Gray Television (GTN) 24 Feb 232022 Q4 Earnings call transcript

Company Profile

Participants

Hilton Howell	Chairman & CEO
Pat LaPlatney	President & Co-CEO
Kevin Latek	Chief Legal & Development Officer
Jim Ryan	CFO
Bob Smith	COO
Dan Kurnos	Benchmark Company
James Goss	Barrington Research
Alan Gould	Loop Capital
Craig Huber	Huber Research Partners
Nick Zangler	Stephens
Michael Kupinski	Noble Capital Markets
Steven Cahall	Wells Fargo

Call transcript

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

Operator

Ladies and gentlemen, thank you for joining the 2022 Q4 Earnings Call.

I will now turn the call over to President and CEO, Mr. Hilton Howell.

You may begin.

Hilton Howell

Thank you, Misty. everyone. morning, Good

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

President With me today, our Development Pat Bob usual, Chief are Chief and Financial our Legal Kevin Ryan; Smith. and and Operating officers, Chief our our LaPlatney; Officer, Co-CEO, executive as our Latek; Officer, Jim Officer,

going shorten streamline call our to today. We're and

Kevin Jim, as will hear will begin, We five take usual, your to you myself, disclaimer that any of available After with will questions. provide. will abbreviated then a that, Kevin, and us from comments be of and then then all

Kevin? So,

Kevin Latek

you, Good Yes. Thank Hilton. everyone. morning,

information. address uses www.gray.tv. The website Gray as of website its is a key company source

XX-K our SEC file Annual the Form on Report with will today. later We

on financial non-GAAP as replace operating certain assist discussion public meant are their call measures, cash in supplements the may flow, not of and leverage free Included be flow, a valuation are provided broadcast flow, measurements, but and company. cash Metrics cash particular, of our to the ratio. GAAP analysis in to

measures statements. of earnings Included website in reconciliations as the as financial financial reported GAAP measures on release are our to our well in our

file on no The earnings most statements. the with of result most matters our those number statements forth of forward-looking from reports recent Form the our forward-looking future update risks regarding, XX-K call in including obligation implied release. differ and operating in a important the Certain discussed Actual future subject today may factors and or things, could we'll these company's a this filed uncertainties. set various and undertakes statements among that Annual in results. one are Report company as to other recent on include have SEC, forward-looking to Those been the expressed recent most statements any results

Hilton. call And turn to the now I'll

Hilton Howell

Kevin. you, Thank

XXXX. total fourth XXXX, to advertising $X.X in cash strong good the of by we to to of record XX% once revenue fourth quarter increased again, compared a On capped XXXX by our year the basis revenue an XX%, increased for an Core increased flow quarter quarter exceptionally Today, broadcast XX%, finish Gray. reported billion. a as-reported fourth the

For was billion, the total full-year increase XXXX, highest annual XXXX, record revenue. XX% revenue $X.X marking of from an a ever of our

Core increase of from revenue XX% XXXX, billion, advertising XX% for the increase a $X.X attribute was campaigns professionals' by unique an most was combination the our agencies. on which battleground cycle. exceeded number XXXX. flowed the for revenue competitive basis of advertising excellent factors, advertising record with from million, XXX% another $X.X a on our combined news an cash which political direct full-year was stations revenue particular, advertising record advertising these unbiased In in XXXX's political $XXX political and and broadcast of political advertising an and divisive of political results billion, market-leading coverage states, historical from revenue XX% results significant basis. These stellar We year XXXX, was revenue our our as-reported flow by of mid-term issues of a in and and to relationship Gray's news political

continue years that its to our Meredith Corporation's ago, and television emphasized our consistently Gray, we Since acquisition announced and Board are we to team two reducing of sheet. our our leadership its Our Board leadership senior focus local on leverage. have committed balance stations

demonstrate actions this commitment. Our

over the reduced remaining the principal those On intend principal have $XXX three-year down approximately paid that proceeds under our to March less we receivable our in point, Yesterday, XX to of received Term outstanding under million During million Loan term we use entirely XXXX, loans. accounts B. course a Gray $XXX facility. At debt million than of will balance off pay we $XXX under $XXX months. securitization of million X,

expectations. balance To entered annual of to interest X%, will through to all our sheet, These annual arrangements that XX, risk could also rates, a will events expense basis an our charged unforeseen variable over further one-month to on interest margin current strengthen maximum caps points rate will interest December increase yesterday, an rates limit limit into agreement. our we XXXX. our market of effectively XX an the reduce The market rate rate debt applicable above cap LIBOR additional exposure our approximately plus of current which

especially allocate produce a and to in significant in the of significant free ahead, we cash Year we fully to additional Election XXXX, reduction. free portion debt Looking Presidential XXXX, of continue as to intend cash

use complete portion to phase also put flow our from We which us Atlanta of position a later year. strong the to Assembly project our cash first a the revenue begin of project, will will this earning in

broadcasting our the know, participating state television industry Atlanta you in in Assembly As and will film growing Georgia. segment provide headquartered our Studios home Assembly fast of diversification production by from and

inflation, Construction This the so on ahead due continues chain for other XXXX. only issues remaining for other of Assembly was run Assembly area Atlanta within possible concrete on-site supply and overruns many any certain our key projects decision and materials in to infrastructure cost created produce pre-order Studios XXXX and of the to to in delays, to the before steel our schedules.

the that and the two At time, land on complete, side. Gray and movies this soon funding is both June. industrial on begin an across will be anticipate development construction than of XX of intends roughly as this and its the less for will infrastructure Atlanta was We completed pause construction remaining of NBCUniversal much Assembly television to that Studios projects at Studios Gray Assembly. phase will Once Assembly portion that as years shows empty currently entire the the project acres Television construction producing of that ago comprise

of unique shareholders. maximize opportunities of will all now quite evaluate the and several months, value benefit are Gray's to long-term We actively this the next of the to continue over to investment

be and that value Gray will macro some challenges, drives other and our locally solid producing marked advertising focused the XXXX and by -- delivering will continue retransmission audiences revenues. content that While want

now I call Latek. the Kevin? Kevin turn back to over will

Kevin Latek

right. again. All Thanks

stations Television you perform better in might well beginning production Gray in about continued economy. certain based quarter, and fourth a presume of headlines on position the XXXX than to companies sectors the

revenue dip revenue that underlying cannot X% compared an confirms we throughout million XXXX, all Since core For converted a billion. being in revenues additional a very in is inventory, advertising television extra political the full-year XXXX strong with by demand that our core from This historical successfully in Gray inventory outcome stations of basis. despite declined core XXXX to $XXX were That's political mere because combined $X.X our on traditional impressive by the displaced manufacture this advertising the XXXX. sales minor additional X% into year. advertisers as

results advertisers stations, As attribute morning’s confidence sales our solid news local advertising businesses noted and stations investments and and acquired to among real-world television in scale operations. release, we markets in high-quality and with of recently local efficient combined this in portfolio

approximately outpacing renew XXXX. Turning of MVPD renew result to revenue all Gray platforms. is we retrans contracts rotating in growth of did retrans retransmission the prior and Recall agreements contracts revenues. step-ups Gray a retransmission first traditional the Virtually posted covering not over increase X% annual increases our subscriber of rate into experienced in outpacing other gross subscribers. Consequently, year. MVPD XX% of subscribers full-year and of impact re-price the our annual rate OTT its in X% that In declines our will January. retrans quarter XXXX, XXXX

the we fourth anticipate of approximately quarter first retransmission will that XXXX, of the quarter revenue XXXX. by increase For XX% our to over gross XX%

at are to and renewal paid reaching increases our impacting as our previously. ability this at keep price to Retrans the escalator be declines annual neighborhood both value level same remain Sub seen have fair we for contract content. in

contracts step-up reverse to addition, years networks that did the X payments January were a ago. In on few the negotiated comp under

discussed we have times, we kick-in. as network now affiliation expect XXXX, in As agreements decline reverse rates comp will recently negotiated starting more many

retrans the contracts of first MVPD XX% XXXX, approximately MVPD the We for and MVPD quarter of of the XXXX, in subs XX% subs XXXX. will of half of XX% in second renew second quarter in subs of

quarter subscriber second a of what the provided of subscriber quarter received XXXX terms In we third positive received we the than counts, for reports picture XXXX. for more that of

Specifically, XXXX, in TV subscriber quarter XXXX. of third declined third the our from of Pay quarter X.X% the total by roughly

We are subscriber fairly our that remains gratified base stable.

our continue distribution impacted the and be by households of virtual revenues. traditional platforms both We direct-to-consumer to MVPDs to the from our the MVPDs rotation terms the dictate networks of where and

all virtually signals on all affiliate control to like groups continue Gray push of for platforms. own our will

period, for annually. XXXX this especially to that Net together, Still and retrans in not gross traditional retransmission Putting to we news performance reverse we our will on coupled in based retrans experienced based true relief we are projections We continue on years. with a grow even our retrans These more macroeconomic starting top our losses. and command to stations, in next some that conditions all of continue XXXX, with local and over will multi-year ability sub grow will continue to anticipate rated continued platforms to portfolio rates strong for assumptions of conservative demonstrated production core do strong year. XXXX, XXXX. our than in continue XXXX, we vantage revenue payments that to in comp challenging today recent compare point anticipate our expect revenue, revenue XXXX MVPD in be

I'll remarks. my call to now the concludes Ryan. Jim This turn

Jim Ryan

everyone. morning, Thank you, Good Kevin.

Kevin key the highlights make covered today. the and very full-year have for and short my XXXX, quarter Hilton remarks of I'll so the

of XXXX QX our it varied with First results. all, full-year and

from of believe when $X Olympics of the NBC off you is Super cycle, the XX to of core to demonstrates relating anticipate broadcast channels to XXXX, XXXX. QX a are on XXXX in We Bowl our Winter during Turning XX revenue. $X Fox a but compared political to Super guidance. aggregate million an revenue of company that's the net of and it's the our non-recurring start million consider the million $XX the good channels, facing, net about we broadcast That's our on revenue guidance especially year QX of for Bowl event and that revenue we off the an

our look consider So we're million good for you very actually QX. QX think $X a at to that start and headwind we off when guidance in

our XX make undoubtedly of current preface progresses. I comments data of of of change the today not points by the these I'll I'll will last will that for year in amounts dollars full-year up these admit XXXX, expectations When few company, I'm are down the millions that the saying on size fully as as [indiscernible] about expectations and or I'm and a and talking more comments billions smart. current or given dollars, our the

we So directionally this what again, see is today.

well. we're be Retransmission $X.XX billion, over approximately XXXX of Core in revenue would revenue currently total as for XXXX. $X.XX expecting of which approximately revenue low-single-digits $X.X billion. So billion about up

at in just was core well matched set. retrans our like our are So it pretty XXXX

the approximately early this consider Political revenue advertising to importantly, but $XX does that off any cycle see we year, million $XX $XX political million possibly revenue potential for of XXXX the given later million not is that could year. range

conservative So the guide any in on counting Presidential. is and political XXXX not

$X.X be would approximately revenue billion. broadcast Total

depreciation, disposal billion. anticipated Network is going Our operating comp recourse and broadcast is expenses to Of before billion. be be $X.X that, amortization, gain of to million assets up $X.X on expenses approximately. currently will approximately $XXX and loss approximately

and million, $XX On million of of $X $XX million. non-cash the of $XXX $XXX approximately includes non-cash $X.X million, approximately $XX comp. expenses comp expenses million non-cash stock we XXX(k) of of production billion, million stock have broadcast That expense and corporate

credit flow agreement $XXX cash senior be as our to operating million defined Our will million. in $XXX approximately

Turning in XXXX. major cash to uses

we in years. several a put rate significant place rates in insulate which caps, the us for As interest have market Hilton next mentioned, increase

cash expect interest million to $XXX of we $XXX So million.

our rate on of interest billion are caps LIBOR debt. X% floating $X.X Our rate

Term $XXX $XXX Preferred We is capital million. $XXX $XXX our and amortization million, estimated $XX free That million expenditures expect are $XXX $XXX Loan taxes $XX cash our would of and required million between place dividends million million. of million. cash to to D million, routine

strong We of cycle. successful and the a we are year look return very well-positioned starting XXXX and forward presidential continuing a with into another to XXXX,

Hilton. turn call the I'll to back

Hilton Howell

time, up Bob Pat, me. this the at Jim, Operator, to line much. for Kevin, we'd very like for any questions open you Thank and

Operator

Okay. [Operator Instructions].

And is it to going like looks Dan first Kurnos come line from with your Benchmark Dan, your is open. question Company.

Hilton Howell

Dan. Hello,

Dan Kurnos

Hey guys me? you sorry. hear Can

Hilton Howell

We can.

Dan Kurnos

right. All

sub thank super color don't back one happened I all thing morning, for for appreciate Sorry about the me? you The cadence really and that. Kevin, could good just miss, there. I did know the what it. again helpful go over But you

Kevin Latek

Hi of we re-price our Dan, will and renew contracts covering subs. in MVPD XXXX, traditional the first XX% retrans quarter MVPD of

quarter XXXX, subs XX% second in subs the in of quarter of renew of of We will in MVPD first of XX% approximately XXXX, and the MVPD of XXXX. XX% half the subs second MVPD about

Dan Kurnos

the us kind for side, the of were little guide your I -- Perfect. of than Jim, can a probably on a answer, or think expecting. bit net so a retrans. we people your But kind bit it's right. upside probably it's better on is do little -- net retrans little worth, reverse All gave And what lower guide the math.

sure on of But at as that Meredith of was stations marketplace So this. you for kind -- conservative under relatively plenty today coming Kevin, look seems I'm of sort like sub you've And up I'm the legacy assumptions, obviously the got ABC guessing Meredith benign. your questions have renewal. It even we

Kevin Latek

lost we you Dan, Hey, at Meredith.

Hilton Howell

we are Operator, Hello. still online?

Operator

not what I'm happened Dan, line there. on, Yes. is sure your and

Hilton Howell

is Dan him right. able get let's next on back on, the to put in will back when And go queue. All Well, the we to question.

Operator

problem. No Okay.

going line is from come next your James, open. James Our question Goss. to is

James Goss

about All I streamer contracts was those is talk changing I the network think couple you address little bit. of the maybe right. But talking how sales And have in affiliate rather fees. were about those that? the and own you of the little ad you the curious markets. Could traditionally, question channels some market a about them, because, is this a the I of a little this dynamic you. local that One, things. national and usage about unclear Thank issues Kevin than

Kevin Latek

the not is CBS Jim, affiliates to what CBS opt-in referring think, to largely I you're contract. the did Fubo,

James Goss

that's situation. a that one the unique maybe is example. And the That's

Kevin Latek

Yes.

time, years, gotten networks negotiations now, I Fast said deals virtual the have years think several ground. the let we've round broadcast the for for of get were opt-in. to also much Sony the deals the off their now PlayStation larger. the YouTube, offer the many stations. them that to at will they those And groups all do Hulu, we first So and owned with largely then negotiating operated affiliates forward virtual And to

has Vue on has PlayStation Fubo obviously come gone market. away. Sony the

a the our And boards. been virtual providers just longer can all affiliate hand different the groups the all are affiliate that be we the established negotiations with we have affiliates should destiny. all think MVPDs now several I under These months surely MVPDs. have loudly saying or And we last as negotiate great pretty three controlling

and a affiliates would affiliates into did endorse CBS CBS signals and a affiliates have, the our to contract Fubo affiliate opportunity was deal. that provide take were the sign which we CBS, Gray situation local that opt-in an contract CBS it then offered that And and the In did presented not and our to CBS local to with deal. Board Board the content what CBS Fubo. CBS to not

not Fubo have signals. the access CBS As did to a affiliate result,

than alternative provide some to So to the signals. or created feeds CBS content CBS Network customers national Fubo rather feed CBS local the

overall have opt-in CBS, last think said agreement, and month about talking affiliates time late virtual knowledge, sure was Fubo. again, that and couple of changes our we a This happening the years case. several in that and earnings in discussing been picture. the affiliate feel calls is so control destiny, the this own groups our first other -- to -- what streamers no context last you're don't feeds. we’ve the not something, pretty national with to I strongly I'm should that's The the that last only for it carrying an

next are talk continuing we question. anticipate to to to CBS, your So

the all the say be sense that's -- all those. reach that negotiation affiliates. with long-term we're affiliate make and hopeful network going that networks The to and that this on and groups agreements other But we'll to new able optimistic are for

James Goss

a Atlanta that going about The thing little other color. bit. And the issue ask No, to it Studios. brought to was the one Assembly I Right. light maybe appreciate

any else close that think cost of in able to or financials terms or in you to the investment, Now about of you're usage revenue provide getting the be estimates of might and it coming how of there terms to expectations, NBCUniversal -- statements? your opening them the we you is anything impacts initially, might that overall framing

Hilton Howell

to details James, we're reasons, rental it's terms that happy say particularly to revenue -- great a on a production what to revenue in side. for right this Suffice very unable that on for going revenue summer. of the we’re producing not of be it provide number just just but now, with beginning

those to our won't X. next the June we while partner, over So we'll very beginning have numbers turning it at about talk it be our probably it to will NBCUniversal, near call, to because be

James Goss

Okay.

rather that them you? using on it be will it will and as be predictions on And so be there intercompany well? -- some than you'll And or

Hilton Howell

TV it properties from Well, the and and leasing using movies are there making us. I mean be will on they shows that they

will and we stages the same properties be that retained. on have doing We and them the the studios

And subsidiary there on that will so Swirl our stages. happening be Films our through some is production

In County, out will their other to Gray Paulding producers, stages film that be in addition retained. the to have stages we but then separately leasing

Operator

Instructions]. [Operator

our question Dan, your open. from line Dan Benchmark. And comes is next from Kurnos

Hilton Howell

back, Welcome Dan.

Sorry that. about

Dan Kurnos

this before try be again, I'm I'm quick guess. get going I and Hilton, going hook again, really to to the I

Hilton Howell

you Technology give always like. hook, I'm messes can it seems of sorry. to up kind from the time, We time

Dan Kurnos

it. clear, could thoughts Atlanta, on out wasn't laid as It you from And the definitely to you I'd hear is guide any expand guys any But monetization that be that to release, definitely the included a me. on Thanks. you or revenue in Hilton, bit benefit in the love guys. little opportunities, if It you upon press was gave? just your

Hilton Howell

Sure. Jim?

Jim Ryan

not a is that at -- commenced in we not over, in terms. under lot would to there's time There's actually of least by a -- little remember this many bit the turn year. payments the it months There be guide. actually its But NBCU us

for number small by pretty XXXX, just a it’s timing. So

Hilton Howell

number. a of that individual flow how And Assembly maybe stations are be UHF continue cash FCC I'm seem contributor the the moment of did is to in it to Gray on company. of the quite currently, significant one free past, with really upon the capped Scripps we on the TV at -- with business And about be they XX% the a below currently to going terms things maintain be slightly maturity and grow because X.X% have at the as asset recognizing basis. we doesn't both the to in our to while since We quite continue we is cap to the an to Nexstar excited focus X% the discount distribution articulated seems to

our what And charged grow number live with to our who production of for of come think that's Georgia Georgia, stunning you reasons, obviously may state, Academy, this with Credits. they understand while Tax the so this unique so a Georgia the management Dan. is the done not has follow began created of really ago, continuing of XX it's a of the in and I team that those if correctly. company. has may It the creation think business years calling Georgia quite XX-plus But legislators ago testament great not wise that years or the you Film may and And to Film state amount fully I'm I is not to

making in generations state. craft have at Georgians we And this learned young television have least of now who of two film and the

And so the talent, is the crews, here. everything

so The billion, was revenue we here. is amount the -- the so year, Georgia, production the I that's is and old, coming huge it's huge it's $X.X which generator a that of now. this XXXX of got numbers Last have And probably right a to public of there productions only we for but state. this amount were it's production in year, all total know from

of one back been I the built Assembly up. -- world. have in will the finest I The anywhere believe me it is of the let studios told one finest Studios be

day that here in and the are we so -- direct we creators, say television of films from about NBCUniversal, full a to financial a Atlanta that very Georgia. have that a had of independent say to to one, our going Georgia. I and it's for of And production the coming excited with Obviously, to that. And with our happy post and and going and be have looking forward being huge city in gamut consent whether endeavor other It's in would be to have asset demand candidly, actually or we content profitable feature bring Georgia. the agreement immense they the all contact we of we're have company, individuals, and and of and to to use Atlanta direct But I'm for State from studios. shareholders long-term for the Assembly

Dan Kurnos

try got we And That's real now. this on Kevin, reverse numbers it. I'll helpful. I the quick, Got from super Jim mean the

Legacy of of back And comes and seem do I this we're benign onerous. ABC -- your thoughts your Meredith relatively year, here. guide math the given. we the up obviously, So based on too kind can obviously you've seemed on it think doesn't in the half,

trying just you get year net some to substantially next So because be pretty a commented on and up sense, that trend. obviously reverse that relief also you should get

three-year a maybe view? are of model just outperform? I sort kind sub horizon, over the What's do you your expect to mean in assumptions now? underlying what right of like your So And time

Kevin Latek

we've We continue We've phone -- of to again, sub that shock last second been we've and will so on the call. a the we we Dan, a do quarter what in we model. bit use on losses, revealed that. we conservatively never our Yes. projecting in commented had said

all our look the quarter I have they point, count quarter. the quarter As third was. this frankly do better in what sub fourth said, We third numbers at not improved relatively sub the but than

we'll continue So direct-to-consumers. good direction the things right at have in sub virtual modeled, rotations to and on the model now be to least -- to conservatively losses of what a trending a definitely seem sub in a we than but better sort and

for over the two ever I guidance most this we've out guidance period. phone modeled call probably or is and the not full-year. three-year appreciate a in We've February given given a

little guidance a we year is and going we're little for a stick more So current the which specific of have now, kind general. this with to

prepared earnings the be prepared gave over really year net after again we to We But for that today. same to script, more I'm the right be again, specific in next than not will percentages script mentioned the the in XXXX, do think reasons and put what that improved on not now. reasons. I'm this year,

Dan Kurnos

Okay. on. Fair enough. back Thanks guys for me let

Kevin Latek

Yes.

Hilton Howell

you, Thank right. Dan. All

Operator

question Gray to come Alan is from Our is Gould Alan, TV. with going open. line next your

Alan Gould

Thank plant, you. pull-forward? Loop. first, Atlanta How the it sound a this two, couple A one. of stages on higher the expected? cost questions. was the a there? that Assembly easy than CapEx inflation like it a one year. Hilton, expected looks part are -- Or was many little to a higher Was And little than is higher be than causing bit

Hilton Howell

Well, we first out and about our stages answer always Thursday, but in stages XX. The in feet it's total total office space total. XX under inflation X,XXX,XXX me is topping last now. let But of ceremony. terms right had square is square are The construction footage fact, And mill there, production, question. your sound

So almost we're done.

Kevin Latek

Third Rail.

Jim Ryan

Third Rail.

Hilton Howell

Studios. there's add additional operational I'll you three stages incorporated Third numbers and are asked but Plus Rail Assembly, about with currently in, are whose an that

Studios currently We is further part also subsidiary are Television. two the studios that XX% are owned Swirl of that a Atlanta Films of have a named Group Film Gray that

Alan Gould

Okay. the And costs?

Jim Ryan

and in there's delivered of got chain supply the guided. -- up number actually two earlier QX number inflation, we the would in the We issues than a -- regular was thought the what -- is in XXXX. answer, So Alan, CapEx some one It's pull-forward shown had it's actually have some is year. multi-phased -- what higher at CapEx

assure but watching CapEx better. I'll in we're was -- that, something internally, we pleasant regular a also -- had a surprise, will So on into have take XXXX. And responsibility hawk the we not And going should one we that that and also, guided like hand, I you CapEx expected. XXXX

we piece the not push regular our current but equation to some And renovation projects landlords were further CapEx could the was on open the studio leases. XXXX, into extending thought we last of

leases thought little will to and originally because So than expiring year, next we be move we to got had and move our had faster in. move a we've out

million. to But million combination we of obviously, to going possible, very can. watch $XXX guide that the put CapEx as to and as So as XXXX we're much said $XXX is I factors. regular the year, a several again, this in extent into And carefully

Alan Gould

And Jim, on the do plant Assembly more how completed? much until expect Atlanta until it's you or spend to June

Jim Ryan

that net Studio be to In about to project. the million $XX XXXX, on finish estimating currently a basis, we're

Alan Gould

Yes.

And quick one question Kevin. Okay. for

rotation assume should you're matching trend just to the we Your close to pretty is what VMVPD, industry there?

Kevin Latek

of terms MVPDs? Alan. the with I'm In sorry, what

Alan Gould

that Your for from rotation traditional is Gray share for your virtual more to Television? industry the MVPDs. MVPDs Is --

Kevin Latek

rotation. pretty know we the the the pretty To it. a what would and I a have I mean was don't we're be honest, say we industry significant have in a say we significant growth I'd seeing MVPDs, lot in of decline of virtual the direct-to-consumer.

a X.X%. minus year-over-year So again, basis on total sub count was our

subscriber who's leaving basis. tracks that X.X% how with number a a the essentially year-over-year but don't almost else, the converting traditionals we're side. new know on everybody our on into I digital everybody So quite is minus -- everybody

Alan Gould

Okay.

Kevin Latek

Total subscribers.

Alan Gould

VMVPDs you now us or Let differently, subs digital? what me just can -- maybe I ask through coming percentage are of your you can tell

Kevin Latek

No, we not disclosed that. have

Operator

to is Huber question next Craig come Partners. with Research line is Huber Our from open. going your Craig,

Craig Huber

glad My place. question first you. into Thank are cap. is interest this Great. you to rate I'm putting see guys this

December put place You payable from on release the a terms press to mentioned in your this is of on to of I that XX amortized? quarter? it. And Is guess cost $XX XXXX. P&L on how be that what's million this impact the in in going your -- that's

Hilton Howell

From XX, the is more is XXXX. cash of again, and be part December a GAAP will that now settlement But I perspective, XX XXXX. between or think in amortized the accounting less -- ratably over at important December

given now the insulated you we've gotten road, -- but jokingly, actually would not we're said, I got one and with -- I continuing this pleased So this fully in this got I'd in and And been earlier pleased I'm to caps place, we today way we're have we're with somewhat I'm very absolute sincerity, on the put pleased morning. hikes. rate to the have inflation headlines glad say rate down that trying I'm as on week. glad the -- price

pleased very we're So with out. came where we

Craig Huber

mid-single-digits, And I retrans count down been X.X%? thoughts markets than company, is hear mid-single-digits. has could, your good, And second lot declines that. down you're sub very your good want and publicly them it they're your very about X.X% you that you're talking down question to that certainly, better trend down just similar about on are then for there, if I only a please. are year-over-year, What quite

Kevin Latek

Yes.

announced forever. declines were first I gains. sort still announce our saw We sub When years XXXX, industry couple that seeing we some August peer a you We have been still may the in we're were growing. groups declines, stabilization. seeing and that we were said of sub stabilization. little later, of of seeing A they really broadcast trailing seeing

sub they're greater declines we than Now seeing some are.

we've So we definitely guess we more rural exposure have behind. have than best The been is folks. other trailing

large very in whole smaller and but certainly We that are markets, are some a some geographically markets we're in bunch large. of

virtual and great little have access broadband large been markets. San is is it as in other a and as later to those MVPD their because And Francisco the folks not Philadelphia

much. they our Sony, -- Hulu, markets than not substitutes Fubo, broadband others signals was large because deployed they until not YouTube, as of full later and local et launching in recently not as in were So than more cetera, the sort were markets was

couple years. rolling the out in So of now broadband we're aggressively more seeing last

is people of But loss best a that's the type covering footprint more and our others. those have seeing the bit different than up, we're pick subscriptions MVPDs. guess is on So probably that's we

Craig Huber

on update my alternative Thank next years? you -- you maybe Great your is aggressive Okay. that. your on thoughts us And in spectrum. of place just how you. the that, Can then my uses coming -- broadcast for second sorry, might question,

Pat LaPlatney

Yes.

-- it's that So Pat LaPlatney.

out the would spectrum of uses. about are like the of we and tell XXXX, majority larger quite at So rolled I in ATSC rest the you possibility our of automobiles X.X. this that There's rolled markets a have a other point. of we industry, markets of that and out number data for talk We've I bit guess three the using been into out, rolling

away years at the pretty few that a good that moving the clip. is from I But a rollout still. is along reality think we're

of north be the of XXXX. expect to by XX% We end

And chips today selling chips side really of sets. TV manufacturers X.X selling them. majority The chips -- with then a terms in it's television at the or getting the of of of the sets into matter are of vast

the So the side. pretty then on that's happening TV filled that's and the getting And matter a on quickly. footprint it's alternative out, uses, of

Craig Huber

you Okay. the curious guys now, the given the right curious guys, on environment you [indiscernible] My thoughts mean, guys around your how broad your all there. in last are I U.S.? what's are question, markets thoughts economic just

Bob Smith

our This a a coming We're local Those of is accounts and with business in of about direct optimistic, of automotive coming markets. that. having new seeing lot in we're of ton a a are a on that seeing mentioned, things actually development. Smith. also markets, our bit of TV, are lot to But back success lot a and little pretty We're as local we're actually numbers good Bob -- Jim the projections. lot

legal pretty Ohio. to is strong. sports Nissan We do approved in saw And get well. Motors recently General strong. gambling is continues

gambling seeing season. a in in North pass of We're that will here buys and Carolina big lot the continue Ohio markets are pretty for will the time So football optimistic first quarter. the here second in our quarter

a all good markets chatter, you despite our of things all, So all despite right local in happening the lot in now. the if headwinds, will, there's

Operator

next with is question going from Nick Our Zangler line to is Stephens. Nick, come open. your

Nick Zangler

is work local assets, local the through networks of some the pretty direct-to-consumer here? Hey, just new. maybe the I on so retrans it's figure piece curious access at net feed material like I'm broadcast when And of your direct-to-consumer the is basically moment? how guys. stuff, Are economics between a and your Yes. Plus recognizing On you available contribution Gray through Paramount of a top-line app the this think feed Peacock. an or the made revenue

Kevin Latek

Hi, Yes. it's Kevin.

not Access All and markets on gate. All first were we of We Access day the that company, a CBS tested was CBS the O&Os launched the -- CBS one. little acquired tiny put So on a we Access CBS as our All even on Every signals we on the with in point, All actually app Access. available CBS out station beta from CBS

of piece clear, Obviously, distribution us. Paramount not time. for to our is new been be part The for really direct-to-consumer just rebranded Plus. a Access So as All was has CBS some the that

both of sub negotiated Revenue it. There's again, it of late based the per revenue. the last December. number adding the Peacock, to And comes month. boards -- respectively, in local NBC, net paid the -- That no would sort year. not And us Peacock on per just Those the retrans dollars respective affiliate affiliates the signals is that price offset expense the to of line. drop retransmission this into revenue for subs fee on a against is markets CBS as late added additional a by they're station. each or

couldn't -- are just the even you subs I So I tell later. as sit don't here we what

Nick Zangler

Got Yes. it.

I roll total Okay. guys on in for guidance the want year. campaign No, fair. about -- revenues. -- Political then ask hear if that's to early. upside Presidential And the to billion start I in the you $X.X for did Obviously, total occur total Election would

your when the Is you'd upside currently. make continue So we naturally, underlying assumption on displacement like, for XXXX And assume growth about recessionary relative expectations saw sounds things the then obviously, it XXXX, see segment does that core talk show exclude into the you XXXX. in in to like we if could to environment guide? then potentially the maybe even you later that year. to political get that so assumption And piece you the press when referred if And a year, guide the basically also, core that you that in advertising improvement, year-over-year XXXX? to revenue in your in core upside in release, in the for

Jim Ryan

not money. There saw upside early Hopefully, you we cycle upside number are into Several now. good cycle. the primary news that's from we the seen in for guide. in years. early calls the of every and basically a have first, So couple that Later But baked We that -- potential the last cycles, several the every correct. primary we've political phone money. we can in from is this saw that about talk year, XXXX

would above year. the over and some last expect from yes, the growth political we you're -- In core, displacement

all -- a pleased we We And everybody are I'd we company where we're are like with seeing dig year, core it minutes start XXXX. commented local see say in for a not and else ago, good down of think to XXX a no, no continue. headlines Bob to go we news reason recession. we few local the So of does. have lot planning the our when markets, we our won't as in -- But in at as a business

the macro if that. Now changes, we control changes, the macro can't

and has very said Bob focus new direct successful higher this year, direct was and too, new for business, the budgets But been it local as year. local are even earlier, the creating last

So we're core, butter and bring and bread -- we're on focused in we can. to working local and dollar every is our on -- it local is hard

Nick Zangler

improvement like that did experience out. And this start -- cadence? keep stronger core core market, altogether? similar weak did it. from because advertising and a I there it just local hearing sorry, Got December then on the soft ad -- I'm to just very was everywhere or Or experience else, Did in was January

Bob Smith

again. decent into -- All it's the and year. been over in December of pretty It's first carried in Smith the Bob all

there's we in moving But Jim the about other February. returning forward feel that, good after that. again, than some As pretty not Olympic mentioned, political and and dollars quarter

Operator

to with question Noble come from next Kupinski is going Markets. Michael Our Capital

open. Your line is

Michael Kupinski

Most here. core question been questions have you. have of -- I the on another Thank

you pause opportunities. evaluate indicated considering a project about to I'm for be if wondering funding might Atlanta you could You And you bit little Assembly options to the just what plan there. that talk

Hilton Howell

XX kind estate got acres options to We've concern and over -- there, of and what's we're about of there. on on I put There's going mean, we're pausing. macroeconomic I a considering. some hate real record out Well, public what we have

just taking we're So a break.

is studios about and on all built. those just building focus we have Our

Operator

come And with your our Wells Fargo. open. is from going Steven, question line next to Cahall Steven is

Steven Cahall

Kevin, a for Maybe couple you. Thanks.

about on industry down our So numbers, seen. trends about sub it X% looks trailing like the subs you've are you the for that talked industry XXXX. of Kind

there you'll that the time? year that to plan you a that continue next do something that so? bit that the business is not better means to and trend over Do to revert to going think over around So that do you'll something you about or you're think catch-up exposure more like that? perform rural your structural Or you

Kevin Latek

going next some mean, Steven. over to be the I would middle, we will to of point, it's say kind likely right At revert not the down it's year. the but

one years. years least eight we'd year have mean. seven We the been for see -- revert I at why would suddenly don't that in and reverse now, trailing to

we're… but -- So

Steven Cahall

Yes.

Kevin Latek

I kind the And better. actually have quarter second quarter what was said, is I shock. better the don't third of as in we've insight quarter any beyond even than far so seen. fourth coming And

going So -- about retrans feeling value the signals. good we're subs Gray about Gray I'm these really and and, feeling good of feeling certainly, re-pricings, for as through environment the

Steven Cahall

about the like is VMVPD the issue. deal, It doesn't network VMVPDs. Kevin, of is like It an unfairness it's moves FCC that sound a sounds peers kind and we've to talk directly that and your What ability with place? on the mechanism into national this then to issue. negotiate affiliate of And another the you really one, of Great. an Fubo industry issues few the heard and just the

relationships think the directly? nature you when that those can think networks, about is arrangements function national the So might of they negotiate the you change of by kind you what with your which so

Kevin Latek

of issue, that saying it's a guess of of privately the them -- having I affiliate all by affiliates. with have answer And the affiliate discussions boards I four issue with networks instead to this boards negotiating private network an active all affiliate and of providers improvements negotiated four the resolution out would the are work four or attempting animates but about all negotiation we groups. of the been virtual the

some are a reach now So we actively the network. all arrangement time quite equitable of for us, to more working, with

Steven Cahall

Is less year? the free we Jim, for should about CapEx for you'll for cash dividends the the Assembly cash flow you And have that the then cash number. just debt And talked thanks think available free then, to what paydown? flow is less and Yes. then

Jim Ryan

flow dividend debt towards as most the beginning remaining or have at of we of mentioned wouldn't flow we mean include the way define year, free the what free the Assembly The investment. call, part the Hilton will reduction. I the cash year, Yes. this go But that cash of

million everybody It does, quarter could debt. got especially -- fourth that of depending paying -- on on political next debt a determined, is be further debt I'll Wednesday, XXXX be to that little right? we're we've reduction. -- a $XXX off which in remind year be little Obviously, for reduction And strong what could higher a

less than In the of we last months, million have XX debt. $XXX down paid

would we a were debt start to on bringing going within as the we closed that I good Meredith everybody is XX $XXX million we to be promised months focused what when that darn say as So last our fast we could. down

Kevin Latek

we've we If were past been a I little break and more from this on ads election, just political add, than only just, only the Steven, enjoying days can TV. XXX

to You be this may debate August has presidential primary in going scheduled. It's have seen first -- Milwaukee. the been already

where Republican have very in markets; the money, in very that stations debate strong officially August, so a from mean on projections making with New we So will we again, South And have a months presence; campaign begins presidential first in I we're not this Hampshire, Carolina, strong little station; presence. own -- a primary we really still have both we a now. six huge Iowa primaries primary held but be Nevada,

season now, upon quiet the before know it. the going to you enjoy us be but is So political

Hilton Howell

other Steven, Absolutely. thing me to one add question. let your initial

Just and negotiate That's behalf has as that basic understand of right just our to please consent. sense, on company common. without other of my a company just common law matter no a

agreed criticizing intention or Now, public negotiating negotiations the anywhere. anyone no in to. I in past, have everyone The of

personally And and where that articulated Sinclair's Chris I earning change. were at he friend, The call, I comments groups you his who, I brilliant endorse in affiliate times, our they so to it. Ripley, way. setout will his will, And position, handled and think refer

been. through something consented out we of can I well. with stands some Gray it has networks, the very issues. article picked & covered it up hopeful Cable all but a that we to of work that where where those that's I'm Broadcasting And as

consenting We will forward. be not going

Operator

And there are no more people in queue.

Hilton Howell

are we XXXX you we did right. everyone, for thank us today. about about very very, joining in excited very We're actually quite much and All Well, XXXX. really excited what

signs XXX We Street our seeing the see seeing Board. and markets, actually no it much regional recession. throughout Main be the dips, we are a heralded across lot not robustness to We're of in seems of

to we regard this you. look to So XXXX deal and with with a Thank enter to our forward you first great talking of optimism quarter of year.

Operator

Thank you for participating.

now disconnect. may You

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.