Q3 2022 Urban One Inc Earnings Call

Mhm.

Yeah.

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 company's 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 PM 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 9% net revenue growth increase of.

Adjusted EBITDA.

In the face.

And increasing headwinds we thought this was a.

Very very solid performance.

Even more importantly, our Q4.

Things 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.

<unk> 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.

<unk> 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 150.

Yep.

It's probably impossible to.

Did that update now that we have about two months left in the year and so yeah, we 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 happen in them.

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 though will be in the mid 100, <unk>, we had a oh.

Great robust upfront for TV, one and Clio and again, our radio pacings are doing better than me.

Many of our other brother and I think that.

We owe that to continued demand for R.

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 is that that that brand recognition 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.

It's a.

Battle It will be a battle in the upcoming General Assembly session.

Starting in January .

As to whether the casino opportunity stays in Richmond, where we have been the chosen developer or if it moves to Petersburg.

Petersburg has been.

The announced that they're working with the Cordish companies, which is which.

Which was the runner up it got in there.

Richmond process.

The legislature.

Tricky and it will be highly political I don't really have a.

Good answer as to ultimately what happens.

My position on the casino opportunity.

Has been muted in previous conference calls I'd like.

Investors to really think of that as something that could be.

Positive.

Obviously, if it if it happens, but but speculative.

Because 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 to get by we're most focused on.

The continued trajectory of the business, 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 103 in order to take out bond.

Before.

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 we will.

Come back for Q&A.

Thank you Alfred.

In the third quarter was another strong quarter for us with both consolidated net revenue and adjusted EBITDA.

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 $38 $7 million and pre pandemic 2019, net revenue was up by eight 9% year.

For the quarter approximately $121 $4 million.

Net revenue for the radio segment increased by four 8% year over year.

And on a same station basis by one 4%.

According to Miller Kaplan, our local advertising sales were down one 7% against a market that was down two 1% on.

National AD sales were up 19, 7% against the market.

Zero point agency.

That was helped by a corporate sales effort and the continuing demand for our target audience.

While we outperformed the spot markets, particularly in national sales, we like the market in the MTR category as it was.

Disappointing performances on events in Atlanta, and Raleigh, and that 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.

$1 $8 million was it radio compared to $711000 last year.

That meant the government and public was our biggest advertising category for the quarter up six 7%.

<unk> was up 35% <unk> was up strongly at 57, 3%.

Communications was up.

14, 5% year over year.

While services entertainment retail financial food and beverage and travel and transportation were all down in the quarter.

Fourth quarter revenue.

Radio Division is currently pacing up approximately 26%, including political and about 10, 9% excluding political.

$5 6 million of net political AD revenue is on the books before quarter, bringing.

Bringing the annual total to approximately $9 5 million, 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.

With national pacing up four 1% in local pricing down two 8%.

Net revenue for reach media was $10 $1 million in the third quarter up one 3% over prior year, adjusted EBITDA was $3 $7 million up <unk>, 9% for the quarter.

Fourth quarter AD sales are holding steady.

However, we don't have a cruise event in the fourth quarter this year.

And that event generated approximately $7 million in revenue.

$1000 in profit.

For fourth quarter last year, which is not returning this year, but.

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.

Revenue growth. It was really a result of the continued demand from advertisers to spend with black owned and certified divers 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 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.

$1 million increase for Cleo television.

And then the 1 million three unfavorable audience deficiency unit Burnell.

<unk> 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 billion 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 had $41 3 million Nielsen subs.

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.

Hawaii compensation increased by approximately $1 9 million.

Revenue variable expenses increased by $2 $4 million travel entertainment and office expenses increased by $525000.

And outside services, including contract talent and consulting fees increased by $1 2 million.

Marketing and promotional and event spending increased by $3 3 million.

Our corporate development costs decreased by $2 1 million and cable TV content amortization decreased by $1 $1 million.

But about $1 million of increased expense will be Indianapolis radio acquisition is included in these totals.

Radio operating expenses were up 9% Indianapolis cluster added $1 million of the increase.

<unk> expenses were up in Cleveland and Raleigh.

<unk> is 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%.

<unk> costs drove the increase.

<unk> remained mostly flat otherwise at reach.

Operating expenses in the digital segment were up 39, 7% driven.

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 elimination 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.

28 notes were repurchased in the fourth quarter at an average price of approximately $85 seven 5%.

Bringing total gross debt to a balance of $756 $7 million.

From $825 million at the start of the year.

Increased interest expense decreased to approximately $15 $3 million for the third quarter somebody made cash interest payments of approximately $29 $9 million in the quarter include.

Including the accrued interest on the retired notes.

Semiannual debt service payment is due in Q1 'twenty three.

A noncash in time 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 27 per share the third quarter of 2021.

Capital expenditures were approximately $1 $4 million.

We 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 D. Common stock in the amount of $1 4 million.

As of September 32022, total gross debt was $775 million.

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.

Net leverage was 397 times.

And with that I'll hand back to al. Thank you Peter operator could you.

Open the lines up for questions.

Thank you, ladies and gentlemen, if you wish to ask a question. Please press one zero.

Again, if you do wish to ask a question. Please press one zero at this time.

Our first question comes from Ben Briggs lift store next financial Inc. Please go ahead.

Yes.

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 want to make sure I heard you guys right you bought back in another you bought back another $19 million.

In the fourth quarter, so far you said.

$18 seven call. It then.

Okay perfect. Thank you are there plans to continue this is there additional authorization that you need to do any more buybacks.

Are we thinking about that going forward, we actually that $18 7 million odd number that's now.

That we had an additional $25 million authorization, so there's a almost a $7 million balance.

On that.

Now, we're looking to be opportunistic in.

Yes.

I think that paying down debt.

Uh huh.

Good thing so.

Youll continue to see us.

Be opportunistic.

Yeah.

All right.

You there.

Yes, I'm, sorry, I cut out for just a second to kind of second.

So.

Yes.

Go ahead.

There's like $7 million leftover.

<unk> left on there.

On the last $25 million authorization. So we will get through that and then we will see.

We'll see where we sit obviously want to get a feel for what the economy is doing et cetera.

And but paying down debt is a good thing and we will continue to.

Look at being prudent in how we utilize our cash.

Sorry, I missed 18, tusa and <unk> seven.

Even as close to the moment.

Okay. Okay.

So you've got about <unk> got about a call it $8 million of authorization left.

What is the access about.

Getting authorization to buyback more look like is it a is it a quick enough process that allows you to be opportunistic if there isn't all that makes sense.

It's Super quick Yeah, we just you know base.

Basically reach out and communicate what our board and then they respond now.

Generally getting a board to approve paying down debt is not that difficult.

Right right right. It certainly seems that way.

From your history of buying back debt.

Yeah.

Moving on from.

From the debt for a second so what I know this is a formula.

Maybe you can put back the MGM Grand National Harbor investment back to MGM, what does that Formula look like right now what does that look like right now and what.

Theoretically put back how much is it worth.

Yes, it's seven times.

They're they're EBIT Dar.

There's a slight adjustment to what their EBITDAR as to what our definition is al and it okay now.

<unk> two.

Yes.

Several millions of dollars on the on the EBITDA number nothing to get.

Crazy about but I mean look it's worth over $100 million right last year their EBIT dock I think our number that we would get paid on with like $236 million.

Of EBITDAR.

Dave This is no but.

Because they report their revenues, but they've been continuing to gain market share here.

Here in Maryland this year.

They're going to do.

They're going to do.

Over $800 million of gaming revenue, so I suspect that that that EBITDA is going to go up from from last year.

And we've got a window.

In the first quarter of every year to put.

Our interest at seven times whatever the.

Previous years.

Reported.

Adjusted Ebitdas and so we'll we'll see what it looks like in <unk>.

And make it make a decision but it's.

It's worth over $100 million.

Okay got it got it so it's a window in the first quarter youre, saying its not something.

Alright anytime.

Okay.

Okay 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 have we haven't thought about that I mean, we're sitting.

We're sitting on cash now so we want to pay.

Pay down debt, we just use the cash on our balance sheet right now.

Right.

The question is is if we were to put it.

We are going to do with that cash are we going to pay down more debt or are we going to put it into an investment now.

We don't know yet, but there is no there.

There's no pressing reason to have to monetize it today.

Good that we didn't cause.

Got it.

Its EBITDA 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 pacing seem like they are well up I think you said in the fourth quarter. They are pacing up 26% if youre inclusive of political at.

It sounds like you lost a few subs, though.

At TV one.

TV one network.

Youre down to $43 six you said was 45.

You have any clarity sort of mid fourth quarter, right now where that number stands.

Does it continue to.

Bleed subs or Hasnt stabilized.

Yeah, I mean look.

I wouldn't want to give a mid quarter estimate of what we think churn is going to be I mean.

Remember November Nielsen numbers came out and we actually gained over 200000 tons yes.

Okay great.

Yes.

But look.

<unk>.

It's probably the biggest debate in media right now is what is the trajectory of the pay TV ecosystem right and so.

So.

<unk>.

I don't know.

Stabilizing is it increasing.

Yeah.

Yeah.

It's definitely a big debate we feel.

Good about the TV business given that.

We've got more subs launched for our new service Cleo television.

Many of our.

Our affiliate agreements advertisers still have a robust appetite for.

Video.

Programming and advertising.

We are we are seeing a.

The softening in AD demand in.

And our television space and yes, I mean, I think Paramount has.

<unk>.

It has released earnings.

Yes.

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.

Diversity inclusion so we feel good about that but make no mistake youre in AR.

Macro economic headwind, that's affecting national TV advertising.

Okay, Alright, well these questions have been very helpful.

I said I appreciate the time and I'll hand, it back 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.

And Sir just.

Curious.

What you are 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 rolling into 'twenty three it sounds like you're feeling a little bit of it on the TV side, Albert maybe just a little more on the radio side, what Youre, what youre seeing out there.

Yeah.

Definitely seeing radio slowdown in national.

However, we're offsetting that we've got our own <unk>.

Corporate sales.

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 are 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 our results in radio versus everybody else's results, but can be night and day.

How does that play out.

For next year.

We're going through budgets right now yeah and.

And so.

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.

Indianapolis acquisition, I think is going to be a great deal for us now.

And 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 going to be able to reduce real estate footprint.

We're gonna have a killer year. This year. So are we going to be able to match that next year.

Yes.

The answer is probably not but quite frankly, I didnt think that going into this year I don't think were going to do as well as we ended up doing this year, so I can't really.

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.

Sure.

We've got our we didn't have our Tom Joyner crews.

This year, we're going to have it next year, it's already 80% sold out we're about to announce and we haven't announced any talent lineup whereabouts.

We're about to announce talent lineup soon thats 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.

I wasn't.

<unk> about the impact the stress that was going to put on us as a company.

And that's got a lot to do with where.

Where we've gotten our leverage level two and.

And our prospects.

Yeah.

Say it might be nice.

Sitting in that position I know you've gone through the up and down a couple of times before.

It seems like you are in a better position this time around for sure.

Do you think Alfred that.

For for maybe some of your peers that arent.

As well position this time going in there are some additional nervousness and stress on their part that there.

There could be some opportunity for you with regards to maybe investment or M&A.

You could take advantage of that to grow your platform for that.

Yeah, I mean, I think 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 youre stellar 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 for even the big diversified media company. So.

Lot of the.

Steffan.

And radio is kind of trading.

<unk>.

Low fives to six times right, so you've got to get.

A seller.

That wants to be reasonable.

This kind of multiple valuation.

And so.

And by the same.

Token, we've got to be able to.

Justify any acquisition.

With that kind of terminal multiple right because that's where we're trading at now so that's the historical.

None of them of the bid ask between a buyer and a seller so.

Is there a nexus where there was a meeting of the minds and something can happen.

I don't know, maybe probably right, we keep looking at stuff but.

If we don't if we don't get to that Nexus, we're going to be happy just paying down debt.

We're continuing to.

Grow the existing platform, but we will.

We are absolutely going to be looking to see if we can.

Take advantage of.

The environment now.

Sure.

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 Briggs Lisco next financial Inc. Please go ahead.

Hey, guys. Just one just one quick follow up here I, just I just noticed something with.

Very strong I think by any measure first 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 $150 million that would imply only $16 million of EBITDA in the fourth quarter, which obviously doesn't doesn't sound right.

Yes.

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 Gulf So thats exactly.

Yes.

That was that was that was in the.

Introduction that I gave so sorry that hadn't five.

But.

Yeah.

When you think about it and you look at it and you're modeling out you should expect the fourth quarter. So look.

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 160, <unk> and we figured that we needed to update guidance because somebody is going to do the math that you. Just did go what are your guys' thoughts.

Yeah.

Alright.

Yes.

Right.

Thank you very much for the cloud, yes, no worries sorry about that.

No no problem.

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 I wanted 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.

Can we think about that as a sort of a sticky base or would you expect.

How much how much.

Regression aspect in the following year.

Yes, theres probably about.

$12 billion of total political across the platform almost.

10 of that is in radio.

So next year, that's going to go away, it's not going to go to zero right, yes, but it's going to go down substantially so you've got that headwind you've got.

The headwind of a looming recession.

But we've got our Indianapolis acquisition.

Did you at all as a <unk>.

Category.

Has been robust right I don't think I was.

A conversation with the Chief investment officer for one of the top three AD advertising holding companies.

<unk>.

And Theres still purging.

Our revenue growth next year for digital advertising, even though they are projecting.

Down for traditional advertising, we've got a pretty robust digital platform.

So no I wouldn't say that.

<unk>.

You can look at.

The mid 100, <unk> as kind of like the sticky baseline because if you just take off.

Political and then throw something in there for.

A recession.

Youre going to go backwards right.

Indianapolis is going to be.

A meaningful contributor.

<unk> to our EBITDA next year, probably an additional $4 $5 million.

And we've got other stuff that is.

Is coming into play the Tom Tom Joyner credits I, just mentioned that could be another almost a couple of million dollars of.

EBITDA, so we're kind of working through all of that now.

<unk>.

Well look TV companies go up and down.

Every other year based on political ad demand.

And I think at.

At least internally, we're starting to view our business.

A similar fashion because it's it's a double digit revenue.

Swing for Us now.

Thanks, that's really helpful.

1020, <unk>, we do almost $20 million of political.

<unk> yeah yeah.

It's a real number right now.

And so.

We're not going to have that next year and.

Yeah.

So don't be surprised if our EBITDA next year ends up being less than it is.

This year.

But again.

Yes.

You know it's.

Don't know I mean, you know.

I'm, probably not in the budget flat.

Flat.

Right, but.

I got one I got one guy looking at me.

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 is that the website basically website advertising or data.

And al what does that look like.

I mean that now.

We sell our digital business is primarily display and.

And more and more video.

Off the top of my head, but I think revenue is probably what 25% digital video video right now.

We've pumped streaming audio streaming is a growing category.

<unk>.

And our digital business and we've just seen.

<unk> seen a real explosion of demand against the digital category.

And this was a business that before.

In 2019 was.

Low <unk> of revenue low to mid thirties.

And it's probably going to be closer to.

High 70 is closer to 80 this year.

Well I mean are you do you think youre, taking share from and just more people listening everything you hear from radio or.

For PHA in between a Spotify and Youre right.

Increased demand and its.

Well first of all.

Sure I mean.

Amount of money that we're doing is.

A pimple on the elephants, but.

In comparison to the entire digital revenue ecosystem, which includes meta and Google and Spotify and so and there is no there is.

No Miller Kaplan for digital right like where we can sit and figure out what our digital shares but even if there was we probably wouldn't even register right.

And so I can't tell you the only place I can the only thing I can tell you is that national advertisers.

I put more money into digital B they are now.

Recognizing the contextual value of targeted digital media and and diverse owned platforms and is there increased interest in diverse.

<unk> and diverse ownership.

Has.

Has evolved we started interactive one and 2008, so we've been pounding the the urban.

Urban digital message for a very long time, and I think I said it earlier as well.

That brand building has.

It's helped us plus we've got.

The largest.

Urban or African American targeted digital audience in the.

Yeah as it relates to Comscore among all the competitors.

Right Yeah. So.

I know that my next question.

Sorry.

So that's what's happening.

Okay, and that's a great segue to my next question, which is.

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 you have on those commitments and second of all.

Yeah.

Are they.

Are you able to quantify for the advertisers with the yard.

Are the economics pretty similar to maybe just like a.

Typical pop station or are they are they different and 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 the diversity of the equity inclusion initiatives how do we.

Those are my two questions on that front.

I mean, saying that.

As they've increased their.

Procter <unk> 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 theyre going to grow their spend with black owned media from 2% to 4% over the next two years or so they've made multi year.

<unk> 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.

That.

That we're working on now.

I can tell you that rates 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.

Audiences.

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 to our particular audience.

At urban one.

I think there are some diverse owned platforms that really don't have a lot of audience for some have no audience that are now getting money.

So.

The CPM there probably through the roof.

Or not even calculable because there's.

I know some platforms that are getting real money diarrhea rate right.

But they're getting they're getting money now.

We've always been rated we've always had a decent size audience and so even when.

If we get to a 40% rate increase.

Not more expensive than.

Just wanted to.

Discovery networks.

We're probably still at a significant discount to what advertisers pay for those networks.

Got it Thats very helpful color. Thank you.

Thank you.

Hi.

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 want to congratulate you guys on a great. Another great quarter. Just quickly is there any thought to doing any additional equity buybacks or can you talk about that thank you.

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've got.

<unk> 48.

So we <unk>.

Like to do it opportunistically.

It's been good I mean, we've generally bought.

At the right time of our last big purchase was.

I think last.

A quarter ago, when we bought $4 5 million shares back and I think the average price was like.

In the low fives.

But then the stock preceded the trade down after that so.

Wasn't feeling great a week after doing that trade.

<unk>.

But ultimately.

Felt good about where the company was gallon and.

And the opportunity to buy that many shares back in one fell swoop was.

While it was a good opportunity.

Fact, the matter is the volume is not huge on the stock so even if we go in.

When the stock is depressed you can't.

You won't be able to buy a ton of it.

We are assessing our R.

Our options now.

No 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 an opportunity to take a sizable block came up I think.

No.

We would look at that because it just it just doesn't happen.

Hum.

That often.

The other thing that.

We've been watching but I kind of feel good about it now is that.

Our EBITDA has been increasing our debt has been coming down.

But the stock's kind of been going.

Hanging in there.

And thats because multiples have been coming in right. So what I feel good about now as I kind of think where the companies trading at now probably low fives.

Not including the value of MGM.

Kind of feel like that.

Should feel like a floor.

For that.

For this business when I look at.

The low watermark in the cable space, which is AMC, which trades at about five times you can look at what newspapers have historically traded at which I think we have.

Much better business.

And that even.

<unk>.

The radio guys <unk> trading at almost seven times I think.

Yeah.

Cumulus is trading at about six times.

I think if 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.

It's.

It's probably a.

A pretty good trade.

I don't know and again, we're going through budgets right now.

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.

We're believers in it and we.

We generally like to own.

More of the company.

Then last over time, so, but we want to.

We wanted to do it right.

Yes.

You don't like the stores.

You see a bunch of them are people who.

I believe and believe and believe and they buy.

Yes.

At the high end than the stock takes a valuation adjustment and just burn through a lot of money. We don't we don't really want them.

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.

There is very much risk in that at all.

Thank you.

Yes.

Okay.

If there are any additional questions. Please press one then zero at this time.

And there are no further questions.

Thank you operator. Thank you everyone. We'll talk to you offline. If you have any additional questions and we'll see you next quarter.

Thank you, ladies and gentlemen that does conclude your conference for today. Thank you for your participation and for using AT&T event Conferencing service you may now disconnect.

We're sorry your conferences ending now please hang up.

Yes.

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[music].

During this conference call urban one will be sharing with you certain projections or other.

Other forward looking statements regarding future events or its future performance.

Urban 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 are 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 PM Eastern time today.

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 139.

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.

Scott 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 is the chief financial Officer for TV, One our general Counsel, Christopher Simpson, and our Chief administrative officer, Karen Wishart.

Thank you for joining folks.

<unk> gotten.

Our press release for our third quarter results.

Very happy with the quarter.

Almost 9% net revenue growth increase of.

Adjusted EBITDA.

In the face of.

Increasing headwinds we thought this was up.

Very very solid performance.

Even more importantly, our Q4.

Things 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.

<unk> political.

Is going.

Very well into Q4 political.

What we've done too.

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 to 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 $1 50, and then we're going to do.

Probably better than the top end of that range of 150.

Yes.

It's probably impossible to.

Update us now that we have about two months left in the year and so we.

We feel pretty comfortable that our full year EBITDA ended up in the mid sixties.

This year there.

A number of things that happened in the <unk>.

Fourth quarter bonus accruals true up for TV, one programming amortization debt.

Will affect that but even net of all that we felt that it's safe that.

We'll be in the mid 100, <unk>, we had a.

A great robust upfront for TV one.

And Cleo 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 R.

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 is that that brand recognition is really.

Proving to be very fruitful during this during this time period.

Update on the Richmond Casino.

It's Jeff you've been following in the crash.

It's a.

Battle It will be a battle in the upcoming General Assembly session.

Starting in January .

As to whether the casino opportunity stays in Richmond, where we have been chosen developer moves to Petersburg.

Petersburg has an.

We announced that.

Working with the Cordish companies, which is.

Which was the runner up with that.

Richmond process.

The legislature.

This tricky and it will be highly political I don't really have a.

Good answer as to ultimately what happens.

My position on the casino opportunity.

Has.

Muted in previous conference calls.

Investors to really think of that as.

As something that could be.

A positive.

Obviously, if it if it happens but.

But speculative.

Because 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 to get fight we're most focused on.

The.

Trajectory of the business, 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 going to have to pay 103 in order to take out bonds.

Before.

Before the first call date and now.

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.

More detail.

Then we will.

Come back for Q&A.

Thank you Alfred.

In the third quarter was another strong quarter for us with both consolidated net revenue and adjusted EBITDA 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 from.

$38 $7 million.

Pre pandemic 2019, net revenue was up eight 9% year over year for the quarter.

<unk> $121 $4 million net.

Net revenue for the radio segment increased by four 8% year over year.

And on a same station basis by one 4%.

According to Miller Kaplan, our local advertising sales were down one 7% against a market that was down two 1%.

National AD sales were up 19, 7% against the market.

0.8.

And that was helped by a corporate sales effort and the continuing demand for our target audience.

While we outperformed the spot market, particularly in national sales, we'd like the market in the MTR category as it was.

A disappointing performances on events in Atlanta, and Raleigh, and that 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 of which $1 $8 million was it radio compared to $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% <unk> was up strongly at 57, 3% and telecommunications was up.

14, 5% year over year.

While services entertainment retail financial food and beverage and travel and transportation were all down in the quarter.

Fourth quarter revenue.

Radio Division is currently pacing up approximately 26, 5% including political.

And about 10, 9% excluding political.

$5 6 million of net political AD revenue is on the books for fourth quarter, bringing.

Bringing the annual total to approximately $9 5 million, 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 <unk>, 9% for the quarter.

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 and four.

$400000 in profit.

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.

Revenue growth 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 commencement 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 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% for the.

A favorable rate volume impacts of $3 $4 million driven by higher average unit rates.

$4 million of free video on demand.

$1 million increase for Cleo television.

And then there was 1 million three unfavorable audience deficiency unit Burnell.

<unk> 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 billion of increased loan support.

Cable subscribers with TV, one as measured by Nielsen finished third quarter at $43 6 million compared to $45 million at the end of Q2.

<unk> TV had $41 3 million Nielsen subs.

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 employee 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 contracts 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 and cable TV content amortization decreased by $1 $1 million.

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 the increase.

<unk> expenses were up in Cleveland and Raleigh.

This is 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%.

Talent costs drove the increase.

Expenses remained mostly flat otherwise reach.

<unk> expenses in the digital segment were up 39, 7%.

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 wallet employee compensation and benefits were up by $855000 in 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%.

<unk> in the net gain on retirement of debt of approximately $1 $8 million in.

An additional $18 million $271000.

28 notes were repurchased in the fourth quarter at an average price of approximately $85 seven 5%.

Bringing total gross debt to a balance of $756 $7 million.

From $825 million at the start of the year.

And Chris in interest expense decreased to approximately $15 $3 million for the third quarter something to make 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 'twenty three.

A noncash impact 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.

<unk> was approximately $4 2 million or <unk> <unk> per share compared to $13 9 million caused by <unk> 27 per share the third quarter of 2021.

Capital 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.

That's a $1 4 million.

As of September 32022, total gross debt was $775 million or 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 with 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, it back to al. Thank you Peter operator could you.

Open the lines up for questions.

Thank you, ladies and gentlemen, if you wish to ask a question. Please press one 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 Sterne X Financial Inc. Please go ahead.

Yes.

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.

Want to make sure I heard you guys right you bought back another you bought back another $19 million.

In the fourth quarter, so far you said.

$18 seven call. It then.

Okay perfect. Thank you are there plans to continue this is there additional authorization that you need to do any more buybacks.

Are we thinking about that going forward, we actually that $18 7 million odd number that's now.

That we had an additional $25 million authorization, so there's a almost a $7 million balance.

On that.

Now, we're looking to be opportunistic in.

<unk>.

I think that paying down debt.

A good thing so.

Youll continue to see us.

Be opportunistic.

So.

Yes.

<unk>.

Okay.

You there.

Yes, I'm sorry, it cut out for just a second to kind of second.

So.

Yes.

Go ahead.

Yes, there is like $7 million leftover seven ish left on there.

On the last $25 million authorization. So we will get through that and then we'll see.

We'll see where we sit obviously want to get a feel for what the economy is doing et cetera.

And but paying down debt is a good thing and we will continue to.

Look at being prudent in how we utilize our cash.

Sorry, Amit plus 18% to seven 7% close to the model.

Okay. Okay.

So you've got about <unk> got about a call it $8 million of authorization left.

What is the process about.

Getting authorization to buyback more look like is it a is it a quick enough process that allows you to be opportunistic if there is something that makes sense.

It's Super quick yes, we just you know.

Basically reach out and communicate what our board and then they respond now.

Generally getting aboard to improve paying down debt is not that difficult.

Right right right it certainly see it that way.

From your history of buying back debt.

Yeah.

Moving on from the from.

The debt for a second so what I noticed there's a formula.

Maybe you can put back the MGM Grand National Harbor investment back to MGM.

What does that Formula look like right now what does that look like right now and what.

It's theoretically put back how much is it worth.

Yes, it's seven times.

They're they're EBIT Dar.

There is a slight adjustment to what their EBITDAR as to what our definition is al and it now is it.

Two.

Several millions of dollars on the on the EBITDA number nothing to get.

Crazy about but I mean look it's worth over $100 million right last year their EBIT.

I think our number that we would get paid on with like $236 million of EBITDAR.

This is no great but.

Because they report their revenues, but they've been continuing to gain market share here.

Here in Maryland this year.

I'm going to do.

They're going to do.

Over $800 million of gaming revenue, so I suspect that that that EBITDA is going to go up from from last year.

And we've got a window.

In the first quarter of every year to put.

Our interest at seven times whatever the.

Previous years.

Reported.

Adjusted EBITDAR is and so we'll we'll see what it looks like in <unk>.

And make it make a decision but it's.

It's worth over $100 million.

Okay got it got it so it's a window in the first quarter youre, saying its not something.

Alright anytime.

Okay, Yes.

Okay anytime you want.

Okay got it so and then so obviously this first quarter once you see their annual results won't be internally 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 are sitting now.

We're sitting on cash now so we want to pay.

Pay down debt, we just use of cash on our balance sheet right.

Right.

The 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 or are we going to put it into an investment now so.

We don't know yet, but there is no there.

No pressing reason to have to monetize it today.

Good that we didn't cause.

Its EBITDA 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 pacing seem like they are well up I think you said in the fourth quarter. They are pacing up 26% if youre inclusive of political it.

It sounds like you lost a few subs, though.

At the at the TV one.

TV one network.

Youre down to $33 six you said was 45.

You have any clarity sort of mid fourth quarter, right now where that number stands.

Does it continue to.

To boost subs or hasnt stabilized.

Yes, I mean look.

I wouldn't want to give a mid quarter estimate of what we think churn is going to be I mean.

Remember November Nielsen numbers.

Came out and we actually gained over 200000 tons yes.

Yes.

Oh, Okay great.

Yes.

Yes.

But look.

Hi.

It's probably the biggest debate in media right now is what is the trajectory of the pay TV ecosystem right.

And so.

I don't know is the stabilizing is it increasing.

No.

Sure.

Yeah.

It's definitely a big debate we feel.

Good about the TV business given that.

We've got more subs launched for our new service Cleo television.

Many of our.

Our affiliate agreements advertisers still have a robust appetite for.

Video <unk>.

Programming and advertising.

Although we are we are seeing.

<unk>.

A softening in AD demand in.

And our television space and yes, I mean, I think Paramount has.

<unk>.

It has released earnings.

Yes.

Said the same thing NBC you Comcast before that the same thing so.

We're experienced experiencing it we're going to.

I think the affected less because of our target demo and the commitment to.

Our audience.

Diversity inclusion so we feel good about that but make no mistake youre in AR.

Macro economic headwind thats affecting national TV advertising.

Okay, Alright, well these questions have been very helpful.

I said I appreciate the time and I'll hand, it back 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.

And Sir just.

Curious.

What you are 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 rolling into 'twenty three it sounds like you're feeling a little bit of it on the TV side, Albert maybe just a little more on the radio side, what Youre, what youre seeing out there.

Yeah.

Definitely seeing radio slowdown in national.

However, we're offsetting that we've got our own <unk>.

Corporate sales.

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 yet we are 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 our results in radio versus everybody else's results, but can be night and day.

How does that play out.

For next year.

We're going through budgets right now yeah and.

And so.

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.

Indianapolis acquisition, I think is going to be a great deal for us.

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 going to be able to reduce real estate footprint.

We're going to have a killer year. This year. So are we going to be at a match that next year.

Yes.

The answer is probably not but quite frankly, I didnt think that going into this year I don't think were going to do as well as we ended up doing this year, so I can't really.

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.

On other on others.

For sure.

<unk>.

We've got our we didn't have our Tom Joyner crews.

This year, we're going to have it next year, it's already 80% sold out we're about to announce and we haven't announced any talent lineup.

We're about to announce talent lineup sooner and Thats 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.

It wasn't.

Nervous about the impact of stress that there is going to put on us as a company.

And that's got a lot to do with where we've gotten our leverage level too.

Yeah.

And our prospects.

Yes.

Say it might be nice sitting.

Sitting in that position I know you've gone through the ups and downs a couple of times before.

It seems like you are in a better position this time around for sure.

Do you think Alfred that.

For for maybe some of your peers that arent.

As well position this time going in there are some additional nervousness and stress on their part that there.

There could be some opportunity for you with regards to maybe investment or M&A.

You could take advantage of that to grow your platform further.

Yeah, I mean, I think 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 youre a seller, it's not great, but multiples have come in quite a bit, particularly in the media space right theyre, bringing multiples down.

On a quarterly basis for even the big diversified media company. So.

Lot of the.

Steffan.

And radio is kind of trading.

<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 at now so that's the historical.

None of them of the bid ask between a buyer and a seller so.

Is there a nexus where there is a meeting of the minds and something can happen.

I don't know, maybe probably right, we keep looking at stuff, but if.

If we don't if we don't get to that Nexus, we're gonna be happy just paying down debt and.

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 Ali.

Yes. Thank you.

Okay.

And we do have a follow up from Ben Briggs with Cisco Next financial Inc. Please go ahead.

Hey, guys. Just one just one quick follow up here I, just I just noticed something with.

So very strong I think by any measure first 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 $150 million that would imply only $16 million of EBITDA in the fourth quarter, which obviously doesn't doesn't sound right.

Yes.

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 call So thats exactly.

Yes.

That was that was that was in the.

Introduction that I gave so sorry that hadn't fab.

But.

Yeah.

When you think about it and you look at it and you're modeling it out you should expect the fourth quarter.

Quite like fourth quarter last year overall run so sequentially.

It's going to be down on Q2 and Q3.

For various reasons, which I hope we kind of went in so in the first five minutes, but yeah that would bring you out.

The mid 160, and we figured that we needed to update guidance because somebody is going to do the math that you. Just did go what are your guys' thoughts.

Yeah.

Alright.

Yes.

Right.

Thank you. Thank you very much for the clock, yeah, no worries sorry about that.

No problem.

If there are any additional questions. Please press one zero at this time.

And we have a question from Brad Kern with Adelina. Please go ahead.

Hi, Thanks for taking my question.

The one I wanted to ask is how sustainable do you think this updated guidance is how much of an uplift. There is do you think is from political and.

Can we think about that as a sort of a sticky base or would you expect.

How much how much.

Regression, where do you expect in the following year.

Yes, theres probably about.

$12 billion of total political across the platform almost.

10 of that is than radio.

So next year, that's going to go away, it's not going to go to zero right, yes, but it's going to go down substantially so you've got that headwind you've got.

The headwind of a looming recession.

But we've got our Indianapolis acquisition.

Did you at all as a <unk>.

Category.

Has been robust right I don't think.

Having a conversation with the Chief investment officer for one of the two.

Top three ad.

Advertising holding companies and.

And there is still projecting.

Revenue growth next year for digital advertising, even though they are projecting.

Down for traditional advertising, we've got a pretty robust digital platform.

So no I wouldn't say that.

<unk>.

You can look at.

The mid $1 <unk> as kind of like the sticky baseline because if you just take off.

Political and then throw something in there for <unk>.

Recession.

Going to go backwards right, but Indianapolis is going to be.

A meaningful contributor to our EBITDA next year probably.

Additional $4 $5 million.

And we've got other stuff that is.

Is coming into play the Tom Tom.

Tom Joyner Critters Digest.

And that could be another almost a couple of million dollars of.

EBITDA, so we're kind of working through all of that now.

Well look TV companies go up and down.

Every other year based on political ad demand.

I think <unk>.

Internally, we're starting to view our business.

Similar fashion, because it's it's a double digit revenue.

Swing for Us now.

Okay, that's really helpful.

In 2020, we did we do almost $20 million of political.

That was 18 <unk> yeah, yeah, no. It's a real number right now.

And so.

Not going to have that next year and.

Yeah.

So don't be surprised if our EBITDA next year ends up being less than it is as this year.

But again.

Yeah.

Yes.

Don't know.

<unk>.

I'm, probably not in the budget flat.

Flat.

Alright, but.

I got one I got one guy looking at me.

That's not what you told me.

Yeah.

Okay, and then so 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 is that the website basically website advertising or that.

And al what does that look like.

I mean that.

We sell our digital business is primarily display and.

And more and more video.

Off the top of my head, but I think revenue is probably what 25% digital video video right now.

We've pumped streaming audio streaming is a growing category.

Yes.

And our digital business and we've just seen.

<unk> seen a real explosion of demand against the digital category.

And this was a business that before.

In 2019 was probably low <unk> of revenue low to mid thirties, now and it's probably going to be closer to.

High 70 is closer to 80 this year.

Well I mean are you do you think youre, taking share from and just more people listening alright. Thank you hear from radio or.

Our PHA in between to Spotify.

Sure.

Increased demand in it.

Well first of all.

The share of I mean, the amount of money that we're doing is.

A pimple on the elephants, but.

In comparison to the entire digital revenue ecosystem, which includes meta and Google and Spotify.

So and there is no.

No Miller Kaplan for digital right like where we can sit and figure out what our digital shares but even if there was we probably wouldn't even register right.

And so I can't tell you the only place I can the only thing I can tell you is that national advertisers.

I put more money into digital B. They are now recognizing the contextual value of targeted digital media and and diverse owned platforms and is there increased interest in diverse.

<unk> and diverse ownership.

Has.

Has evolved we started interactive one and 2008, so we've been pounding the the urban.

Urban digital message for a very long time, and I think I said it earlier as well.

That brand building has.

It's helped us plus we've got.

The largest.

Urban or African American targeted digital audience in the.

Yeah as it relates to Comscore among all the competitors.

Right Yeah. So.

Alright Thats great.

Question.

I'm sorry.

So that's what's happening.

Okay, and that's a great segue to my next question, which is.

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 how much visibility you have on those commitments and second of all.

Yes.

Are they.

Are you able to quantify for the advertisers what the.

Are the economics pretty similar to maybe just like a.

Typical pop station or are they are they different and 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.

Those are my two questions on that front.

I mean, the same mechanism.

As they've increased their.

Procter <unk> 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 theyre going to grow their spend with black owned media from 2% to 4% over the next two years or so they've made multi year spend target.

Commitments.

I actually havent.

Come in and given us a two or three year contract.

Hard wires that there are some conversations going about multiple.

About contracts for multiple years now.

That.

That we're working on now.

I can tell you that rates 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.

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 for some have no audience that are now getting money.

So.

The CPM there probably through the roof.

Or not even calculable because there's.

I know some platforms that are getting real money diarrhea rate right.

But theyre getting but theyre getting money now.

We've always been rated we've always had a decent size audience and so even when.

If we get a fee.

40% rate increase.

Not more expensive than.

Just wondering.

Discovery networks.

We're probably still at a significant discount to what advertisers pay for those networks.

Got it Thats very helpful color. Thank you.

Thank you.

Hi.

Hello.

If there are any additional questions. Please press one zero at this time.

And we have a question from George Mike <unk> with Barclays. Please go ahead hi.

First of all I want to congratulate you guys on.

Another great quarter, just quickly is there any thought to doing any additional equity buybacks or can you talk about that thank you.

We have been discussing I think are our focus has been.

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've got.

<unk> 48.

So we like to do it opportunistically.

It's been good I mean, we've generally bought.

At the right time of our last big purchase was.

I think last.

A quarter ago, when we bought like $4 5 million shares back and I think the average price was like.

And 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.

And the opportunity to buy that many shares back in one fell swoop was.

While it was a good opportunity.

Fact, the matter is the volume is not huge on the stock so even if we go in.

When the stock is depressed you can't.

You won't be able to buy a ton of it.

We are assessing our R.

Our options now.

No 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 an opportunity to take a sizable block came up I think.

Well.

We would look at that because it just it just doesn't happen.

That often.

The other thing that.

We've been watching but I kind of feel good about it now is that.

Our EBITDA has been increasing our debt has been coming down.

The stock's kind of been going.

Hanging in there.

And thats because multiples have been.

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.

Not including the value of MGM.

Kind of feel like that.

Should feel like a floor.

For that.

For this business when I look at.

The low watermark in the cable space, which is AMC, which trades at about five times you can look at what newspapers have historically traded at which I think we have.

Much better business.

And that even.

<unk>.

The radio guys <unk> trading at almost seven times I think.

Yeah.

Cumulus is trading at about six times.

I think 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.

It's.

It's probably a pretty good trade.

I don't know and again, we're going through budgets right now.

Where do I think we're going to end up next year.

How does that factor into it.

We're long term shareholders of family is the largest shareholder.

Now.

Yes out there so.

So.

We're believers in it and we.

We generally like to own.

More of the company.

Then last over time, so, but we want to know.

We wanted to do it right.

Yes.

You don't like the stores.

You see a bunch of them are people who.

I believe and believe and believe and they buy.

Yes.

At the high end than the stock takes a valuation adjustment and just burn through a lot of money. We don't we don't really want them.

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.

There is very much risk in that at all.

Thank you.

Yes.

Okay.

If there are any additional questions. Please press one zero at this time.

And there are no further questions.

Thank you operator. Thank you everyone. We'll talk to you offline. If you have any additional questions and we'll see you next quarter.

Thank you, ladies and gentlemen that does conclude your conference for today. Thank you for your participation and for using AT&T event Conferencing service you may now disconnect.