SBGI - Earnings call transcript Q1 2018 | Sinclair Broadcast Group, Inc.

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Operator

Greetings and welcome to Sinclair Broadcast Group First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded. It is now my pleasure to turn the conference over to your host, Lucy Rutishauser, and she is Senior Vice President, Chief Financial Officer with Sinclair. you. Thank

begin. may You

Lucy A. Rutishauser

of Participating Steve President call Vice and Vice Chief Chief Officer. Operating Marks, operator. Senior Development Rob are President TV Executive Vice Chairman; me Vice Chris Executive and Officer Chief and Ripley, CEO; Officer; President TV on you, Group; with Weisbord, and the Revenue today Steve our Pruett, Thank David and Amy, President

make will Before we forward-looking disclaimer. McIntyre begin, our statement (X:XX) Felicia

Unverified Participant

among recent and be regarding, on leverage. and webcast of meant of website things, being public a call will website supplemental quarterly to most cash future may financial you Such results under Regulation measures. described measures The Ripley flow now earnings quarter include as results. as next as to accessed earnings our these A the in forward-looking have FD, company the forward-looking those matters take reports our statements our available discussion can accordance is future in our are which the set Investors/non-GAAP company. to their is replace highlights. statements. and in from obligation measurements, but update this at made are filed reconciliation EBITDA, Certain broadcast These on Such free statements of release. in to factors. provided included detail available statements operating statements be factors to www.sbgi.net. non-GAAP been financial available SEC GAAP a our the assist the discussed in this with metrics GAAP to not as cash our through measures company's In of The a specifically until forward-looking number Chris non-GAAP the our operating television key release. uncertainties. the other will A its replay the are valuation of analysis in subject result important source on will call and company first be the will a information, forth public. differ provided and of could risks company call financial website no Actual flow, undertakes on remain with uses later measures, today various Included

Christopher S. Ripley

Thank Jo you, Billie (X:XX).

let Before we the some go through review results, highlights. me

We are closing. Tribune stages final the on nearing the

We and divestitures have are government on reached the approvals. awaiting agreements

We late expect Tribune in QX. the QX, to and close related acquisition divestitures station early

own, Network the valued TV of enterprise sold to times and X.X will announced, investor $X.X XXXX-XXXX to at Tribune post assets stations for sale divestitures stake, we of stations flow the valued Furthermore, Food entity times. that multiple Tribune. the EBITDA TV multiple X of a times The better expected $X.X remaining The be we provide $XXX annual Network in reduce Food of value As than and approximately estate the generate reflects for $X.X generates the proceeds assets Sinclair-Tribune of cash $X.X which million for under which billion billion being further combined services. adjusted costs. which $XXX billion, from acquisition in and The million for real proceeds, a enterprise are of at XXXX-XXXX includes a Discovery or X.X times and X-K, $XXX The X.X assets market recent in retain to about programming would stake entertainment network is entertainment TV billion to working $X.X TV consisting concerns, we to the cash. of including held stations FOX's closing expiring free X multiple million million ago. $XXX total Tribune average $X.XXX capital an affiliation previously shares million on pro operate cash $XXX transfer rate year free are stations' generate EBITDA final multi-year at move, forma billion we billion to The the renewals billion The the of have $X.X on XX Network billion Tribune of $X.XXX are finalized of forma to the average are X.X Tribune EBITDA. all combined XXX Tribune total end cash per and which at sold, pro XXXX-XXXX keeping approval share. reported XX through value, billion flow, we of represents times a for average the at $X.XX sold of or Tribune year, agreements multiple stations, affiliations that FOX flow to combined pertains $X.X a including this after-tax of package stations that closing. alleviating In there that expected another in is will of annualized convert of will being million an gross

fees, are that and the solace our knowing half when marketing about reliance source revenue rise, audience economy of from levels. and Cox Channel carriage for and volatility, In of national of are uncertainty come on now On the distribution half and stations, not, effort on are These our content, media revenues. the increase we and spot wireless, we with that time investors renewed Tennis almost At subscription distribution fees, ad revenues political as from agreement an About a depending our TV of direct-to-consumer services consist those of market our any are reducing our distribution sheltered transparency, should revenues XX% our dollars. disclosing other advertising fees a our distribution to networks. front, distribution take affiliate revenues. on for the retransmission the our to XX% initiatives our are local the network, fragmentation

our part community studying Scholarships Diversity of seven Broadcast in As recently we outreach, applicants awarded broadcast-related fields. to

including stations Three news outstanding Awards with Murrow newsrooms. Since XXX to XX for helping R. Edward thank journalism. for award-winning the local with XX nationally XXXX, Sinclair of are also to of journalism our were employees stations achieve our beginning Finally, our I those have same impactful regional awards people awards, continuous a of their to vision across who local everywhere, won connecting focus. in want recognized commitment and content newsrooms, us dedicated

flagship, Investigative Journalists news of Baltimore D.C. The Women by won the Research. WBFF, presented And National Award Professional Our [for] of well American for Media in a Portland, as by the from a Society a programming WJLA as and Alliance June Headliner won Biedler Headliner Cancer Reporting won for Award. WGME created Prize Association Gracie National L. from the women. (sic) Maine, the Award in exemplary in Award

awarded the industry, proud of be in news and provider extremely their news are number congratulate personnel all with achievements. we local to the We of stations our for the and greatest newsrooms journalistic

first will Lucy through Now, you the take results. quarter

Lucy A. Rutishauser

Thank you, Chris.

reimbursements note. To fees our thrill we financial reviewing direct-to-consumer Media virtual and retransmission earned. now out investors, fees Before of research affiliate any ONE many barter is the income that the the the the in development in And MVPDs now reflected for items included fees statement. in few non-media distribution income recognition as had been repack The highlights, the and barter as to distribution expenses expense included pursuant line are gain media stated, government and the reflected Chris subscription spectrum in in revenue to our trade statement. the in from on is Also reflects revenue from other and breaking a as as income revenues. statement a Barter expense OTT reflected no financials. as a MVPDs, revenue are are rules well line the longer reminder, and

quarter our highlights. pleased report first financial guidance in exceeded that we to the to financial metrics. am I all key Now,

$XXX an a quarter Turning of initiatives. the last first exceeding the lower defined guidance first to increase $X is in higher forma over year. were media than the a or from quarter quarter forma pro up last not $XXX in an XX% in media majority details, election in year the offset revenues year first were X% first of $XX result offset Included media increase XXXX million first fees a growth being prior the decline first normal was in $XXX distribution SG&A part $X XX% and in than as our XXXX production and by million, of was expenses as up not first XX% expenses. million, in revenues primarily, the part Olympics the million media first quarter retrans On first million. quarter, This Political Super on of aired were revenue, of a XXXX by forma and which our $X related revenues cases, our operating on basis, operating the period. and quarter in year, to X% reverse were financial revenue, on expenses, pro both start-up quarter a higher pro Media advertising the stations. quarter million costs revenues million by higher quarter of basis, over Bowl versus higher result for and distribution media

estate in Our $XX million transaction investment of one-time $XX corporate the the the million for lower or expense in guidance, sold. interest the the EBITDA, includes was Total was and guidance reported prior beat, the gains quarterly announced ticking costs. of a a overhead favorable impairment were ONE before overhead expenses stock-based on million timing Spectrum disclosed being in was Non-media non-media compensation. which CL previously media in Corporate to is Net below fees process guidance. million million had quarter expenses of Corporate includes million, was related our and partially revenue of our charge financing. $X slightly the in the committed million previously million EBITDA which first on million the asset $XX gain expenses. our offset $X and includes was approximately by quarter. than of the $X $XX acquisition one-time $XX non-cash of higher costs Tribune which Media adjusted R&D real We Media cash in million the relating quarter ONE quarter expenses, that for included to dispositions, $XXX $XX reflecting transaction cash and Milwaukee,

on fees, the of received end share second $XX we by close. million, one-time pay expenses, in was $XX of were million cost free and For quarter, cash on million Adjusting of million $XXX guidance XXX the per assuming $XX used quarter, the prior earnings flow generated the in quarter our million. of Diluted quarter EBITDA a for exceeding were and the in common method $X.XX ticking cash million guidance Equity and $XX includes loss was $XX weighted shares CapEx. beat cash second down transaction a debt the timing $XX dividends. of average distributions while million XX% flow quarter. distribute for to the in million free investments

flow, a per to $X.XXX cash billion free $X range cash Our or share we XXXX-XXXX pro flow to pre-Tribune, of billion $X.XX of free reconfirming the forma $XX.XX. are total

our flow combined billion divestitures, post on Sinclair-Tribune pro mentioned, million billion a of cash total As XXXX-XXXX be is increase per free forma to for per That's expected share flow to $X.XXX or Chris $XX.XX to shares. a XX% share. free XX% guidance $X.XXX XXX $XX.XX in cash to

the to balance highlights. turning Now, and cash sheet flow

as and for the balance first transactions reminder, be the close. our sale purposes real Capital repack. a divestitures operation were quarter for the in of assets As accounted held million $X $XX estate included million, until in for will are announced station and for statement the including sheet expenditures

of guidance unchanged be repack be For the were CapEx in to and $XXX during Baltimore. $XX expected million. $XX taxes million $XX our the are to CapEx million prior the million. gain Harrisburg to first for to payments expected estimating cash while million, approximately remain be quarter and prior $XXX in cash related $XX $X.X spectrum XXXX, non-repack programming reimbursable quarter taxes XXXX, our on from includes million, guidance, Net for Cash million first to and we the is sale of paid the unchanged year which were is

tax million For a percent sure effective reflects flow. as single-digit and related spectrum rate the expected rate of VIE tax-free and in benefit and included lower XX back are repaid federal purposes, was spectrum The proceeds statutory spectrum this be low April, Milwaukee to not add on and sustainability the free in credits A of on million, to to non-guaranteed the as sale in be March plus of the tax since tax $XX gain In the cash income the at accounts. million cash well flow loans free rate, is taxes total of including cash proceeds hand. tranche with debt. on initiatives million debt intermediary was term At matured million $XXX Cash $X.XXX the sale. March auction were $XXX the $XXX billion, XX, $XX qualifying of XXXX

VIE net leverage is total net end and X.X the of leverage. bringing net basis, trailing $XXX eight-quarter almost $X.X billion. non-guaranteed had low quarter revolver, the debt cash. holding our we was on available at target through of excluding on addition, end liquidity In million Total below the and to a our times company This

trailing lien of a X.XX The X.X eight on times. covenant first indebtedness ratio on was a quarters times

two-year For year-end total holding times a to and historically net after be expected to company approximately Tribune leverage for we net forma on pro end. the X.XX company divestitures, be low before leverage XXXX, combined at Tribune X.X is acquisition expect year times the

Marks Steve through Now, performance. now will our take you operating

Steven M. Marks

Thank and you, everybody. good morning, Lucy,

the $X As QX both revenues. $X quarter we Nevertheless, which discussed media core first versus being for NBC, was the first XXXX. we is a by and met on Political in last smallest guidance beat Olympics, our in revenues quarter Super million affiliate were advertising quarter, by challenged the million carried Winter of Bowl group. and

political to grew quarter at Pro from our same be revenue estimated to as revenues million million compared for Our first XX% year. in last full digital business year. $XXX continues the the $XXX forma year the to almost period

and XXXX. to for to second versus distribution to media in second on Pro outlook, X.X% assumes million political $XX to growth to higher media forma core This $XXX and up $XXX digital we year. million forma versus revenues Turning include distribution, be the to second in expected second Chris low X% revenues revenues XXXX million fragmentation period fees commentary last be advertising are economy. approximately to as million same are of mid-single-digit million Tribune, basis, pro versus which in $XXX $XX are includes revenues. the X% quarter, be and our million uncertainty year compared down to the QX political quarter last quarter, quarter political, of not does million, year. reflects a On $XXX excluding This $X expecting higher regarding to revenues percents the last audience around expected approximately than gave

As a this expected fees low retrans grow of reverse Distribution not revenues reminder, single-digit media percents. our XX% and revenue, based subscription to of to still advertising. are tied to XX% is net by for year

$XXX the expense approximately increase basis Media pro are expenses and acquisitions of quarter retrans million. to in On the growth were be side, million media second in of or XXXX the $XXX of quarter the coming in the we initiatives. second expenses XXXX, second versus forma reverse majority $XXX forecasting a with million from quarter on

Free pro of to quarter year, the of versus million reverse quarter. full half be the and second and billion. primarily guidance increases, remain on EBITDA million million renewed compensation of back year $XX one-time that and are is than $X timing initiatives year. second revenues. for pro to network's larger expected be flow unchanged which media approximately XX% million approximately at For growth of to timing year of for to cash quarter agreements to the in primarily distribution $X.XXX the retrans million due decline ONE political $XX added is billion adjusted $XXX in the commissions expenses forma transaction XX% increase their $X.XXX last to one-time $X.XXX to related unchanged expected the Media annual sales $XXX of net XXXX billion forma in is $XXX and The expenses approximately a expenses, on revenues, political reported million to EBITDA as costs adjusted the versus fees XXXX cost higher $XXX remains quarter is media million, to number pro forma. second higher weighted second The

And $X.XXX XXXX-XXXX cash at estimated forma open $X pro to like As is to flow to that, I'd billion. combined up billion it Lucy our questions. with free stated,

Operator

time, be this At conducting you. session. Thank a we'll question-and-answer

first Marci Securities. Our proceed question Please is Wells with from Ryvicker your Fargo with question.

Marci L. Ryvicker

stations multiple explain guess blended Thanks. "market adjusted what I on rate morning, you times cash to costs." is sellers' flow the have the the the Can I that divestiture network couple. first that related out release for one which X.X first that programming is means? release, mentioned was a XXXX-XXXX this that

Christopher S. Ripley

the stations to of package year. in of the straightforward. had so, was as reverse total under-market retrans this pretty June involved and going It's end Three that Sure. of

about how So, flows that's the those retrans was into perspective economic market cash from look it more to representative it. reverse way put the to an at think in because buyers

Marci L. Ryvicker

Okay.

apples apples. it's to So,

Okay, perfect. that's It's to apples apples.

Christopher S. Ripley

Yeah.

Marci L. Ryvicker

timing process And to talk then related about the and you the think you about the relative are DOJ also just to the their deal, what Tribune review where UHF can in discount decision? both and FCC maybe

Christopher S. Ripley

Sure.

to that going outcome front or some an to FCC this it the the buyers, and So, there's we there's the NPRM, public in then, file get the of back (XX:XX) have are vetting up on scenario either have as they if can we national we which DOJ of hopefully been has now go wrapping FOX, by completed If and sort the shortly, don't start comment I wait the as this look, as a case, by FCC note cap. approve we likely through for gone And an to very action, there's been XX-day some the which its not and the of which know we with period a already period FCC about, which FCC believe that to I court relates approved lot is divestitures. relates the will it them far speculation firmly wins. and here that appeal of will outstanding see comment is

go changing that record the cap. on he saying We to open had O'Rielly was also

that scenario. and deal there And Sinclair just obviously fee the any not expire or in that would is could so, would just happen everyone does something alternative remind that the I breakup other have

Marci L. Ryvicker

you has across soft auto about on, going specifically reported just then, the from And who's Do what's Steve. the I any Great. everyone category? color in I for have so think on far. board have pretty Auto been one

Steven M. Marks

Well, local seeing But is when second especially this well foreign that with we and this is cancellations for as quarter, wrong took domestic others, down. car is heard we're quarter, reports, from I as Chrysler on and you've read What color nothing what for some the sales. is Marci, know you primarily primarily. money dealers, interesting first there's

what of second saw as a with in low. pockets, as quite are little remains and not many their putting sales rather year perhaps first money a last could argue you strong inventory taking quarter, the right being sales that we're little frankly and we're more and and bit in bit we promotions because seeing So, dealerships now strong, a remain rest seeing

So, we think there's some of terms domestic dealerships. profit taking and foreign on both going in

had Now, in category negative if think be the years, the the with increases. this political. out XXXX. the in is And back look year, four will still because crowd quite frankly, take a category you to we're has category half of confident a nothing rebound of going that but we this situation last But at

a it year, So, it's a little taking we're confident eventually. this months bit six will rest of but for of rebound that

Marci L. Ryvicker

Great. Thank you much. so

Operator

from proceed Our Please with Bank. your Watts next is with Deutsche question. Aaron question

Aaron L. Watts

Thanks morning. next this post you of kind years? me Does had the that for the provided retrans few FOX on announcement Hey, fee impact on. everyone. One net the goal follow-up having for new the growth previously agreement

Christopher S. Ripley

expectations going already We No. in that was around had factored deal be. to what

Aaron L. Watts

ad core moment at you over spending then right fragmentation due will you a now where of the the softness a two bit year question Okay, that think of expectations next backdrop? talked got the for for softer And it. kind to just growth would guess much little advertising. be around your just about trend? core Chris, advertising I or versus or consumer any audience secondly, ahead as sense how And

Christopher S. Ripley

more consumers been as think fighting are informed. been listen, and has decades be a trend Well, available I choices to we've to or more fragmentation now entertained for that

really it's of new. continuation just nothing so, existing a And trend. It's

we're think is the driven weak very some by I seeing recent around softness auto. specifically that sectors

to not much we're ad tremendous core that challenging of growth side So, seeing growth hiding side. and no stream, while on I is the most revenue that and expect way in rebound. digital there's core in ad retrans And our the the

progress. buy strategy, green recently of it think that local into on and programmatic agencies our are there finally making challenge, addressable, the which comes additional where profitable today. that local shoots it all and inventory. the despite is initiative, that broadcasters network not when making just out And stations, efficient the we're to then, around to broadcast think we're of and inventory for our we added opportunity it automation in great there repositioning which programmatic, is making lift actually which We is and terms it putting a the marketplace our marketplace, huge network, CPM I to TIP

today, the need So, networks just over leveling even see great in other now, or right equalized. which us playing a be it though digital video, be networks have versus future I it's that forms really ad the challenged potential broadcast to field for inherent or advantages cable

Aaron L. Watts

Thank Okay. Appreciate it. you.

Operator

Our from morning, proceed Credit LLC next is David with your Suisse Securities (USA) taking my Please - guys. questions. David Thanks question. with Farber for question Suisse. Good Credit Scott Farber

on the Some are but a to asked, of wanted already pro leverage highlighted. forma you that minute and them guidance spend I

So, first, gross. have and on to but now it of appears might expenses line a missed non-media at of XQ more net it, perhaps was at the from basis revenue you what changed I the guidance just

a Thanks. thinking the since XQ? question about apples you guys And had if So, how and to non-media then, have apples your line I is are changed my expectations follow-up.

Lucy A. Rutishauser

Yeah.

development so David David, we LLC that we now Farber (USA) - and Suisse in non-media Right. guidance and the in Scott the the this didn't that's expense change. only line Securities thing line, was took that is research comments did and The So, with piece. opening Credit netted my

not have XXXX, how even And business expectations is we so, line, don't though the see for the changed. that revenue performing for

Lucy A. Rutishauser

Credit Scott the believe, then, I And you leverage, LLC discussed Securities pro (USA) Farber mid-Xs David Great. Correct. Suisse - forma.

anything me. to other that leverage stock then any about you're recent price that if performance talked it do or lower question given for would Xs to So, you you with about uses taking were, number guys previously, And have you high leverage thoughts respect number? Thanks. from is, now? little lower And consider that's my a you bit

Lucy A. Rutishauser

So, the the divestitures. for that of X.XX combined is Tribune times, and after XXXX Sinclair end

a already from So, prefaced we shareholders that to both from year is to look, we've And had want which us close about they ago, was that at lenders sharing X and lower times. delever. what than heard

And At higher the X.X end the so, range. that it's us. times, be than will our upper a focus of for continued target

So, we down. bring will want to that

Now, well longer-term, we'll continue with opportunities. returns to reinvestment balance shareholder as targets our with as deleveraging

Christopher S. Ripley

I taking if That's toward where today, liquid would just to LLC we'll in Thanks add Okay. the not this and Appreciate it. - going that for going is be that closing position be David allocating price be Securities to is stock transaction incredibly hard Scott near to to share be it Credit helpful. the anywhere (USA) repurchases. question. it's Suisse Farber

Operator

Our question. proceed Please Crockett next your is B. with Financial. from with question Riley Barton

Barton Crockett

Thanks great. get this. up on Okay, on that the follow of theme the side to question. share taking other repurchase for kind your wanted of I and just thoughts

dry (XX:XX) occurrence, unfortunate share you're Tribune able to say low scenario? you'd have How ton that cash about high leverage powder some free repurchase in the close flow. would of feel you deal, through let's very not a that So, generating

Christopher S. Ripley

the of end just at to shareholders day. scenarios our what maximum the we're Even and about don't, dry better. amount leverage and higher I at close at powder. have bit both as of an Tribune, little flexibility We'll little for maximize a be I a going we're if do mean, returns look, if look we we and all to to cash both ways, lower incredible just that's

Barton Crockett

on to you've seeing second to time bounce this be than that different I at of I the ago? you talking hopefully have were it sounds mean things about kind generalities a can a good where what softness first from few little saw I know saying bookings more quarter, one the add fragmentations, spoken changed And you call here weeks back the think and of in you were of about seem doesn't Okay. some materialized. the And you but what up, audience specific? a what in quarter,

Steven M. Marks

casinos, the get call categories, and obviously, could the very were our Two that. second services cancelations some billing up of be were first There's about with to are broadcaster. will second to no after started category and first affected that every significantly second that category biggest second automotive as our up. in the I both in and and quarter well is specifically billing quarter, positive. rest we subset up for and situation, our quarters seeing finished category The question call, weeks no Movies our categories. we're for political (XX:XX) it (XX:XX) more There's biggest be up positives. reason second is is when the We're panic. the some numbers back would significant automotive true will cancelations which these with a saw be. optimistic billing. and remain in pacing into us, the countrywide year, Drugs that the a are still and quarter half to We will to the highlights will quarter. quarter was on now second significant close we you which be factor there's give up for pacing means enough quarter. going thought affect first that up The numbers, of than aggressively And to cosmetics, in arguably out XX% duplicating we cancelations Entertainment, crowding be obviously they we be where to holding

Barton Crockett

has Okay. just some of profile and on trends there's gears, this I And content of the I wondering, kind programming thing, news any been high your reporting switching kind of audience news on was That's on then, think, one some, the from last And impact just helpful. of any views content, programming? there? seeing your you that are aside had the in how publicity stepping

Christopher S. Ripley

Sure.

the with So, newsrooms far if we XXX my of comments certainly of of award industry. would won had some first done more back this the and any have time to no more, anyone controversy I recognized than this being terms year in being say, of so that's go and that's journalism It you time and impact quality has in and again. awards winning the

on whatsoever recent closely front, ratings ratings watched ratings. there the obviously and we through very that impact no controversy On was

we this that sometimes, they cancelations, And on people some of was amount. get the some an fact, but side, And then, support In was go from calls would very overblown. realize advertising up. immaterial would there then,

Barton Crockett

Thank That's helpful. Okay. you.

Operator

is with Jefferies. from Please John your next question Our Janedis question. proceed with

John Janedis

Hi, thanks.

So, Chris, lift. and the CPM advertising you mentioned addressable

and along lift you wondering visible think was evidence line, bigger from you see just of separately, to and I front, cycle? I then do political front So, was TV conversation? of of what this you digital an in that type a in on I from more guess are the wondering the shift how least at the good addressable or targeting do incremental part you tracking will on digital be far do have be And maybe to when capabilities

Christopher S. Ripley

addressable targets on the which access. televisions. have our million side, They about Sorenson TVs agreement, can So, on That early they stages. that is commercial XX smart in started the we've just

who to already. also We're – lends then, base time. over the get And opportunities through that So, starting addressability sorry, capability then ATSC needs the it grow and to addressable and MVPDs, built already, standard. X.X streaming to have will do has virtual grow to targeted streaming naturally into itself

penetrate is the when it's addressable we're in financials, it's terms hard early pretty marketplace. surface, and and say but So, see technology to there to of the it's going to for the working it starting you're in so me scratching the

In political, one restate terms that question of time? can you more

John Janedis

Yeah, sure.

incremental to front? TV this you do And them? political the just shift what cycle on on political front, guess an have digital in see wondering Just I extent targeting in to you of terms the digital did capabilities, from

Christopher S. Ripley

we targeting digital. personally lots So, we terms of capability, of have have target ability in to – on certainly

a line it for is money in and cycle be The seeing politicians they are great non-presidential We shift digital They from cycle. cycles this of We not in to don't return political about very to strong think thing that raise it a political. with money terms will TV all. spend people.

is a TV So, lot the be place still quickly. of money deployed where can

Steven M. Marks

lag the we ZIP a neighborhoods add targeting I the races. politicians local from and can geo that advertising, target being would seeing the And that not to on we're requested seen have local for while of we to Codes, some television

neighborhoods. and to into desktop And whether right geofence, mobile drill down so, able it's a Codes or ZIP we're

Christopher S. Ripley

that's but really politicians, And replacement. being not used complement, so, a it's a by it's

Steven M. Marks

Right.

Operator

with with from Our & proceed Lucas is next Gabelli question. Company. question Please your Barry

Barry L. Lucas

hearing and good with categories what beat ad dealers to elsewhere the the just death, as a dealer's pocket? going or in to those don't you. regard to dollars Steve, I opposed Thank staying to Thank agencies you want you but morning. are from from auto

Steven M. Marks

I realize to adapt that dollars have technology Well, digitally. those aggressively think follow we and There elsewhere. you have going to today's into those new are you dollars. follow In technology, we dollars

of your on our forward, to any of diversion technology. you billing portion on from a going digital come and absolutely game top So, automotive towards have be does

You is could broadcast so a peers that follow technology-driven success. of dollars lot aggressively a more this than with company We argue our company. those

to this dollars diversion significant the automotive prepared. a So, scared going about we're in presently digital of category category. in not digital. billing We're We're

the diversion, automotive dollars So, flow, we whether it's digitally may other of category. the wherever those deal in or having automotive and success to a we game great in and continue category any have plan we follow category any do a are

Robert D. Weisbord

the I is and tier about commitment would solutions at and level. our that X are content local add to ongoing conversations multi-platform conversations in multi-platform

Barry L. Lucas

in something can If of comprehensive? some lit or squeeze up from I X.X, Phoenix a one so more update more front, in market Thanks. next what for terms to when would either be on Great. technology test we the something do markets progress for ATSC got

Christopher S. Ripley

And to back has issue progress X.X. the can for was that do involved on year, transitions. within lighting X.X that think others construct in to that the and that are market, of the channel and this finishing made share Dallas the I going front on and be and That's going primary other stay up we're people on putting so execute how – cooperation broadcasters. done good we summer right go Phoenix Phoenix half some tackling And been within Well, main and seeing can Co. we're to same hurdle you're on that people in can a Spectrum stations reason touches the was with is those start each cooperate touches as we our finishing putting the people now on

Barry L. Lucas

Thanks, Okay. Chris.

Operator

is your question with from Stephens. question. proceed next Evans Our Please Kyle with

Kyle Evans

some a We've your of we sub-counts? your kind people please? trends update places Thanks appreciate can my you versus Any metric. thanks and driver. your give an traditional are taking on Can get specifics about distribution for Hi. in talking disparate it. us being and on a heard for size there us commentary We giving virtuals questions market MVPD

Christopher S. Ripley

we On have QX. and QX total saw I basis, needle previous quarter sequential – proving as in to calls, growth said Well, virtuals to this actually subs be a that's move would start we be the have predicted year QX to from true. in that year really the from where

declines so, and that's And seeing but good least on on at currently near-term more the than virtual. side, traditional on for the made being up – stability trends we're on slight the

Kyle Evans

And you we consumer? a are switching Vue. should the blacked about Is for think blackouts? PlayStation How guys fact there difference you. there lot versus I'm traditional any just if with there's other OTT Got than the correct, options more out

Christopher S. Ripley

Yeah, of us in launch Tennis. Vue it's their obligation and for amount case, particular subs a this Sony very And similar. to is honor minuscule refused they to

And some in I come we a may that. of them. we from to suspect So, pulled sort some at point on settlement time,

Kyle Evans

segue Good Tennis question. and for you you. carriage update the on Could into between split Got revenue? my advertising us in Tennis

Christopher S. Ripley

Tennis has that carriage overwhelmingly the very challenges for Nielsen been of and still event fairly And fees based Tennis. small a one sample. it's It's has that

slow we they're a now, advertising but in and but for also growth significantly those the audiences. shows the like revenue long-term, has – on spikes size and them. may, most working better Nielsen been getting is special night, it of this larger it's right majority up opportunity because And So, know we with certain there big the in it's interested really think we a sample a your is on the we're if it of comScore, get carriage. it picking the be is process, trouble But events, isn't tennis and certain side us, that currency match a vast as But seeing then the which viewership.

Kyle Evans

for quick Two ones Steve. Right.

digital you XX%? confirm, say you was did can up First,

Steven M. Marks

did. I

Kyle Evans

number? down dig you Can into that some of the drivers on

Steven M. Marks

will you. I Rob think that for do

Robert D. Weisbord

Sure.

that For a commitment we've had have companywide. to last out multi-platform big years, the been a rolled several initiatives

the has rewards years results, this And the that initiatives a websites, content multi-platform focus the we're significantly both on became of mobile. reaping stronger gotten and ago. of about desktop our four results Our

Kyle Evans

local advertisers top are local other if I to your screens more content different digital of guess than on on I was buying TV? that, restate your

Robert D. Weisbord

They're both buying TV and the other screens as well.

not So, out single multiple screens. are our repertoire solutions now is and go for sell There solution. covering a all to

our are in all the So, local screens. presentation's general marketplace covering out

Kyle Evans

again. for the to Can trends auto give for you. us going question specific I'm XQ Steve. then you a one hit Got and And horse last pacings? XQ

Steven M. Marks

wrong Well, affiliations. also where is, in on read was believe second what QX, Bowl is quarter. the the conjunction And we're this mid-single periodicals primarily effect primarily our category having stations point, of and I with first automotive in mentioned car down the FOX about because and talking But most second most as lot not if a Super I available teens in at quarter, of mentioned, especially I have we're it's there's I you dealership that the in number money automotive where again, quarter, sales. believe low we XXXX, lagging first digits NBC That Olympics in in foreign having is we're the and nothing with at the of down information that's looking seeing the – domestic both quarter. behind. on is And

and believe on figure the dealer scratch and try for because year. out six groups money cars and we first now that we profits the and we their So, they're are bit your you holding a little local don't their sell months the promotions many enjoyed have continue time this inventories right and to are they advertising dealers taking low, as to to have head to doing are what what doing and last

not do that mentioned crowd of again, rebound. in in us mentioned, had But will will will category the as we row in because I four this come I political It that of a in year. XXXX now of be back half the success upon years and So, out the think I category.

automotive panicky the So, on we're category. not

Robert D. Weisbord

Chrysler and The this other other now. is that thing right is shopping calls to add actively on some you've heard Fiat is

So, the we to is Fiat brand. cancelations some had as do have with figure Chrysler from to what out trying

Kyle Evans

you. Thank you. Got

Operator

with question next Wells Davis proceed is Our Hebert with your Please from Fargo. question.

James Davis Hebert

I wanted just focus Hi, to for Lucy taking leverage metric thanks gave. the the questions. on

flow the by assumptions there? months. I going X.X to growth, just wondering it or balance generation I think release, in delever curious, over the times the press the cash year sheet, And with mean XX you that would said And meaningfully materially you've does Tribune. end think was that EBITDA following just free

Lucy A. Rutishauser

Yeah.

from the the the going he way is Davis, model and the right So, flow built comes generation cash sheet. is deleveraging balance our now EBITDA free that onto

So, be cash uses that'll the of we be will something free evaluating over of time the next flow. period the short that

James Davis Hebert

Okay. $X mentioned question, Understood. valued a stake? Thank you. at Discovery any second And the thoughts of then You around Network little that billion. Food north

know Just closed development thoughts deal's curious the conversations? if you're having any there? guess Tribune I yet. I on

Christopher S. Ripley

Sorry. Could repeat question? that you

James Davis Hebert

Yeah.

Has from comments? around changed Food thoughts that any Network the prior monetizing Just stake.

Christopher S. Ripley

we noted I look, it. in to it's in up be value. Quite open Well, well would frankly, and only we as exceptionally performed going our think monetizing press it's release

of an and continuing is flow increasing basis. a cash and to going direct-to-consumer grow asset, that on very think internationally stream annual an excellent produces to it steward Discovery I be it nice

that. continue entertain anything. sense, on the not to If to to makes certainly but be happy we're that, with we're do a we're partners happy in rush Discovery So, deal to

James Davis Hebert

Thank great. you. Okay,

Operator

of we've session. gentlemen, reached back Lucy to question-and-answer this turn Rutishauser closing and the call I'd the At like comments. for end Ladies to the time,

Lucy A. Rutishauser

And thank us. questions, you, our And Thank this earnings participating you has contact call free on operator. additional if feel please for morning. anyone to

Operator

conference today's concludes call. This

thank at do time. your participation. You you your for we lines And may disconnect this

Sinclair Broadcast (SBGI) 9 May 182018 Q1 Earnings call transcript