Q3 2022 Urban One Inc Earnings Call
Mhm.
Okay.
During this conference call urban one will be sharing with you certain projections or other forward looking statements regarding future events or its future performance.
One cautions you that certain factors, including risks and uncertainties referred to in the 10, Ks 10, Qs and other reports it periodically files with the Securities and Exchange Commission.
Could cause the companys actual results to differ materially from those indicated by its projections or forward looking statements.
This call will present information as of November three 2022. Please note that urban one disclaims any duty to update any forward looking statements made in the presentation.
In this call urban one may also discuss some non-GAAP financial measures in talking about its performance. These measures will be.
Reconciled to GAAP either during the course of this call or in the company's press release, which can be found on its website at www dot urban the number one dot com.
A replay of this conference call will be available from 12 P M Eastern time today.
Until 11 59 P M November six 2022.
Callers may access the replay by calling 866.
207.
1041.
International callers may dial direct four zero too.
970.
0847.
The replay access code is one three.
Nine nine.
699.
Access to live audio and a replay of the conference will also be available on urban one's corporate website at www.
Dot urban the number one dot com.
The replay will be made available on the website for seven days after the call no other recordings or copies of this call are authorized or may be relied upon.
Now I'll turn the call over to Alfred C. Liggins, Chief Executive Officer of urban one who is joined by Peter D. Thompson Chief Financial Officer. Thank you.
Thank you very much operator also joining me are Jody <unk> who's the Chief financial Officer for TV one.
Counsel, Christopher Samsung and our Chief administrative officer, Karen Wishart.
Thank you for joining folks.
You've gotten.
Our press release for our third quarter results.
Very happy with the quarter.
Almost 90% net revenue growth increase of.
Adjusted EBITDA.
In the face of.
An increasing headwinds we thought this was a.
Very very solid performance.
Even more importantly, our Q4 <unk>.
Hastings continue.
It would be strong, particularly relative to some of the other reports that we've seen coming from folks that have already reported our radio business.
Including political.
Is going.
Yes, very well into Q4 political.
What we've done in 2018, we're expecting double digit.
Revenue growth in the radio segment.
We are experiencing very very robust growth in our digital segment. This year. That's also continuing from Q3 and into Q4 with that we are going to update our full year guidance I think that we originally had it.
At $1 45 to 150, and then we're going to do.
Probably better than the top end of that range of $1 50.
Yep.
It's probably impossible to get to.
Did that update now that we have about two months left in the year and so yeah. We yeah, we feel pretty comfortable that our full year EBITDA what ended up in the mid one sixties.
This year there are.
A number of things that happened in <unk>.
Fourth quarter bonus accruals true up for TV, one programming amortization that.
Well at that but even net of all that we felt that it saved that will be in the mid 100, <unk>, we had a great robust upfront for TV, one and Clio and again, our radio pacings are doing better than.
Many of our other brother and I think that.
We owe that to continued demand for our.
Our target audience.
And the move towards more diversity and inclusion in the advertising sector. We've had a long history decades of building a brand that serving the African American community and adapt our brand recognition is is really yeah.
Proving to be very fruitful during this during this time period, a update on the Richmond Casino.
It's Jeff you've been following in the crash.
Oh, it's a.
Battle It will be a battle in the upcoming General Assembly session.
<unk> in January .
As to whether the casino opportunity stays in Richmond, where we had been the chosen developer or if it moves to Petersburg.
Petersburg has been.
We announced that they're working with the Cordish companies, which is which.
Which was the runner up at Dod and the and the Richmond process.
The legislature is.
It's tricky and it would be highly political I don't really have a.
Good answer as to ultimately what happens.
My position on the casino opportunity.
It has been muted and previous conference calls I'd like.
Investors to really think of that as something that could be a.
<unk>, obviously, if it if it happens, but but speculative.
Because yeah again, it's going to be all about politics, and not about where the.
The best place for this casino.
Resort operation to go but we continue to fight the good fight we're most focused on.
The the continued trajectory of the business you know, we're continuing to Delever, we've been buying back our bonds in the open market, which is which is actually great and when we first put this facility in place now we were gonna have to pay one O three in order to take out bond.
Before.
Right before the first call date and now with.
With pretty much everything in the market trading at a discount.
It creates an advantageous.
Delevering opportunity for the company since we're sitting on.
A fair amount of cash and we've been we've been taking advantage of that so with that I'm going to turn it over to Peter So he can go through the numbers in more detail and then we'll.
Come back for Q&A.
Thank you all for so in the third quarter was another strong quarter for us with both consolidated net revenue and adjusted EBITDA up year over year and also significantly above pre pandemic levels consolidated adjusted EBITDA was $44 $3 million for the quarter up from $42 $7 million in 2021 and up from 30.
$8 $7 million and pre pandemic 2019, net revenue was up by eight 9% year over year for the quarter at approximately $121 $4 million.
Net revenue for the radio segment increased by four 8% year over year.
And on a same station basis by 1.4 cause them.
According to Miller Kaplan, our local advertising sales were down one 7% against a market that was down 2.1%.
National AD sales were up 19, 7% against the market there was.
0.8.
And that was helped by a corporate sales effort and the <unk>.
<unk> and demand for our target audience.
While we outperformed spot markets, particularly in national sales, we like the market in the MTR category as a result of disappointing performance as all events in Atlanta and Raleigh.
It also impacted margins overall at the radio Division.
Midterm election spending started in Q3, and honest and we booked $2 $7 million in net political AD revenue, but which $1.8 million was it radio.
$711000 last year.
That meant the government and public was our biggest advertising category for the quarter up six 7%.
<unk> was up 35.5% photo was up strongly at 57, 3% and telecommunications was up 14% year over year.
While services entertainment retail financial food and beverage and travel and transportation were all.
All down in the quarter.
Fourth quarter revenue.
Radio Division is currently pacing up.
Only 26%, including political and about 10, 9% excluding political.
$5 6 million of net political AD revenue is on the books for fourth quarter.
Bringing the annual total to approximately nine and a half million dollars, which is above the $6 6 million net that we did in 2018.
On a same station basis fourth quarter is pacing up 0.1%.
Excluding political.
National pacing up four 1% in local pacing down two 8%.
Net revenue for reach media was $10 $1 million in the third quarter up one 3% over prior year.
EBITDA was $3 $7 million up by 0.9% for the quarter a.
Fourth quarter AD sales are holding steady.
But we don't have a cruise event in the fourth quarter this year.
In that event generated approximately $7 million in revenue.
$400000 in profit for the fourth quarter last year, which is not returning this year.
But we will have our crews in 2023.
Net revenues for our digital segment increased by 41% to.
$21 million.
The direct sales team continued to build on the momentum that began in the first half 'twenty two.
<unk> revenue growth. It was really a result of the continued demand from advertisers to spend with black owned and certify and diverse to publishers.
So midterm political revenue as well as brands remaining committed to drive deeper engagement and reach with black audiences.
Adjusted EBITDA increased for the quarter by $2 $2 million up 47%.
Demand continues to be strong in fourth quarter digital revenue is expected to exceed Q3 number.
We recognized approximately $58 million of revenue from our cable television segment during the quarter and increased 4%.
Cable TV advertising revenue was up 16, 7% with a favorable rate volume impacts of $3 $4 million driven by higher average unit rates.
Uh huh.
$4 million of free video on demand.
A million dollar increase for Clio T V.
And then there was a million three unfavorable audience deficiency unit burnell.
Cable TV affiliate revenue was down by seven 6%.
With favorable rates increases of $1 $2 million offset by $2 $2 million of net churn.
On the $1 million of increased loan support.
Cable subscribers with TV, one as measured by Nielsen finished the quarter at $43 6 million compared to 45 million at the end of Q2.
<unk> TV at $41 3 million Nielsen sums.
We recorded approximately $2 $1 million cost method income for our investment in the MGM National Harbor property for the quarter the same as last year.
Operating expenses, excluding depreciation amortization impairments and stock based compensation increased to approximately $85 million in Q3 compared to $74 $6 million in Q3 of 2021.
Compensation increased by approximately $1 $9 million revenue variable expenses increased by $2 $4 million travel entertainment and office expenses increased by $525000.
Outside services, including contract talent.
<unk> fees increased by $1 $2 million.
Marketing and promotional and event spending increased by $3 $3 million over the our corporate development costs decreased by $2 $1 million in cable TV content amortization decreased by $1 $1 million.
But.
About $1 million of increased expense for the Indianapolis Radio acquisition is included in these totals.
Radio operating expenses were up 9% Indianapolis cluster added $1 million of that increase.
<unk> expenses were up in Cleveland and Raleigh.
<unk> relating to the revenue increase such as sales commissions and bonuses were up as well and there were some increases in outside services and employee compensation and benefits.
Reach operating expenses were up by 2%.
Alan costs drove the increase.
Expenses remained mostly flat otherwise reach.
<unk> expenses in the digital segment were up 39, 7%.
Driven predominantly by variable expenses relates to traffic acquisition sales and integrated marketing.
Cable TV expenses were up four 8% year over year content amortization expense was down $1 1 million all of his wallet employee compensation and benefits were up by $855000.
Sales and marketing spend was up by $1 $4 million.
Operating expenses in the corporate and eliminations segment were down by $1 $5 million due to a $2 $1 million decrease in corporate development costs relating to the Richmond casino venture last year.
Compensation and recruiting fees increased slightly.
For the third quarter consolidated broadcast and digital operating income was approximately $58 million an increase of three 5%.
During the quarter the company repurchased $25 million.
It's 2028 notes at an average price of approximately 91, 1% comp.
Resulting in a net gain on retirement of debt of approximately $1 $8 million.
An additional $18 million $271000 of the 28 notes were repurchased in the fourth quarter at an average price of approximately 85.75%.
Bringing total gross debt to a balance of $756 $7 million.
From $825 million at start of the year.
And Chris in interest expense decreased to approximately $15 $3 million for the quarter somebody made cash interest payments of approximately $29 $9 million in the quarter, including the accrued interest on the retired notes.
Next semiannual debt service payment is due in Q1 of 'twenty three.
A noncash impairment charge.
$14 $5 million was recorded for Atlanta, Charlotte, Dallas, Houston, Philadelphia, Raleigh, and Richmond Radio market broadcasting licenses.
And that was really triggered by the overall market performance in these markets rather than a specific radio on performance.
The provision for income taxes was approximately $3 $4 million for the quarter on the company pay cash tax.
Income taxes in the amount of $247000.
Net income was approximately $4 2 million or <unk> <unk> per share compared to $13 $9 million or 27 cents per share per quarter.
Quarter of 2021.
Little expenditures were approximately $1 $4 million.
Company repurchased 100803 shares of class B common stock.
And the amount of $439000 and executed a stock vest tax repurchase of 325872 shares of class B common stock in the amount of $1 $4 million.
As of September 32022, total gross debt was $775 million.
Our ending unrestricted cash balance was $105 $1 million, resulting in net debt of approximately $669 $9 million.
Which we can put $266 $3 million of LTM reported adjusted EBITDA for total net leverage ratio of 4.03 times pro forma for the Indianapolis acquisition total net leverage was 397 times.
And with that I'll hand back to Alfred Thank you Peter operator could you open.
Open the lines up for questions.
Yes, Thank you ladies and gentlemen, if you wish to ask a question. Please press one then zero.
Again, if you do wish to ask a question. Please press one zero at this time.
Our first question comes from Ben Briggs with <unk> financial.
Inc. Please go ahead.
Good morning, guys. Thank you for taking the questions.
Sure.
Yes so.
Congrats on the quarter it looks like a great quarter congrats on the buybacks.
I just want to make sure I heard you guys right you bought back another you bought back another $19 million of debt in the fourth quarter. So far you said.
Yeah 18, seven call. It then.
Okay perfect. Thank you are there plans to continue this is is there additional authorization that you need to do any more buybacks.
How are you thinking about that going forward, we actually that $18 seven odd number that's now.
We had an additional $25 million authorization. So there's a almost a $7 million balance on that now where you're now looking to be opportunistic and yeah, I mean I.
I think that paying down debts are.
It's a good thing so youll continue to see us be opportunistic in Peru. So yeah.
Hum.
All right.
You there.
Yeah, I'm, sorry, I cut out for just a second to cut off for a second.
No.
Yep.
Go ahead.
Yeah, there's like $7 million leftover seven ish left on there.
On the last $25 million authorization, so we'll get through that and then we will see.
We'll see where we sit obviously want to get a feel for what the economy's doing et cetera.
And but paying down debt is a good thing and yeah, we'll continue to.
Look at being prudent in how we utilize our cash.
Sorry, I misspoke, 18th Tuesday, seven seven is close to the model.
Hey, J T.
Okay. Okay.
So you've got about it so you've got about call it $8 million of authorization left what is the catalyst that's about it.
Of getting authorization to buyback more look like is it a is it a quick enough process that allows you to be opportunistic if there's something that makes sense.
It's Super quick Yeah, we just you know.
Basically reach out and communicate what our board and yellow and they respond now.
Generally getting a board to approve paying down debt is not that difficult [laughter] right right right. It certainly seems that way.
From your history of buying back debt.
Yeah.
Well get moving on from the from.
From the debt for a second so what I know that there's a formula.
Where you can put back the MGM Grand National Harbor investment that back to MGM.
What does that Formula look like right now what does that look like right now and what you know.
Is it theoretically put back there and how much is it worth.
At seven times.
There are their EBIT Dar.
There was a slight adjustment to what their EBITDAR as to what our definition is al and it now is it.
Yeah too.
Several millions of dollars on the on the EBITDA number nothing to get you know.
Crazy about.
I mean look it's worth over $100 million right last year their EBIT.
Our number that we would get paid on with like $236 million of EBITDAR.
Hey, this is great but.
Yeah, because they report their revenues, but they've been continuing to gain market share.
Here in Maryland, this year there gentlemen.
They're gonna do over $800 million of gaming revenue. So I suspect that that EBITDA is going to go up from from last year.
And we've got a window.
And in the first quarter of every year to put our.
Our interest at seven times, whatever the previous years.
Reported.
Adjusted EBITDAR is and so you know, we'll you know, we'll see what it looks like and.
And make it make a decision, but it's you know.
It's worth over $100 million.
Oh, Okay got it got it so it's still it's a window in the first quarter, you're saying, it's not something.
Alright anytime.
Okay, Yeah, Okay anytime.
Anytime you want.
Okay got it so and then so obviously this first quarter once you see their annual results won't be internal discussions and that'll be the time that you guys make a decision.
Leading the call.
We havent, we havent thought about that I mean, we're sitting you know it's like.
We're sitting on cash now so if we want to.
Pay down debt, we just use of cash in our balance sheet right. Now. So right question is is if we were to put it what are we going to do with that cash are we going to pay down more debt are we going to put it into an investment now be out. So we don't we don't know yet, but there's no.
There's no pressing reason to have to monetize it today.
And did that we didn't cause.
It's EBITDAR has been growing so.
Okay. Okay. That's helpful. Thank you and then kind of moving on it was good to hear that the radio pace you seem like they are well up I think you said in the fourth quarter, they're pacing up 26%. If you are inclusive of political.
It sounds like you lost a few subs, though at.
At the at the T V one, but the TV one network.
We're down to $43 six you said versus 45 do you have any clarity at sort of mid fourth quarter, right now where that number stands and it does it does it continue to.
Bleed subs or has it stabilized.
Yeah, I mean look you know.
I wouldn't want to give a mid quarter estimate of what we think churn is going to be I mean November .
November November Nielsen numbers.
Came out and we actually gained over 200000 yeah.
Okay great.
Yeah.
Yes.
But look you know.
I.
It's probably the biggest debate in media right now is what is the trajectory of the pay TV ecosystem right, yeah and so.
I don't know yeah. It was a stabilizing is it increasing.
Oh yeah.
It's yeah, it's definitely a big debate we feel.
Good about the TV business given that.
We've gotten more subs launched for our new service Cleo T V. Yeah, we will.
Now many of our.
Our our affiliate agreements advertisers still have a robust appetite for.
Video.
Programming and advertising.
Although we are we are seeing a.
Hum.
The softening and in AD demand in <unk>.
Television space and Yeah, I mean, I think Paramount.
As.
<unk> has released earnings and yeah yeah.
Said the same thing NBC you Comcast before that the same thing so.
We're experiencing experiencing it we're going to.
I think the affected less because of our target demo and the commitment to.
Our audience.
In diversity inclusion so we feel good about that but make no mistake you're in a.
Macro economic headwind, that's affecting national TV advertising.
Okay, Alright, well these questions have been very helpful. Like I said I appreciate the time and I'll hand, it off to somebody else.
I appreciate it.
Operator next question.
Thank you. Our next question comes from Aaron Watts with Deutsche Bank. Please go ahead.
Hi, guys. Thanks for having me on maybe a follow up on that last answer just curious.
What you're hearing or seeing.
Within the radio business in terms of any advertiser reactions or concerns related to the macro headwinds to close out this year a roll into 'twenty three it sounds like you're feeling a little bit of it on the TV side, but maybe just a little more on the radio side with what Youre seeing out there.
Uh huh.
Yeah.
Definitely seen radio slowdown in national.
However, we're offsetting that we've got our own corporate sales team.
Team and its large and robust and they're really leaning into this this AD demand down that we have for our space and so we're outperforming.
On an as you know we're way outperforming on a national level than than any of our other competitors right now.
And so what does that mean for next year I mean I. Just described to you what fourth quarter is going to look like and so you know our results in radio versus everybody else's results, but can be night and day right.
How does that play out for.
For next year.
We're going through budgets right now yeah and.
And so you know.
I don't know yet.
If I had to bet I think that we've got some things that are going to that are going to continue to bolster US you know our Indianapolis acquisition I think is gonna be a great deal for us now.
And in the radio space, we're already starting to figure out how we're going to control costs.
We've got some things that are.
Our rolling over like leases, where we're gonna be at a reduced real estate footprint.
We're gonna have a killer year. This year. So you know we're going to be at a match that next year.
Yeah.
The answer is probably not but quite frankly, I didnt think that going into this year I didn't think we're going to do as well as we ended up doing this year, so I can't really.
I I can't handicap.
What the recession impact is going to be on us.
At this point in time, but.
I would say, it's going to be less than it is going to be.
One other on others.
For sure.
We've got you know we didn't have our Tom Joyner crews.
This year, we're gonna have it next year, it's already 80% sold out we're about to announce and we haven't announced any talent lineup whereabouts.
Whereabouts announced talent lineup soon that you really really big we think that that's going to push us.
To sell it out before the end of the year.
And so I you know.
This is the first time I've gone into a recession, where I wasn't.
Nervous about the impact of stress that was gonna put on us as a company.
And that's got a lot to do with where we've gotten our leverage level to end up and our prospects.
Yeah, I was I was kind of.
That might be nice sitting in that position I know you've gone through the ups and downs a couple of times before and it seems like you are in a better position this time around for sure.
Do you think Alfred that sort.
For maybe some of your peers that arent as.
As well position this time going in there are some additional nervousness and stress on their part that.
There could be some opportunity for you with regards to maybe investment or M&A, where you could take advantage of that to grow your platform for that.
Yeah, I mean, I think that you know that.
That that could happen.
We've been super disciplined on stuff that we've been we've been buying and.
And one of the problems that you have right now is that.
I don't know if it's a problem if youre buyers, it's actually good if you're a seller, it's not great, but multiples have come in quite a bit, particularly in the media space right, there, they're bringing multiples down.
On a quarterly basis or even the big diversified media company. So you know a lot of the stuff in.
And radio was kind of trade ins.
<unk>.
Low fives to six times right, so you've got to get a seller.
That wants to be reasonable.
And this kind of multiple valuation environment and so.
And by the same.
And we've got to be able to.
Justify any acquisition.
With with that kind of terminal multiple right, because that's where we're trading that now so yeah. That's the historical.
None of them of the the bid ask between a buyer and a seller. So you know.
Is there a nexus where you know there was a meeting of the minds and something can happen.
I don't know, maybe probably right yeah, we keep looking at stuff but.
If we don't if we don't get to that Nexus, we're gonna be happy just paying down debt and continuing.
Continuing to.
Grow the existing platform, but we will.
We are absolutely going to be looking to see if we can take.
Take advantage of.
The environment now.
So that's that's kind of how we think about it.
Okay, Alright, I appreciate the time as always.
Yes. Thank you.
Okay.
And we do have a follow up from Ben breaks loose stone ex financial Inc. Please go ahead.
Hey, guys. Just one just one quick follow up here I, just I just noticed something with you know.
Very strong I think by any measure first the first three quarters of the year your guidance. The last that I have written down here for the year for 2022 is $145 million to $150 million at.
At the high end.
At a high at 150 million that would imply only $16 million of EBITDA in the fourth quarter, which obviously doesn't doesn't sound right.
Yes.
You you must have missed the first five minutes of the call we updated guidance the mid $160 for this year.
Oh, Okay I did miss the first five minutes of the golf. So that's exactly what it is.
That was that was that was in the.
Introduction that I gave so yeah, sorry that hadn't five isn't it.
Nope.
And then when you think about it and you look at it and you're modeling it out you should expect the fourth quarter. So look.
I quite like fourth quarter last year overall, Ryan so sequentially.
It's going to be down on Q2 and Q3.
But for various reasons, which I hope we kind of went in during the first five minutes, but yeah that would bring you out.
The mid 116th and we figured that we needed to update guidance because somebody who's going to do the math that you. Just did go what are you guys talking.
Yeah.
Alright.
Alright, well thank.
Thank you very much for the clock, yeah, no worries sorry about that.
No no problem.
Yes.
If there are any additional questions. Please press one zero at this time.
And we have a question from Brad <unk> with <unk>. Please go ahead.
Hi, Thanks for taking my question.
The way I want to ask is how sustainable do you think this the updated guidance is how much of an uplift. There is do you think is from political and end.
You know can we think about that as well.
Sort of a sticky base or would you expect.
How much how much no regression aspect in the following year.
Yeah, there's probably about.
$12 billion of total political across the platform almost probably 10 of that is then radio. So next year, that's going to go away, it's not going to go to zero right, yeah, but it's going to.
Go down substantially so you've got that headwind you've got.
The headwind of a looming recession.
But yeah, we've got our Indianapolis acquisition.
Did you at all as a.
Category.
Has been robust right I don't think I was having a conversation with the chief investment officer for one of the top three AD advertising holding companies and and.
And they're still projecting.
Revenue growth next year for digital advertising, even though they are projecting yes.
<unk> down for traditional advertising, we've got a pretty robust digital platform.
So no I wouldn't say that.
You can look at.
The mid $1 six these as kind of like the sticky baseline because if you just take off.
Political and then throw something in there for.
A recession, you're going to go backwards right, but Indianapolis is gonna be a.
Now a meaningful contributor to our EBITDA next year, probably an additional $4 million to $5 million.
And we've got other stuff that is.
It's coming into play that Tom you know the Tom Joyner crews I, just mentioned that it could be another almost a couple of million dollars of.
EBITDA, so we're kind of working through all of that now.
Hmm.
Well look TV companies go up and down every other year based on political AD demand, Yeah, and I you know I think we're at least internally, we're starting to view our business and are in a similar fashion because it's it's a double digit revenue.
Swing for Us now.
Thanks, that's really helpful.
1020, we did we do almost $20 million of political.
That was 18 and Shane Yeah, Yeah, I know, it's a it's a real number right now and so you know we're not going to have that next year and.
Yeah.
So don't be surprised if our our EBITDA next year ends up being less than it is it is this year, but again.
Yeah.
You know, it's you know.
Don't know I mean, you know.
Not in the budget flat.
Flat.
Right, but.
I got one I got one guy looking at me, but that's not what you told me.
Yeah.
Okay, and then so and within digital just to kind of double click on that so what kind of growth is sustainable there and what's the nature of that or is that the website basically website advertising or or Atwood.
And al what does that look like.
Now.
We sell our digital business is primarily display and and and more and more video I don't know off the top of my head, but I think you know our revenue is probably about 25% digital video video right now.
With streaming audio streaming is a growing category.
And Ah.
<unk> business and we've just seen we've just seen a real explosion of demand against the digital category.
And this was a business that before.
In 2019 was.
Probably low 30, as our revenue you know low to mid thirties.
And it's probably going to be closer to.
Yeah, Hi, 70, it's closer to 80 this year.
Well that's I mean are you do you think you're taking share from and just more people listening everything you hear from radio or.
Okay.
And you're right it.
Increased demand and it's yeah, well first of all that.
The share of I mean, the amount of money that we're doing is.
<unk> a pimple on the elephants, but you know in comparison to the entire digital revenue ecosystem, which includes meta and Google and Spotify, you know and so and there's no. There's no Miller Kaplan for digital right like you know, where we can sit and figure out what our digital.
But even if there was we probably wouldn't even register right yeah.
And so I can't tell you the only place I can the only thing I can tell you is that national advertisers.
A I put more money into digital B they are now.
Recognizing the contextual value of targeted digital media.
And and diverse phone platforms and is there increased interest and diverse.
Audiences and diverse ownership.
As a has evolved we started interactive one and 2008, so we've been pounding the.
Urban digital message for.
Very long time, and I think I've said it earlier as well.
That brand building has helped us plus we've got.
The largest.
Urban or African American targeted digital audience in the Oh, yeah as it relates to Comscore among all the competitors.
Right Yeah. So.
I know that's a segue for my next question.
I'm sorry.
So that's what's happening.
Okay, and that's a great segue to my next question, which is you know on that.
Diversity and inclusion initiatives can you can you speak to the what the nature of those commitments from advertisers look like are they kind of year to year have they committed a certain dollar amount or how much visibility do you have on those commitments and second of all.
Yeah.
Are they.
Are you able to quantify for the advertisers with the yard.
Economics pretty similar to maybe just like a.
Typical pop station or are they are they different or how are they how are the advertisers.
Thinking about it is more for them.
The same economics, better or is it a marketing expense for them in terms of a diversity of equity inclusion initiatives how do we.
My two questions on that front.
I mean, saying that.
As they've increased their look procter and gamble and Mcdonald's and General Motors. These are all entities that have said that they're going to.
And I don't have the exact numbers off the top of my head, but they're gonna grow their spend with you know black owned media or from 2% to 4% over the next two years or so they've made multi year spend target commitments.
They actually havent.
Come in and given us a two or three year contract that hard wires that there are some conversations going about multiple about contracts for multiple years now that that that that we're working on now I can tell you that right.
<unk> have gone up because with AD demand rates to go up but rates for.
Our audience in comparison to what advertisers have historically paid for general market you know audiences, we're already low right. So yeah I think.
When you match us up in comparison.
We're not they're not paying an outsized premium to reach at least our particular audience.
At urban one.
I think there are some diverse owned platforms that really don't have a lot of audience or some have no audience that are now getting money yeah. So yes.
The C. P M. There are probably through the roof.
Or not even calculable, because there's you know.
I know some platforms that are getting real money diarrhea rate right.
But theyre getting but they're getting money now.
We've always been rated we've always had a decent size audience and so even when you know if we get a a 40% rate increase.
Not more expensive than.
Just yeah Warner deal.
Yeah discovery networks.
We're probably still at a significant discount to what advertisers pay for those networks.
Got it that's very helpful color. Thank you.
Thank you.
Uh huh.
Hello.
If there are any additional questions. Please press one zero at this time.
And we have a question from George Mike Goss with Barclays. Please go ahead hi.
First of all are you don't want to congratulate you guys on a great. Another great quarter. Just a quickly is there any thought to doing any additional equity buybacks or can you talk about that thank you.
We are we've been discussing it I think are our focus has been on.
On bonds.
We've been talking about it internally don't know.
We haven't landed anywhere.
Just yet.
We always like.
We always like we we used to have over 100 million shares outstanding and now we got.
<unk> 48.
So we like to do it Opportunistically and you know.
It's been good I mean, we've generally bought.
At the right time or elastic purchase was.
I think last quarter.
A quarter ago, when we bought $4 5 million shares back and I think the average price was like.
And in the low fives.
But then the stock preceded the trade down after that so.
It wasn't feeling great a week after doing that trade.
But ultimately kind of felt good about where the company was gallon and AR and the opportunity to buy back those that many shares back in one fell swoop was.
While it was a good opportunity.
The matter is the volume is not huge on the stock. So even if we go in now when the stock is depressed you can't you won't you won't be able to buy a ton of it.
So we're assessing our you know our R. R.
Our options now I don't know exactly where we're going to land.
But I think we kind of want to.
Get through budgets.
See how we feel about it.
If a if an opportunity to take a sizable block came up I think we would yeah.
We would look at that because it just it just doesn't happen.
That often.
The other thing that.
That'd be we've been watching but I kind of feel good about it you know now is that.
Our EBITDA has been increasing our debt has been coming down.
The stock's kind of been.
Hanging in there.
And that's because multiples have been yep about coming in right. So what I feel good about now as I kind of think where the company is trading at now probably low fives, you know not including the <unk>.
The value of MGM.
Kind of feel like that.
Should feel like a floor.
For the year.
For this business when I look at.
The low watermark in the cable space, which is a M C, which trades at about five times you look at what newspapers you'll.
We have historically traded at which I think we have a much better business.
And that even.
The radio guys IRT trading at almost seven times I think.
Cumulus is trading at about six times.
I think if if our company is trading in the low five times EBITDA.
That's a pretty safe entry point.
So.
Given that if you were to buy back stock and keep paying down debt at the same time.
Sure.
It's <unk>.
Probably a pretty good trade.
What I don't know and again, we're going through budgets right now is where do I think we're going to end up next year.
How does that factor into it.
But we're long term shareholders of family is the largest shareholder.
Now.
Yes out there so.
So where we are.
We're believers in it and we you know we generally like to own more of the company.
<unk> been less overtime, so, but we want to.
We wanted to do it right now.
Yep.
You don't like the stores you are you can you see.
Jamba people, who.
Believe and believe and believe and they buy.
Yeah, Yeah, yeah at the high and then you have the stock takes a valuation adjustment and it just burn through a lot of money. We don't we don't really want them now.
We don't want to see that happen to us, but I don't I don't feel like the valuation of where we're at now yes. There is.
Very much risk in that at all.
Thank you.
Yeah.
Okay.
Yeah.
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Thank you operator, and thank you everyone. We'll talk to you offline. If you have any additional questions and we'll see you next quarter.
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