first Our in the question caller Huber

Craig Huber

Yes. maybe -- could, much how a of your subs down please. little you OTT the retrans more benefit? including color, year-over-year, if Can you

Kevin Latek

we delayed to of one two quarters. reports basis on So receive a

best we numbers I quarter. calls. -- these we second providing have I so And just the have on been this call, address will on earnings

it. The second read quarter, just

Operator

Our comes... . next question

Kevin Latek

Sorry, just that. me let finish

Second uptick by . quarter, quarter subscriber the our sub second pay-TV total which single-digit low from XXXX, represents levels. figure an flat a declined

Craig Huber

think months it guys I was year-over-year. last you about down time X% Because ago, said three on

you be down down Now in your impact revenue that low quarter going fourth it's the quarter, you're are the is heard saying right. retrans you single thinking for third if digits, number? What I to

Kevin Latek

guidance. retrans We provided our

fourth the are quarter again, know April As the next -- basically of we for second won't next declines the we said, what numbers year. modeled until We are have we out sub I quarter quarters. several

we the most at recent our when So provide reports looking quarters' that we we're have. guidance, full

modeling could They fall. in be worse. visibility be have don't as could even they could into numbers. for be numbers quarter, lag. mid-single-digit we're -- the the quarter's the or It sub so a obviously, better fourth slight sports real-time And return We second

quarter quarters the of close to Our reports month. the after about come a X

Craig Huber

Okay. question, My please. last

a the Just were total three months were it you those just political why your they maybe talked ago. revenues, little that political of you significantly dollars bit thinking Are Or about? other what months the what thinking a three color ago? shift more you that thinking available are lower were than states less on than in marketplace you is

Kevin Latek

Yes.

as a just places where Carolina, that places New very California don't was like where the for because diverted that is, in then fell had there those have came spending really back wall that I spending kind a spending there think the made campaigns York, in do total Oregon, seems accounts. competitive have become be the was Places but in but to up. expected didn't to were to -- that two a a number The example, spending dark to late not and coming by short, cycle we lot in Alaska have dollars strong detail a was Oklahoma, all to moved the there State, Florida went remarks, historically particularly that general of seem are we and we advertising have presence. in of them Bob's mid-August, quarter, that North see cancellations of happened industry and dollars strong of presence things number a competitive. Washington strong, we Michigan, places not be fairly to in the fell to this in And

don't TV the example, New San for own but Seattle. York to dollars Los where places stations, Angeles, they So in City, were yes, we Francisco, there, move

big Alaska. Carolina, very in little have presence big in in Oklahoma. a presence big We North Oregon. in little in And a we presence presence Florida, a a have had We presence

so folks The So spending a more ago. map the cookie has there, expecting way was if competitive become much than crumbled, were months the but will. three in you

seats in look Republicans Biden races not -- the -- were months reports spending months the are Biden or six five competitive that of won three and to today's can tremendous expected by that Washington ago. in Denison points places are You on were six seeing out to be up was -- more from

map they're to So in funneling were X as -- going the but places dollars that months not ago. are expected, on getting the are

Hilton Howell

up midtime the Craig, That's on we're And $XXX remember we at election. were million please where or midterm increase. a last XX%

which at a at two presidential decreased election Our presidential just pacing apologize. hit political least pacing I we were a we like three -- year, year haven't through quarters, election as quarters, basis. We the at first hasn't were

of And number, proud immensely political proud these truly of so immensely numbers, it's this gargantuan $X.X I'm billion.

And about a so miss a is misnomer. talking

Operator

Fargo. question comes next Our from Wells with Steven Cahall

Steven Cahall

thanks for flow cash guidance. Jim, new free the

$XXX there. would trying if kind down retrans be First, one The interest million political, I us cash allocate. just help in if wondering it versus obvious but there's guiding just what extend I do to that's of you're this, curious was And you prior. came next out could about cash think in anything or but of lot to have figure of know all to a kind not year. to on work we're you to I XXXX, be going

you'll So assembly little maybe debt and CapEx a down next about bit if out trying the able got to and And CapEx then between be you a Kevin. going common. is I'm pay is I've assembly for year some to what talk to preferred the could be. follow-up for figure really What

Jim Ryan

up political our continued you're a Most Steve, cash last to on risk from increase. $XXX guide. be Obviously, little in is the down delta million would bit of free cash rates the have right. that

there's estimating bit in bit and a on pretty Our solid, current think probably assembly a but guide difference go November, December, some little in still numbers is costs. December. I for of through But locked timing little construction it's we're our up

As not, Hilton of construction ahead schedule. or mentioned earlier, actually, believe is it

ahead are ahead and bit the and of 'XX. little a a So timing dollars schedule, but too, when it's between of that's difference 'XX schedule

full land we is we answer. we -- say hang trying assembly later sale on -- of receive payments and/or I'd million said -- little million would an I'm a $X and 'XX when additional infrastructure will a million is million Q second, 'XX $XX about that probably costs approximately now for next which the early public the 'XX, me certain additional yes, it the the Construction year with of is, today, of right based payments year, either on political 'XX So in in which late for the then schedule. late construction incentive simple $XX file we answer or $XX incentive obvious anticipates to say

anticipate the should pay debt have additionally down 'XX. numbers. still some our we ability that do to in working We're on I So 'XX

I of So full on yet, pay expect to have I capacity debt want degree we we move down don't really year as some elaborate but 'XX to do will through 'XX.

Steven Cahall

And then, if Kevin, lot just looking a retrans declines correctly, your commentary, think at some 'XX understand sub look it guide I worse. MVPD of . plus in like the your renewals are so little a I 'XX

retrans be expect So bit you is little cash a guessing I'm on net flow lower. in retrans Do growth positive XXXX? gross to

Kevin Latek

no at 'XX. and no in in all Steven, the half we of XXXX renewals had renewals second

not there's been XX-month for an a of period. So repricing retrans

So what declines the sub we have for this year year. is retrans this literally minus just the rates

some 'XX big So 'XX begin renewing by operators. we'll --

don't going temporary a to Obviously, that will it's contracts will we to up. sub in of big push uptick sub saw whether have push guidance. are gross was that we I hard declines know don't where these wind. down. declines give or so permanent, Plus, feel And growth Since the the

in. comes premature need And also, kind But until think will we the we where I of to think we come we're those provide know at where up it's we not point, for that those The this guidance more cable. numbers are on third subs. I get repricing going as to contracts. platforms Again you prices numbers want look -- to return quarter TV pay like. -- back see a well. sub goes drives of people the and us benefit that's to streaming

subs be in hard second about that us -- So XXXX talking of basically the it's for quarter recorded 'XX. just based to were on it's

there's but need optimistic, to ready a data we're points. not guidance. be So more to We reason provide yet 'XX

Steven Cahall

remember us Kevin, your affiliate next covered don't year? your you the that in updating on cadence mind you if remarks. would for just renewals I of

Kevin Latek

CBS all of ABC well? summer the last CBS Meredith Meredith contracts and XX. The 'XX. last 'XX. year as of renewed up Fox. flies. it Fox What all at renewed year. NBC up was end stations in are are The expire stations Time We of We

counter there's point, there's here So that cycle I up But is at group half are off CBS then next schedule. the are or think most about a don't network and -- the any part, until the renewal of this 'XX. summer. full a -- have there's dozen, there end Meredith with ABC-MBC at for no that we -- a markets

Operator

[Operator Instructions] Our question Kurnos comes Dan Company. next from Benchmark with

Dan Kurnos

A of understanding need just see Kevin, to retrans. stick I theme perspective, couple still you parts but for two if data, questions more the guys. on you can with time that maybe that

yes, net about thought there. if remain at separately, Is had sub versus medium-term Just XX-XX impact was fixed one, way your declines historically, variable. reverse we the some retrans CAGR any to to renewals future. for you X-year were the there we of or But side, mid-single foreseeable know portfolio elevated your permanently current on levels quantify digits. And on the

So step a maybe declines. incremental the it's didn't that little sub down reverse surprising with bit the

I to can those you talk just then maybe So have And two a follow-up. things.

Kevin Latek

again, just too there's many going talk I just I'm -- not to points. unknown data -- We're Yes. guidance. about really

reverse, it's contracts. cases have network Remember, case, operator The not net of of we in we piece most don't lower net a of the OTT they're cable amount, are our basis all net and them, a in dollars, on than dollars MVPDs. the noise. becoming we On but pay get obviously formula sort lot the most and of the fairly is therefore, -- --

how us harder it's is the assumption retrans net making of on, to big estimates we pretty OTT moving much -- on because as have kind again, So well. be a for on to make

the on see of is step-down a So I this in. of also much how bit OTT we think the reason didn't is reverse a coming interplay

when not there and about It's some much more now. retrans has of $X.XX relationship one-to-one We mixed, net. in, sort are are of become moving a just half dollar and The -- come half math those down. a cloudy generally risen are not doesn't but of gross less

Dan Kurnos

too, the Hilton, then And it. and you appreciate political commentary Got on Kevin. I

to with Premion Maybe there. the here know from because But this a obviously, I insight seems guys think just seen maybe the we bigger some have else. partnership. on broadly lot to be your concern you anyone haven't fundraising

It really dollars there to market I of into there's flex do were before. easier even believe media? guys of to you say, Kevin, there, get mix back sense it's September, like maybe that but into you -- shift and we October, or digital are no like a different can think, there CTV any more races. dollars that doing We've the particularly social it's still intimated maybe the is half all other maybe to well, seen seem way in a doesn't shift, appreciate. which dollars, August, Is more

So is versus a to of political broadcast sense there of of kind sort media? your way of on other any view share get

Bob Smith

where other large is a The fact of in available I of and underfunded. there of void is also September, of to those places. that spending August primaries the we a Bob. pullback The just candidates the was way funds was those have in were political going states that it matter, that This -- after of the end currently some wasn't footprints. mean fact matter lack

dollars of of expected little states. key pointed Arizona. October. week people had while get really sitting in And the we just Kevin those Michigan, then first October, didn't North aren't matter metric And a ago. until on was fact So sidelines handful really kind and the the Alaska, out at Carolina is expected and states of we the and of there, a of as we times on The the sidelines as a Kevin it to mentioned, and revenue Florida states sit are in in money they

Jim Ryan

next question. is broadcast that shift Obviously, what will had of there allocation hasn't was coming whatever. been a seismic the To it's footprint the doing is sense of what in spend. whole was But few our answer broader the weeks there versus in the draw Broadcast for total the and patterns. industry. luck macro out this the what the be or lot historical spend reporting of a year just the of fine digital you

every fair as cycle cycle. we're its know, got share like or this So more far as it's -- done broadcast just other of we

Operator

Barrington Research. from comes question next Our Goss Jim from

Jim Goss

Okay.

of little that there spending been this. dollars the a parties quarter. slicing gone potential quarter the the earlier think more in the Was year weeks half of dicing to including first components. have some the also fourth aisle across tend that and primaries, of to the some X example, -- there bigger I for reports the influence the just To political in and to spending influence the parts fourth in So that of have usually come of real to the the try extent

might wonder that -- have of were a was experience terms that from now saying, happened things you as So I there you're coming that expected. these ambitions. right than better earlier if then down created aspirational open in

Jim Ryan

probably up we I that we primaries, more patterns -- probably with Jim, from on robust in primaries agree the from more hindsight, historical than Yes, anticipated. think ended relative would perfect a basis we

cycle of like 'XX bode That's I part and this if may in that's primaries what in cycle we the ways the at yet, start lineups would that the But robust wait early from suggested, about looks what well and late look now. year primary the the So cycle this more and were become to indicator for think of looking what we'll but see have may talking a like an quite when year. in again, 'XX, next than it's a history out it. then is XXXX cycle have

Jim Goss

always perhaps the the we you've political. by talk And would you about little the in a any terms might larger Is influenced carton to difference, size of do not did being make in a displace otherwise. have And I displacement some quarter of better well. much offset you they as there Phil? as on that markets comps have been basis, recognize entered in

Jim Ryan

did what very we core feel We than happened. quarter. about we exactly third and were up We anticipated, was in better good in do the commentary, we're That's that. --

Pat LaPlatney

X% down were third We in quarter.

Jim Ryan

. is which Yes,

Pat LaPlatney

Which guidance, is better Jim. than

Jim Ryan

core... we're but down like $XX Yes, in million

Pat LaPlatney

$XXX million of...

Jim Ryan

million political. of $XXX

better So was than expected. that trade-off much we

market about. you're but... as we mean not hoped as would fairly large maybe a talking Phoenix was really for large had as I As far and quite gets to market, what it did number, large they down okay

Pat LaPlatney

number. up a where despite of is markets political. onslaught really But of that's one It's the the big well core holding

Jim Goss

other one Maybe good. nonpolitical That's Okay. question.

the for facility to impact you makers. about it of content financial somewhat the that you're have and And about of I close route use the if out us as in might the that wonder being your farming studio. remind going own construction well project talk You've the to might on programming as talked whether

Hilton Howell

of use cash large it our a some will we also for but will We own production individual needs, using as be generator. it

it will making year. XXXX. up The the in fall. tenants to deal it's or there of when cash a whether NBCU X, June studio midyear lot itself an it be . And movies across completed. should finish flow potential we'll be expect the be We board, other next beginning

Jim Ryan

to production, as content on, have add years. large-scale many We planning production to and do just become a had we We're adding have past, in Jim, we for said it we've are not the company. long-term content vast NBCU not on merely will complex the of creator.. to on our in majority existing the constructing lease But capacity. landlord, we we're the are be to and what a the studio times being

Operator

with question next Nick comes from Zangler Our Stephen.

Nick Zangler

into guiding core pessimistic I seasonal with large X% on sequentially quarter no revenues for very up views, quarter. You we've CTV are uptick. guess, fourth calling the guys fourth some player effectively heard the a And

obviously are guys You optimistic. more

seeing you that hoping might where you unpack might be strength, some Just a some guide could softness. you bit, be seeing where if

from to years, you guys maybe XQ has up prior in think I been for XQ XX%. core

relative . unpacking some X% heard. the expectation expectations. maybe So that weak of fourth But we've the these quarter here to maybe views handicapping some macro weaker that is of just

Jim Ryan

entire Well, industry, the is seasonality. there you right that for are and us

Second and year. are fourth always quarters of -- the the

First weaker. are and third

And It's little of displacement, lot far lock seasonal other core don't wait actually far to so optimistic. happy based in influx. -- tremendous in I up a will political at seeing QX been that of so October seeing still the tend what pretty the a core QX So mean rest of our doesn't between after of held come is amount the a admittedly, we tell and probably the where has been good dissimilar because the volume we place we to early displacement in because then displacement -- bit yet. year down little on election we've about The to And political, saw QX. is day pretty we've to core in well. until November look than we're QX we -- naturally with so But we December we're -- in markets cores whether of to this we're mean, visibility People natural we feel an sequentially or we factor pretty again, doing what I cautiously out. is political. increase what our year. far -- have a in X months have not

it massive macro -- think up some we fourth absent will well reasonably quarter. events, So we the for end

Nick Zangler

about look but any certain side, if relative that's playing markets actually not No, might that talked match play I'm guide. political are And of advertising softness some role a that's markets helpful. geography, that maybe Or I'm . you at to just the you expect all, maybe you it. curious where guys just out. in the point XXXX if actually to might Got the election. a I there dollars where of case to But the political obviously lot the could last on political, curious guess,

Kevin Latek

looking at look at way don't we've midterm I -- we've been to internally, actually we in think that looked at midterm.

So in XXXX. of And 'XX, 'XX. XXXX be internal looking to low reports are all to Obviously XXXX. XXXX, we'll our at

a but very pretty some still strong. would for were strong. disappointment that was markets are I say it was still So the there total, Arizona

expensive lot have in it really race there, certainly of Nevada well. -- of Illinois. we is a an actually a governor's for a bright expensive spot. strong. We very both a strong. have in those a was Wisconsin governor's as money not was and that Illinois, typically particularly primary race seat presidential

I there a to pockets -- That's -- of strength. of lot it's So Hilton there political certainly, going of said, again, somewhere. as billion come mean, got to we're revenue. $X.X are have from are

money. lot strength, of money money. XXXX. our $XXX-some-odd actually are but noted, and $XX Remember, meeting Senate there your a That's of So as includes of Georgia presidential XXXX [indiscernible] pockets runoff. political million Bloomberg million of we It's

Senate election we even haven't was hill climb. a So it's was to yet. $XX -- hit hard runoff big -- kind day million. It's of it Georgia alone But

third there XXXX. all, was strength. in nine hair's of quarter, there of all of a again, third within lot we where strength around, So was lot the we quarter -- certainly a months, we breadth the in finished finished a going first and And into were

in up. got And mid-August really said, strong again, the these were wells So as lots other math then things and just again, we places. things of hit in you competitive, that mess

Nick Zangler

says. little there upside as think helpful. Obviously, Right. a it, of what referred willing suggested? that's to your but might have flagship then a No, to runoff offer got to you from potential And way Georgia is presence there, maybe if -- it and just the you crystal any bit, but you're you ball a

Jim Ryan

than what this all, does It's impossible it we kind to although polling don't can't a no us. it XX does this if variables front to of of want there's is instead 'XX polling run two month will for to mean know because the be race But the that whether there's cycle the way whether might to whether Among to to Tuesday's the compare Tuesday. or will that a year is, on XXXX. the impossible you months. election, of go the it's suggest days to the balance say And runoff, does say -- first yet Senate and a less runoff. runoff go will one certainly week likelihood results decide decided balance particular Senate of of the that in dollars It's

ticket I right than Saturday. . impossible now. on winning couldn't could So I tell predict better whether predict it's to it any I lottery got the just

Nick Zangler

still that trends at rate? one Local super around XX% the Last mix, under are still No, seeing improvement that fair. Or core they're that's but we there? the trending interpretation automotive advertising quick. any of

Pat LaPlatney

And I We think mentioned. looking improve. forward, did we quarter, in see -- some continue improvement we as to third will it

Jim Ryan

definitely quarter, improvement. About so the for XX% an

Operator

Watts. Our comes Aaron next from question

Aaron Watts

cap covered believe I lot questions. us set, that. Jim, debt, You total floating on maybe had and your hedged, a just as two percent -- your remind ground. of I a you're but confirm don't of your

XX X versus expense how you in interest the in solidify expect 'XX. cash 'XX to trying looks Just

Jim Ryan

'XX We haven't finished yet. our numbers

was in spring not of I'm curves, would and days then at comment that to down least couple next of that. I year looking to on prepared this rates can come at gradually. look curves and everybody So be mean last begin the suggest forward peaking will be the week

by be as the As roughly the debt of XX% will end preferred year floating through fixed. further this and floating fixed reduction with far XX%

We are . hedged. currently not

Aaron Watts

until a previously the And the keep envisioned Okay. political bit then resulting less-than-expected for And revised down year half, than debt longer debt talked impact at as you've -- second in outlook helpful. those pay That's down a that how this follow-on to about? leverage with that, as perhaps and little your does few months least hit a targets? back, that you a it outlook top pay target does

Jim Ryan

that doing of that our fair change, a we be 'XX. as we 'XX as said will have we've can. a a I It Aaron, compound don't to and would now -- it rapidly that's year of not as I'm primary to free consistently been and And sorry, question. be kind continue in debt was as use a will be to cash -- say reduce for to we continue

hoped about we of ratio the end down on had away approximately we for, of currently was can. the 'XX Leverage and pay will the year. continue XX the low -- zip work be the quickly move part? we're as as that will estimating that start to other debt possibly X.X where as X 'XX in year, not were we what code, it we we continue at through at So as But the to as as we quite

Operator

from comes next with Instructions] Loop [Operator question Gould Capital. Our Alan

Alan Gould

two I've Jim. ones, got quick

rate your all, percent? plus floating SOFR what is is of what What First benchmark?

Jim Ryan

LIBOR-based. currently We're

our the we B XXX. with loan our that ago LIBOR put LIBOR transaction year is our in term and C Loan Meredith a Loan Term D Our Term

Alan Gould

X? your And the further XQ Kevin, using versus deterioration XQ assuming XQ? saw Okay. you seem worse are to single-digit because numbers in low Or are retrans MVPDs you deterioration in guidance, the you show

Kevin Latek

are We quarter model. using in the results our second

years. second uptick last number seen the we've in what an Our of quarter from was

what that's of this the are rest so year. we for And using

Alan Gould

X.X%. The of your follow down X.X%. If those, was I so can midpoint at your XQ on sequentially retrans -- is XQ

a So appear using doesn't or... that you're worse it number

Kevin Latek

transition or receiving -- linear assuming the from were traditional OTTs we're we customers negotiating a than receiving with MVPDs. a if MVPDs to I'm or sorry, We're lower would be is rate the that continued there the where additional we of evolution

the contracts if under the right we focused We're paying signals I So get a Networks network the just subscriptions not that some putting on obviously money. and contract broadcasters money now, that are MVPD world goes and meaningful. and The rates, that think market to this. we're leaves they're all is negotiated, we've and getting said below it's this now, us these OTT to the better on not But delta don't -- see we're get about. getting told money than is are

Comcast our whole still up them Charter still But and on Hulu, we number of and net mean, I of -- have move the of DIRECTV wind same goes if a subscribers. growth down. our So off could bunch goes and

trying our political. conservative disappointed on guide. -- we missing are in say also be to than we're more I'd more We

going our all So to we're be can guides of trying we as in as conservative forward.

Operator

question next Resource Huber from Partners. Our Huber Craig comes with

Craig Huber

little Talk please. quarters, that the get of a trend have sense could, I year-over-year, a a you if couple about how auto I further for to that would, follow-ups, just cadence. of is of advertising three if first each

Pat LaPlatney

today, in to And QX mentioned it minutes 'XX. we Auto this of positive a advertising expect was we think I QX. few be over down And year. would in QX the first mentioned positive I ago, two quarters as turned

green. 'XX, but the So category we've a it's time been again, tell with happen to going it's since long in the seen early what's to definitely too

Craig Huber

Is I quantify it? you, can you Is could ask Or... that it -- X%, if X%? like

Jim Ryan

XX%. the To XX%. QX percentage just quarter first quarter-by-quarter, was core so QX this you was is cadence auto political, core, as QX of was a XX%. excluding pure give auto auto

Craig Huber

can't you me, but X%, X% up is third X%, the -- quarter then it year-over-year, can you pro forma? in maybe And up -- tell

Jim Ryan

was was XX. 'XX XX. QX 'XX QX

Craig Huber

apologize. I sorry, I'm

figure can the I Okay. math. out

we you, could to wanted but further? a bit, fourth talked advertising, The little quarter about core ask thing I this you other little talk a

Jim Ryan

$X.X million 'XX. or it basis, again, about do X% over in 'XX up a to dollar is QX quick, Real about

Craig Huber

Or looking bit, want little little advertising November, I a versus talk the is Just great. it down bit? like, how pace I is December, bit That's year there, now. flat? little that point, part a then please. election core look, looking mean the sense you this versus? How I is Is mean, talk hear on And further the post a at little remaining post the a up a core advertising have you seems election. the ago? bookings I Okay. example, of to -- for for it

Pat LaPlatney

Yes.

down is November touch. a So

Jim Ryan

Normally.

Pat LaPlatney

as for wait right little earlier, rest Yes, as generally, you'd after year. advertisers it's because, the until election the would Jim read be, get a to as mentioned December, will hard in it expect, of now to lay everything a the

December think, still single I -- waiting low waiting that for but digits. earnest. So is to we're in And down, -- we're break

it how see we'll develops. yes, So

Craig Huber

for Right. And sense that a single remaining part guess post election for I please, whole month. is of have November number, what you down, Do the the of call the low said year-over-year? you it, November digits it

Jim Ryan

down it no. No, . that break don't We granular.

Operator

Capital [Operator next Kupinski with Instructions] Michael comes Markets. question Our Noble from

Michael Kupinski

my a as follow-up. but quick asked Craig just question, just

Or to you booked forward bookings in month. month So your typically say, just right? you're the in trying you the just the of about terms advertising some Is get of your for of would that next in advertising for you to how terms delay of would I'm you next have relative to that look sense same I'm terms seeing at in where December, anticipate you of or election? a curious, I amount of terms would as of bookings, next of month, And you're that believe enter bookings? be XX% the

Jim Ryan

said, Michael, It's just -- just rest in wait waiting December the normal read as until to a Day the on their hard Pat traditionally, lock day. get after before are of people is simply on because, to to perfect Election election Friday year. they

right in with until will the we obviously muddied see we -- political unusual. year anything next week ordinary to say next say, don't an without look about now, now, waters the political nothing weeks, or of -- that with right there's every cycle. couple as December, So right of What we as can

we're So -- should December -- core think we it good in December. a be be should reasonably

Michael Kupinski

the going Okay. question. I And back guess, to then auto

terms context of what to the from. of it just dealerships where auto the I'm trying coming coming understand category, from strength -- manufacturers? In is is the or

Bob Smith

gives This is both. Bob. a There's bag us mixed

it of Some of the -- up should are back our And we be spending local comes dealers on for the pacing most pretty manufacturer. business. looks healthy a from, again, also its the third quarter, manufacturers fairly anticipate, side our major automotive them. pretty The manufacturers but good. in amount, That national they're good a quarter. of were markets based same where via And the in pacing,

Operator

are further at time. Instructions] [Operator no There this questions

Hilton Howell

right. about actually We All very for today year. for much so of forward seeing you talk look proud Thank our QX to . Thank QX's We're to the questions. whole performance. your attendance enormously you and you. everyone's

Operator

this call. your Ladies concludes gentlemen, and

You may time. disconnect at this

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