Q3 2022 Cumulus Media Inc Earnings Call
[music].
Good morning, ladies and gentlemen, welcome to today's Cumulus Media quarterly earnings Conference call I'll now turn it over to Collin Jones Executive Vice President of strategy and development. Sir you May. Please go ahead.
Thank you operator, welcome everyone to our third quarter 2022 earnings Conference call I'm joined today by our President and CEO , Mary Berner, and our CFO Frank Lopez Balboa before we start. Please note that certain statements in today's press release and discussed on this call may constitute forward looking statements under federal Securities laws.
Actual results may differ materially from the results expressed or implied in forward looking statements.
These statements are based on management's current assessments and assumptions and they're subject to a number of risks and uncertainties. In addition, we will also use certain non-GAAP financial measures. We believe the supplementary information is useful to investors should not be considered superior to the measures presented in accordance with GAAP.
Full description of these risks as well as financial reconciliations to non-GAAP terms are in our press release and SEC filings. The press release can be found in the Investor Relations portion of our website and our Form 10-Q was also filed with the SEC shortly.
We also posted a Q3 investor update to our website, which we encourage you to download if you have it already.
A recording of today's call will be available for about a month via link on our website and with that I'll now turn it over to our president and CEO Mary Berner Mary.
Thanks, Colin and good morning, everyone.
Despite a challenging market environment consistent execution of our strategic plan has put us in an enviable position that will allow us to not only effectively manage through the continuing headwinds, but also take advantage of opportunities that may arise.
And in the context of this environment, our third quarter results reflect the benefits of that execution, although total revenue driven by macro weakness declined 2%, we increased EBITDA, 2% with expanded margins digital revenue bright spot grew 5%, we generated $24 million of cash from.
We reduced net leverage to three seven times and we returned additional capital to shareholders through open market share buybacks.
Looking ahead, we are confident that we will maximize the impact of our multi pronged capital allocation approach and as we continue to rigorously execute our business plan drive shareholder value.
To remind you. Our plan consists of the evolution from a radio first focus to a multi platform audio first content strategy, including the development and growth of multiple profitable digital businesses.
Significant and continuing reduction of our cost base, which enhances operating leverage profitability and cash flow generation.
Hi, Roy and internal investments, a disciplined approach to M&A and the generation of incremental cash through noncore asset monetization.
And the creation of a strong balance sheet with best among peers net leverage and liquidity to support a return of capital in that strategy that maximizes shareholder returns.
And as I said Q3 is yet again, another example of the value and impact of this plan.
We highlighted on our last call that the market environment, particularly for national advertising has been weak.
As we mentioned starting in late Q2 national advertisers reduced marketing to mitigate the headwinds they faced from inflationary pressures persistent supply chain issues finance market turmoil and overall recession risk.
That weakness in national advertising demand that we experienced affected all of our national channels, including network national spot in podcasting throughout Q3.
On a relative basis, our local businesses have had has held up better outperforming national though notably we did see some of that gap start to narrow as local did not outperform national in Q3 to the extent that it did in Q2.
Collectively these macroeconomic pressures resulted in broadcast revenue declines of approximately 5% in the quarter, which was the major driver of the 2% decline in total revenue.
That said through the execution of our audio first strategy. We are successfully expanding our presence in growth areas of the audio ecosystem.
<unk> increases in both digital audiences and digital revenue.
Organizationally, we've undertaken a number of efforts to support this strategy.
And programming, we've restructured it aligns compensation to Incent, our team to grow audiences in the aggregate.
In sales, we executed numerous compensation training and recruitment tactics to both help and motivate our entire sales force to modest monetize our assets across platforms, regardless of distribution channel.
Collectively these efforts resulted in 5% year over year revenue growth in the quarter across our three digital businesses streaming podcast Sting and digital marketing services with that growth, helping to offset lower broadcast revenue performance in aggregate dip digital revenue now represents approximately 15 <unk>.
<unk> of total revenue.
We delivered streaming revenue growth of 11% year over year for the quarter as our focus on continuing to deepen and increase engagement with current listeners and bringing new listeners to our content to create sellable impressions that we monetize through local national network and programmatic AD channels is paying off.
Do this through developing new products, increasing distribution outlets for existing content and expanding broadcast partnerships with digital extensions.
From a new product perspective, we saw meaningful increases in audience engagement with the new sports apps that we were rolled out.
That we were rolled out last quarter for iconic local radio brands like the ticket in Dallas can be are in San Francisco and the zone in Nashville.
Downloads of these apps were up exponentially in Q3, driven by increased demand for our content as the NFL season kicked off.
We also increased distribution of our streams through expanded renewals this quarter with tuned in and I hurt radio and as we mentioned on our last call. We expanded our NFL broadcast partnership by securing the digital audio rights and now with the NFL and Westwood one we are truly able to serve NFL fans whenever and wherever.
They want to listen.
With the availability of the NFL on the Westwood one stream, we've been able to create new exclusive opportunities for our advertising partners and our flagship streaming sponsor is seeing extraordinary levels of brand equity lift from its prominent pre roll ads. We're.
We're looking forward to a strong second half of the season as we March towards the playoffs and Super Bowl.
Moving to podcast thing, we achieved strong download growth in the quarter up 36% year over year, which puts us on a run rate to nearly $1 5 billion downloads annually or.
Our primary strategy is to serve as a monetization distribution and promotional engine for large national national personality, driven podcasts, mostly through partnership and also to leverage our terrific local talent and brands to develop and monetize local podcasts.
Investments we've made listeners are now able to hear our local talent on both a time shifted basis, mostly through our owned apps and websites as well as in a bespoke podcasts.
On the National side, we've increased impressions through the growth of existing partnerships and by entering into new partnerships with established podcast content creators.
A key focus has been the expansion into video companions to audio podcast or Vodcasting with Youtube now a top three platform for podcast consumption.
Spanning our video capabilities is a critical value enhancing strategy to help podcasts talent reach incremental at attractive audiences and we're taking advantage of this opportunity with many of our partners.
The massive download growth that were seeing reflects the impact of those efforts. However, while our listenership is growing robustly sincerely all of the advertisers currently in this space are national in nature.
<unk> revenues have not been immune to the pullback in national advertising as a result, even though we saw strong revenue growth in our local podcasts business. It was off a small base and not sufficient to offset the market driven softness in our national podcast aggregate podcasts revenue was down 4%, but.
We remain bullish on the prospects for the business given the strong underlying audience trends.
And finally in Q3 digital marketing services grew 12% year over year, driven by multi market sales new product additions and strong sales execution.
Our multi market sales strategy, which is tracking up over 40% year over year facilitates the ability of larger clients to place coordinated digital and broadcast campaigns across cities and states. Additionally, this year, we launched our Cumulus boost product, which is an integrated solution for smbs that enhances their <unk>.
<unk> performance reputation management as well as overall productivity.
We're seeing good traction and boost customer sign ups and look forward to speaking more about the growth of this recurring monthly revenue stream.
Overall, our ability to execute as a one stop shop provider at scale differentiate differentiates us from competitors and the very fragmented built $15 billion total addressable market for digital marketing services.
In Q3 as per our plan, we continued to reduce costs.
Through continued permit permanent reductions in our fixed cost back base, we're still on track to be more than $75 million below the 2019 baseline we increased EBITDA by 2% and grew EBITDA margin by 70 basis points to 20%.
As we monitor the increasingly tough market climate throughout the quarter, we implemented additional cost reductions with a keen focus on non revenue impacting our actions.
As I've mentioned in the past to those has historically been a company that's been very lean on the cost side, but we have still been able to find ways to do business differently to drive cost reductions and more operating leverage. This year. For example, we've taken on 28 facility consolidations or reductions, which have yielded some cost benefit this year.
<unk> result, and more in 2023.
With regard to capital allocation, we have always been prudent stewards of our cash as we have focused primarily on investing in high ROI internal initiatives and partnerships as well as maintaining a disciplined approach to M&A for instance, this year, we've invested with partners and the capabilities we needed.
To bring to bring Cumulus boost which I just mentioned to market.
Additionally for our podcast business, we've invested in the development and implementation.
Of technology to enhance our sales effectiveness yield management and access to programmatic podcast AD channels and over time, our disciplined approach to M&A has resulted in a high success rate with acquisitions and swaps completed at highly attractive multiples.
Lastly, we have aggressively monetize our non core assets over the years, such as land and towers and we continue to look for opportunities to generate value from our remaining non core assets.
All of these items have helped bolster our already best among peers balance sheet during.
During the quarter, we reduced our net leverage to three seven times the lowest it's been in more than a decade, while still returning $3 9 million of capital to shareholders via share repurchases and retiring $2 7 million of senior notes at a discount.
We ended the quarter with $118 million of cash and with our Undrawn ABL facility, we have more than $200 million of liquidity, providing significant dry powder with which to support our multi pronged capital allocation strategy.
Looking ahead simply put we are in the enviable position, where we have flexibility with respect to the choices that we can make to mitigate the impact of further economic slowdown while still being strategic about the actions, we take to accelerate longer term growth.
As I mentioned earlier, the macro headwinds headwinds have become more challenging than expected on our last call as we sit here today and look at Q4 port pacing the national advertising pressures. We saw through Q3 has stabilized at or near those lower levels also similar to Q3 local spot and did.
Pacing continues to be better than national spot and network in aggregate. We are currently pacing down low to mid single digits inclusive of political given.
Given the timing of this call we don't have a full read on political spending since there is still more than a week left for political dollars to come in and the prospect of Runoffs remains unclear. However, so far in Q4, the prioritization of political spending has been more heavily weighted to demographics and population areas.
Which don't align as well with our portfolio as they have in the past.
Such we're trending toward a political finished slightly below 2018 levels for the year.
We told you on our last call that based on our pace and visibility at that time, we were on trend to the low end of our original EBITDA guidance range of $1 $75 million to $200 million.
Our trailing 12 month EBITDA grew in Q3 to $166 5 million, but given the market backdrop, achieving the low end of that range is now aspirational as such we are revising full year EBITDA guidance to a range of $1 $60 million to $170 million.
This is of course wider than we would have normally provided with about two months left to go in the quarter. However, the macro pressures that all AD based media companies are feeling have resulted in a lack of visibility that makes them more narrow range of practical at this time with that I will now turn the call over to Frank to go through the numbers in more detail.
Frank.
Thank you Mary as Mary mentioned revenue in Q3 was down 2% driven primarily by ongoing weakness from national advertisers as well as lower activity from local advertisers, which in aggregate.
It really impacted broadcast revenue, partially offset by continued growth in our digital businesses.
We're a little bit more color on the broadcast revenue lines with <unk>.
Drop in National advertising revenue began in late Q2 and continued through Q3.
National advertising is reflected in our network revenue line with a smaller portion of our spot broadcast revenue line and also international podcasting business.
Local spot revenue outperformed in Q3 versus national but to a lesser extent kind of did in Q2.
During the quarter, we also had $4 5 million of political revenue.
Bringing year to date political revenue to $10 1 million versus a year to date political revenue in 2018 of $8 7 million.
As a reminder, the lion's share of political dollars occur in the fourth quarter.
While we were ahead versus 2018.
Through September and despite strong political advertising environment and strong street overlap with the markets. We operate in much of the spending in the most hardly contested political races has been skewed to demographics and population areas, which are less well match with our station footprint.
Having said that we could still have some upside from political election spending they've run offs occur.
Turning to digital we continue to see strong growth in our digital marketing services and streaming businesses.
Which grew 12% and 11% respectively.
Our podcast business experienced revenue declines of 4% driven by pullback in national advertising.
With respect to category performance home products was our best performing category with a percentage and dollar growth basis.
We continue to see growth in entertainment General services and professional services.
Automotive after declining 5% in Q2 year over year actually grew in Q3 year over year, while theyre still down nearly 40% from 2019 that is off the lows were down more than 50%.
Financial was our weakest category from a dollar standpoint, driven by insurance and mortgage subcategories.
From a percentage standpoint sports betting was the weakest category driven.
Driven by both overall reductions of spend by sports betting companies as well as the impact of the wind that comparison for us specifically.
We also expect to win back comparison to have a similar negative impact on our Q4 numbers.
Moving to expenses total expenses in the quarter decreased by approximately $5 million year over year.
Driven by benefits from our continued cost reduction actions as well as lower variable costs from lower revenue.
These cost reductions, which more than offset ongoing insertion of inflationary increases from items like personnel and insurance costs helped us drive growth in EBITDA for the quarter of 2% year over year to $46 6 million.
Now to the balance sheet and cash flow, we generated $24 million of cash from operations during the quarter, bringing year to date cash from operations was $55 million and resulting in a cash balance of $118 million at quarter end.
Year to date spend on Capex has been $18 6 million and we continue to anticipate we will spend approximately $30 million for the full year 2022.
During the quarter, we retired $2 $7 million of senior notes at a discount.
Bringing year to date debt pay down to $65 1 million.
This pay down results in $3 5 million of cash interest expense savings on a full year run rate basis.
We ended the quarter with net leverage of three seven times down from three eight times at the end of the previous quarter as.
As importantly, we have continued to delever the balance sheet.
Still returning capital to shareholders in the form of share repurchases of $3 9 million this past quarter.
Year to date, we have spent $28 9 million on share repurchases against our $50 million Board authorization.
Since the beginning of her.
Share repurchase program, we have retired approximately $2 1 million shares.
Approximately 10% of our shares outstanding as of December 31, 2021.
Liquidity, which consists of cash and availability under our Undrawn ABL facility at the end of the quarter was $213 million.
As Mary mentioned revenue is currently pacing down low to mid single digits inclusive of political for Q4.
For the full year, we are revising EBITDA guidance to $160 million to $170 million.
With the new EBITDA guidance, we expect to finish the year slightly above three five times net leverage however, our net leverage target of below three five times remains unchanged.
We can now open the line for questions operator.
Absolutely.
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The first question comes from the line of Michael Kaplinsky with Noble capital markets. You May proceed.
Thank you thanks for taking my questions.
We look to the possibility of heading into an economic downturn I was wondering if you can just talk a little bit about capital allocation.
Do you plan to build cash instead of.
Maybe buying back stock occurred even though the.
Stock price at current levels.
Quite depressed.
Wondering if you can give us a little bit of outlook on what your thoughts are.
Building cash as we kind of look at a recession coming.
Michael Good morning, it's Frank I'll take that.
First we start off in the way we look at it is we have a terrific amount of liquidity on the balance sheet.
Between cash and Undrawn.
<unk> all availability.
If you remember through Covid, we actually generated positive cash from operations, so going into economic weakness.
Potential economic weakness in the recession.
We're in a very good position.
With regard to our capital allocation.
What I can say at this point, we'll continue to monitor the markets be opportunistic we're also going through our budgeting for next year.
And we will have more to say as we get into the end of the year and our <unk>.
Quarter call in February .
And there are some other.
Broadcasters out there that are struggling and I was just wondering if there is any increased interest in M&A activity anything that youre seeing out there that might be of interest to you.
Well as Mary mentioned, we're given our liquidity and our strong balance sheet, we're really in an excellent position to be able to look at opportunities as they arise.
Having said that I do think.
And what we're seeing right now most companies are assessing not only the fourth quarter, but the impact of a potential recession.
And there is nothing on the horizon, which is significant.
But.
As I have said in the past we will look at everything that makes sense from a strategic perspective perspective.
Fortunately, we have the liquidity and availability.
Take advantage of those opportunities as they arise.
And then you were talking about weak national advertising was just wondering is there any particular category.
That's causing weakness or is it just broad based.
Yeah, I can take that it's pretty broad based it's across a national.
Spot network podcasts.
But it seems to have hit a low and stabilized with pod casting appears to be having rebounded fourth quarter. So and we looked a lot of category trends and we looked at it.
Way and its really its just across the board.
Gotcha. Thank you.
And if I could ask Oh go ahead.
Let me add a little bit more color.
Financials as we mentioned in our prepared remarks are particularly weak, particularly when you think about the mortgage sector.
Insurance companies.
We did mentioned this just as a reminder.
Last year, we did.
Announcer.
Our partnership with <unk>, which could generate nice dollars for us in the third quarter and the fourth quarter.
Which are national.
And thats that makes it a difficult comp.
And again as a reminder.
We did unwind that partnership in the first quarter of this year.
And as part of that settlement payment in essence accelerated dollars that we would have otherwise earned this year through the partnership. So I just wanted to give you that additional color.
Thanks, Frank and can you tell me what was the wind but.
Contributed last year.
Well, we said in the first quarter earnings call was first quarter revenues and when that was.
In the low to mid single.
Did your dollars.
And then the settlement was a pull forward of roughly $5 million or so of revenues that we otherwise would've seemed through the rest of the year.
Gotcha, so in aggregate pretty pretty close to a double digit number.
Mhm, Okay, great. Thank you I appreciate it.
Thank you.
The next question comes from the line of Aaron Watts with Deutsche Bank.
Aaron Your line is now open.
Alright, Thanks for having me on just a couple questions.
But one housekeeping.
Housekeeping.
Can you remind me where we stand today.
With regards to what.
What percentage of national.
Spot revenue versus local spot revenue.
National is between 20%, 25% of our local spot line is as per the press release.
And obviously, it's a 100% of our network virtually 100% of our network advertising revenues.
Okay.
And then.
On your guidance I want to make sure I understand the underlying theme going into down low to mid single married when you say massive stadium.
<unk> and <unk>.
Fourth quarter does that imply local has softened comparatively more.
And I guess, if thats the case.
Sure.
Can you just flesh out again, what what areas of local are you feeling that a bit more now.
Aaron I'll take that so.
The way to think about it is national declined.
Fairly dramatically in the second quarter accelerated in the third quarter.
Stabilizing at lower levels, but down.
Down very significantly from last year.
The local spot business increased 8%.
In the second quarter.
Was slower in the third quarter and continues to be a little bit slower on pace as compared to the previous quarters and that shouldnt be surprising because as you read.
Read about.
Some of our larger companies in the media sector, who are having softer advertising trends there seems to be some pressure at least in the near term.
Small and local businesses.
And so.
That worked through in the guidance is since a large component of our revenues.
That comes from our local spot business instead of pattern contribution versus last year.
To the extent it stays flatter declines a little bit that impacts the the pacing for the overall company perspective, which of course is offset by the digital growth that we continue to have in our business. So hopefully that clarifies it a bit.
Yes, that's good.
And then lastly for me.
With your podcast revenue down in the core in the third quarter can you highlight a bit more of the area of digital that are showing strength.
And is that continuing into the fourth quarter and then Frank maybe just.
What the margins are you seeing on your digital revenues now and in your latest outlook on where those margins can trend over the near and medium term.
I can take the beginning of that question.
So.
As we said in the prepared remarks, we continue to say see growth in both the digital marketing services.
As well as the streaming business and we expect and are seeing continued growth there.
In terms of podcasts.
That was almost entirely almost entirely a national advertising business.
So.
That it was impacted very directly by the weak environment.
And.
We did see we saw.
Saw cancellations and pod testing and just lower demand in general.
But as we said with that business. It seems to have stabilized from a revenue perspective.
And theres been a lot of it was we.
Mentioned, 36% download growth.
Is good growth, so we're pretty bullish about that business going forward.
The digital marketing services to give you more color the new product boost which we'll talk about in subsequent calls.
<unk>.
Tracking pretty well, we just launched it just a couple of months ago and it's.
It's designed to complement the advertising campaign products that we've that have already been central to our digital marketing services growth over the past few years.
It is a full suite of integrated presence products and that ranges from listings to listings to reputation management and website development, where it makes that important is that.
It's it's a it's a sticky product because it's a subscription based product.
We'll report on that and so I would say that we're seeing growth continue to see growth in digital and are bullish on that.
And as I mentioned with regard to.
50% of our revenue and growing.
With respect to margins.
Before I talk about margins.
Anticipating a question that you may ask.
From our digital businesses are roughly a third a third a third in terms of revenue contribution at this point.
And that balance may change from quarter to quarter, depending on the organic growth with each of the businesses.
The margins continue to be the contribution margins continue to be healthy for all these businesses and the highest contribution margin comes from our screening business.
And that contribution margin.
It was very similar to our.
Our local spot terrestrial radio business, it's a little bit lower.
But pretty pretty similar.
Digital marketing services contribution margins.
Or in the mid <unk>.
Is roughly 50% plus or minus.
And then on Podcasting center since our business model.
Is it really a rev share model.
That has a lower lower margins and thats in the range of 20% 25%.
Contribution basis.
Okay, Great I appreciate it thank you.
Thank you.
The next question comes from the line of Dan <unk> with B Riley.
Dan Your line is now open.
Yeah. Good morning, guys I appreciate you taking the question. So first one for me higher level question, just looking at spot broadcast radio in the quarter.
X political down about 25% versus 2019 network about 35% versus 2019.
Understanding a lot of this is the macro challenges the pullback in AD spend, especially on the national side, but just given the gap between where we are now where we were then.
There's a lot of skepticism.
Among investors.
Well ever get back to 2019 levels on our broadcast radio.
Maybe if you could just talk about where we sit today your longer term expectations in that regard to close that gap, whether you believe there's.
Then some sort of permanent impairment in broadcast radio versus pre pandemic levels.
There has been may be possible to quantify that in any way.
I'll take that Dan.
That's a good question and difficult one to answer to come up with a long term forecast.
The business.
I will say, though.
Earlier this year, we were talking about let's see where we get to the end of the year.
In terms of from a performance perspective to compare.
At the end of the year performance versus 2019, two to answer that question.
Unfortunately, we saw the economic weakness hit us starting to hit us in the second quarter at a time that we had so many categories have never recovered from supply chain issues and labor issues.
I did mentioned about automotive, which is still down 40%.
From 2019.
Our belief is that that's not an issue with radio it was a supply chain issue.
And it just didn't come back and then we got into economic weakness.
So it's too early.
To say, whether or not there's been a permanent change.
I don't think so there are some organic challenges in the listenership from the top line of the business as we all know.
But that's being offset by our digital growth business. The key thing I would have you focus on is the improved operating leverage so we've been able to deliver.
To deliver for the company with our cost cuts.
So that will offset some of the decline in revenues versus 2019.
I think it remains to be seen until we come out of the all clear economic weakness.
What that comparison as 2019, if there has been a permanent change or not but we're still very bullish on the future and.
Again focus on our digital growth in addition to our terrestrial radio business to get back to those type of EBITDA levels.
Great. Thanks, Greg and then one other one for me in the past and on the call today.
You talked about the opportunity.
Disciplined M&A.
The cost of capital has come up dramatically in the last couple of quarters, just given that the likelihood of M&A over.
Over the next year or so changed in your view I'm sure like if something came along that was a slam dunk everyone would entertain it but just wondering where you sit today versus where we were earlier this year M&A.
Move down that list of priorities, just given where the cost of capital move to where you are.
Stockton bonds are trading.
Alright.
Yes.
We continue to be.
Thinking about the business long term and yes, the cost of capital is more expensive, we fortunately have a tremendous amount of liquidity.
On the balance sheet.
Not surprising multiples have come down a lot.
We think thats, probably more driven by <unk>.
This point.
The economic activity as opposed to hopefully as a long term.
The issue with multiples so to the extent there are businesses that we can look at that we think we can buy in at attractive multiples given our liquidity and as it helps us strategically we will certainly look at that seriously and as a reminder.
We will look at everything our principal focuses have been in the digital areas.
But now given what's happening in the radio markets in multiples to the extent there are properties, whether its on a swap basis.
Purchase.
Second help her portfolio, we will take a look at it.
But I'll emphasize and I think it's probably the fourth time Ive said this with over $200 million liquidity low net leverage free cash flow generation that puts us in a pretty good.
Pretty good position to to look at everything.
Great and then last one for me just on podcasting just in the industry generally.
Okay I've seen a lot of these.
Podcasts rep deals, where the creator changes the rep firm. The company is talking about how the weak margins that came with it.
No.
We just sort of mutually agreed to let them go to another rep.
Can you just maybe talk about the mix in your podcast revenue between these rep deals that are sort of lower margin as you talked about versus like one did publish content that might come with higher margins.
Whether there's any concern that some of the biggest clients on the rep side.
Might look to go elsewhere, and then obviously.
Low margin, but the.
The revenue volume is bigger.
Yes.
Thanks.
Yeah, I mean, our approach I'll I'll take that Greg.
That is a great question.
Our approach is different than many that are big personality, driven talent that we represent.
We have <unk>.
Deals with them that span beyond podcasting into broadcasting and other areas. So we we look at our talent and our partnerships as how do we help you too.
To attract and monetize listenership, regardless of platform and so for example, damper on Gina's on radio.
As there are several of the other so that is a strategy that's worked quite well for us.
In terms of our owned and owned and operated.
Focus that is the focus of local.
And as you pointed out our own stations can't leave us. So that's been that's been a key focal area and has been growing nicely, obviously, albeit off a small base. So it's the nature of the Beast, but we are at the destination, becoming increasingly the destination for a certain kind of podcast and.
And.
It's something we watch but the business is.
We're as I said before bullish on that business.
Great well, that's all I had guys appreciate the time.
Thank you.
Thank you.
Your next question comes from the line of Jim Goss with Barrington Research.
Jim You May proceed.
Alright, thank you.
Wanted to ask a little bit more about the.
National local mix.
Your network numbers indicated like an 18% decline, but in the quarter.
If that rough 70, 525 local national split was true for <unk>.
<unk> advertising it wouldn't indicate the same level of shift so maybe that 70 525 is just rough approximation that didnt really hold in the quarter.
Talk about what's happened in the.
The national advertising within the.
Core radio and.
Whether it was different from what you experienced with Westwood, one and weather.
There are things you can point out in terms of that mix that we can look for for the future.
That's a good question.
The way to think about.
<unk>.
Is that.
We work with advertisers.
To provide them the flexibility across our network and it does move around quarter to quarter.
Some of those national dollars could have been placed.
Depending on the inventory and the broadcast versus our local businesses.
And so when you look at any particular quarter, it's hard to come up with the trend our national advertising.
Comments was a broad effort.
What's common across our channels.
Happened this quarter.
Is that the network suffered more of a decline than our spot business.
It does jump around from quarter to quarter, and we were actively work with the <unk>.
Our national advertisers to optimize inventory and value for them.
But it does represent between typically between 20%, 25% of our swap business, but it just moves around quarter to quarter.
And maybe the local.
The spot national advertising in the local market.
Little stickier or managed better with the local apps in the national and the network, which make it may tend to bounce around a little more is that what you're suggesting.
Somewhat but I also think its when we would do with.
For agencies and National dollars, we take a holistic view as to where they can place their dollars.
Better value in one channel versus another will go that way.
So.
It's more driven by the lumpiness of that and.
We could have had.
<unk> the network be down less than 18% in spot.
Perform worse, but the overarching theme of weak national dollars are something that just affects the entire the entire business and geographically just.
How it's held in this quarter.
Okay.
One of the trades reported that.
W. T O P. In D C, which is has been the nations largest biller for a lot of years.
Hey, Ed.
I think there's some.
Some of the necessary cost cuts that have been taking.
And they're obviously news talk.
Fair representation in news talk and you did.
Mentioned youre improved leveraging with improved operating leverage with cost cuts I'm wondering if you might.
Talk about your own experience in that area.
It's one of the year and one of the.
Categories that has been targeted for the cost cuts.
Mary Youre on mute.
Oh, yeah, sorry in general.
Yes, yes, sorry with regard to the way we look at.
Expense reduction as we look at it Holistically and as I said in the prepared remarks, we focused on where the.
We have a keen focus on reducing expenses, where it does not have an impact on revenue.
Our new stack these tuck portfolio is.
Generally very very well for us.
So our cost reductions were mostly focused in non revenue areas. So as I mentioned.
Real estate reduction some contract renegotiations that don't affect.
The programming for example, so.
I don't think the Frank do you have anything else to say I don't think theres any certainly isn't any focus on one.
Particular format or another.
With regard that wouldn't happen.
Yeah Yeah.
Okay. My last question might be.
<unk> TV.
Ed plans to go on this.
<unk> spending in this sort of cut out those plans and you indicated a somewhat of a backing away yourself and I'm wondering if the bloom is off the rose and what seem to be an emerging growth category that everybody will have four.
Maybe that wont be the next big thing.
Another good question.
The category is a growing category.
Particularly as more states legalize.
I would say that based on what we've seen.
Is that the robust projections from last year.
Terms of the growth.
<unk> been more tempered in terms of business activity and.
That has occurred in the economics for the sports betting companies, but having said that as they grow their business.
It is important for them too.
New customers in advertising is a key component of that but.
But the activity we've seen it remains to be seen whether or not it's more from a macroeconomic perspective.
Or is the projections are coming down but.
I agree with you the frothiness that we saw in that category.
Last year has abated somewhat and that was driven also and we saw that.
Realized win win that decided to unwind its partnership and that that is just another example of that.
Okay.
Thanks, very much I appreciate it.
Thank you.
That concludes the questions for today I'll now turn it back over to the company for any remark final remarks.
Thank you everyone for joining us today, and we look forward to speaking with you again early next year, that's a great day.
That concludes the conference call. Thank you for your participation you may now disconnect your line.