Q4 2020 Gray Television Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Gray television and fourth quarter, 'twenty and 'twenty earnings Conference call.
Lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad to withdraw your question press the pound key.
And I'll turn the call over to Hilton Howell Executive Chairman and CEO to begin.
Okay.
Good morning. Thank you operator, as she mentioned I'm Hilton Howell, the chairman and CEO of Gray television and we think of.
All of the and for joining our fourth quarter and year end 2020 earnings call on the line with me as usual are president and cause C. O type of flattening, our chief legal and development officer, Kevin of Latex, our Chief Financial Officer, Jim Ryan and our Chief operating Officer, Bob Smith.
We will begin this morning with a disclaimer that Kevin will provide the Kevin.
Thank you Hilton and good morning, everyone.
Certain matters discussed on this call may include forward looking statements regarding among other things future operating results and the impact of the novel Coronavirus and of disease of COVID-19, and our future operating results.
These statements are subject to a number of risks and uncertainties actual results and future could differ from those expressed or implied and any forward looking statements as a result of various important factors.
More information of all such factors please refer.
Two of our company's most recent reports filed with the SEC, including our most recent annual report on form 10-K, and that will be filed today. The company undertakes no obligation to update these forward looking statements.
Gray uses its website as a key source of company information the website address is www Gray television.
And also will post an updated investor deck to the website within the next two weeks.
Included on this call will be a discussion of non-GAAP financial measures and in particular of broadcast cash flow broadcast cash flow less corporate expenses operating cash flow free cash flow and.
Adjusted EBITDA and certain leverage ratios. These metrics are not meant to replace GAAP measurements, but are provided as supplements to assist the matrix.
And just the public and the analysis and valuation of our company and.
Could it and our earnings release as well as and our website all of the reconciliations of non-GAAP financial measures to the GAAP measures reported and our financial statements and I will turn the call the Hilton.
Thank you Kevin.
Today, we have lots of very good news to report and.
And to discuss.
As we approach the one year anniversary of the beginning.
And so.
The most of them full 12 months of my life So far.
And I'm extremely gratified that gray television today.
The small true course record fourth quarter results.
He's fantastic the acquisition.
Continuing momentum and our business.
And strong guidance for the year ahead.
Our people and our company overcame unprecedented challenges over the past year.
Last name despite the challenges we predicted that we would remain cash flow positive each quarter of 'twenty and 'twenty.
And we met the challenge.
Mercury rule and all of Bolivar North of our accepted any government financial support.
The adopted work from home and report from home and even produced from home policies very quickly in March.
We imposed no pay cuts.
No furloughs and.
No layoffs no benefit cuts.
And no benefit of delays.
In fact.
We expanded the scope.
As it goes.
Pinch and fully exposed to cool on the virus.
Our stations expanded the coverage of the coronavirus the.
Hurricanes and storms, one even known as a lack of which I'd never heard of before and my lives.
And widespread.
Social unrest.
And in fact in December we.
We pay bonuses to each.
And every full time employee and recognition of their of hard work during these hard times.
And.
And response, our stations and production companies.
Teamed up to organize and lead extensive efforts to support local residents to fun lasers.
Virtual concerts school and television virtual food jobs and other projects that collectively was literally tens of millions of dollars sort of the local communities.
And in fact.
And at what flattening will shortly discuss one such effort that we will be launching this weekend.
Our managers and account executives.
Throughout the company, but new emphasis on sales training, new business development and new ways of.
Selling and.
We also held and executed the innovative ways to reduce expenses from.
Top to bottom.
Gray television runs lean and mean and no one and this company would have it any other way.
The results of Gray's collective efforts are now.
Very apparent.
With today's earnings release.
For the full year, our revenues broadcast cash flow and operating cash flow ex.
Exceeded even our pandemic expectations.
From one year ago.
We greatly improved our balance sheet to a successful bond offering and robust stock buybacks.
We continue to invest and our stations and even and acquired a few new stations to boot.
And at the end of the year, we intensively dog and do our planned acquisition of Quincy media, which as you and though we announced on the force of this month.
Today's earnings release announces record results, which have made us very happy.
Even of 'twenty and 'twenty did not through a pandemic of recession multiple hurricanes the records severe storms and social unrest of our way.
Our total revenue for the fourth quarter was $792 million.
And increase of $213 million of 37% from the fourth quarter of 2019.
Net income attributable to common stockholders was $211 million or $2.22 per fully diluted share, which is in and amazing and 174 per cent inquiries from the fourth quarter.
2019.
Broadcast cash flow was 424 million and increase of 195 million or 85 per cent from the fourth quarter of 2019.
Our adjusted EBITDA for the fourth quarter of 'twenty 'twenty.
404 million and increase of 189 million or 88 per cent from the fourth quarter of 2019.
Our total core revenue continued its sequential improvement from the the troughs of April reflecting better business conditions at the national and local levels.
We ended the year with the total leverage ratio as defined in our senior credit facility of three point non five times on a trailing eight quarter basis, netting our total cash balance of $773 million and giving it back to all transaction related expenses.
During the fourth quarter of 'twenty and 'twenty, we repurchased roughly 973000 shares of our common stock at an average price of $16.44 per share including commissions.
For all of 'twenty and 'twenty when.
And you repurchased in the open market five 5 million shares at an average price.
The $13 and change per.
And for $75 million.
The big stories of the fourth quarter, where the refinancing that we addressed on our prior earnings call in November and.
And political advertising revenue, which we also addressed on that call yet continued robustly even after the election day.
And all of those topics.
Certainly deserve attention.
And once in my opening remarks addressing two items that occurred after the close of the fourth quarter.
First we announced our acquisition of Quincy media on February the burst.
Upon closing that transaction Gray television and Malone stations, serving 102 television markets.
That collectively reached 25.4 per cent of U S television households.
Leaving us ample room.
And your mergers and acquisitions.
These 102 markets include the number one ranked television station and 77 markets and.
And the first or second the highest ranked stations and 93 and markets.
Those on buses statistics at any time and all of the more so because it was only a few years ago that gray owned stations and just 30 markets.
And at that time, our leverage was more than two times higher than it is now.
And our press release announcing our planned Quincy acquisition.
And I expressed how honored and humbled, we ought to be selected by Quincy shareholders to acquire their terrific company.
Those words were heartfelt.
Quincy because of very fine company.
With the tremendous television stations and tremendous people.
And it has been led from many years my true Giants and our business.
Ralph Oakland.
The only regret that we have and the only regret that I have and this transaction.
Is that the broadcast industry will lose ralph's and men's contributions to the M D.
Two the indeed, the pox two.
The affiliate boards and <unk>.
Super important and Dumpers.
Well, who work and broadcasting and for the local residents and businesses.
Who rely on our stations.
We pledge.
To operate the bond stations that we acquired from Quincy and tribute to Ralphs lifelong contributions.
The local service.
Local broadcast stations.
Local journalists journalism and love of community.
And the country.
The final Big news and the announcement, we made this morning concerning our dividend.
As you know from our prior earnings calls Gray.
<unk> Board of directors has been intending to formally consider where the market conditions permit us to return to paying quarterly dividends once our total leverage ratio as defined in our senior credit facility.
All of us below four times.
As you saw and are released this morning, our net leverage ratio did fall below four times at December 31st 2020.
Accordingly at yesterday's quarterly board meeting after careful discussion.
The directors decided to restart graves regularly quarterly cash dividend for our equity shareholders and eight cents per share or 32 cents a year.
Those of you who follow US closely may remember that gray consistently paid a quarterly dividend for decades prior to the book session.
At that time, we reluctantly suspended the dividend to preserve our capital the capital.
Thereafter, we place the highest Paul are seeing on reducing leverage.
Growing the company and.
And more recently with zoom and robust stock buybacks.
Executing on these priorities has been the singular goal of the management team.
So really all of the past 12 years.
And now today Gray.
Gray is several times larger than it was in 2008 with the balance sheet and work force and portfolio that has never been stronger.
The board surveyed the remarkable progress and determined that now is the appropriate time to resume paying a quarterly dividend.
This historic move is therefore, another confirmation of that Gray has successfully executed the long term recovery and growth plans that we put in place some of the darkest hours of the great recession.
We are especially grateful to our equity and credit investors and bankers for their support of our efforts.
With the dividend now returning gray capital allocation priorities will be slightly altered and get our priorities remain.
First to reduce our leverage over time and the extra return capital to shareholders explicitly through opportunistic stock buybacks and our regularly quarterly dividend.
We also anticipate that the future will present opportunities.
Oh, great strategically.
And as I mentioned earlier.
We have ample room under the ownership cap.
So that we will as always evaluate acquisition opportunities.
In terms of our long term growth goals and capital allocation policies.
And short today is a good day and grain.
We all gray proud of our business our stations our communities and.
And most importantly of our people.
And as you will hear next.
We look forward to the very strong year ahead.
At this time I'll turn the call over the past, Kevin and Jim to provide additional color of today's earnings release thereafter, we will open up the lines of questions for all of us.
And per our CFO, Bob Smith, and as usual joins us today to help answer the questions and his area.
So Pat.
Thank you Hilton.
Gray was blessed throughout 2020 with political advertising revenue of historic levels, and a very wide field of competitive races across our footprint.
Geographical location plus high quality highly rated local news operations were once again, the one two punch that's unbeatable.
Recall that the earnings call of one year ago, we predicted full year of political advertising revenues from the range of 250 to 275 million.
Later, we increased our estimate to be between $2 $75 million to $300 million.
When we reported third quarter results in early November we raised our full year of political advertising revenue guide to at least 380 million and then in late December we announced will be of broadcast over $400 million of political ads.
That point and the year with more orders on the books and anticipated to arrive thereafter today and go.
And thrilled to announce of our political advertising revenue crossed 245 million and in the fourth quarter alone, which exceeded our political revenue and all of 2016.
And as well as exceeding what was nearly or expectation for all of 2020 of it one time and.
The and our political advertising revenue was 430 million of full year 2020.
I'd like to put that number and perspective, if I can and do.
2016 on a combined historical basis, three year and gray generated $9.63 of political advertising revenue per television household despite the lack of historical presidential spending levels and.
And the sort of lackluster statewide races, and 2018 and on a combined historical basis through year end and with no presidential races at all persons and race and all great generated $8.80 of political advertising revenue per television household.
And 2020 of that figure was $17.57 per television household or 82% more per household.
And in 2016 and.
It's worth noting two of the grades of political advertising revenue per television household was the highest across all publicly traded television group owners and 16 18 and 2020.
Our combined local and national broadcast revenue, excluding political which we called total core revenue was also relatively strong in 'twenty and 'twenty, despite the pandemic recession and political displacement.
And each of our 'twenty and 'twenty earnings calls and we told you the while April seem to be the very worst month for our business, we saw continual improvements and core retrans and political advertising revenue is the here and what type.
Non.
The fourth quarter of 2020 continued this trend even amidst all of the political advertising.
Total core revenue decreased approximately 8% compared to the fourth quarter of 2019.
While the significant much of this decline can be attributed to historically strong and political displacement and a large number of our markets.
And October total core revenue declined 22% from the prior year again, largely impacted by political displacement and.
Fact of political advertising revenue in October of 179 million dwarfed, our total core revenue in October of 81 million.
In November with political advertising revenue, mostly disappearing outside of the Georgia total core revenue declined less of 1% from the prior year and.
The December with the resurgence of political advertising and Georgia total core declined just 2% from the prior year.
Overall, the momentum that began in may with the first stage of reopening.
And you'd essentially throughout the year, there and thereby gradually diminishing the effects of the pandemic of her business.
As we've mentioned previously what our core business slipped and the spring as Lockdowns affected many of our clients and nearly all of our viewers and we use the new kind of a time to refocus on sales training developing new products your clients and prospecting for new business.
Those back to basics exercises helped us post lowered the core declines and faster recoveries, because many of our peers largely due to new business development.
We also believe that these investments in 'twenty and 'twenty, we'll continue to get benefits benefit us in 'twenty and 'twenty, one and beyond.
It's worth highlighting one particular category of the seeing very strong growth rate now that we believe will continue for some time.
The 2019, we starting to see new advertisers of growing budgets for gambling and which historically include state where of lotteries as well as casinos with the increasingly legalization of sports betting on a state by state basis. This category grew to a few million dollars and 2020, well most of the other categories were down for the year the.
The business has only accelerated and the last few months, our pacings, which are not necessarily of great predictor for future revenue are still very encouraging because of the gambling categories now pointing to no more than 250% increase over 2020.
If anything near that holds gambler would be the fastest growing core had kind of category for us for this year.
We were hopeful about of returned to more normal operating levels and our core business in 'twenty and 'twenty one.
So far our patients have begun the ear and the good spot and we are increasingly optimistic and we will push back towards 2019 core levels and the second quarter of this year.
And we all need to highlight the continued growth of momentum and our digital business, we've often mentioned that our digital usage.
Our digital usage, breaking the records and that the continued throughout last year. The 2020 now closed we can reported over the course of the entire year, our total online sessions rose 24% over 2019.
Our users rose, 37% and our page views and video views each rose 13% over the prior year.
Year ago, we announced on this earnings call of the grades digital sites had just surpassed 100 million monthly unique viewers and the very first time in December of 2019.
'twenty and 'twenty, we'd be past that achievement.
Average of 123 million users across all platforms each month.
Many of you recall, the gray joined the number of other broadcasters and placing individual local stories live events and local news live streaming of think back to the lab called viewing which is best thought of as the Netflix for live local and free contracts.
For example, grades K C or G and Cedar Rapids streamed, it's Friday night lights, 'twenty and 'twenty High school football coverage on viewing.
The review at the series reached online viewers and the 108 Dma's with one game alone, reaching 53 D. M. A S. Today, you would host content from a total of 164 local broadcast stations, including most gray stations.
The average view of user visits the F 18 times per month and spent 30 minutes per session.
Finally, I just like the Echo Hilton's comments about the remarkable work being done and all of our markets by our dedicated staff.
The extraordinary weather events of last week presented yet another very difficult chat.
Challenge for news coverage not only in Texas, but many other states are journalists and the other team members did her role of work again, and making sure that our mark and set up to the minute news and critical information.
In addition to providing extensive extensive coverage of the weather of emergencies. We've teamed up with the Grand old Opry and circle network to leverage the Saturdays lives of operating broad jobs to help raise money and awareness of food and security.
The Opry broadcast we're at nine P M. Eastern on virtually every gray station and I'm happy to report also on grams, K, PRC and Houston and additional stations owned by the good people at Hearst Nexstar and Meredith.
All of proceeds will benefit feeding America and network of 200 true banks and more than 60000, and food pantries and nearly every community across our country.
And now I'll turn the call the Kevin.
Good morning again.
The state the obvious we are thrilled.
Thrilled to have reached an agreement to acquire Quincy media and.
Of the stations that will join Gray television and are precisely the type of strong local institutions that we are consistently strive to add to our portfolio.
And in this case, the new markets, our archive hand, and glove fit the grades.
Geographic footprint.
And even more perfect whether the company culture of empower and local managers and local professionals to make the content sales and operational and staffing decisions that they believed best suit their individual local needs.
This is closed and are quickly press release.
We are divesting of Quincy television stations, and all fixed market, and which both great and Quincy already own and full power network affiliated television station.
Wells Fargo comeback of the Hormel divestiture process from the same day after we announced the quality acquisition.
Well first round bids are not due until tomorrow. We are very encouraged at the level of interest and the divestiture stations and we have seen so far.
We are also gratified.
And at the pool of interested parties is wider and more diverse and we've experienced and prior divestiture processes.
We expect the process will continue to move quickly with final contract executed announced and submitted to the FCC and Doj and April.
And another major recent development and was our successful completion of the negotiation and renewal of our largest batch of retransmission consent agreements.
And this batch of contract that expire between late 2020 in January of this year.
Covers a bit over 40% of our paid N V. P D subscriber base through individual contracts with more than 480 different and.
And B P D.
And that includes one of the two DBS companies several of the largest cable operators and.
And nearly all of our small and mid sized cable operators.
We successfully concluded retransmission negotiations without interruption to the public.
All of those and be PD other than two relatively small telco overbuilt, representing less than 1%.
Of our total Mvpds sub base today, only one bankrupt telco, operator, and as it used to continue carrying and gray stations and that impacts of about two tenths of 1% of our Mvpds sub base.
And an even smaller portion of our total paid subscriber universe.
Consequently, we once again began and quietly and at another significant and renewal cycle with the success ratio at close to 100%.
Looking ahead, we have one postpone negotiation.
And will occur later, this spring and that will be price retroactively to January of <unk>.
This summer and at year, and we will have a small number of negotiations with Mvpds, who cover about 25% of our paint Mvpds Hebei.
And then in the middle of 'twenty and 'twenty, two well, we won't renew and other small number of negotiations with Mvpds, who cover around 20% of our paid and the PD sub base.
For the first quarter of 2021, we anticipate retransmission revenue will increase by about 15% over the first quarter of 2020.
Retransmission revenues should increase and the next quarters. This year by larger amounts as a result of the renewal of repricing that will occur over the next few months.
To put these estimates and perspective.
I'll remind you that our retransmission revenue increased 4% and the first quarter of 2020 on a year over year basis, and 9% and the second quarter last year, and then of 11% year over year and both of the third and fourth quarters in 2020.
For the full year, 'twenty and 'twenty, our retransmission revenue increased nearly 9%.
And as revenue increases are the result of both annual escalators and all of our agreements as well as the repricing of a portion of our Mvpds fan base and the first quarter of last year.
And repricing and April one of last year.
And finally, we have now received subscriber reported from Mvpds and OTT providers covering nearly all of the three first three quarters of 2020 and a good portion of the fourth quarter of 2020.
With more comprehensive data in hand today than we have had available to us and even point last year. We can now report that our total sub counts for 'twenty and 'twenty held up much better than anticipated and the darkest day from last summer.
And as an aside when we discuss total sub counts we are only looking at subscribers for whom we are paid a fee because they receive a big four affiliate of channel from Gray.
And in particular with the benefit of the nearly comprehensive set of N V. P D and more complete set of OTT subscriber reports for 'twenty and 'twenty, there's a relatively significant increases and decreases at many of the operators throughout the year.
Overall, however, grays total subscriber count and.
And for the full year of 2020 declined only one 1% from the total subscriber count.
And the prop.
Backup at the total subscriber count and the fourth quarter of 2020 declined only one 1% and total subscriber count and the fourth quarter of 2019.
Given all of the challenges of 'twenty and 'twenty, two and everyone. We're certainly pleased the more comprehensive data reveals our total subscriber count declined by essentially a small amount.
Thank you for your time and I'll now turn the call it the Jim Ryan.
Thank you Kevin good morning, everyone.
In addition to this morning's release.
And we'll be filing our 10-K later today, which will have a great deal of additional information for you.
Also as a quick reminder, remember the beginning in the first quarter of 2020, all of our reporting is and on an as reported basis, because we considered the acquisitions and dispositions of the late 2019 and during 2020 as being immaterial.
One final quick comment about political yes, Q4 was all about the $245 million of political but I just wanted to point out the debt $245 million actually exceeded the 235 million combined historical political from 2018.
The cell mentioned earlier, our leverage ratio at the end of the quarter was $3 95 net in the $773 million of cash on hand, and we stated with the announcement of the Quincy transaction at the first of the month debt.
At the end of this year.
And with the Quincy transaction Hasnt been closed we expect our leverage ratio pro forma for Quincy to be approximately four times.
During the fourth quarter, we increased our cash by the $306 million.
And as of today.
We have and Undrawn $300 million revolver was and so we're in a very strong liquidity position.
At this time, we expect we will continue to generate significant amounts of free cash during each quarter of 'twenty want.
As of today, we have approximately $95 4 million shares outstanding and 2020, we generated full year free cash of $559 million were approximately $5 of 86 per share with the record setting political revenue as we look to 2021 and non political year we.
Currently anticipate total year free cash will range between $300 million and $325 million that is excluding any additional free cash generated by Quincy Quincy acquisition post closing that transaction.
So to sum it up our average 19 'twenty free cash flow was about $5 458 9 million and we.
Dissipate that our average 2021 free cash flow, excluding Quincy Aquila acquisition will be and a range of approximately $430 million to $442 million.
Given our strong liquidity position free cash generation and low leverage and no debt maturities until 2024, and we believe we are and a very good position to thrive and emerge from the effects of the patent data and make just as we are today one of the strongest local broadcast companies in the country.
You'll also see and the release that we've we've returned the formal guidance for Q1.
And we're pleased with what we're seeing so far is the started the year. Our total core revenue, we're guiding to an increase of.
Flat to up approximately 2% retransmission revenue growing 15% to 16% and given as Kevin mentioned and the timing of some additional renewals a little bit later this year that quarter over quarter cadence will pick up a little bit in the back part of the year total of <unk>.
Casting revenue again, we're guiding to be flat to up approximately 2% and the production companies will generate about $13 million in Q1.
And revenue operating expenses, our broadcast expenses will be increasing 8% to 9% that's about a $29 million increase.
And all of that increased 24 million is represented by increasing and reverse comp to the networks.
Production company expenses will be about 16 million and corporate expenses, including transaction costs related to the Quincy, we're anticipating and to be about $20 million.
To add a little more color on the core revenue in Q1 January was down low single digits.
Be wary is up.
Low single digits and currently March is appearing to be up low to mid single digits. So we're very encouraged by the cadence month over month of the continuing sequential improvement of core revenue.
Couple of quick liquidity items for full year, 2021, and we anticipate cash interest will approximate $180 million, our capital expenditures of about $80 million and cash taxes will be in the.
The low twenties of millions.
At that I will turn the call back to the Hilton.
Thank you very much.
Joe let's begin with any questions that everyone and may have.
Thank you as a reminder, if you would like to ask a question. Please press Star then the number one on your telephone keypad.
Your question has been answered and you wish to remove yourself from the queue press the pound key.
First question comes from the line of Kyle Evans of Stephens, Inc.
Hey, Thanks, Jimmy ripped through free cash flow numbers, if you don't mind.
And could you just slowly tick back through them again, and if you didn't give one for Quincy can you help us think about that.
And some follow ups.
So the.
2020 free cash was $559 million net.
It translates to $5 and 86 per share.
With the $95 4 million shares outstanding as of today.
We believe our free.
Free cash.
Excluding Quincy this year and 'twenty, one will range somewhere between $300 million and $325 million.
So blended the two year 19, 'twenty free cash flow averages $459 million.
And that would imply a 2021.
Our free cash flow prior to Quincy.
Of between 430, and maybe $442 million.
The free cash flow generation from Quincy, obviously is going to be dependent on when we close.
We are currently anticipating a close.
Sometime in the.
The middle of the year.
And obviously Quincy is free cash flow accretive.
We haven't gotten into.
Exactly how accretive that will be right now in part because Quincy is a private company and we're trying to respect the.
And there.
The private information I.
We will have more to say once we close the transaction.
And how much additional free cash flow Quincy will bring and sometime in the second half of this year, but I think it would be fair to say that and to your blended average basis, whether it's 19 22021.
Even without Quincy, it's a very very compelling free cash flow story, and especially on our free cash flow per share basis.
Historically, you've given great CH B numbers when you do deals do you anticipate.
Yes, Quincy is large enough that we will update the CH b for Quincy once we close it it may I will caution it may take a couple of weeks that are a little a little bit of type of post closing to get that all pulled together, but that is our intention yes.
And then Kevin you.
Kind of gave us the.
And so on Retrans growth in 'twenty and I think you said four nine.
Were you implying that we should be thinking about the same deltas.
<unk>, 16% year over year.
For the <unk> for the balance of the year.
No not a point of that I was just simply referring to the accelerated income.
<unk> and growth because we were renewing a group last year and a large group this year.
Given what we have ahead.
And certainly it's.
And Tim and I, both mentioned the retrans should be higher than the year.
But of your increase we should be higher in subsequent quarters, and we have and this quarter, but I don't think of the cadence last year is going to be indicative of the share because we renewed.
What are your cost per cent of ourselves and of January one we didn't have that last year.
And we didn't have and we won't have a big April one renewal like we had last year and then.
And we had some going into the summer and we didn't have the do not have last year. So I don't think last year is necessarily indicative of a separate of the trend line of getting.
The increase of the year.
Okay.
Can you can you help us think about the virtual component of your <unk>.
Retrans sub base.
Would you size that from a number of revenue perspective and then.
It's not.
And I'm guessing you won't.
You talk a little bit and of high level about what.
The per sub per month rate has done and virtual since since inception has it tracked the.
The more traditional cable satellite and then one more.
Thanks.
The OTT and certainly bigger than.
The bigger than we thought it was going to be and has grown much faster than we thought it would grow.
And you've heard this from us before with with a couple of big guys out there and then some very very small OTT providers.
And each network of taking a different approach.
Operator.
There is.
We don't have growth and retrans growth and reverse arrangements with everybody and it's just simply we're paid a fee by the network others. When you go to the correctly.
And pay a fee and.
And so there's there's a lot of variation.
Overall I would say.
There are.
Yeah.
R R.
Our preference is to have people and the pay TV ecosystem and we had the luxury of choosing we would all want them to be with the operator, who is paying us the most not the operating spending and I believe and.
And some cases of the OTT guys or the waste and in some cases are higher than the beauty.
It's a mixed bag and there's a lot to do with one of the deal the class Mcgarry share there.
The deal that we did the.
And we negotiated three years ago is not going to be anywhere close to or deals that we've negotiated and the last week.
It's hard to put general turnaround is around the OTT those all renew at different times as well so the.
And the rates there have been going up.
Just as they've been going up and then the PD price, there's a lot of room to grow on both of them.
The headline of the OTT providers are definitely at large.
And they've become a meaningful component of our sub growth at this point.
Great and then lastly, you guys didn't do a call around Quincy.
The public congratulations to you and especially Ralph all of these playing golf right now.
Can you help us think about that.
And the opportunity.
Holiday and grow.
Station group M&A and.
And maybe in thinking about that or talking about that touch on the Supreme Court case, and the UHF discount.
Okay, I'm going to assume Thats from me when you think theres still.
Planning and we still think there's still a lot of patients out there that and smaller groups debt.
That we think would be good fits for gray.
Geographically operationally and culturally.
There, obviously are sound and that would not but we it's a small industry and folks are in this industry are very involved and.
And.
And join efforts is just the example of Pat mentioned on this weekend, the Opry reps and that happens all the time and this business. So we know of the people one of the stations that we would like to own and they obviously are interested in buying it and at some point and hopefully that will happen.
I think it's a fairly safe path of the UHF discount.
We will not survive over the next four years and.
At this point as you know it does not impact us out with the discount we're at 17% with all of the discount were at 24% after Quincy will be of 25%.
So we still have a great.
Out of them.
Room to grow the company without worrying about whether the UHF discount is in place or not and place.
It would appear based on the Obama administration penalty views that are reflected in this administration the UHF discount will go away.
Unclear.
Also raise the cap.
I I don't.
Of those discussions Havent really seem to have started the out there other focuses and ex U.
See today, which obviously split Q2 as we sit here today.
The last question, which is probably the first question and you asked me.
And groups from the court case.
The Supreme Court case.
And we.
We benefited from the 2017.
Deregulation that we.
We spent a lot of time.
Well I mean for and.
And supplying lots of evidence of the FCC that acquiring non big four television stations is not the end of the Republic and we backed that up this past fall with a study by the IAA that show that acquiring non big four stations and need requiring big four stations in our markets result in higher news and more news.
And we've demonstrated again and again and again, but we have some hard data to prove that.
The Supreme Court case, which gray CFC asked the Supreme to take off and endometriosis and member of our generic brief to address our unique experience here of unique from other broadcasters.
And of different perspective.
We were very encouraged by the oral argument and we are encouraged by the briefs.
We have no insight into when the three and where it's going to act other than the Supreme Court almost always issues all of the decisions by the end of June. So I think we'll see a decision by the end of June.
I would caution again now it's a lot of folks think the Supreme Court is going is considering getting rid of all the ownership rules that's not that's not with the floor at the 2017.
FCC deregulation was a very small step.
Allows us to acquire non big four stations outside of the largest market.
The FCC has allowed non big four acquisitions and the largest market since 99 and outside of the largest markets and we'd be a waiver and certain circumstances. So the the 2017 is a very small step of.
Common sense.
It's not going to unleash great.
Station and trading activity at.
At least with respect of gray.
Perhaps the world with others, but we don't see a great opportunity to be swapping away of legacy number one television stations. So that we can pick up of my network affiliate or of Telemundo and some other market.
So again other people may have different views and what the court decision might be and but for us it would mean that.
There may be some additional independent stations off irritation Telemundo affiliated CW affiliates.
Better.
And that might make sense for us to acquirers and we've done from the steadily and quietly for many years.
The waiver process and this just eliminate the need for a waiver process.
So we're encouraged.
But if they can open the floodgate to Q2.
The math of consolidation as I've read so many people predicting.
Thank you so much.
Our next question I think the style.
Of John Geneva, The Wolfe research.
Great. Thank you and can.
Can you guys talk about what youre seeing on the ground from an advertising perspective, meaning it sounds like you're tracking flattish call. It for the last four months or so.
Before any of the Covid comps and.
And with the few categories dark and I think the mark of would've expected more pressure and results from some of the amputation and owners were a bit softer than when you guys are seeing some are you seeing market share gains from lower rated stations, even given your market share of where you are today and so any market share of stats you can share I think it would be helpful and as the weaker categories come back into the market can they.
A tailwind that translates to a few points of growth and I guess finally, you talked about the dollars, but how does your of gambling footprint of luck.
Bob you want to take that one.
Sure Oliver.
The address the.
The gambling issue first and.
First of all of its there's a tremendous upside.
And our view for the entire year, we're already seeing and first quarter, we saw it and fourth quarter as well.
The gambling money and.
And is going to be a significant category.
From this point forward and and.
And currently we're active.
And when you when you talk about it I should add that most people think of fan dual and draft Kings. For example, could you see those all the time, but there are several more players and the market and they are all pretty active and.
And there are active currently and the eight of our states with pretty heavy schedule from first quarter.
For other states that are true, but not live yet, but three of them will impact our markets and we assume that will we.
It will happen yet this year and it could.
It is early the second quarter, you could add those three other states and addition of 14 other stages of the pre filed legislation.
And that potentially we could see those states become active.
And the second half of the year, so even on its own.
The attractive it is.
Pretty robust schedules and.
And our stations are benefiting greatly from that.
With.
With regards to your other questions.
Our market shares.
Our growing we've outperformed and most of our markets.
And of extraordinarily.
The strong sales team sales management, we probably have the.
The opinion of the best sales training program.
And the business and all that together combine has allowed us to and often cases and a lot of markets outperform our market share.
We're already of the market share so.
And we're.
And I can speak for our group and our senior Vice Presidents, who oversees the stations, but they're pretty bullish as the year goes on and I think you're going to see.
More and more of local sales activity and and in our case, we spent a lot of time on direct local new sales development and we're seeing some terrific numbers in that regard.
Okay, and maybe thank you Kevin and one quickly for you on the on the sub count that one 1% decline looks like like an outlier.
Thing.
In terms of relative over or under exposure in the region or with the distributor to call out there.
And.
John.
And we saw a lot of.
A lot of moving a lot of noise within the numbers.
And it's better and no surprise and the public reports kind of which.
Big Mvpds have been shedding a lot of customers over the last year.
And then we saw the folks picking them up.
And these comments, we try to get and try to break through the noise.
And I could pick a date certain because obviously people report differently, but to try to look of that total number of subs and the fourth quarter.
We took the orders outside of the total paid big for subs.
With the pay down in the fourth quarter of 2019 for which we have complete records now.
And we have a good number of records and our estimates on the complete the big four OTT and and Bpd revenues will get and the total sub base year over year from the fourth quarter the fourth quarter of it that was just.
Slightly down.
That's a big improvement from where we what we were looking at earlier in the year.
And we said folks we are going to come back.
They've got jobs, and hotels reopened and bars reopened and sports return and that did that did certainly.
It did seem to occur.
So we're trying and trying to.
The smoothed out the noise and looking at full quarter versus fourth quarter, but I don't mean to say that everyone is kind of moving and locks attitude of the opposite there are some and when.
We look at the top 15 operators I bet you half of them have.
Double digit moving over the course of the year up or down and.
So a lot of noise in there of that shakes out and make it up 1%.
Alright, Thanks, a lot.
Your next question comes from the line of Aaron Watts of Deutsche Bank.
Yes.
Everyone. Thanks for having me on a couple of questions. Let me start with just the advertising question can you talk about what you saw from the auto category and the fourth quarter and maybe how it's starting off the year here.
First quarter second quarter.
So in fourth quarter auto was still down but remember there's a huge amount of noise in October.
The political advertisers and the auto advertisers always love your local news and so on.
Obviously.
And.
And I think the whole quarter is not necessarily indicative of if you look at November it was down about 10% and maybe a little bit softer than that in December and which is still a marked improvement over.
Where it was last April.
So far this year it is still lagging.
I'd say overall for the quarter it's down.
And the pacing and pacing and wishes not necessarily completely indicative of where you end up but the.
Down about 10% per quarter.
January was pretty good.
February was softer.
And March is it still kind of early to see how that breaks.
And it is definitely better than it had been for many quarters last year and it does look like and slowly.
Slowly coming back and and Bob I don't know or Pat I don't know if you want to add something to that.
Yeah, I would I would just add.
The couple of our the advertisers.
Including forward.
One is.
And that's a real bright spot for us and showing some real positive comps and the all the other thing I'd add debt is still enters the new name for Chrysler Jeep Dodge advertising is.
Been dark for it was dark and fourth quarter and really for a considerable amount of time on.
And local spot, but theyre coming back or have come back here and.
The first quarter and most of those dollars are in March but there is some still and the process will be in place. So that's a positive sign to see them back and in play.
Yeah, I would just add.
Still have issues with chip shortages.
Impacted manufacturing and I think once it gets ironed out the supply chain gets I heard that youre going to.
You can see that category and come back.
How much stronger the where it is right now.
Okay, that's really helpful.
Second question, Kevin and I think I'll point to point of view with the.
Renewals that you got done at the end of 2020 and early this year are you comfortable enough yet to get put some goalposts around what net retrans growth could look like over the next few years for you guys.
No not really.
The short answer okay.
Okay.
Let me ask another way I guess with the renewals you've done on the distribution side and then also with your visibility on the affiliate side.
How can you give us anymore.
Color on how to think about margins for Retrans.
The retrans margin will be better this year than last year.
And remember that we had re priced.
And our network contracts at various points in 2019 and the first.
First of January of 'twenty.
January 1st of 2020, all of them had an annual step up and we.
We knew that was coming we predicted it for five years and at the time.
The issue so last year.
It was just as we thought it would be.
This year with so many of the Retrans repriced.
Some of them you know starting last year and all of the cycle net.
And net retrans margins should be better.
And I would say no.
Without quantifying our net Retrans and certainly will grow this year over last year and absolute dollars and that's what we care about you know we don't not running the business the margins were running for.
Net retrans.
It will grow over time some years, it's going to be on the challenge that with 2020 of this year's net retrans will be higher than.
And last year for sure.
Okay got it thanks for that and last last question from me.
Just with the acceleration and streaming service adoption.
Been plenty of written on the pressure of that Prime time viewership has been on <unk> and I.
The eight that the last year hasnt been a normalized template for per viewership, but assuming continued pressure for primetime audiences Oh.
On broadcast.
How do you think about that impacting your business on the local level, both from an audience perspective, as well as kind of advertising coming in and perception on that.
Yes, so it's Pat.
Look it's not of great trend and the other hand.
And it's a trend that's been sort of out there for a number of years and.
At this point.
Prime time in terms of the revenue it represents to our company is.
The.
I think I've got it.
Some kind of range or point of and it's below 20% I think or so.
So it is not what it used to be it's as important as it used to be and there's nowhere near.
The.
The.
The amount of money or kind of percentage basis.
Our local news represents so Kevin you might have some out of there.
Yes, we are.
And the exact numbers of 2019 2020.
And.
Revenue by the time period network Prime time.
The 15 to 16.
And the 16%.
Of our total revenue so 50% of our revenue comes from local news.
And you're out again in 2019 2020 network primetime of 16%.
And kind of I guess, just as a follow up.
I appreciate that prime is not driving your revenue base, but as you think about your local news viewership and other local content.
And the ratings has been holding up there considerably better.
And what we've seen at the at the Prime time time slots I guess I'm, just trying to think about kind of the overflow of effect on your local content.
Yes.
Bob do you and talk about ratings.
Yes actually.
The old days of how much prime had an impact of local news does not really.
And issue any more local news tenths of stand on its own and so really the lead and the lead out factor.
And that was certainly out of.
The term used much more prominently many years ago is really not an issue today. So the my.
My point is the local news can stand on its own so and then.
Certainly not coming doors six o'clock news are 10 o'clock news out of prime.
And the.
Prime access or anything like that and so just the bottom line is that the prime does not have much impact on our local news viewership.
Yeah, I would just add that we're not as part of local.
No.
But I would just add the local jobs out of the local news and 2020 had an extraordinarily strong year for a lot of good reason.
We we found younger viewers actually discovering the local news and viewing levels of moderated.
It's still still very very strong.
Okay. Thanks again for the time.
Your next question comes from the line of Steven Cahall of Wells Fargo.
Thanks, maybe just start off and you made some really interesting comments about Q2 being back to those 2019 core level. Then you talked about some really strong growth in gaming or of gambling. So as we think about the mix as you get back to 2019 levels. It sounds like sports betting others there'll be a much.
Bigger percentage are there any sectors that you think will be a smaller percentage going forward or anything else like gambling that you think is also kind of kind of growing a lot more.
Yeah, So I.
I think the legal category.
For a long time, it's been growing and with the continuing to see.
There are the health category, which we have a sort of a companywide focus on and we have a pulse team.
<unk> continues to show pretty solid growth.
I think that look I think right now as we talked about auto.
The soft for.
And there's a lack of cars and and.
Yeah issues and the supply chain of course.
<unk>.
Availability issue. So I think that you know I think once the automotive comes back and.
It will that's going to put even more pressure out there so yes.
And that's encouraging.
Yeah.
And then Jim.
I think before you've talked about maybe putting a buyback structure in place that can be automatic during blackout periods are on a grid system.
Given the Quincy deal will you be forgoing that so that you are just kind of focus on the dividend and and deleveraging through that transaction.
No.
And.
Great.
And then maybe a last one.
The last night, Paramount plus talks about a lighter tier the doesn't include local station content and Peacock and he's done some of that with NBC and those are really obviously big constituents sort of partners of yours. How do you think about the evolution to streaming and how to make sure that you're really important local station content is <unk>.
<unk> and and a lot of those services going forward. Thank you.
And as the virtual we can't.
You can't point to someone in the room and tell them the answer the question. So.
And I apologize for that.
The the.
And the Paramount news as we know of as much about it is as you do so where we need to we have a lot of questions and.
We'll learn and amicable and more.
And as time goes on but we don't know enough about it we.
We are in terms of streaming where and the big streaming packages obviously.
In terms of the local news.
People can get local news on any device currently obviously part of view it as well as our local websites and our station apps.
And so we're there.
Whether we need a local news and.
And the packaging and there's obviously no and there's no shortage of streaming packages and streaming platforms at this point.
It's a.
We're looking at some of them and some will be of part of and some of them we won't.
And we will be good to be part of it and some of which who are part of and some we don't really need to be of part of so it's a mixed bag.
It's just we keep.
Every day, it seems and there's another streaming package the whole growth, obviously getting a lot more complicated and we need to be and some of them and we don't need to be and others, but where what exactly the paramount plus means to us.
The news came.
Came out after.
The market and closed last night, and we've got to have a conversation with the network and and I know all of the broadcasters and looking for more information from CBS on that.
Yep.
Thank you.
And again.
Our next question comes from the line of Jim Goss of Barrington Research.
Oh, Thanks, a couple of the first with regard to your capital allocation priorities and I Wonder if you could talk a little more about them right now and the wake of your the resumption of a dividend for the first time and more than a decade and the no is the new.
Acquisition of the country stations and.
And also with the unrelated basis with currency.
The $925 million.
Purchase price and it looks like you're adding nine stations. The divesting of about six is there any guidance you can give in terms of what the net purchase price might be.
No we have no guidance on what debt and it is Jim I think you can you understand why we're certainly not at the negotiating in public and potential with the potential divestiture buyers.
When the contracts are signed up and and done.
Just like we did with the.
Other divestitures in the past and other transactions.
And we'll we'll let everybody know where where that the net number of plants.
As far as capital allocation goes.
First and foremost look at the free cash flow generation of the company.
There is ample of room.
And now.
And a continued to return to shareholders in part with the reinstatement of the dividend starting this quarter.
Hilton they clear a couple of minutes ago, there will from time to time the stock buyback, we will continue to reduce our leverage over time and make very clear.
And many many calls that if a good opportunity for a station or a group of stations that fit our criteria and become available.
We will always take a look and we will always be interested whether we transact or not.
It depends on the facts and circumstances at that point in time, but I think our allocation will be a mix because our cash flows now are large enough and and.
Actually out of two year blended basis stable enough debt, we have the luxury of being able to do.
Our mix of of the allocation rather than having focused primarily on delevering of over the past several years.
Okay and there isn't.
And let me remind just one thing to that I mean really from the board so calling the discussion yesterday I mean, it was pretty clear and the use of crochet.
And walk and Chew gum at the same time alright.
I had probably been the highest one about reinstating the dividend because we had focused and I have frequently said that our BC.
And besides delivering post the acquisitions that growing the couple of things.
Corey.
Two items.
Extremely high pool worsening, but we truly believe that we can do both I chimed in and to a previous question with regard to our stock buybacks.
And during blackout periods, we have that in place at a certain price level I hope, we never get to that price level again.
Because we are.
No.
And much better company one of the things that the board considered and but I certainly want to tout.
And that this management team is now responsible for a company with the finest balance sheet.
The final group of assets and the highest free cash flow generating capacity.
That we had ever ever had and I've been with the company since 1993.
And so.
Debt.
Net free cash flow capacity is going to give us the ability to do a lot of things opportunistically and otherwise, but this dividend is important we hope that as we continue.
The run lean and mean.
That will be able to increase the dividend.
And then as we look at.
And relative weaknesses, we will step into the market and and.
And buyback stock if we have.
If it begins to fall excessively.
I will tell you guys and this is just sort of in the side.
Candidly Joan.
At this time of about a year ago and made a comment during the Q&A session.
And Harry adjusted went to the new Shack picked up on it.
And that was during the pandemic and COVID-19 broadcast stocks, where the perfect Safe Haven.
And that's proven to be true.
At the time Gray was and the Nines next door was and the 14th the fifties and techno was and the nines and.
And you can see what the course of the pandemic has done per our stock prices.
We have a heck of a business, we're going to be able to handle all of different pieces of it.
Yes.
Okay.
Thank you and one other thing then.
Yeah and clearly.
Local news and other local programming as the most profitable thing and the local broadcasters can do in terms of owning your own content I Wonder. If you feel you have more room to add additional programming right now of the night, you might be able to take advantage of them that way and.
And how that might be impacted by the tremendous surge and additional content availability with all of the new streaming services.
Yeah.
It's Pat.
And I want to make sure I understand your question. So I think look we will add.
Local news.
And every opportunity.
And whether it's of a recent acquisition of workstations, we've had for a long time.
Where are we where are we and local news.
It's a better service to our community and candidly of better business.
So I.
And I hope that.
Answers your question.
And you suggest was the question around how we're distributing and local news on the OTT platforms.
And I know it was more of that.
And if to the extent of you from a rip and replace program and you have to.
Pay of syndication fee for.
And the and replace and replace it with something and create on your own and you own all of the all of the content or all of the AD spots that tends to be the most profitable from and the local broadcast we could do and I wonder if theres more room room for more of that or is that the is there a more of a challenge because of the abundance of program and thats becoming available.
And.
No I would say that.
There is room to do more local programming and we will do and.
We've been going down that path for some time now and that's going to continue. So I think you could you could plan on seeing more not less local programming on the gray stations.
If I could jump in and this is Bob.
Further answer that question, we've actually eliminated quite of bit of syndicated programming over the last of our two year period and saved a substantial amount of money and replace it in most cases with local news and and in fact, we have a couple of our markets currently with no syndicated program and whatsoever.
And the substantially larger markets debt.
Relied mostly on local news, so something we believed and for a long time and.
And certainly any time, we get that opportunity to add local news.
We tried to do that.
Okay. Thank you.
Your next question comes from the line of Michael <unk> of Noble capital markets.
Thank you thanks for taking the questions and first of all congratulations on your quarter and congratulations on Quincy.
Regarding Quincy, you indicated that they're going to be $23 million and synergies and I was wondering can you break that up between revenue and cost synergies and also are you expecting that and your first year of operations or the or is this multiple years.
First of all when we when we talk about synergies we don't we don't we.
And we don't include revenue synergies other than whatever our.
Retrans uplift is given our contractual rights.
The 23 million and Quincy is roughly a third of re.
Retrans uplift roughly a third.
The other contractual advantages, we bring to the table and roughly a third of elimination of.
Duplicate costs.
So it's a nice mixture.
And the way we the way we have consistently.
Defined a synergy is a.
Our fully annualized 12 month amount.
And that the.
The synergy can be achieved and implemented sometime within the first year, so to say that a little differently. If you can if you can achieve the synergies day, one and then of full 12 months, obviously of crews who are benefit.
We achieved that synergy and day.
<unk> hundred 64, we will still score as of synergy of the full 12 month annualized amount because we weren't able to put it into effect within the first year.
Perfect. Thanks for that color and then as the company has obviously played and smaller markets and you're just brilliantly executed.
And now that you're reaching 25%. It may indicate that you need to move into a larger markets and and as you see the television industry consolidate kind of have you changed your thoughts on where gray plants to position itself and the industry. What is the limit in terms of the size of markets that you might consider.
And is it important for the company to reach that 39% of ownership cap and how urgent is debt.
And you are achieving that target to get there.
And so Michael this is Kevin.
We have not been buying the small market stations, because we like small market stations that we've been buying we're buying high quality television stations most of them happened to be and midsize and small markets, because that's where the opportunity set has been and the top.
The 50 markets. They are less than five television stations that are ranked number one and number two that are not already owned by network or one of the larger rotors like Hurst.
Attack now.
And the market's 100 to 210, there are still a very large number.
There's the sizable number of television stations and are not owned by network or one of the large group owners that meet our requirements the big of number one or try and number two.
We have participated in every single television option the bandwidth of the company for nine years now.
Of all of the television station and that's the number one number two tests.
Regardless of the market size, we just simply were outbid.
Patients and larger markets like San Diego like Las Vegas, who came and the market and while we certainly could of purchase though with the way we weren't afraid of the market size.
Rather our priority, we talked and Hilton talked about our priority of the paying debt down and managing the balance sheet. It was more important and adding one more television station and so while we certainly regret not being able to find the great television stations that were available.
And we needed to put our.
Our emphasis was on the balance sheet person and we repurchase of what we can afford and if we can't then we move on and it's not there is no must have patients. So.
The first one to correct the idea of debt.
Backstage and the midsize and small markets, because that's where the opportunity set of that.
And as we look out again and there are very few opportunities and large market to own television stations and meet our requirements. If they become available we will participate if theres an opportunity for us.
By more television stations.
And that meet our requirements.
And we absolutely are going to look at it and we've said that many times nothing has changed that and we're going to look at it in terms of what we can what we can afford and what's in the best long term interest of the company.
And so there is no magic market size and there's no magic.
Cap or ceiling of core and which we look of the things, we look and number one and strong number two television stations.
I think we will.
And get closer to the cap over the next couple of years.
If the UHF discount goes away and patient groups come on the market that would allow us to get there.
And there are two pretty important requirement.
<unk> offered for sale, there, it's going to be a long slog to get to 39% and.
Become available there.
And we can strike a deal with and it makes sense for us and we could be at the cap pretty quickly, but we just we can't control of what comes and the market.
So that's that's part of the gating issue and then of course, the gravity of the UHF discount the discount goes away.
And of our competitors for those stations and one would not be able to participate and those those auction where the sales processes.
No.
And do you want to just kind of hear obviously from a broadcast.
Peers can continue to consolidate and different goes away.
The smaller number of folks that can and can compete for lots and lots of patients.
Thanks for that and I'm sorry, the question of yes, It did and thanks for the clarification of appreciate that that's all I have thank you, okay because of all of them.
Your next question comes from the line of Alan Gould of loop capital.
Thanks for taking the question and I've got two please.
And we see what's happening with the big Internet platform, starting to pay for the newspaper content.
Do you think there's a possibility that they will also start paying for broadcast news content and how much of your of broadcast news content finds its way onto the large internet platforms and then the second question is with respect to the reverse comp.
Based on your guidance for first quarter of it looks like it's up 20% year over year that seems like more than just the escalator. So I was wondering if I'm missing something and there. Thank you.
No.
Yeah.
And on reverse comp.
We.
We had a large step up on and reverse on January one this year and last year.
Last year, we did not move the.
The top number the growth.
The much and so we were.
Our margin.
With higher and our reverse comp.
It is not as good of last year as it has been and inquire of years and that was a gain of function of redoing all of our all of our network contract from 2014.
With five year terms.
This year was going to be a better year and I think you'll see coming out of particular margin.
I think you'll see a better.
The reverse.
Okay, and better Retrans margin this year.
And of that reason.
We're in the process of renewing so many contracts that's going to drive the growth number up again.
And again, you saw 15% this quarter on the year over year basis.
And that's going to continue through the year.
And on your first question and sort of attack.
Yeah sure. So look we don't we don't we can't say whether.
Our stations will benefit from the move to have the large platforms begin paying as they as they are in Australia.
I think there is a chance of that happening and I think and general supporting the originators of.
Content.
Which in many instances of local television stations.
As a positive development and and so.
Will it happen not sure which.
Certainly hope it does.
I can't say at this point.
Okay, Thanks, Craig and thanks for the answers.
At this time there are no further questions I will now return the call the helpful. Hilton Howell for any additional or closing comments.
Well, thank you and maybe on mute.
And it does appear if he has disconnected.
And we just want to thank everybody for participating today and.
Your the rest of the day. Thank you.
Yeah.
Thank you for participating and the Gray television fourth quarter 2020 earnings Conference call you may now disconnect.
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