Gray Television (GTN) 4 Aug 232023 Q2 Earnings call transcript

Company Profile

Participants

Hilton Howell	Chairman, CEO
Sandy Breland	Chief Operating Officer
Pat LaPlatney	President & Co-CEO
Kevin Latek	Chief Legal & Development Officer
James Ryan	Chief Financial Officer
Aaron Watts	Deutsche Bank
Daniel Kurnos	Benchmark
Steven Cahall	Wells Fargo
Nicholas Zangler	Stephens Inc.
Alan Gould	Loop Capital Markets
Craig Huber	Huber Research
James Goss	Barrington Research

Call transcript

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Operator

Welcome to the Gray Television Second Quarter 2023 Earnings Call. I will now turn the call over to Hilton Howell.

You may begin.

Hilton Howell

Thank you, operator. Good morning, everyone.

name Gray Howell, Television. my and the mentioned, of CEO Misty is I'm Hilton Chairman As And for XXXX our you second thank all quarter earnings for call. joining us

on we I Managing Senior Sandy. who Chief have am that Gray's President, Sandy today, became Officer. absolutely with our delighted Vice us Operating this recently long-time call, Breland, also Welcome,

Officer. and LaPlatney, And will our Kevin Latek, Co-CEO; addition, as and President, Ryan, with begin usual, In will provide. Jim Chief we I'm Development Legal a our Chief Kevin and joined Financial by Pat that Officer; our disclaimer

Kevin Latek

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

We Form will with on file the XX-Q quarterly today. SEC our report later

financial our flow, and the in operating assist our but reconciliation to metrics GAAP supplements financial well of our Included cash flow, are as GAAP reported cash financial broadcast free the are release measures, measures replace as and website in of public in statements. leverage on may on a not of the measures call ratios. non-GAAP cash particular, measurements, their analysis our earnings provided the and be flow, certain a as to valuation to These company. in meant non-GAAP Included discussion

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

the return Hilton. call I now And to

Hilton Howell

we continued beat We advertising you, quarter. through key in We revenue. We Kevin. core consensus retransmission estimates on cash on on XXXX all on of political on beat five first the Today, and beat our we flow. EBITDA, revenue. beat start Thank beat guidance strong second metrics. quarter on free We revenue. advertising Gray and beat Television's

$XXX the the particular, of -- our million revenue quarter from exceeded of guidance. high our for revenues total end In

In quarter. end $XXX addition, expenses our our total of were million the operating for guidance below the low expense of

especially of our are television during the We at performance quarter. the stations pleased

with predicted, and low to a Our up revenue basis the both core had for core a on advertising X% grain. as category and single-digits we auto also increased significantly, And basis. in on national strongly continues year-over-year local year-over-year recover

Meanwhile, strong a a political particularly year. preceding election second was presidential quarter, for also

allow of footprint strong advertising stations ranked to over-index will political continue us television Our has and number one dollars. to on

election looking we cycle. presidential the are such, very 'XX to As forward much

The to second The well XXXX that Gray's revenue. quarter second political year's for set in revenue last quarter continued have also compares that confirms content in that television tough of we will clients. despite comp deep reach our records which our advertising continue quite our the is all-time station want. trusted we that content produce shows for portfolio the viewers that strength strong and value to real It delivering

fronts. quarter, busy leadership remained number team of a on Gray's first end the has of Since the very

First, as Chief our we mentioned, role Officer. from to Operating we Vice of promoted the Sandy Senior Managing Breland President

and Vice Officer; Managing to Revenue Second, we Matt Marketing Senior President. to promoted Matt Mike Jacklin Officer; Moran King, Chief to Chief

Gray of our affiliation our well legacy as the and Television Importantly, markets this agreement Meredith very Gray renewed former pleased extended with We're markets. renewal. all for extension all as and CBS

by Suns within detail, broadcast and LaPlatney games to threefold. the to reach television in the cover Phoenix will We with more reached historic expand to and Arizona return agreements team's of Pat set Mercury a the that in its their market

Diamond also with the partially disruption of the by a sports the We ACC the a CW unfortunate bankruptcy. deal losses caused package from that network mitigated Sports covering rights struck

complete. happy infrastructure project the most for Atlanta long-term that covers are largely Studio to of XX the X under We which are new construction report NBCUniversal. also Assembly Phase build-out Assembly Phase Assembly the our entire of with public which project encompasses Studios, now lease is X and of the stages, Atlanta a

strike, we and into moving as the to and stages, least but use offices. NBCUniversal retained spaces NBCU In production Despite facilities, is Gray and constructed fact, for for that today, in the that will mill writers begin production new next few in our at speak third-party only actor lease sound other with we months, its then anticipate studios own current not also the newly houses. you

parties plans our not in $XX -- and than years Assembly of the altered overall be of first is up expected The a in be last the project yet the actors not second in year in of construction to resolved Atlanta We and have the largely net of complete. in and costs portion do million, the and to remaining good all the writers we reimbursements. not of investment so anticipate industry. in and anticipate this term for XXXX governmental incentives and half which few light of intend during to the near wrap We of our over finish million amicably will do particularly half range now assembly sincerely will $XX between the strike, hope the do studios

various Atlanta development the with roughly total across the years, site's to seven completed five Over Assembly be two-third of the the will remaining mixed-use projects next acreage.

our provide to introduce I more will on now Pat? Pat color operations. LaPlatney

Pat LaPlatney

Hilton. Thanks,

increase stations quarter at other second auto. than reporting see demonstrate Once the In to revenue all. this To increase stations stores not experience read expect larger with the the of national Gray's year. the of was the led year-over-year our advertising. We advertising, again, are increases year-over-year advertising side. stories and of continued better in results, companies for in national Television continues softness dismay continuing quarter, parts contrary, second auto on some by the the seemingly It's we the XX% advertising a Gray of auto trends executing in and production particularly ecosystem. well. positive positive Those rest During Television Gray to XXXX, reflective posted

continue in that in new our previously the report revenue at in improved X% of not second more local developing business additional our In we last result our quarter from quarter Meanwhile, new direct XX% We the first who direct that platforms. business to brought on to revenue than year. quarter of 'XX. advertise stations we did the first pleased second brought when upon over customers local excel business new from quarter, local are

is Hilton as Political mentioned. also in advertising

not we've We're the the to that 'XX, levels of make and the half of have presidential station uncertainties and prepared in range encouraged we as Arizona, Virginia we're estimates far out. to first of doubling Iowa. year a doubled XXXX last quarter that quarter we're preceded second both in Political prepared that been revenue received this still, full first not Louisiana, time But in it revenue make XXXX. given political particularly any strong political experienced ad wide of literally revenue the over -- at political the in of by election current year. year portfolio the Now ad has our 'XX, amount the advertising

for engaged successes, television Recall May, Suns arrangement great teams be with Mercury of their present that and are deal In teams of between deal At these in time, expiration deal in the Arizona an conditioned Phoenix In all that Suns with Mercury. the professional the innovative discussions announced by addition and the Suns We're and Mercury excited leagues. assistance owned to to games Diamond sales very Diamond and from in early on Gray I to all an was deal that these to Sandy the to the with our sports actively returned and and the became Phoenix Sunset able many Gray. people others, Arizona. effective. stations expired Sports July,

as discussions broadcast a Our will we analyzing markets professional return to the with have spending see a have in we as broadcast work these professional We're to that Whether as more at value, the and indicate hope market recognition that Arizona local ways sports deal to stations new structure we fan can partnerships franchises, or in innovative sports value. in will professional months, teams to marketing local revenues, well. that well In coming sports replicate other growing increase our lot time other advertising new returning of engagement we fans. opportunities. partner to sports local a sales teams with into team rights, rights stations find the leagues

now Sandy. the to I'll call turn

Sandy Breland

amount my of I'm we and Caribbean my a years I'm, Thank on so And have join Gray's including about especially Investigate developments and news news and time our efforts. focused good Washington, I Pat. much happy Television's the earnings successes. many positive operations. so its has I'm newsroom. very this Breland, my Personally, report last news when call, colleagues Gray join you, therefore, honored this few to to own very local D.C. great call on resources, when Sandy TV

local TV exposed the and of sense Awards, foundation, to by excellence work defenders the Investigate across Ownership a radio in series, stations. the with which Gray's shortage by received Gray America television of year, June, the the of in critical received Gray Award unit This outstanding six, of Group the TV XXXX it service public recognition and greatest celebration humility, In from leadership recognition community NAB our which Service on country.

selected cancer its fifth The Eagle foundation Rochester, as station TTC district Gray's K winner small telephone. market also for Minnesota, in its television

in Kansas, finalists for service. community Dokan, Wichita, While their named were exemplary and KWCH Alabama and WTBI

XX to in R. roster of Orleans, Now Morrow stations. seven Radio the awards The awards combined to separate excellence quarter, local second led Hawaii XX by was Digital to awarded the during journalism Louisiana. Edward News awards Awards regional News Gray's Honolulu, separate in and a Association WVUE Also for Television New Hawaii, XX in

weekday called TVs. consumer, will will investigations program, curated health featuring plus across investigate award-winning and Gray's magazine new unit XXX markets. showcase TV News stations, This a September, news magazine from Gray's The content groundbreaking Gray launch original local the Investigate

XXX% audience has to we behind cable Investigate in TV surpassed of primarily new weekend show a consistent airing that many by TV time syndicated programming at While are airs been we posting period the been weekend cleared or weekend no to that the have become our Despite Gray's ratings our broadcast having a current not national have program surprised own on pleasantly country. unlike promotion it, house, plans stations. tremendous program programs that well-known Investigate and reaction

an broadcasters by pieces issues as programs there will the weekday well. seated that is new audience us produce consistently to news investigate TV+ for particularly television programming, stations owned quality unknown local Gray tells other good that results. make otherwise that highlight in This and

turn Thanks now to for your I for Kevin. the your interest. thanks time, call and

Kevin Latek

result a you, contract Thank of the second as Sandy. quarter, retransmission year-over-year a basis, grew on revenue In XXXX. of the repricing our at X% beginning

subscriber whole. and trends digits down a or are single over on slightly beating year the as low Our basis matching essentially therefore, a industry

by the network than Our retransmission less gross quarter. increased second our revenue expenses during reverse compensation

a spring the decline somewhat during net the the company substantial routinely continue in in into prior As retransmission revenues result, slightly revenues generate years, summer. cycle our therefore, that retransmission we to quarters political when cash and grew churn to increases quarter. turns we support year. the expect to off as have with Consistent $XXX subscriber flow this re-trans years million Net second as revenues, between third second helps

control part keep This organized discussed distribution affiliate news. the to of the the affiliates in forward the value virtual paying ourselves Recently, We of their step streaming distributors. the are of boards the networks affiliate affiliate coalition for that for of virtual our retransmission many in exploiting on the by battle control FCC is the important local MVPs times content, four for the to revenues signals. result signals regain to affiliate and of an distribution already the the networks coalition are loophole reduction broadcast have the long

the of that other I'd highlight one during big XX% recently strong is. broadcast for stations of Ford indicate how the like of networks. average big XXXX, stations the surpassed our because stations television impressive households. in really of impressions Finally, month television by prime Gray's Gray high-quality easily available all three broadcast television unlike Television Gray's and ratings data decided In are a particularly total to only big impressions a We bit the networks. feat May time of audience just the less cable to to is stations portfolio comScore's U.S. only Networks networks, audience, and the four This than we're total compare log

hours Prime combined in available Time that of MSNBC Gray's addition, It -- average Gray's In exceeded late late total during television the bears three XX% the XXXX, of all exceeded stations audience when audience hours our stations May combined news during stations news country. networks impressions local repeating CNN and FOX in just and audiences the across News, hours. are

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

James Ryan

Good Thank the everyone. have key Sandy quarter and morning, year-to-date. the you, covered and Pat, Kevin the highlights Kevin. Hilton, of

So Again, be core the very we are short. really pleased on our results, with quarter. my X% to are we very in remarks revenue up are going pleased, the exceptionally QX and second

revenue in that air ACC this Diamond in All loss the low million mentioned the release of for noncash saying in to stations immaterial filed anticipated games, impairment extremely both to we the based again, as that charge pre-tax the Turning and all contract. company. agreement I XXX we I that single-digit is guidance our are are is charge. performance mitigate shortly that our contract of Again, QX. $XX which CW strength our strong operating this and continue new to of ACC a we the to to the XX local on be the will relating pleased up have Diamond core of And with remind our be of out Chapter repeat, rejection million the noncash, the expect to we $XX certain in will and a television range. of former to all, everyone

commentary gave quarters not guidance full since our two year really call full Our we quarter fourth has on year ago. first changed

around revenue low digits. will We somewhere $X.X to single expect continue our up billion, core be

of again, be billion, will revenue approximately digits. single We $X.X expect retransmission low up our continue to

spending in million, been record $XX our is that the the revenues because to last our given approximate We and be increase expect of is we provided an solid political have we And which reported $XX political half currently $XX revenue we improvement the early just that of approximately to of booking. million our range million presidential on call. light first

in We of expect revenue Broadcast in the billion. range be 'XX somewhere $X.X to

before and impairment on noncash charges that range. be operating approximately expenses to loss expenses, we Broadcast billion I assets of operating discussed. will expect be in would Our depreciation, disposal to any the And amortization, $X.X $X.X continue billion. that gain exclude just

to approximating $XXX comp, Our we be reverse network expect million.

for $X be noncash million expense comp that's the and stock about $XX approximately Our comp will sorry, -- year. stock incorrect. million, our I'm about of will be $XX Non-cash XXX(k) noncash million

you have for around not uses expenses corporate we since Our this beginning at the be Cash will estimates $XXX million. changed significantly the year, of gave first again, year.

about cash We expect interest of $XXX million.

all rate I'll at in in our we remind $X.X of everybody about rates that with the well X% rate that with SOFR that caps are on rate debt debt. the interest currently rate from further place, And the quarter increase. interest put are interest our caps XX% insulated floating billion first fixed of on we we

That Cash, million million. cash taxes, including again, the $XX pending $XX for be refund is to of million we benefit the year. range expect in the of a of $XX approximately to

million. range in still is the CapEx of routine Our about $XXX

And the said the with an know, for to free with our to loan dividends conclusion rest of $XX amortization million. B we be year again, is $XX positioned $XXX are forward before, our million. year. of term term we've a loan that the and preferred year. cash required As what the XXXX million approximately range through At I in Consistent consistently a look on midway again, we generally -- you consistent reiterate successful this are our the expect annual well point, of

call the Hilton. to back turn I'll

Hilton Howell

second company strong you, maturities. a no flow profile Well, summarize, to free continues quarter, near-term in to cash the with liquidity generated and Thank the Jim. Gray have

from in an but no As we rate further Jim have debt, our on envision policy. increases to we bank dividend protect interest changes us in our cap place rate interest noted,

on focus to continue balance We deleveraging our sheet.

are Finally, while to recession encouraged levels term to abating. as trading of we of we the needs our securities be any our have seem refinance concerns no continues to that debt tranches, recover macroeconomic

now, in it year the a in the of has clear half finish Gray fashion year and that will strong us With behind XXXX is begun strongly.

ratings, the our to results, advertisers advertising and core in content our audiences need efforts are evident solid initiatives. our Our deliver strategic successful and want

Studios cash to of With direct and Assembly balance improving the expect next Board of another investments Atlanta our political X complete, essentially flow debt be strong very through free in development continue months capital cycle. the to as sheet paying XX our Phase Gray's we the down Directors of we what progress will advertising

line Operator, to at anyone. for this questions like open time, I up the would from

Operator

Instructions]. [Operator Okay.

from come Deutsche with going question Aaron line open. is first Bank. Watts is Aaron Our to your

Aaron Watts

advertising. for core Hi, me couple today. for I'll on having one me. A everyone. Thanks of with start questions on

You grew in XQ. X%

to lot national in out growth trending Just and gives up some had general edges and the low the for are to relative takes local parse XQ. they're You're could sequentially? guiding softening how us in in there you around single-digit a the What and and maybe each XQ?

Pat LaPlatney

Yes.

it's and Jim, start here. I'll let So Pat

So is is in be seen better part from XX up, look, comp one think heard will 'XX. years up positive me, it automotive. pardon positive there as and Work first I substantially, comps the a you the on QX. 'XX QX of Automotive QX in substantially we've factor -- is

in categories But we positive of all, about, that's to growth and continue that expect Obviously, it. a down performance and including talked a from a legal. see bit. So solid In see there's a in QX, home automotive QX. overall very, we the we it's lottery improvement pretty very all part positive But communications are to few story. and other

James Ryan

was local. QX is basis, Auto already many a in calls, National we than significantly overall better earlier the better little Yes, call Aaron, on we've commented national. as bit said But performance last that in performing than relative a local

is that no to both local the And and point between I'd part, relative new doing that is QX to, changing not strong results better. mentioned I Sandy direct creating up. that into local surprise directly, think the emphasis local -- on anybody Sandy mentioned performance Pat side they're month-after-month. looking and and business as national that very in And --

Aaron Watts

And Or but which maybe national, too a steady sort you'd perhaps you turning corner. call it's the from out? anything we've Is had that quarters, That's several as just maybe of that here, said? Okay. holding thin I'm been heard parsing others some of helpful. choppy kind obviously just last

Pat LaPlatney

just you think I said it.

James Ryan

you Yes, it. said

quarters pleased several think exemplary doing. but I very, local we both our relative they're what with our holding very has think from we're since fairly standpoint, split, for been consistent, that is

Aaron Watts

Okay. right. if I then And All Great. could...

James Ryan

other Aaron, that said is, we've this years. times one quick to the remember, add over many, many

proportion local is of much Our else's. probably core than to higher everybody

So up or don't see or tweaks just faster as it other see see because it people, when but our they proportionately more, it of down, we national may local, much.

Aaron Watts

No. to hanging your local there. is hear good that in It's

understood. So

the population I think you Do to do Gray re-trans a you? little area that a be industry over net sounds the consider re-trans underlying the I that areas think overall, Southeast you it that to and seen to may like to general On relative benefit. tracking on the the Related versus since job the a pandemic can and subscriber spot for time of erosion how shift side, would population in many low given down indexing country sweet your over single-digits. theme, an of your growth that allow trend would we've other the side, better play you're landed to gross one of job benefactor

Kevin Latek

Aaron, obviously. this Hi, is Kevin,

certainly Southeast, more -- don't and Southeast. agree more We homes, the as really think subscriptions moving a see And in we have more to pay-TV households, good a more strong that's presence that's I it's audience. that's very we population observation. I the

It's to more than rest benefit observation. country, probably others. the So little fair disproportionately the of that's a Southeast the than better a bit going grows

Aaron Watts

Okay.

trading the concerns me, some you Last one security and again, time. about asked rebounding I dampen macro discount. picture. as prices appreciate around All heard Okay. the around at right. a quarter, I bond your the comments last prices for Jim, being got perhaps

is a exist stated a that sheet, that I still as goal Any yours? the help know perhaps to relationship lever on to which deleverage today. cash updated think of I thoughts use using balance

James Ryan

quarter, to what been this I versus it while, just probably a on opportunistic the again never. the will being is for quarters put So like consistent. consistent Aaron, on with loan can the my answer of place But I last pretty focus we've saying I loan focusing say of 'XX will banner of never couple under to maturities. our is on XXXX term maturities our the where would pricing bond term probability we say continue

Aaron Watts

Understood. Thanks guys. again

Hilton Howell

Aaron. Thanks

Operator

to going is line from Kurnos open. come question Dan next Dan is from your Our Benchmark.

Daniel Kurnos

of Great. sounds want delays causing morning. of to cash $XX Hilton, there's for don't value just from we just release, quasi-governmental you model make on in. on I XXXX. I of of the million talk to It land some that or any if in can assembly. and authority future to guys separately, in Thanks. in sales unlock not value NBC around later there strike estate? comments limited thoughts know back that additional still recognition. the the in I sure the understand that kind necessarily real revenue proceeds Can part go writer a a the is just Good that's moving incremental. And that's sort like

Hilton Howell

please couple that everything possession. in be of of And else. days from NBCU arriving bringing revenue, of as terms take the they cameras, were lights, country, from and growth all literally were is trucks here In get dozens going Dan, that to a over XX-wheeler ago, rental the vast income we know stuff majority there of

then studios are about things And that also some that there to are us kept. And begin. we have so that are up will the backed talking that leasing

revenue we fourth believe will know year. -- start seeing I So will I of in that revenue that start seeing this quarter the we

are Board, there million have on are entirety it and -- the things. various that in project. and and $XXX Pat issues utilities, of Both overlays community and is other the the north i.e., we liquidity improvement to district public, of CID a that we that that streets has regards With in the as reimbursement, I

by CID assumed from and local Gray are reimbursed then is As the proportionately. the those are complete municipalities.

think things I anticipate received completed. million-ish we And mature of about as $XX year-to-date, we kind more out and and get so

Daniel Kurnos

Got it.

reimbursement. that's additional just or do any incremental to real achieve incremental unlock could correct? nothing other sale you value with estate, So leasebacks with has the That [indiscernible] or

James Ryan

Correct. a balance not purely is activity. P&L sheet a That It activity. is

Daniel Kurnos

And double maybe back as also want to just it. lapping you that that outperformed on I to been, a guide industry expect Meredith Got for a said core. little second. points we click Okay. now else into the the Station going the a guys I have it's bit? then guide just know of the you we goodness Jim, by something broader be few fade factoring should on QX starts that Is to kind sort goodness of the acquisitions.

Kevin Latek

We closed not ago, year ago. years two one

James Ryan

mean -- on two So certain year we closed through there We that ago. yes, revenue Quincy we have thought since Meredith especially said had to upside was that -- in consistently sometime then I last markets. in call years starting every Meredith we in

into assumption, that said quarters several assumption the was deal we We reaping never announced. benefit of synergies of are have that that consistently the we for the

from markets. in but not continuing XX to They eight the by a we I'm I the part see is few outperformed, but QX, in that's points. progress industry We by probably points, are think, close benefit reading Meredith to why what making tremendous

continue foreseeable So please to us will future the garnering do. for in that benefit. credit give And reasonably

portfolio performing is on and the side. strongly. the on the both very of the also, national the extent, some side, that's side entire local digital to that, commented But rest on We've also

rest we've too. the the about of very talking but portfolio the of while, upside story been for a Meredith part it's well, So is revenue that doing

Daniel Kurnos

Certainly just wasn't comment. to understand into elements any a I'm going trying negative QX. lapping

that... So

James Ryan

it take as didn't want to some negative. a just I I credit. get

Daniel Kurnos

QX a for kind to obviously, because just on happened I just is so most one I sure there you noise? want came be know Last mostly that make your expected? what that true-up QX, was sure? make sub-churn in the in Kevin, Mr. to of trips of below enough. re-trans. Fair question number, Or any

Kevin Latek

we much -- the not re-trans growth decline in did as our million $X were not Our -- as than as sales had guide higher modeled. our came because

attempting the have a conservative to on fall. We we're surprised our political in since the year, all been last be over guides last of particularly -- little

on So out have negative trying to any we that don't are model we're -- we things again, surprises the conservation there.

yes, in our So subs we bit -- a than expected. better came

Daniel Kurnos

right. it. it. Got Cool. Appreciate All everybody. Thanks

Kevin Latek

you, Thank Dan.

Operator

come is from Dickson Our to next [ph]. question going John Artemis with Investment

open. Your line is

Unidentified Analyst

Good and team. your morning, Hilton

Hilton Howell

morning. Good

Unidentified Analyst

portfolio I just in tell team. wanted I'm the company, leadership your impressed your an and investor your to with of very you as

one debt questions, of load. my give just a into some your load wanted down? from going long-term pay debt my to can guys, is more concerns you're of One to insight picture I that you you question what

Hilton Howell

begin, then let all follow-up that. Well, I'll with let me Jim and

communication after Street And happened debt We of the situation ratio have our shores. to grow was have the acquisition with and we intentions our do, Raycom. were had of we're That portfolio. down. a now. the it pretty of then into happened that allowed acquisition The direct our five all investors and our It And of range. about the And grow after the to what we to have same quickly in paid size

because television we really judgment portfolio of quality my is high in have reflected, ratio not such percentage a Our stations. totally accurately

strong political of record on year, delivering proven During political. have very a we over a

we lot you political roles. So the ratio, a quarters measure as that have the big of

the paid about we that forward. down to have debt $XXX quarters. intention do And in million so last is that absolute going over And our several

our So and reduce will you absolute well. our us to ratios debt see continuing as I think that

Unidentified Analyst

your Well, had. I leadership of really appreciate thank I only the it as you, to Hilton, I'd just like the and leave really team. question that's

portfolio. the impressed And you're I'm think quality very doing very well. much. your of I Thank you with

Hilton Howell

You're appreciate awfully I certainly it. nice. Everybody does.

Operator

[Operator Instructions].

Wells Steven Fargo. Our next question from is Cahall to going with come

is line open. Your

Steven Cahall

on pick up to just first, Maybe last the question. Yes.

some of do use to next dividends reduction then you flow through think maybe cash I number I be big CapEx. some could be you you'll flow walk just know it So to for a the takes you year. free and talked cash Jim, would great, a year. this for paydown cash And maybe and that's between able be much to debt if free the How going of the but to puts available get number, assume the debt this year?

So debt year bring any big amount on coming able down look be of kind to political might with next the year? of you the

James Ryan

our be said million I Steven, range. free it define would we cash in it, the $XXX as

cash the know, full-year also a dividend, it roughly common It's before be which you project. running year. on free basis $XX-ish about million define As we for expected 'XX the in investment on a assembly a our a $XX And full-year. is million currently net before net would

be late this some paying year. will we So down debt

that a revenues longer we political right, we and the peer basis thing exceptionally out per ago can in historically, on are anybody from well have performed and you in You space. same couple than years, of this minutes absolutely Hilton capita a remember basic as political indexed know, for

We reason be why 'XX similar. no see won't

We advance. you can are going a to it's to 'XX a to comes Political full-year on political, certainly imagine. large put be number. say Only in estimate cash not going as

intents So flow. for all and goes purposes, directly cash

which year. allow up of in But it was a 'XX 'XX, to be history will it about in of every for part able we So especially half debt, slightly has payment significant but for us remind half season, our next said people except I'll shows changed will the anyways, make that slightly majority the debt of and make latter that than quarter fourth of vast a the of year, the political paydown. significant in less and of to in 'XX, 'XX political our political. political

But political in to the everyone. political see is -- the be guarantee very able been deck years, if years free can we've what at You will look future. can't done and see the do our to investor you to in and it instructive in investor I think I we've what look deck past cash prior at

Steven Cahall

that on Thanks, Jim. or And Pat. maybe for theme, be follow-up for political this Jim could to

that, imagine you political is lower you Pat, how that some out of tailwind for QX some in big did than of conservatism given pick political Because after maybe half year? of many your in related dynamic the impressions what political pro of back up forma year? the in I that's level pretty the had guidance in XXXX. the a crowd just do core you Is spending? think I last to more And nature

Pat LaPlatney

crowd terms in It'll will impactful definitely -- out. it September, in be October of

obvious sort Obviously, his I for President reasons. the dictates of and we think is situation, right, huge Former You're being a are conservatism. wildcard conservative and

could churn in and October? or out October was could there factor crowd of I year, fall it last think significantly wide a into sort out particularly but range, significant a -- better September So it of

James Ryan

Steven, if conservative. Yes. 'XX, -- yes, probably look a more we're at you you're to little again, comparing But if obviously,

guide. As Pat think to obviously year said, million be. there's first closer to probably but and a $XX million We've look, go started an reason the political performance. half with I'd have $XX to We the guide. I it a extremely had in back was current strong

have So as certainly, we've improving been gone. our expectations

is any keeping kind I the Presidential Traditional I to. think major don't year we that flags off is for traditional like progressing it early seen think have year it again, of this -- President mind a us off year. of in except money, red would is -- yet 'XX any expect there.

primary itself. all, All early especially the of unimaginable end kind we states, 'XX the in numbers a political is 'XX going money those Pat year QX more as of happens the 'XX of to into political, the the latter the Presidential or certainly We'll year, getting we've we early very we strong commented part because early an 'XX states off the will day, spend -- take going in At in positioned we for through the with as said, care take early the political and to year is that whether of for cycle. the for nonpolitical it's themselves. think QX of wildcard go states. care on 'XX about let And primary be what expect be in going we're is

Steven Cahall

of as in than Thank forecast And certainly number the one well sounds sub and your do low own counts then better ours. Kevin. our single-digit maybe kind you. We last for just

I think on for Plus some of Paramount which the your I delta as may stations be Peacock, well. get paid you do know and

Peacock counts? way one, number terms is rate Plus doing within correct that in there your So you. trend way that that and now? impact the is low the single-digit you're think about Thank of of sub any And Paramount to

Kevin Latek

a Plus we Steven, CBS we always Paramount as fee and we counted count before distributor a linear Access subscriber our pays when we with of who included a have always for always, that have subscriber distribution the distributor us subscribers. do every signals counts, when

distribution the are our of XXxX paid fee We getting sub monthly for for signal. a

otherwise. So excluded to them don't have never a reason we them, see and exclude I

that Plus We're we magnitude asked out. supposed and provide I for number. concerned of been terms that. disclosing think numbers Paramount giving of and not Peacock, the sub I'm In any about call combined the We've every percentage to distributor, be for

and people do prepared we're it Plus numbers to think that. out a Paramount roadmap figure provides I not to are, for what easy fairly

are We affiliate. biggest CBS the

that and and of it's large that. And Plus, fairly is Peacock part presume you small a so that, a Paramount between of can is part Plus Peacock very Paramount

Steven Cahall

you. thank Great,

James Ryan

Steven. Thanks,

Operator

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

Nicholas Zangler

Hey, Thanks. everyone.

received man, like investor do wish from compliments artifact I off, the just received there. you First I

So and and here. of say. you But to them -- -- the so, question nice always to to nice it's I'd hear do if

sizable, growth which back If Autos of in this the is of be XX% imagine math at the and I out assuming you point this the to quarter, strip growing pretty envelope obviously contribution XX%. mix Autos may

Just outlook curious in is performance quarter outlook And the guess, growth that call really if verticals how you local any out commentary? there's Auto? and the gauge, contributing stripping and out to the other to I

James Ryan

not Home QX as continued quarters, said improvement And our that long we've for consistently last a no quarter. as commented be we've least -- So also year, at if quarter legal on multiple And record. strong QX longer, to a well the based for track is very different has not done different. for for exceedingly expectations has well. is after

So you're right.

after bright been can challenged, had categories growing and expect, I probably after business about time that. that other rebound, but I Auto business longer eventually that's did. basically challenged things is of And mean like local a quarter also, happen, would it for there's food, remember. No there long it for way. that's quarter mom-and-pop not we little Auto, again, guess again, development said like than some -- which would you month, spots, is that now and fast Part think month a story new I surprise But what, a old-fashioned is good that's

Nicholas Zangler

walk talk the But to basically, That's the wondering structure brought on perhaps potentially wondering you different helpful. whether got share do through look Like I'm we us I'm just like like these to guys up. typically did And potential kind because kind and that. forward? with really as to sports what it to deals I are take. actually of as be rates just not more maybe of if you're many or structures payments, Got the just provide rev Suns that anything And Phoenix structures of announced just Mercury. see, it. there's could you can structures fixed sports want just these types agreements, help you what types any spoke on able if us details you've advertising then of to understand push alternatively, you

PatLaPlatney

Pat. There's all some direct-to-consumer. the It's start. you that direct-to-consumer, I'll can number can infinite variances some these of a some whether So whether ways deals. air air, over air, over in over distribution, it's be are with ways structure an the of There some There's it's played. lot cable, the

sell sell who rights of the but that's where at acting there. impacts different we post, situation. to that but I there's we're And opportunity the where in there differences and gets acquirers just get be do just a inventory. Does pre as monitor. need types a the We're we Is -- the to is and the act, out, of a all ways we sort the variables, inventory There discussions. the those sold. inventory, production. team starting it's And situation, need very to will monitoring where Diamond fluid of point and there figured ton believe -- -- are of the does way we're Does think

Nicholas Zangler

Last estimates out maybe given XXXX. this then, cycle. I for the some maybe here, to me are just the be into in right. pull on I think some for $XX guess one billion coming billion political, potential And there all obviously, forward, And it. $XX Got cycle, for

indicator there As have point your highlighting at different spend from political worth might of this you this at that time in you Thanks. leading ad across about just how where time seen are might spend markets, we in large think look be a what any or whole significantly in as you are last the is above would just point Presidential seeing cycle? the the election maybe be

Kevin Latek

still really the well. is, mean, it's states primary I states no. advertising why -- deal. People any big getting for any now Presidential other Short look, Iowa In the outside well. doing money aren't still answer are for is a that early to of really performing generally That's primary noticeable is extent.

Virginia. primary some states, in historically two issues a race little there in It's happening time, early, us. up in in race are money popped Governor's have happening 'XX, now Presidential to House the then Our -- that was primarily for quarter fourth Iowa been State a has time but it but event. And from it's

Nicholas Zangler

Got it. Thanks guys. Appreciate it.

Hilton Howell

Thanks, Nick.

Operator

question Loop Instructions] next from with Our to is [Operator Capital. Gould Alan going come

open. is line Your

Alan Gould

Thank you.

Any -- you to trying you you drill affiliate going the about what more change just some looking can get to virtual little Are give literally boards negotiate a distribution? are to us there? laws? benchmarks down First going for? Kevin, the What's more details we bit question, can should be

Kevin Latek

request on the focus encourage in to the the rule-making XXXX of The a reflect FCC XXXX obviously are whether stale MVPDs. asking virtual reopen was coalition arrival basically is in update XXXX. FCC potential rules to comment of its should to Comments that to submitted

on. in what window questions -- us literally time. since the an developed just going We they reopen the and the did has the ask the people where support ask that let to supporting of and are at -- at simply the Senate, let that years going about hear at. the to open not FCC this us for again, point, There proceeding, we're clearly the the tell on on. And what's has nine let That's both sides FCC aisle been FCC exist the industry FCC what's

Alan Gould

frame hear open when again? whether should to that time window Any we chooses FCC the

Kevin Latek

to up the entirely It's Chairwoman.

don't I know. So

Chairwoman. So it's to up entirely

Alan Gould

estimate And is you. two that or $XXX free behind Thanks. all million? cash liability one. us that any Jim, Easy on Is Sports, And flow million for is now? Diamond there potential remaining? Or questions $XXX

James Ryan

as forward contract, we contract put the the for at a the on say is the got ACC with rejection Diamond company is -- outs that CW And -- clearly, the ins the but move this that would us impact we a place technically, to we've issues is significantly approximately is but historic And on as able it, number. behind cash, in as all event, a free to numbers we a and were the we behind X-X-X. bankruptcy point. the you've result agreement we immaterial of Obviously, as said, Diamond with with going the it And QX our the I that's net define of us. as and new So there, the be impact games. said,

Alan Gould

very thank Okay, you much.

Hilton Howell

Alan. Thanks,

Operator

from Our Craig Huber is Huber with next come going question to Research.

Your line is open.

Craig Huber

a I wanted you're on but guys think mean much so like Thank hear your why first you bullet are to than your wanted much please. why you to are we to obviously, I ask, peers better there? to our advertising think there. outperforming their explain peers just you much out out chance so points give on, on have much, thoughts all you. outperforming off, core numbers I you your core,

James Ryan

be to to then the to we going leading year-to-date. in Sandy the Pat I'm start, comment advertising, group quarter going not to acknowledge core and I'm let on going and peers in seem results in. that, to the both published this jump is obviously, the only Well, Jim. today I'm and peer that

You'd respectfully, I'm not comment on a -- them to peer. have going to ask

peers -- I results. cannot their results will ask what think You should for and answer their why certainly they or not their them.

And I times in many again, saying back literally I what it it. decades. results, to for for we Answering prove goes is have it Gray, the past, think, think been QX's

quality television that business, broadcast the we portfolio for decades. asset have had We with and have preeminent the in

news well to on local wrapped most television got strong, a form around operation to you on the to consistently larger a operations operate when strong We have news laser outperforming had And overall local group. strong markets a have well an the operation local exceedingly you focus with peer focus XXX always of exceedingly a you've chance strong in operations. in,

have said of is So what other what in than saying quarter this lots quarters. we times really we're different no of lots and

Pat LaPlatney

a repetitive. little talked we Pat. would impact, north million We're Meredith. on I on new quarter a We on growing. risk and efforts. would it's which packing direct that's a that, talked quarter, our of add little in bit back Meredith closed $XX about at I add We every business of the bit local about telegraphed when new the being we

there, upside revenue and there seeing is, the was that. there you're thought and We impact of

Finally, approach calls, training that's our and bit a efforts in previous category-focused again, our something I've great talked about on quite paying dividends.

move have And staff I think category all now. We sales and business a really you're to experts well-trained our forward. right in invest of that seeing we the result

Craig Huber

if question, my I And second could.

Your comments on about arrangement your earlier for the games Suns stations Phoenix there.

you what games if discuss season? would, stations in in of percent Just your of anticipating the the showing or television number you're games

Pat LaPlatney

somewhere depending many historically, networks, on order but it's guess the go of So flexible games the XX is we -- how to number games. the would on

Craig Huber

a lot. That's

of if arises, Okay. markets I assume, to economics to opportunity because do in other must you. be Obviously, the more quite favorable these you're trying

Pat LaPlatney

Yes.

Craig Huber

to night, separate maybe you on day? how and Okay. news two, local going also, late a us And late then get news your those early are morning ratings trends and early sense on the can give ratings,

Pat LaPlatney

there sort around back little have news, to was returned. on but that, And news bit continue large there's COVID. look, or tell and of The Do our stations. be down. a are in sit of So bunch this morning you yes, you can't we're I noise up And numbers any that television large. thoughts -- dramatically -- -- here -- we have and of Sandy? Morning good numbers dramatic spike a

Sandy Breland

for very that we're late news several the well, as back same, our normal some Meredith our we're And pleased seeing seen we those we've of with I Yes. markets, of of grow there. markets and of have in former we the morning quite in news in larger say, seen that. -- audience And -- kind where some frankly, the are in But significantly. It's -- markets. to especially we're very would some

Craig Huber

Sorry.

say, or versus So the flat XXXX you are, maybe ratings suggest levels, pre-pandemic up?

Pat LaPlatney

we're are the in audience No. number seeing saying normalization. And of have, We're Meredith markets just markets. the that a growth those which saying we're markets, there's been a we a in bit also of larger

Craig Huber

thing question, ongoing last Hollywood your could, here? TV I My anticipate any do for if here, ramifications If strike. negative continues Okay. stations this this you

James Ryan

Time Sandy some it Jim. are other. modest don't Prime in, think and on impact a depend This Obviously, off is headwind through join fall. strikes all degree, are way Pat will the -- welcome I'll how significant quickly to as will to that the we or on it but move we have a settled. the as one see we start or Obviously,

Time, the -- sooner hope that a Hilton impact amicably for we amounts not strike later, niche but through It's the and available significant September not the inventory they're fourth any as to network. as before. we limited We than parties all. settled that to that at all I again are And don't it seen mean, quarter have us occupy, said, a of move local settled. concerned we've eventually given we big broadcast Prime given is deal, we sell we not gets

So -- it's not a to big deal super us.

Craig Huber

you. thank Great,

Operator

question going last Goss come Research. Jim is And Barrington our from with to

open. is Your line

James Goss

on Thank the One sports more you. programming.

about the talking Phoenix with ACC. been and You've

good plan And stages you to locally, You're pretty how extensive be? for trying for how Prime does involved, a effort out. in this into and this early a all might areas network figure in have to of assume the how scheduling it's and with And take where blends comment it wondering Time rights just there's all to compelling they understand it feed, fit sort issues I'm of that. do of making competition do far the seem those But that big situation. you this, obviously arguments would network I I'm the on getting for lot in interrupt wondering you're -- because be a cases. it how

Pat LaPlatney

start, I'll It's Sure. Pat. Yes. Jim.

a we markets. of number stations those be markets. So Phoenix happens have of larger in one to television independent

great the carry a where So a these you'll of to have think we what use markets subchannels opportunity. It's in games. on problem. independents, And stations the I these not it's affiliated then see is

channels other would CBS that issues but carrying there's we be air -- there it pro sports would where not games. be there's affiliate, the just no So

two market, in to in be markets. great going vary have larger it's particularly should by great -- there's where opportunities are So we but Portland, have markets we Cleveland. Atlanta, opportunities, There in which and there Phoenix, those independents, do signals include

James Goss

Okay. scaling evaluating the have you limit? Studio say, ambition what focusing up further your Assembly other And of one of expanded and and a and thing. you been X% last Do developing beyond your for other and on things. still the growth variety sitting Or just After platform a any undertaking? while platform, into for years are high-quality get you've cap

Kevin Latek

our time because Jim, have for stations thing points today. over opinion, over we the time, there we clearly, along said the came are right our no of long over at to our stress a nothing last must-have in cap, there's the left with when good absolutely I -- But time time right if felt leverage. about and the regard that consistently three time,

because, we maybe. consider was the definite left a lower, a would would price, or time, it the on leverage to get the last that's company, our when is as again, points, transaction our differently, it couple our the have a we say leverage some no three percentage of depend view. outlook the in must-have But transactions there I circumstances of

We -- have assembly Phase on project the up that completion wrap will is studio will months. complete very over its the next few completed clear and be been X essentially

that, very clear of I operations for in But We time we thoughtful developed, as opening comments, talked we'll other consistently that, there we've that said the about be Hilton's remains that that core to Assembly to business than he have been think a a that's view the remaining long exceedingly acreage company the project about. complementary that is company. a long-term be Studios for

completely time that acquisitions core potentially has businesses, we this off again, we're core And we've as doing in been decades far business TV, although opportunities but sense us, it either, those complementary to change for happy when further said what philosophies. long many sense business be are and are our our for to exceedingly company other and makes we to to and limited make going core a to going have -- entertain of as not it go to or

James Goss

Okay, thank you much. very

Hilton Howell

you, Jim. right, All thank

Operator

are There in more queue. questions no

you So I'll for to closing over turn any remarks. it back

Hilton Howell

you operator, morning, talking you next joining a you, weekend. great to this to all for and Have of Thank thank quarter. we and us forward look

Operator

This concludes your call.

You disconnect. may now

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