Q4 2023 Gray Television Inc Earnings Call

Operator: Welcome to the Gray Television Q4 2023 earnings call. I will now turn the call over to Houghton Howell, Chairman and CEO of Gray Television. You may begin. Thank you, Operator. Good morning, everyone, and thank you for joining us.

Welcome to the Gray television Q4, 2023 earnings call I will now turn the call over to Greg.

Hello, Chairman and CEO of Gray television you may begin.

Thank you operator, good morning, everyone and thank you for joining us as the operator mentioned I'm Hilton Howell the chairman and CEO of Gray television. Thank you for joining our fourth quarter 2023 earnings call with me here in Atlanta, or all of our executive officers patent plotting our president and co CEO Sandy <unk>, our chief operating officer.

Hilton Howell: As the Operator mentioned, I'm Hilton Howell, the Chairman and CEO of Gray Television. Thank you for joining our fourth quarter 2023 earnings call. With me here in Atlanta are all of our executive officers, Pat Laplatney, our President and Co-CEO, Sandy Breland, our Chief Operating Officer, Kevin Latek, our Chief Legal and Development Officer, and Jim Ryan, our Chief Financial Officer. As usual, we will begin with a disclaimer that Kevin will provide. Thereafter, I will discuss the company's results and expectations, followed by brief remarks from Jim Ryan regarding our financial posture. And then, after those remarks, we will have a few questions for all of our officers here with me today. Thank you, Hilton, and good morning, everyone. Gray uses its website as a key source of company information. The website address is www.gray.tv.

Kevin Latex, our chief legal and development Officer, and Jim Ryan, Our Chief Financial Officer as usual, we will begin with a disclaimer that Kevin will provide that thereafter, I will discuss the company's results and expectations followed by brief remarks from Jim Ron regarding our financial posture and then after those remarks, we will have a few.

Questions for all of our officers here with me today.

Kevin Great. Thank you Hilton and good morning, everyone. Gray uses its website as a key source of company information. The website address is www T. R. A y dot TV.

Kevin P. Latek: We filed our annual report on Form 10-K with the SEC a few minutes ago. Included on the call may be a discussion of non-GAAP financial measures, and in particular broadcast cash flow, operating cash flow, free cash flow, and certain leverage ratios. These metrics are not meant to replace gap measurements but are provided as supplements to assist the public in their analysis and evaluation of our, quoted in our earnings release as well as on our website, our reconciliations, the non-GAAP financial measures to the GAAP measures reported in our financial statements.

We filed our annual report on Form 10-K, with the SEC a few minutes ago.

On the call maybe a discussion of non-GAAP financial measures and in particular broadcast cash flow operating cash flow free cash flow certain leverage ratios.

These metrics are not meant to replace GAAP measurements, but are provided as supplements to assist the public in their analysis and valuation of our company.

Included in our earnings release as well as our website are reconciliations to non-GAAP financial measures to the GAAP measures reported in our financial statements.

Kevin P. Latek: Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results. Those statements are subject to a number of risks and uncertainties. Actual results in the future could differ from those expressed or implied in any forward-looking statements as a result of various important factors that have been set forth. For example, the company's most recent reports filed with the SEC, including our most recent annual report on Form 10-K and our most recent earnings report. The company undertakes no obligation to update these forward-looking statements.

Certain matters discussed on this call may include forward looking statements regarding among other things future operating results.

The statements are subject to a number of risks and uncertainties.

Actual results in the future could differ from those expressed or implied in any forward looking statements. As a result of various important factors that have been set forth.

The Companys most recent reports filed with the SEC, including our most recent annual report on Form 10-K, and our most recent earnings release company undertakes no obligation to update these forward looking statements and now I will turn the call to Hilton.

Hilton Howell: Thank you, Kevin. Before turning to today's earnings release, I want to address Gray's upcoming transition to a new chief financial officer for the first time in 25 years. A few days ago, after the successful completion of the refinancing and the upsizing of our revolver, Jim Ryan notified me that he would like to transition into retirement after 2025 and, as part of that plan, step down from his CFO position later this summer. As many of you know, Jim joined Gray as its CFO in 1998 upon our acquisition of Bussee Broadcasting, where he had also served as president. And during that process, we were so impressed that he negotiated to the very end and really almost negotiated himself out of a job that we decided to offer him a job to take over and run the combined company. And, happily, he agreed.

Thank you Kevin.

Before turning to today's earnings release, I want to address Grays upcoming transition to a new chief financial officer for the first time in 25 years.

Few days ago. After the successful completion of the refinancing and the upsizing of our revolver, Jim Ryan notified me that he would like to transition into retirement after 2025.

And as part of that plan to step down from his CFO position later this summer as many of you know Jim joined Gray as its CFO and 1998 upon our acquisition of Busey Broadcasting where Jim had also served as CFO and during that process. We were so impressed.

Did he negotiated to the very end and really almost negotiated himself out of a job that we decided to offer them a job to take over and run the combined company and happily he agreed.

Hilton Howell: He has provided steady leadership and management of the company as we have divested our previous publishing assets and embarked on two significant waves of acquisitions of the highest quality television stations in the industry. Jim and his entire team have been instrumental in helping to build Gray into the leading multimedia company that it is today. While we will all miss Jim's day-to-day contributions, we're very fortunate to have succeeded in hiring his most logical successor in Jeff Janiak, a 20-year veteran of media and telecom banking at Wells Fargo Securities. Gray's leadership and finance teams have worked closely with Jeff over many transactions, and he knows our company as well as almost anyone who is not already working here. He is, therefore, the perfect candidate to become our next CFO, so I'd like to welcome Jeff to the Gray Television family.

He has provided steady leadership and management of the company as we have divested our previous publishing assets and embarked on two significant waves of acquisitions of the highest quality television stations in the industry, Jim and his entire team have been instrumental in helping to build great into the leading multi media.

Company that it is today.

While we will all Miss Jones day to day contributions were very fortunate to have succeeded in hiring his most logical successor, and Jeff Ginyard, a 20 year veteran of media and Telecom banking at Wells Fargo Securities raised.

Ray's leadership and finance teams have worked closely with Jeff over many transactions or transactions and he knows our company as well as almost anyone who has not already working here. He is therefore, the perfect candidate to become our next CFO. So I'd like to welcome Jeff to the <unk>.

TV family.

Hilton Howell: Turning now to our earnings release, it should be clear to all that Gray Television delivered in 2023 by nearly every measure. Our core advertising and retransmission revenues increased over the prior year, and political advertising revenue increased in 2019, the last year before a presidential cycle. Meanwhile, our local television stations continue to score with our audiences and to bring new business to our airwaves and to our digital platforms. Our stations have also received more awards and recognition from outside organizations for their successful news, investigations, and community services.

Turning now to our earnings release, it should be clear to all that great TV delivered in 2023 by nearly every measure our core advertising and Retrans revenues increased over the prior year and political advertising revenue increased over 2019.

The last year before a presidential cycle.

Meanwhile, our local TV stations continued to score with our audiences and to bring new business to our airwaves and our digital platforms.

Our stations also collected more awards and recognitions from outside organization.

For the successful news investigations and community service in the second half of the year. We reached substantial completion of our state of the Art Assembly Studios movie and TV production facility here in Atlanta.

Hilton Howell: In the second half of the year, we reached substantial completion of our state-of-the-art assembly studios, movie and television production facility here in Atlanta. And in December, NBCUniversal began its long-term lease for two-thirds of our sound stages at Assembly Atlanta. With these achievements in 2023, we have laid a strong foundation for 2024, which we believe will be further powered by another significant presidential election cycle. In the fourth quarter of 2023, Gray had total revenue of $864 million, which was at the high end of our revenue guidance. The company had total operating expenses of $664 million, which was below the low end of our expense guidance for the quarter.

And in December NBC Universal commenced its long term lease for two thirds of our sound stages at Assembly Atlanta.

With these achievements in 2023, we have laid a strong foundation for 'twenty 'twenty, four which we believe will be further powered by another significant presidential election cycle.

In the fourth quarter of 2023 Gray had total revenue of $864 million, which was at the high end of our revenue guidance. The company had total operating expenses of 664 million, which was below the low end of our expense guidance for the quarter.

Hilton Howell: Fourth-quarter revenue was $143 million, or 20% ahead of 2021, our most recent nonpolitical year. Our fourth-quarter 2023 core advertising revenue was $415 million, an increase of 2% from the fourth quarter of 2022. Retransmission consent revenue was $365 million, an increase of 3% from the fourth quarter of 2022. Unfortunately, investments to grow and diversify a company do not always pan out, but in the fourth quarter of 2023, due in part to non-cash write-downs of certain investments, Gray posted a net loss for Tribble's Common Shift stockholders of $22 million.

Fourth quarter revenue was $143 million or 20% ahead of 2021, our most recent non political year.

Our fourth quarter 2023 core advertising revenue was $415 million, an increase of 2% from the fourth quarter of 2020 to retransmission consent revenue was 365 million an increase of 3% from the fourth quarter of 2022.

Unfortunately investments to grow and diversify our company do not always pan out, but in the fourth quarter twenty-three due in part to noncash write downs of certain investments Gray posted a net loss attributed to common ship stockholders of $22 million on the other hand, when investments do pay off the awards can be tremendous and indeed, we saw.

Hilton Howell: On the other hand, when investments do pay off, the rewards can be tremendous, and indeed, we saw such a payoff about two weeks ago with the receipt of $110 million in pre-tax proceeds from the sale of BMI, in which we have long held a position. Operationally, we had a tremendous fourth quarter, not only in sales and content but also in multiple initiatives to leverage our unique assets for future growth. In fact, our significant focus on developing new local direct advertising business continues to be very strong.

Such a pay off about two weeks ago with the receipt of $110 million in pre tax proceeds from the sale of BMI and which we have long held a position.

Operationally, we had tremendous fourth quarter not only in sales and content, but also in multiple initiatives to leverage our unique assets for future growth in fact, our significant focus on developing new local direct advertising business continues to be very strong.

Hilton Howell: During the fourth quarter, we grew our new local direct ad revenue by 12%, and that momentum has continued into 2024. In addition, as the year drew to a close, we extended our affiliation agreement with NBC for another two years. We are happy that this long-term relationship will continue.

During the fourth quarter, we grew our new local direct AD revenue by 12% and that momentum has continued into 2024. In addition, as the year drew to a close we extended our affiliation agreement with NBC for another two years, we are happy that this long term relationship continues.

Hilton Howell: The most exciting initiatives involve our aggressive efforts to bring professional sports teams in our markets back to free, over-the-air broadcast television. After extensive efforts over the summer and fall, we were able to announce two major deals on top of our previously announced long-term deal with the Phoenix Suns and Mercury, with storied professional sports franchises at the end of the year, literally New Year's Eve. First, the Atlanta Hawks returned to Peachtree TV in Atlanta after almost 30 years away for nearly every Friday night game remaining in the 2023-2024 NBA season.

The most exciting initiatives involve our aggressive efforts to bring professional sports teams in our markets back to free over the air broadcast TV.

After extensive efforts over the summer and fall we were able to announce two major deals on top of our previously announced long term deal with the Phoenix, SUNS and Mercury with Scurried professional sports franchises at the end of the build year literally new year's Eve.

First the Atlanta Hawks returned the Peachtree TV and Atlanta after almost 30 years away for nearly every Friday night game remaining in the 'twenty to 'twenty three 'twenty 'twenty four M B a season.

Hilton Howell: Thereafter, we followed up with the announcement that the New Orleans Pelicans would have ten of their games this NBA season broadcast to fans on Gray's WVUE and our Balance channel in New Orleans. But, significantly, in both cases, we have supported the teams by carrying these games on all of our stations, where all of their true fans are. So the Hawks are broadcast throughout the state of Georgia and a good half of Alabama. And the Pelicans are broadcast across the entire great state of Louisiana and most of Mississippi and even part of Alabama.

Thereafter, we followed up with the announcement that the New York, New Orleans Pelicans would have tuned up their games. This M. B a season broadcast of fans on Gray's WB Hughie and our balanced channel in New Orleans.

But significantly in both cases, we have supported the teams by carrying these games in all of our stations.

All of their true fans are.

So the Hawks are broadcast throughout the state of Georgia, and a good half of Alabama, and the pelicans or broadcast across the entire great state of Louisiana, and most in Mississippi, and even part of Alabama Gray.

Hilton Howell: Gray has begun 2024 with great momentum. In January, we hosted our station general managers for our annual meeting, and they are universally excited about the year ahead. We have continued to sign up professional sports contracts with new deals announced in the last few weeks to bring Gray Stations games featuring the Cleveland Cavaliers, the Oklahoma City Thunder, and the Milwaukee Bucks. Additionally, over the past several weeks, Gray has also renewed all of its retransmission consent agreements with MVPDs that expired in the fourth quarter of January 2024.

Gray has begun 2024 with great momentum.

In January we hosted Artstation general managers for our annual meeting and they are universally excited about the year ahead. We have continued to sign up professional sports contracts with new deals announced in the last few weeks to bring Gray's stations games, featuring the Cleveland Cavaliers, The Oklahoma City Thunder.

And the Milwaukee Bucks.

Over the past several weeks Greg has also renewed all of its retransmission consent agreements with Mvpds that expired in the fourth quarter of January 2020 for these renewals cover sizeable portion of our subscriber base at higher rates and improved terms that recognize the enduring value of our truly.

Hilton Howell: These renewals cover a sizable portion of our subscriber base at higher rates and improved terms that recognize the enduring value of our truly unique local stations and what they continue to provide. Earlier this month, our CBS portfolio capitalized on the Super Bowl with $18 million in local ad sales. That was a 200% increase over our Super Bowl net revenue last year across our Fox station portfolio. But, significantly, it also represents a 39% increase over the last Super Bowl broadcast on our CBS station. Most recently, we took advantage of a good opportunity to launch a process to refinance certain of our senior credit facilities. However, an unexpected turmoil in capital markets led us to postpone that effort with regard to our term loan expiring in 2026.

<unk> unique local stations and what they continue to provide.

Earlier this month, our CBS portfolio capitalize on the Super Bowl with $18 million in local AD sales.

That was a 200% increase over our Super Bowl net revenue last year across our Fox station portfolio, but significantly. It also represents a 39% increase over the last Super Bowl broadcast on our CBS stations most <unk>.

Recently, we took advantage of a good opportunity to launch a process to refinance certain of our senior credit facilities. Unfortunately, and unexpected turmoil in capital markets led us to postpone that effort with regard to our term loan expiring in 2026, we did however successfully refinanced.

Hilton Howell: We did, however, successfully refinance our revolving credit facility as our bank stood strongly with us and provided us with a new and larger revolver totaling $625 million. Although we do not have any amounts currently drawn on our revolving credit facility, it will provide us with additional flexibility in the future when and if needed. We very much appreciate the bank's continuing and deep understanding of our company and our business and their unwavering support of our efforts to grow the company and reduce its debt load. As we now look ahead to 2024, I remain very bullish about our prospects and our future. Our television stations continue to perform at the absolute top of their game.

Our revolving credit facility as our banks did strongly with us and provide us with a new and larger revolver totaling $625 million. Although we do not have any amounts currently drawn on our revolving credit facility. It will provide us with additional flexibility in the future when and as and as needed.

Yeah.

We very much appreciate the banks, continuing and deep understanding of our company and our business and their unwavering support of our efforts to grow the company and reduce its debt load as we now look ahead to 2024 I remain very bullish about our prospects and our future our teller.

Vision stations continued to perform at the absolute top of their game sports teams are rediscovering, what our local advertisers and viewers already know which is that our local stations offer unparalleled reach and promotional opportunities for free.

Hilton Howell: Sports teams are rediscovering what our local advertisers and viewers already know, which is that our local stations offer unparalleled reach and promotional opportunities for free to 100% of the viewing audience. 2024 will see us continue to build on these foundations for continued success. Finally, I'm very proud that we have created the nation's finest television and movie production facilities at our Assembly Atlanta Complex here in Atlanta. By relying on local contractors, tradesmen, and materials, we were able to deliver the facilities to NBCU in just 19 months from the date of announcement.

Two 100% of the viewing audience.

'twenty 'twenty four will see us continue to build on these foundations for continued success.

Finally, I'm very proud that we have created the nation's Spanish television and movie production facilities at our Assembly Atlanta complex here in Atlanta.

Lying on local contractors tradesmen and materials, we were able to deliver the facilities to NBC you and just 19 months from the date of announcement in 'twenty 'twenty four we will be putting the finishing touches on the studio complex and certain infrastructure projects.

James C. Ryan: In 2024, we will be putting the finishing touches on the studio complex and certain infrastructure projects. These additional projects will require about $52 million in capital expenditures, but they will be netted against about $31 million in reimbursements for the public nature of these infrastructure projects, or a net of about $21 million. It is extremely gratifying for us to now see the major content creator, NBCUniversal, leverage the soundstages and support buildings into a new major center for its world-class production. On the Gray side, we are actively marketing the soundstages that we have retained at Assembly as well as our pre-existing soundstages at our adjacent third rail studios to bring additional production work here to Atlanta. This now concludes my remarks, and I will turn the call over to Jim Ryan. Thank you, Hilton. Good morning, everybody.

These additional projects will acquire about 52 million in capital expenditures, but they will be netted about buy against about $31 million in reimbursements for the public nature of these infrastructure projects or a net of about $21 million it.

It is extremely gratifying to us to now see the major content creator NBC universal leverage the sound stages and support buildings into a new major center for its World Class Productions.

On the grain side, we are actively marketing the sound stages that we have retained at assembly as well as our preexisting sound stages at our Addison third rail studios to bring additional production work here to Atlanta. This.

This now concludes my remarks, and I will turn the call over to Jim Ryan.

Thank you Hilton and good morning, everybody Hilton cover the key highlights to the quarter end of the full year. So my Mark My remarks will be very short today again, we're very pleased with our Q4 and year to date results, especially the growth in core revenue.

James C. Ryan: Hilton covered the key highlights of the quarter and of the full year, so my remarks will be very short today. Again, we're very pleased with our Q4 and year-to-date results, especially the growth in core revenue. On a debt net of cash basis and on terms consistent with our senior credit facility, the total leverage ratio at the end of the year was 5.60 times, and our first lien leverage ratio at the end of the year was 2.38 times.

On a debt net of cash basis and on terms consistent with our senior credit facility total leverage ratio at the end of the year was 560 times in our first lien leverage ratio at the end of the year was 2.38 times.

Turning to our Q1 'twenty for guidance, we look forward to accessible full year 'twenty four and we're off to a good start in Q1, we were very pleased with core revenue in Q1's growth guiding low to mid single digit percentage increases core revenue got off to a great start helped by the $18 million.

James C. Ryan: Turning to our Q1-24 guidance, we look forward to a successful full year 24, and we're off to a good start in Q1. We're very pleased with core revenue growth in Q1, guiding low to mid-single-digit percentage increases. Core revenue got off to a great start, helped by the $18 million of Super Bowl advertising revenue in February, providing for a strong year-over-year increase in core revenue in February.

Super Bowl advertising revenue due in February providing for a strong year over year increase in core revenue in February but more importantly, we see both in January and March core revenue.

Is expected to be increasing in both months year over year.

James C. Ryan: But more importantly, we see that both in January and March core revenue is expected to be increasing in both months, year-over-year. I'll turn now to some comments on the full year 24. And as we've said consistently for some time publicly, we are not providing a guide on political revenue for the full year of 2024.

I'll turn now to some comments on the full year 'twenty four.

And as we've said consistently for some time publicly we are not providing a guide on political revenue for the full year of 2024.

We will point to 2020, and say that after deducting the $50 million that was associated with the double Senate a run off election in Georgia in that year, we had approximately 600 million of political and all of that 600 million about 22%.

James C. Ryan: We will point to 2020 and say that after deducting the $50 million that was associated with the double Senate runoff election in Georgia in that year, we had approximately $600 million in political revenue, and of that $600 million, about 22% represented the presidential campaigns that year. We will also point to 2022, where we had approximately 515 million in political revenue. All of you on the call are welcome to plug in whatever political revenue estimate you want for 2024, and after Election Day, we can compare notes to see who got closest. Turning to some other data points for the full year 2024. We expect core revenue of approximately $1.6 billion, retransmission revenue of approximately $1.5 billion, and other TV revenue of approximately $70 million. Production companies had revenues of approximately $110 million. Our operating expenses before depreciation, amortization, impairment, gain, and loss on disposal of assets are broadcasting of approximately $2.4 billion. That would include approximately $937 of network compensation, also known as retransmission expense.

Dented the presidential campaigns that year.

I'll also point to 2022 where we had approximately $515 million of political revenue.

All of you on the call are welcome to plug in whatever political revenue estimate you want for 'twenty 'twenty four and after election day, we can compare notes to see who got closest.

Turning to some other data points and full year 2024.

We expect core revenue of approximately $1 6 billion.

Retransmission revenue of approximately $1 5 billion.

Other T D revenue of approximately $70 million.

Production companies revenues of approximately $110 million.

Our operating expenses before depreciation amortization impairment gain and loss on disposal of assets broadcasting of approximately $2 4 billion that would include approximately 937 of network compensation also known as retransmission expense, we expect a proxy.

The 85 million of expense at the production companies.

And our corporate expense of approximately $125 million.

Significant cash use uses in 2024 are as follows we expect cash interest of approximately $430 million.

James C. Ryan: We expect approximately $85 million of expense at the production companies and a corporate expense of approximately $125 million. Significant cash use uses in 2024 are as follows. We expect cash interest of approximately 430 million.

Routine capital expenditures between 115 and $120 million.

As Hilton already mentioned, our net additional investment in assembly Atlanta is expected to be $21 million.

James C. Ryan: Routine capital expenditures between $115 million and $120 million. As Hilton already mentioned, our net additional investment in Assembly Atlanta is expected to be $21 million. Our cash taxes are expected to be between $190 million and $210 million.

Cash our cash taxes are expected to be between $190 million and $210 million.

That obviously reflects political in 2024. It also reflects the taxes, we will be paid on a $110 million of the BMI sales proceeds are preferred dividends were approximately 52 million and our common dividend will be approximately $30 million.

James C. Ryan: That obviously reflects politics in 2024, but it also reflects the taxes we will be paying on the $110 million of the BMI sale proceeds. Our preferred dividends were approximately $52 million, and our common dividends will be approximately $30 million. Turning again to the BMI sale proceeds of $110 million, that translated into approximately $81 million in after-tax cash proceeds. We used $50 million of that $81 million to repay in full all outstanding amounts under our revolving credit facility.

Turning again to the BMI sale proceeds of $110 million that translated into approximately 81. After tax cash proceeds we used 50 million of that 81 million too.

Repay in full all outstanding amounts under our revolving credit facility as Hilton said earlier, we have nothing drawn on the revolving credit facility as of today.

Finally, as Hilton mentioned, we were very pleased to upsize. The revolver is $625 million. We appreciate our bank syndicate understanding of the fundamentals of our business and partnering with us into the future I'll now turn the call back to Hilton. Thank you.

James C. Ryan: As Hilton said earlier, we have nothing drawn on the revolving credit facility as of today. Finally, as Hilton mentioned, we're very pleased to upsize our revolver to $625 million. We appreciate our bank syndicate's understanding of the fundamentals of our business and partnering with us into the future. I'll now turn the call back to Hilton. Thank you.

John before we open up the floor to take questions I would like to conclude our remarks on what I view as exceptionally positive note about the momentum that we're building with professional sports, particularly with D. M B a.

We have been able to use our unmatched regional presence to distribute these games on our stations across the entirety of the states of Arizona, Georgia, Ohio, Louisiana, Mississippi and Alabama.

Hilton Howell: Thank you, Jim. Before we open up the floor to take questions, I would like to conclude our remarks on what I view as an exceptionally positive note about the momentum that we are building with professional sports, particularly with the NBA. We have been able to use our unmatched regional presence to distribute these games on our stations across the entirety of the states of Arizona, Georgia, Ohio, Louisiana, Mississippi, and Alabama.

At the same time, we have worked with other broadcasters to fill in a few holes in our distribution map as we have done as we have done with Allen media and soon we will announce similar deals with other groups. We have also worked with other broadcasters to enable our stations to provide outer market distribution.

For NBA teams in cities, where we do not have the major market television station as we have done with Griffin meter media and Oklahoma City and Tulsa.

Hilton Howell: At the same time, we have worked with other broadcasters to fill in a few holes in our distribution map, as we have done with Allen Media, and we will soon announce similar deals with other groups. We have also worked with other broadcasters to enable our stations to provide outer market distribution for NBA teams in cities where we do not have the major market television station, as we have done with Griffin Media in Oklahoma City and Tulsa and with Weigel Broadcast, and soon with more companies. I'm happy to see the industry working together to provide the power of broadcasting to local professional sports teams and their amazing fans. Last but certainly not least, it is worth highlighting the massive increase in viewership that these teams are receiving when their games appear on free local broadcast stations instead of their traditional regional sports networks.

And with Woggle broadcasting and soon with more companies.

I'm happy to see the industry working together to provide the power of broadcasting to local proportional professional sports teams and their amazing bands.

Last but certainly not least it is worth highlighting the massive increase in viewership that these teams are receiving when their games appear on free local broadcast stations instead of their traditional regional sports networks in market. After market. These NBA teams are enjoying <unk>.

<unk> that are two and often three times higher than what they had been receiving previously and even more importantly, they are reaching 100% of their fans.

We're racking up impressive ratings for NBA games, not just and this is important to me in their home market, but throughout the regions, where we are distributing the games.

Hilton Howell: In market after market, these NBA teams are enjoying ratings that are two and often three times higher than what they had been receiving previously. And, even more importantly, they're reaching 100% of their fans. We're racking up impressive ratings for NBA games, not just, and this is important to me, in their home market, but throughout the regions where we are distributing the games on Gray Television, they are reaching 100% of their fans. And broadcast stations and professional sports teams are among the strongest local institutions that help to bond our communities together. When we struck our deal with the Phoenix Suns and Mercury, something occurred that I'm extremely proud of, but I am a little embarrassed that I didn't think of beforehand.

Through through local broadcast on gray television, they're getting to 100% of their fans.

And broadcast stations and professional sports teams are among the strongest local institutions that helped to bond our communities together.

When we struck a deal with the Phoenix SUNS and Mercury.

Something occurred that I'm extremely proud of but I am a little embarrassed that I didn't think of beforehand.

Once we launch and it went out on broadcast television our local general managers receive many letters from local individual American Indian viewers, who had never been able to watch their basketball teams before we are immensely proud.

Operator: Once we launched and it went out on broadcast television, our local general managers received many letters from individual American Indian viewers who had never been able to watch their basketball teams before. We are immensely proud that we have spread these sports teams to truly 100 percent of their fans. We are at an important time in history when these two powerful forces are proving that coming together can provide unparalleled reach and experience that benefits everyone. So, operator, at this time, we ask that you open the line for questions from anyone here on the leadership team. Okay, if you would like to ask a question, please press star 1 on your telephone keypad. Again, to ask a question, press star 1 on the telephone keypad.

<unk> that we have spread the sports teams to truly 100% of their fans.

We were at an important time in history.

When these two powerful forces are proving that coming together can provide unparalleled reach and experience that benefits everyone.

So operator at this time, we ask that you open the line for questions.

Of any one here on the leadership team.

Okay do you like to ask a question. Please press star one on your telephone keypad again to ask a question press Star one.

One key pad.

And I'll just give it a few moments.

Okay.

It looks like our first question is going to come from Aaron Watts with Deutsche Bank. Your line is open.

Aaron Lee Watts: And I'll just give it a few moments for the queue to build. It looks like our first question is going to come from Aaron Watts with Deutsche Bank. Your line is open. Hi, everyone. Thanks for having me on.

Hi, everyone.

Thanks for having me on let me start by saying that Jim Congrats on the announcement well deserved but.

Happy we still have some time left to work together and I'll save my laudatory remarks for a later date.

Aaron Lee Watts: Let me start by saying to Jim, congrats on the announcement. I'm happy we still have some time left to work together, and I'll save my laudatory remarks for a later date. Uh, maybe, maybe I can start with, uh..., a question around retrans, your retrans revenue growth in your first quarter guidance seems to be a bit of a slowdown from what we've seen in recent quarters. Can you unpack that a little more for us?

Maybe I, maybe I can start with.

A question around Retrans your Retrans revenue growth.

And your first quarter guidance seems to be a bit of a slowdown from what we've seen in recent quarters.

Unpack that a little more for US is that just timing of renewals is there an acceleration.

And the decline in the underlying sub base and maybe the same question thinking about the components for the full year.

Kevin P. Latek: timing of renewals, is there an acceleration in the decline in the underlying sub-base, and maybe the same question thinking about the components for the full year. Hi Aaron, this is Kevin Latek. We renewed a number of our contracts that were expiring at the end of the year, as Hilton mentioned on the call. And we're happy with where those renewals are at. As the numbers are getting bigger, the percentage increases can't be as big. But we're very happy with the rates that we got and the terms that we received. So the first quarter was about 38% of our total MVPD sub-base. The virtuals, of course, are becoming a sizable portion of that. So when we talk about the percentage, we're talking about the traditional MVPD. The increase in our growth was not as significant as we had hoped, and we attribute that not to the rate increases but to the sub-decent.

Hi, Eric This is Kevin.

This is Kevin Mitek.

We renewed a number of our contracts that were expiring at the end of the year as Hilton mentioned on the call.

And we were happy with where those renewed at is.

The numbers are getting bigger the percentage increases are or can't be as big.

But they were very happy with the number with the rates that we got in the terms that we received so the first quarter was about 38% of our total mvpds have base they're virtually.

Of course are becoming a more sizable portion of that so when we talk about the percentage we're talking about the traditional mvpds.

The b.

The increase in our gross was not as significant as we had hoped and we attribute that to the not to the rate increases but to the sub declines.

The traditional mvpds.

Kevin P. Latek: The traditional MVPDs, this is publicly reported by the companies you all follow, continued to see losses last year, and unfortunately, it seems like the losses actually accelerated last year. That may be due to the strikes leading to not as much new programming or interesting programming on the Broadcast Network. So we're hopeful with the strike behind us and new premieres coming back out. And it will be the sub-losses stabilized, but we did see a continued decline in the traditional MVPD sub through last year, including through the end of last year, when we were expecting to see that slow. So the net result of that was that our gross... was not powered as much because we had a smaller sub-base.

As publicly reported by the public by the companies you all continue to see losses last year. Unfortunately, it seems like the losses actually accelerated.

Last year that may be due to the strikes leading too not as much new programming or interesting programming.

On the broadcast networks.

So we're hopeful with the strike behind us and new premieres coming back out.

That will see the sub losses.

Stabilized, but we do we did see a continued decline in the traditional mvpds subs.

Through last year, including through the end of last year, when we were expecting to see that slow down.

So the net result of that was at our gross Retrans.

It was not powered as much.

Kevin P. Latek: On the reverse side, we've been saying for some time that we expect network comp is going to stabilize, and I think that's pretty clear in the guide today that network comp is stable, but the system where we're paying a fixed fee to the networks and receiving variable income is one that has to change. And I expect all the broadcasters to see that, and we will continue to push for a realignment of the formula because that's absolutely not working for local broadcasters. Okay, thanks. That's helpful.

Just because we had small smaller sub base to multiply it on on the reverse side, we've been saying for some time, we expect the network comp was going to stabilize and I think that's pretty clear in the guide today that number accomplish stable.

But the system, where we're paying a fixed fee to the networks and receiving variable income. It is one that has to change and.

And I expect all the broadcasters are see that and we will.

To push for a.

Our realignment of that formula because thats not absolutely not working for local broadcasters any longer.

James C. Ryan: And then, Jim, I appreciate your comment on politics. But with the way the Republican primary has played out, have your expectations for politics for the year changed? And given the race that you see in play, I don't know if I could ask you if. I think you can grow off that 600 million results in 2020, I think. We are not going to comment on any growth rates or specific numbers. But we will tell you we are confident that 2024 will be a strong political year given how this year's primaries have shaped up versus 2020, which is just stating the obvious, right? I mean, it's two different cycles.

Okay. Thanks, that's helpful and then.

Jim I appreciate your comments on political.

But with the way the Republican primary that's played out have your expectations for political for the year changed and given the rates that you see in play I don't know if I could ask you you.

You can grow off that 600 million results from 2020, I think he mentioned we are not going to comment on any growth rates or specific numbers. We will tell you. We are confident that 'twenty 'twenty four will be a.

Strong political year.

Given how this year's primaries have shaped up versus 'twenty 'twenty.

Which is just stating the obvious right I mean, it's two different cycles.

James C. Ryan: We think the political will be naturally more back-weighted to the second half of the year and especially the traditional general election campaign season of September through election. So other than saying, I don't know how many hundreds of millions of dollars we're going to get, but we're going to get a lot of it. And we have always historically done better per capita than anybody in the peer space by a long shot. We don't see that being any different this year. And we are, you know, got a lot of Senate and House races as well. So we think it will be a good year, but we're not going to put a number on it this early. It's way too early to even try to put a number on it. Aaron, let me just add a little bit to that. I mean, this is an unusual time period in the sense that you have a number of third-party candidates.

We think the political will be naturally more back weighted to the second half of the year and especially the traditional general election campaign season of September through election day.

So okay.

Other than saying I don't know how many hundreds of millions of dollars, we're getting yet, but we're going to get a lot of it so and we have always historically done better per capita than anybody in the peer space by a long shot we don't see that being any different this year and we are you know got a lot of.

Senate and house races, as well so we think it will be a good year, but we're not going to put a number on it. This early it's way too early to even try to put a number on it.

Let me just add a little bit to that I mean, this is an unusual time period in the sense that you have.

A number of third party candidates, we've had them in the past that may be out there Robert Kennedy, obviously comes to mind. He had a 7 million dollar add that our packages, but on the Super Bowl that I'm sure all of you saw.

Hilton Howell: We've had them in the past. That may be out there. Robert Kennedy obviously comes to mind.

Hilton Howell: He had a $7 million ad that a pack of his put on the Super Bowl that I'm sure all of you saw. You know, we have had a rapidly moving Republican primary season; South Carolina is on Saturday, but Governor Haley, Secretary Haley, Ambassador Haley, I should say, have significant funds, and she intends to continue with the primary process. Donald Trump's able to generate an awful lot of free media coverage with his rallies, and that covers it, but he's not going to get what he's had in the past, and so I think he's going to be advertising. Now, a lot of you may be thinking that a lot of his money is going to legal fees. We'll see. But one number that I'm actually certain of is that the Biden-Harris team announced a quarter ago that they had raised $114 million, which was the largest sum ever accumulated by any Democratic candidate in any previous election cycle.

We have had.

Rapidly moving.

Republican primary season.

South Carolina is Saturday, but Governor Haley Secretary Haley Ambassador Hayley I should say.

<unk> has significant funds and she intends to continue with the with the primary process.

Donald Trump's able to generate an awful lot of free media by his rallies and that covers it but he's not going to get what he's had in the past and so I think he is going to be advertising and a lot of you may be thinking that a lot of money is going to legal fees will sing, but one number that I'm actually certain of is.

Biden Harris team announced.

A quarter ago that they had raised 100 and I think it was $114 million, which was the largest some ever accumulated by any democratic candidate and in any previous election cycle and that was a long time in advance and so I think the real the real determinant.

Hilton Howell: And that was a long time in advance. And so I think the real determinant is going to be what the respective parties and the respective candidates raise. And from everything I'm seeing, those numbers are historic numbers, and hopefully, that goes through and matriculates through in an ad business because they're not going to sit on that money. You know, they're not going to pay their debt off with it, right? They're going to spend that money, and Gray Television stations, because of their news dominance and their huge viewership in their local markets, always outperform.

Are going to be what the respective parties in their respective candidates raise and from everything I'm, saying those numbers, our historic numbers and hopefully that goes through and matriculate through in an AD business, because theyre not going to sit on that money you know, they're not going to pay the debt off with it right, they're going to spend that money and.

Gray television stations.

Cause of their news dominance and they're huge viewership in their local markets always outperform so the only thing we see is not repeating.

Outside of strong strong.

Political revenue as you know, we don't expect a double Senate run off for four months in Georgia. This time around so we've taken that out and that was in Jim's comments, but we think it's going to be a great season.

Aaron Lee Watts: So the only thing we see not repeating, outside of strong, strong political revenue, is that we don't expect a double Senate runoff for four months in Georgia this time around. So we've taken that out, and that was in Jim's comments, but we think it's going to be a great season. Okay, thanks for that, Hilton. And if I could flip one more in, I appreciate the time. You end up at 20, 23 at five.

Okay. Thanks for that help me and Maryland, Moran and I appreciate the time.

You ended 2023 at five six times leverage as we're starting a new year, Jim any fresh thoughts on where you see that leverage trending 12 months, perhaps 24 months out and Relatedly does debt Paydown remain our top capital allocation priority are there any other levers beyond organic free cash flow, we should be thinking about that.

Help accelerate the deleveraging process that's it for me. Thank you again.

James C. Ryan: Time's Leverage. As we're starting a new year, Jim, any fresh thoughts on where you see that leverage trending 12 months, perhaps 24 months out? Relatedly, does pay down remain a top capital allocation priority? Are there any other levers beyond organic free cash flow we should be thinking about to help accelerate the deleveraging process? That's it for me.

So.

Our number one priority with our free cash is to continue to delever as rapidly as possible, we've been saying that consistently for some time and that has not changed.

Aye.

Over over the next year or so I see us getting without being too specific because I. If I get too specific then people will start triangulating on and political and I'm not going to go step on that landmine. After just saying, we're not guiding for political so I see us getting into the lower fives and then as you go.

James C. Ryan: Thanks. So it is. Our number one priority with our free cash is to continue to de-lever as rapidly as possible. I have been saying that consistently for some time, and that has not changed. Over the next year or so, I see us getting, without being too specific, because if I get too specific, then people will start triangulating on politics, and I'm not gonna step on that landmine after just saying we're not guiding for politics. So I see us getting into the lower fives, and then as you go out a little farther, you're definitely in the fours.

Out a little farther year definitely in the fours and.

And we will continue to push it downward.

You know over the next several years as rapidly as possible.

Our next question is going to come from Ken <unk>.

Thanks, Mike.

Your line is open.

Great. Thanks, good morning.

Kevin can we just go back to Retrans for a second I just first housekeeping because I think Hilton said this.

James C. Ryan: And we will continue to push it downward, you know, over the next several years as rapidly as possible. Our next question is going to come from Dan Kernow with Benchmark. Eulalina Thompson: Great, thanks.

Are all of the deals that came up at the end of the year that 38% are they all done.

Hilton said all of the deals that expired in the fourth quarter and in January 2024 had been renewed we have not finished the first quarter and therefore, we have not finished.

Kevin P. Latek: Good morning. Kevin, can we just go back to relay for a second? I just want to make a first housekeeping because I think Hilton said this. Are all of the deals that came up at the end of the year, that 38%, are they all done? Hilton said all of the deals that expired in the fourth quarter and in January 2024 have been renewed. However, we have not finished the first quarter, and therefore, we have not finished renewing the contracts that have expired. After January 2024, we're still in discussions; the figure of 38% of our subs is for the entire quarter. So we have renewed almost all of the contracts, but we're still in discussions with another large party. It's going fine. As in all prior cases, we will get it wrapped up, in the ordinary course, and it'll be retroactive to the expiration date.

Renewing.

The contracts that expired.

After January 2024, we're still in discussions the figure of a 30.

38% of our subs as the entire quarter. So we have renewed a almost all of the contracts, but there are.

We're still in discussions with another large party.

It's going fine and we expect as it has in our prior cases, we will get it wrapped up in a in the ordinary course, and it will be retroactive to the exploration date. So again, we had 38% expiring in Q1, which takes us to basically January 1st and we've done all of those expired at the end of the year in the month of January and we have a.

A continuing conversation with another party that's on track.

That is in Q1 in the second quarter, we have more renewals that are up at those renewals represent about 23% of our traditional mvpds sub base.

Kevin P. Latek: So again, we had 38% expiring in Q1. It is January first, and we have done all those that expire at the end of the year in the month of January, continuing the conversation with another party that's on track. That is in Q1. In the second quarter, we had more renewals that were up. Those renewals represent about 23% of our traditional MVPD. Okay, so the Q1 guide assumes that retroactively you will complete the large party negotiation. That's what you're saying, what you're telling us. Our guide represents our current estimate, at this time, of the deals that will be in place, a good faith estimate of what the rates will be for the first quarter.

Okay. So the Q1 guide.

Assumes that retroactively you will complete the large party negotiation, that's what you're saying what you're telling us.

Our guide represents our current estimate at this time.

Of the deals that will be in place and are a good faith estimate of what the rates will be.

For the first quarter.

Okay.

And you know lucky.

Made some fairly strong commentary about the ecosystem then the.

Fact of the fixed fee and the impact obviously on on reverse based on your guide I mean, how do we think about kind of.

Kevin P. Latek: Okay. And, you know, look, you made some fairly strong commentary about the ecosystem and, you know, the fact of the fixed fee and the impact, obviously, on reverse. Based on your guide, how do we think about kind of net retrans from here? Obviously, 1.5 could mean a couple different things.

Net retrans from here, obviously, one five could mean, a couple of different things but.

We have the reverse piece of this I'm just trying to get a sense, especially since this is your biggest renewal year, how we should be thinking about net growth from here.

Jim provided a full year guide of approximately $1 5 billion for gross and 937 I believe for network comp.

We're not at this point smart enough to know tens of millions of dollars, which way that one 5 million is gonna be.

Kevin P. Latek: But, you know, we have the reverse piece of this. I'm just trying to get a sense, especially since this is your biggest renewal year, how we should be thinking about net growth from here. Jim provided a full year guide of approximately $1.5 billion for growth and 937, I believe, for network.

Again, we don't we don't.

Having a crystal ball on the sub numbers.

Numbers and as you know well, we don't even get the numbers until three to six months after the quarters over so we're doing all the modeling we can making assumptions we.

Have both of you for a while at the sub losses would be.

Kind of.

Kevin P. Latek: We're not, at this point, smart enough to know tens of millions of dollars in which way that $1.5 million is going to be. We don't have a crystal ball on the submarine. And as you know well, we don't even get the numbers until three to six months after the quarter's over. We do all the modeling we can, making assumptions, and believe for a while that the sub losses would be mostly moved through the folks who were planning to drop traditionals and either go. Back to antennas. Last fall, the programming was not particularly strong, and the sub-losses continued when we expected them to slow.

Mostly move through the folks who were planning to drop traditional and either go.

Four with virtually or.

Back to antennas.

This past fall programming was not particularly strong and the sub losses continued when we expected them to slow.

We can only make guesses at this point as to what the future holds and so I would just simply say, we continue to think that the sub losses should be slowing.

But we don't have the visibility into whats going to happen in the future. So I don't know how we can give a and we're not going to give a more specific guide on growth because we don't have enough.

Intelligence on what the future is actually going to do with with the.

MVP traditional mvpds hubs.

Okay.

And just one on the production studios on Assembly, where is that I guess for Jim or for Hilton, where is that going to hit the P&L and what do you guys have assumed I guess or Directionally assumed for 24, I think Hilton Hilton I think you said you're marketing the other south.

Kevin P. Latek: We can only make guesses at this point as to what the future holds, and so we'll just simply say... Continue to think that the sub-losses should be slowing. But we don't have the visibility into it. So I don't know how we can give a, and we are not going to give a, of a Guide on Gross because we don't.

Stages. So just how do we think about your ability to grow.

Let me just kind of touch base on that I mean, we're in a very unusual time, how Hollywood. However, you define that term is not green lighting, a great number of production right. Now in fact, we have had three that were coming to our studios.

Hilton Howell: Colleges, the future's actually going to do, and V.P. Okay, and just one on the production studios on assembly. Where is that, I guess, for Jim or for Hilton? Where is that going to hit the P&L? And what do you guys have assumed, I guess, or directionally assumed, for 24? I think Hilton said you're, Hilton. I think you said you're marketing the other sound stages. So just how do we think about your ability to grow, I guess?

Initially.

That ended up getting canceled by their respective production houses.

I think there are a number of issues that are holding that back.

Obviously, there is a potential strike and hopefully it is just a potential and it will dissipate with IR, saying that I think comes up in May and I think that leads to some reticence I will say I think there was a lot of expectation that when the studios and the <unk>.

Hilton Howell: Let me just kind of touch base on that. I mean, we're in a very unusual time where Hollywood, however you define that term, is not greenlighting a great number of productions right now. In fact, we have had three that were coming to our studios initially that ended up getting canceled by their respective production houses.

The Guild and Sag Aftra came to conclusion that it would be a rush back. The truth is I think people will actually really stopped and so I think a lot of productions are out there writing the scripts and so we expect.

Pretty healthy resumption of production capacity, but exactly when that begins will depend on a largely on the odyssey strike or lack thereof.

Hilton Howell: I think there are a number of issues that are holding that back. Obviously, there is a potential strike, and hopefully, it is just a potential, and it will dissipate with Ayotzin, that I think comes up in May. And I think that leads to some reticence. I will say, I think there was a lot of expectation that when the studios and, you know, the Guild and, you know, SAG-AFTRA came to the conclusion that there would be a rush back. The truth is, I think people actually really stopped.

And where does it all that stuff on the P&L just to be clear.

It's in the production lines as it has been.

Got it alright, thanks, guys appreciate the color.

Our next question is going to come from Jim Goss with Barrington Research. Your line is open.

Alright, Thanks, a couple about.

Your sports comment.

One I'm curious.

Hilton Howell: And so I think a lot of productions are out there writing the scripts. And so we expect a pretty healthy resumption of production capacity, but exactly when that begins will depend, I think, largely on the odds of each strike or lack thereof. And where does all that stuff fall in the P&L, just to be clear? in the production line, as it has been. Got it.

If adding some of the sports that CW and Cook clothing live golf.

Yes.

Impacted your affiliated properties Chinese significant extent.

And.

Also when you noted sort of regional broadcasts of the some of the local sports teams to maybe the rest of the state or neighboring states or other gray stations I assume that's envisioned in the contract terms.

Hilton Howell: All right. Thanks, guys. I appreciate the color.

Pat: Our next question is going to come from Jim Goss with Barrington Research. Your line is open. All right, thanks. A couple of comments about your sports comments. One, I'm curious, if adding some of the sports lineup to CW, including live golf, has impacted your affiliated properties to any significant extent, and also when you noted sort of regional broadcasts of some of the local sports teams to maybe the rest of the state or neighboring states on your other gray stations. I assume that's envisioned in the contract terms when you do those negotiations. I wonder if you could talk about that a little bit. Sure, let me start with your second question, Jim. It's Pat. So, yeah, you know, we are. I think Hilton's point in pointing out the fact that we're not just in Atlanta, but we're in the whole state of Georgia and some other markets in neighboring states with over-the-air television is an indicator of what a great move this is for professional sports to go to local television. You don't reference a couple of them, a little bit about ratings and performance, and I'll give you a couple of examples.

When you do those negotiations I wonder if you might talk about that a little bit.

Sure Let me start with your second question, Jim its Pat So yeah. We are I think hilton's point in pointing out the fact that we're not just in Atlanta, but we're in the whole state of Georgia, and some other markets in neighboring states.

With over the air television.

It's just an indicator of how in the.

<unk> that we're seeing is an indicator of.

What a great move this is for professional sports to go to local television stations.

You don't referenced a couple of them.

A little bit about ratings performance.

Give you a couple of examples so in New Orleans, Louisiana, We've run four five NBA Pelicans games on our Fox affiliate, there and Sandy correct me, if I'm wrong here, but the ratings on those games are essentially double what the normal prime time.

Averages in that market. So it's so these games are bringing.

They are bringing new viewers. Many of those viewers are younger they are bringing very large audiences that are bringing new advertisers to our stations.

Pat: So in New Orleans, Louisiana, we've run four or five NBA Pelicans games on our Fox affiliate there. And Sandy, correct me if I'm wrong here, but the ratings on those games are essentially double what the normal prime-time average is in that market. So these games are bringing in new viewers, and many of those viewers are younger.

Again, the key point in your question revolved around well such as New Orleans is also Shreveport.

It's Biloxi, Mississippi and it's.

Baton Rouge, and same thing with Augusta and Albany in Columbus, and Megan in Georgia. So all of those markets, we're seeing a lift there not only in AD revenue.

But also in new folks coming to traditional TV stations.

Pat: They're bringing very large audiences. They're bringing new advertisers to our station. And, again, the key point in your question revolved around, well, it's not just New Orleans. It's also Shreveport, and it's Biloxi, Mississippi, you know, Baton Rouge, same thing, you know, with Augusta in Albany and Columbus and Macon in Georgia.

Yeah, along with new advertisers. So your other question was around live golf and CW.

Right and I think they've been looking at sports as a compliment in areas, where you really didn't have any programming from that.

Hum.

Network.

Yeah. So I think the first thing I'd point out is that the ACC football and basketball packages that the CW is hearing actually comes from Raycom sports, which is a great company.

Pat: All of those markets are seeing a lift there, not only in ad revenue but also in new folks coming to traditional television stations, you know, along with New Average. So your other question was about Live Golf and CW. Right, and I think they've been looking at sports as a complement in areas where you really didn't have any programming from that network. Yeah, so.

And we're very excited about that it look we're happy to see the network go acquire sports we think it's good we think it's.

Good girl to grow the viewership base on that network and good.

Retention.

You know we.

We are happy to have 40, some odd CW affiliates and to be partnered with Nexstar Ana.

You know I hope that answers your question.

Well I was just wondering if it's made much of a difference as it.

Pat: I think the first thing I'd point out is that the ACC football and basketball packages that the CW is airing actually come from Raycom Sports, which is a Gray company, and we're very excited about that. Look, we're happy to see the network acquire sports. We think it's good. We think it's, you know, it's good for

Significant or just a matter of time.

Thanks.

We're seeing some increases, but I can't say it.

I would just tell you as a viewer Jim.

To have Georgia Tech football here in the Atlanta market, that's a really big deal I mean, I'm not a Georgia tech alarm, but all of watching those games on the CW and so I think we're probably the second largest CW affiliate and we're thrilled that Raycom sports could help move the ACC to.

Pat: To grow the viewership base on that network and good for retention, you know, we are happy to have 40-some odd CW affiliates and to be partnered with Next Hour Online. I hope that answers your question. Well, I was just wondering if it's made much of a difference.

To the.

The CW and we're actually also thrilled that love golf is out there.

Pat: Is it significant or just a minor thing? We're seeing some increases, but I can't say it. I would just tell you, Jim, just to have Georgia Tech football here in the Atlanta market is a really big deal. I mean, I'm not a Georgia Tech alum, but I love watching those games on the CW.

Out of Super Bowl Liv golf was out there at the same time they had huge audiences. We don't have any numbers for that here that may be a question you need to ask the folks at nexstar, but from our side, we're very happy with what they're doing and we're very happy to be affiliated with the CW network.

Okay, Thanks, and one other.

Hilton Howell: And so I think we're probably the second-largest CW affiliate, and we're thrilled that Raycom Sports could help move the ACC to the CW. And we're actually also thrilled that Live Golf is out there. I was out at the Super Bowl, and Live Golf was out there at the same time.

Maybe this is for you Hilton primarily.

You've had a quite a period of time over the past several years with the.

A significant acquisitions, which you mentioned in talking about Jim.

The retrans growth.

Simply studios now ramping up I'm wondering.

Hilton Howell: They had huge audiences. We don't have any numbers for that here. That may be a question you need to ask the folks at Nexstar. But from our side, we're very happy with what they're doing, and we're very happy to be affiliated with the CW network. Okay, thanks.

As you look forward the next year or two what do you think would be the principal growth levers you should you think we should be calling attention to.

Well you know we haven't spoken about this but we have a presentation coming up for our board from Rob Ball yard, we think a T. S. C. Three point always going to be a huge growth for the future. We think theres going to be changes with regard to the retrans that exists with traditional mvpds.

Hilton Howell: You've had quite a period of time over the past several years with the significant acquisitions, which you mentioned in talking about Jim, and the re-trans growth and assembly studios now ramping up. I'm wondering, you know, as you look forward the next year or two, what do you think would be the principal growth levers you think we should be calling attention to? Well, you know, we haven't spoken about this, but we have a presentation coming up for our board from Rob Falyard. We think ATSC 3.0 is going to be a huge growth for the future. We think there's going to be changes with regard to the retransmissions that exist with traditional MDPDs in terms of how that's handled. I think Kevin sort of addressed that.

In terms of how that's taken I think Kevin sort of addressed that one of the things that I'm actually really thrilled about is that throughout 2023 Gray was the only T V company out there that consistently grew its core revenue and so you know quarter after quarter, our core revenue was up and in the first two months of this year.

It's accelerating now that maybe Cassandra <unk> now in charge of it all I don't know, but she's doing she's doing a great job out there and so we think there is.

All kinds of avenues for growth.

Some of them may not be quite as fast as the retrans from 'twenty to 2021 nine to two today in terms of its growth, but we think broadcast TV.

Hilton Howell: One of the things that I'm actually really thrilled about is that, throughout 2023, Gray was the only TV company out there that consistently grew its core revenue. And so, you know, quarter after quarter, our core revenue was up. And in the first two months of this year, it's accelerating. Now, that may be because Sandy Breland's, you know, now in charge of it all. I don't know, but she's doing a great job out there.

It is healthy now if not healthier than it's been in decades.

We actually did a video for our general managers is back to the future.

And because what we're seeing is.

No.

I'll return the broadcast TV now I know that doesn't fit the narrative out in New York with too many people confuse the term linear TV a lot of people what they mean by that is cable distributed cable networks, you know back in the day when Ted Turner was in the cable business and he was.

Hilton Howell: And so we think there are, you know, all kinds of avenues for growth. Some of them may not be quite as fast as the retransmission from 2020, 2009 to, you know, today in terms of its growth, but we think broadcast television is as healthy now, if not healthier, than it's been in decades. We actually did a video for our general managers, Back to the Future, because what we're seeing is a return to broadcast television. Now I know that doesn't fit the narrative out in New York, but too many people confuse the term linear television with broadcast television.

Telling everybody.

You know he was cable for cable was cool alright, well they started all those different businesses, but you know way back in the day and some of US around this table were here. All we had was advertising to grow the company now we have so many other different areas one of the things that we have been so successful is growing our.

Hilton Howell: A lot of people, what they mean by that is cable distributed, cable networks. You know, back in the day when Ted Turner was in the cable business, and he was telling everybody, you know, he was cable for cable, it was cool. All right, well, they started all those different businesses. But, you know, way back in the day, when some of us around this table were here, all we had was advertising to grow the company. Now we have so many other different areas. One of the things that we have been so successful at is growing our digital revenue. That's 100% of the hours.

Digital revenue, that's 100% ours, and it gets bigger and bigger and bigger every year and so I think there's just a tremendous amount of opportunities for growth.

And I think youre going to see us have an extraordinary 2024.

Alright, well thanks for your comments I appreciate it.

Our next question is going to come from John Kornreich with JK media.

Your line is open hi, Jim I've got a question for you.

Right now.

You have subordinated debt of 1 billion and $4 50 coming up in 'twenty six in mid 'twenty seven.

Hilton Howell: And it gets bigger and bigger and bigger every year. And so I think there's just a tremendous amount of opportunities for growth. And I think you're going to see us have an extraordinary 2024. All right. Well, thanks for your comments. Appreciate it. Our next question is going to come from John Kornreich with JK Media. Your line is open. Hi, Jim. I have a question for you right now.

Market.

Is expressing skepticism as to whether you're going to be able to refinance that getting the yields on that on that debt is about.

Today is about 13%.

What is the plan.

To reliably predictably refinance the 'twenty six 'twenty seven subordinated debt.

John Kornreich: Coordinated Debt of $1,450,000. Market, www.larryweaver.com, Skip, whether you're going to be able to reach the yield on that debt. Today it is about 30.

You're talking about the senior notes, John and not the term loan.

The bonds.

Aye.

I have every confidence that they'll be refinanced in due course, the company throws off tremendous amounts of free cash on a two year blended cycle as you well know and as we've consistently demonstrated for years I think.

John Kornreich: What is the plan? Reliable, predictably, 620. Coordinated, talking about the senior notes, John, and not the term loan. Right. Goodbye, have every confidence that they'll be refinanced in due course. The company throws off tremendous amounts of free cash on a two-year blended cycle, as you well know, and as we've consistently demonstrated for years. I think a lot of the pricing in bonds is reflective of... the interest rates on those bonds and where the current interest rate environment is.

A lot of the pricing and the bonds is is reflective of the interest rates on those those bonds and where the current interest rate environment is.

They're yielding 12% to 13% yield to maturity not current.

Current yield.

I mean that to me expressed some skepticism.

James C. Ryan: They are yielding 12 to 13 percent yield to maturity. And that, to me, expresses some skepticism about your ability to refinance the bonds; otherwise, they'd be yielded more like Nexstar or Technobot. All I can tell you is I have absolute confidence that we will, in due course, be refinancing. Okay. As a reminder, if you would like to ask a question, press star 1 on your telephone keypad. Our next question is going to come from Craig Huber with Huber Research. Your line is open. Great, thank you. My first question is, are you re-trans-subbed here? How much of a down year are we in? We have not been providing our subcounts.

Your ability to refinance the bonds, otherwise there'd be yielding.

More like next door or taking the bonds, which they're not.

Well.

All I can tell you is I have absolute confidence that we will be in due course, we will be refinancing them.

Okay. Thank you.

As a reminder, if you'd like to ask a question press star one on your telephone keypad. Our next question is going to come from Craig Huber with Huber Research. Your line is open.

Great. Thank you my first question your Retrans subs and in the fourth quarter, how much really down year over year. I think you said three months ago for the third quarter. They were down mid single digits, what was the trend the latest quarter.

Kevin P. Latek: Our sub-counts are running consistent with what you're reading in the trial. In the press, some of the public companies are reporting. So the traditionals that have been, and virtuals have been growing. The net effect of that is that our total sub-count is down a little bit. The traditionals are where

We have.

They have not been providing our sub counts.

Our sub counts are running sort of consistent with what youre reading in the trial.

In the price among the public companies are reporting so the traditional have been declining.

The virtual is have been growing.

The net effect of that is that our total sub count is down a little bit.

Kevin P. Latek: The rates are higher, and negotiating those on our own, those rates are declining much faster, those numbers, the public. Pay TV companies are reporting their numbers, and we're seeing them. Our numbers are fairly reflective of theirs, to be, primarily concentrated in small, mid-sized markets.

But the traditional is where our rates are higher because we negotiate those on our own and those doses.

Those are declining much faster those numbers public company public.

Pay TV companies are reporting their numbers.

And we're seeing numbers our numbers are fairly reflective, but there is a company used to be.

Kevin P. Latek: Trends seem to be different than what was being publicly reported since we closed the Meredith deal, more evenly distributed among large markets through small markets. And as a result, we've been saying for the last year or so that what we see in our own internal sub count, sub report, and members that are largely reflective of what's being reported publicly. Publishers, see publicly, of our. Okay. And then, at GMHouse, below the line of a. 12. Hang on, I'm trying to grab my key.

Maryland concentrated in small mid size market, so our sub trends seem to be different than what was being publicly reported since we closed the Meredith deal. We're now more evenly distributed among large markets through small markets and as a result, we've been saying for the last year or so that are what we see in our own internal sub count several court.

Our numbers that are largely reflective of what's being reported publicly so we don't feel the need to start growing.

Throwing out minor differences between what's been publicly reported.

What you see publicly is reflective of our own experience.

Okay and then.

Jim a housekeeping question.

Below the line you have a miscellaneous income number about $12 million in the quarter or it's a lot larger than it normally is just what is that to be clear.

Craig Anthony Huber: Oh, it's, it's... Yeah, it's, uh.., probably have some of the.......

Hang on I'm trying to grab my P&L.

Gain or something in there.

Oh it is.

Craig Anthony Huber: Let me just catch up; I'll catch up to you later on that; I need to go down another level of detail which I don't have right in front of me. Okay, I appreciate that. So the total cost, the total net cost for Atlanta Assembly. Including the $21 million net you're expecting to have to pay this year, what's the total net cost? We put in the $10K in liquidity. 570 million. Okay, including what you're going to pay this year. Okay, appreciate it. Okay, good. Just giving you guidance for this year, so I want to get down.

Yeah. It's.

Yes.

Probably have some of the.

No it would be far that'd be fine.

Interestingly enough colleagues, let me just catch up catch up to you later on that I need to go down another level of detail, which I don't have right in front of me.

Okay.

That so obviously.

The total cost total net cost for Atlanta Assembly <unk>.

Including the 21 million that you are expecting to have to pay this year. What's the total net cost for that is going to come out do you think.

Yeah.

It's in the 10-K.

We put it in the 10-K and in liquidity.

570 $570 million.

Okay, including what you're going to pay this year, Okay. I appreciate it okay. Good so.

Craig Anthony Huber: You talked about production revenue of $110 million, $85 million in production costs, obviously back into $25 million or so of EBITDA for the whole production. Obviously that line, the EBITDA line. Are you...

Just given your guidance for this year, so wanted to get down to here.

You talked about production revenue of 110 85 million of production cost, obviously back into 25 million or so of EBITDA for the whole production company line.

Obviously that lines the EBITA last year I guess, it's about 6 million the year before was 10.

Are used.

So I mean first baby.

James C. Ryan: So, I mean, first, maybe, you know... round up, it's called $20 million or so of EBITDA this year for more information. 5-7, and R.O.I. I'm sure you originally. So there's some puts and takes in the production line, as Hilton already mentioned, for this year. Our studios that we own are not. We expect that they will be leased a little later in the year, which will mute that production revenue number for the full year, but as Hilton says, we fully expect, as the year goes on, that those studios will be leased out, as we had originally intended. Also, if you recall, and we commented on this in the Q1 call last year, when Diamond had its bankruptcy, we had to completely redo our ACC agreement, and that's how we got it over to the CW.

Roundup, Scott $20 million or so of EBITDA this year.

Inferring over time, that's going to grow significantly from that number or is or with what's going on there between 20 million of EBITDA versus $5 70 total cost is not exactly the ROI I'm sure you originally were expected.

So there's some puts and takes in that production line as Hilton already mentioned.

You mentioned for this year.

Our studios that we own.

Our.

Or not.

We expect that they will be at least a little later in the year.

Which is muting.

Muting that production revenue number for the full year, but as Hilton said.

We fully expect as the year goes on those studios will be leased out as we had originally intended.

Also if you recall.

Commented about this in the Q1 call last year.

Wynn Diamond when Diamond had its bankruptcy, we had to completely redo our ACC.

James C. Ryan: But we also said at the time that that redone agreement was not as lucrative to us as the previous agreement we had with Diamond, so there is some noise in that production line for this year. Thinking about the larger assembly project overall, remember the studio complex represents only about 43 acres of the total acreage, and we have... Somebody can correct me if I'm wrong, but I think we have about 80 acres left that are undeveloped presently. We have said that before. Over the next three, five, seven years, we would be looking to develop that, and I think future development certainly will bring with it additional revenues to help to justify the total investment. Okay, I appreciate that, but you're just saying it's going to take some time here to build a proper ROI in your mind. Yeah, yeah.

Agreement and that's how we got it over to the CW, but we also said at the time that that redone agreement was was not as lucrative to us is the.

Our previous agreement, we had with Diamond. So there is there is some noise in that.

Production line for this year.

Thinking through the larger Assembly project overall remember this studio complex represents only about 43 acres of the of the total acreage.

And we have.

Somebody can correct me, if I'm wrong, but I think we have about 80 acres left.

It is yeah that is undeveloped presently and.

And we have said that.

Over the next 357 years, we would be looking to develop that and I think that future development certainly will bring with it.

Additional revenues to two to justify the the total investment.

Okay, I appreciate that but you're just saying this could take some time here to build.

James C. Ryan: Phase one was the studios, and we, and as we've talked about a couple of times in our calls last year, we. We quote-unquote rushed that because we had a tight delivery line under our NBCU lease agreement. So we ran full speed ahead to get that done and delivered to NBC on time. And then we had been clear on multiple calls last year that aside from the $21 million of modest cleanup investment this year, which is largely public infrastructure, that we would be taking a pause in the very near term to start thinking long and hard about how to unlock the rest of the value in the undeveloped acres. The short answer is yes.

Proper ROI in your mind, I guess youre, saying, yeah, Yeah at Phase one was the studios and we and as we've talked about a couple of times in our calls last year.

<unk>.

We quote unquote rushed that because we had a tight delivery line under our NBC lease agreement and so we we ran full speed ahead to get that done and delivered to NBC you on time.

And then we had been clear on multiple calls last year that aside from the $21 million of <unk>.

Modest cleanup.

<unk> investment this year, which is largely public infrastructure.

That we would be taking a pause in the very near term to start thinking long and hard about how to unlock the rest of the value in the undeveloped acreage.

James C. Ryan: It's going to take a little more time. Okay, and my last question, if I could, guys. Your retransmission costs for you, your guidance is obviously flat year over year and stuff like that. I believe you had an NBC contract renewal at the end of last year. Correct me if I'm wrong there, in a handful of CBS, for renewal. Pretty darn good on your part to be able to hold that line flat this year, despite those contracts for renewal. I'm not sure if I have that right. Let me just talk a little bit deeper about that. What's going on here?

The short answer is yes, we can take a little more time.

Okay and my last question, if I could guys.

Your retrans costs for you your guidance was obviously flat year over year and stuff, but I believe you had an M. D. C contract renewal at the end of last year correct me, if I'm wrong, there and a handful of CBS stations.

Renewal I mean, that's.

Pretty good darn good on your part that you're able to hold that line flat. This year, despite those contracts up for renewal.

At the end of last year, if I have that right.

Craig Anthony Huber: Because that's not like what happened in the past, obviously. You're obviously having your way here, renewables first. Without obviously commenting on any specific contract, we renewed CBS last summer, the Meredith Group, and then the Legacy Group, which are on slightly different days.

Let me just talk a little bit deeper about that.

But what's going on there because it's not like what's happened in the past obviously, you obviously have in your way here.

On the contract side of things at least renewables first to me right.

Without obviously, commenting any specific contract we renewed our CBS last summer.

Kevin P. Latek: And then, yes, all of our MVCs are up at the end of the year. We have been predicting... Two years now that the, the rate of increase would be slowing, stabilizing.

For the Meredith Group and then the legacy group and which were all slightly different dates.

And then yes, our abcs are up at the end of the year, we have been predicting for two years now that the network com our rate of increase would be slowing.

Kevin P. Latek: Seeing that in the number, today, guys, at the beginning of the call, as we were anticipating. Broadcasters, more vocal about changing that regime so that the network comm begins to decline with the subnumbers, but that will take some time to work out on our near-term decks, as we have no near- Okay, great. Going back to the question on the 12 million miscellaneous, the vast majority of that was actually the proceeds from some Spectrum auctions that we were pleasantly surprised by. Our next question is going to come from Hal Steiner with BNP. Your line is open. Hi guys.

If not stabilizing.

I think we've seen that in the numbers that we posted today and are our full year guide for network comp being flat with last year.

That.

What I said at the beginning of the call is we would anticipate.

Broadcasters being more vocal about changing that regime, so that they're never a comp begins to decline.

Along with along with the sub numbers, but that will take some time to work out and that's obviously.

Something that's not on our near term taxes, we have no near term renewables.

Okay. Great. Thank you guys are circling back to the question on the 12 million miscellaneous the vast majority of that was actually some.

Proceeds on answers.

Spectrum auction, we actually.

We're pleasantly surprised at.

Our next question is going to come from health diner with BNP. Your line is open.

Hal Steiner: Thank you so much for taking the question. I think I just wanted to clarify for one thing. I think your 26s and 27s are trading at yields actually below 10%, nowhere near 12%. So I just want to maybe straighten that out because I thought that was a little off. But anyway, I think, you know, notwithstanding maybe a little bit of a softer guide or for one cue, you guys are still gonna generate a substantial amount of free cash flow this year. And, you know, in light of the equity coming off a little bit, your longer data bonds coming off a little bit, is it still right to think that the main priority for free cash flow should be addressing the front end, 26, 27, and not pursuing any discounted debt buybacks or anything like that? I think that is more likely than not, yes.

Hi, guys. Thank you so much for taking the question.

I just wanted to clarify for one I think your 'twenty six 'twenty seven dark trading at yields actually below 10% nowhere near 12%.

So I just wanted to straighten that out because.

So that was a law, but anyway I think.

Notwithstanding maybe a little bit of a softer guide or for <unk>. You guys are still going to generate a substantial amount of free cash flow this year.

And you know in light of the equity coming off a little bit.

Longer dated bonds coming off a little bit is it still right to think that the main priority for free cash flow should be addressing brought out in 'twenty six 'twenty, seven and not pursuing any discounted debt buybacks or anything like that.

James C. Ryan: I, you know, you always have to say, I can't, never say never, but I think as clearly as we did start a refinancing of the 26th term loan a couple of weeks ago. But because of a market dislocation that had absolutely nothing to do with us, we postponed that just to wait for a little bit better time in the market. So I think we've clearly signaled that it's more likely than not that we'll be focusing on the 26s and 27s first and then thinking about the longer-dated stuff later. That's super helpful.

I think that is more likely than not yes.

I.

You always got to say I can't never.

Never say never but I think.

And as clearly as we did.

Start a refinancing of the 26 term loan a couple of weeks ago and then.

Because of the market dislocation that had absolutely nothing to do with US we put in we postpone that just to wait for a little bit better time in the market.

So I think our wheats clearly signaled that it's more likely than not that we'll be focusing on the $26. In 2000, Seven's first and then thinking about the longer dated stuff later.

Alan Gould: Thank you so much. That's it. That's all my questions. Our next question is going to come from Alan Gould with Loop Capital. Your line is open. Thanks for taking the question, and first, Jim, congratulations. I have two questions left. The reimbursements for the assembly plant appear to be a little bit less than I was expecting. I was wondering if that might be in some other line item. And secondly, if Hilton or someone could comment on whether the Georgia production tax credit bill has any significant impact on what you see coming to Georgia. So I'll take the first question: yeah, there's a little bit of a timing difference between 23 and 24.

Got it that's super helpful. Thanks, so much.

But thats all my questions. Thank you.

Our next question is going to come from Alan Gould with loop capital. Your line is open.

Thanks for taking the question first Jim Congratulations on your retirement I have two questions left one is the reimbursements on the assembly plant appear to be a little bit less than I was expecting I was wondering if that might be in some other line item and secondly at Hilton or someone can comment if the Georgia production.

<unk> tax credit Bill has any significant impact on what you see coming to Georgia.

So I'll take the first question.

James C. Ryan: Some of that we had expected to get in 23 and it's actually showing up now in the, And what we're, about the roughly 31 million we're expecting in 24, part of it was just a shift in the timeline of some of those projects. So, as I've commented before, The public side has to be done, completed, inspected, valued, and I think there are several other steps involved.

Yeah, Theres, a little bit of a timing difference in 'twenty three.

We some of that we had expected to get in 'twenty, three and it's actually showing up now in the and what were about roughly $31 million, we're expecting in 'twenty four part of it was just the shift in the timeline of some of those projects.

So as I've commented before.

The public side has to be done completed inspected valued and I think there's several other steps are involved so one some of the public stuff. It wasn't critical to get it done to activate the NBC lease so we let it slide a little bit.

Hilton Howell: So, one, some of the public stuff, it wasn't critical to get it done to activate the NBCU lease, so we let it slide a little bit. So the, the public funds are fouling it up as well in the construction schedule. And I'll remind everybody that those public funds, which we refer to as the CID, all of that money has been in a trust account. So it's. It is a dollar good, it

So the.

The.

Public funds are following it as well in the construction schedule and I'll remind everybody that those public funds, which will be referred to as the CIB.

All of that money has been in a trust account.

Hilton Howell: The related public infrastructure has to be completed in order for us to go through the process of getting the funds out of the trust account and into our bank account. And then, with regard to any questions about the Georgia Tax Film Credit, we've obviously been deeply involved; I've personally been deeply involved in all of the negotiations. During the summer, the state of Georgia launched a review of all tax credits in an effort to begin a process of reducing the overall tax burden on Georgia citizens here, but we don't see any effort on the part of anyone in the General Assembly to get the tax credits.

So it's it is dollar good it's just that.

The related public infrastructure has to be completed in order for us to go through the process of getting the funds out of the trust account and into our bank account.

And then with regards to any questions about the Georgia tax film credit. We've obviously been deeply involved I've personally been deeply involved in all of the negotiations during during the summer the state of Georgia launched a review of all types of credits in an effort to begin a process of reducing.

The overall tax burden on the Georgia citizens here.

And we.

We don't see any.

Hilton Howell: We don't think that's an issue at all. In fact, everyone wants to make sure that Georgia remains a competitive player in the film industry because it is now a permanent part of our economy and generates a huge amount of revenue for the state. There's all kinds of discussions about how much that really revenue is, and there's room for people of good faith to differ with what that is, but I'll tell you one thing. It's the film business that is a big chunk of the reason that the state of Georgia is sitting on close to an $18 billion surplus this year. And I think everybody in the General Assembly understands that because it creates revenues from everything from restaurants to lumber mills to carpet mills to every industry in this state. And so, plus all the creatives that we have, and Georgia has spent two decades, two generations really, building up a huge reservoir of local talent through the Georgia Film Academy. And that employment base is in the hundreds of thousands.

Effort on the part of anyone in the General Assembly to got the tax credits. We don't think that's an issue at all in fact, everyone wants to make sure that Georgia remains a competitive player.

In the film industry, because it is now a permanent part of our economy and generates a huge amount of revenue for the state.

There's all kinds of discussions about how much that really revenue is.

And there's room for people of good faith to differ with what that is but I'll tell you one thing.

The film business that has a big chunk of the reason that the state of Georgia is sitting on close to an $18 billion surplus this year and so.

I think everybody at the General Assembly understands that.

Because it.

It creates revenues from everything from restaurants to two.

To lumber mills to carpet mills to every industry in this state and so plus all the creative that we have in Georgia has spent two decades two generations really through the Georgia film Academy of building up a huge reservoir of local talent that can.

Operate in the production space.

Hilton Howell: And so there's a huge constituency here for that in this business, and so I expect it to continue. The slowdown that we have in terms of leasing, I think you'll probably hear about it in a lot of places. People are reassessing a number of things. Holly's just not green lighting enough.

<unk>.

That employment base is in the hundreds of thousands and so there's a huge constituency here for that in this business and so I expect to continue.

The slowdown that we have in terms of leasing I think youll probably hear about it.

And a lot of places people are reassessing, a number of things Hollywood just not green lighting enough I think that will change dramatically when this potential strike.

Hilton Howell: I think that will change dramatically when this potential strike is settled and when some scripts get written. Okay. Thank you, Hale. Thank you. And we have enough time for one more question, and that's going to be from Stephen Cahill with Wells Fargo. Your line is open.

As subtle then when some scripts get written.

Okay. Thank you thank.

Thank you.

And we have enough time for one more question and that is going to based on Steven Cahall with Wells Fargo. Your line is open.

Kevin P. Latek: Thank you, and thanks for squeezing me in. Maybe first, Kevin, you know, just as it relates to reverse, the slowing rate, and you said the comment about how reverse isn't working for broadcasters anymore. I think you've maybe been leading the charge here to try to change the norms, whether it's negotiating directly with the MVPDs or changing the structure of reverse. Can you give any more clarity on how you think this can work for affiliates over the next couple of years to start to realign expectations in reverse with your outlook for growth? And then maybe Hilton or Pat, what do we think about margins on sports rights?

Thank you and thanks for squeezing me in maybe first Kevin just as it relates to reverse the slowing rate you said.

The comment about how reverse isn't working for broadcasters any longer.

You've maybe been leading the charge here to try to change the norms, whether it's negotiating directly with the mvpds or changing the structure of reverse can you give any more clarity on how you think this can work for affiliates over the next couple of years to start to realign expectations in reverse with your outlook for for growth.

And then maybe Hilton or Pat how do we think about margins on sports rights. So it certainly seems like the viewership is strong.

Stephen Cahill: So it certainly seems like the viewership is strong, the advertising, and the revenue generation is strong. I think one of your peers has said they expect to be essentially cash accretive on sports in year one. So wondering if you could confirm that with your sports business as well.

Advertising and the revenue generation is strong I think one of your peers is that they expect to be.

Essentially cash accretive on sports in year, one so I'm wondering if you could confirm that with your sports right as well and then lastly, Jim how do you just think about when you want to restart the refinancing process I know there was a lot of volatility in the stock that caused you to.

Kevin P. Latek: And then lastly, Jim, how do you think about when you want to restart the refinancing process? I know there was a lot of volatility in the stock that caused you to delay that with the completion of the upsized revolver, but what do you need to see to kind of get back on that track? We're going to do these really, really fast because we have the post calls actually starting a minute ago. You've got your team coming up this afternoon, so it's super fast. All the affiliates of the content companies, cable, satellite, virtual, pay for all channels on a per sub basis. Broadcasters are the only people who are paying the conglomerates on a fixed fee basis.

To delay that though with the completion of the Upsized revolver, but what do you need to see to kind of get back on that track. Thank you.

We're going to do these really really fast because we have the post cost starting a minute ago and I think.

Got your team coming up a bit this afternoon. So.

Superfast.

Hum.

All of the affiliates of the content companies cable.

Satellite virtual.

Hey for all channels on a per sub basis broadcasters are the only people who are paying the conglomerates.

Kevin P. Latek: And so I think the simple answer there is that we should be paying on a per sub basis for quick answers on sports. Sorry Steve, what was the third leg of the question for me? to restart the refinancing process. We will more likely than not be coming sooner than later, not necessarily on Monday, but we certainly would like to get back to the market and get that done in the reasonably near future. Obviously, that was an opportunistic refi, and we want to hit a good market window where we can conclude that opportunistic refi.

Fee basis, and so I think the simple answer there is we should be paying a per sub basis as well. So a quick answer and sports yeah sure. So these deals will be accretive.

Yeah, sorry.

Sorry, Steve can you what was the third leg is the question for me.

Key to restart the refinancing process.

We will more likely than not be coming sooner than later.

Not necessarily.

Monday, but.

We certainly would like to.

Get back to the market and get that done.

In the in the reasonably near future, obviously that was an opportunistic refi and.

We want to hit a good market window. We're at a loss we are where we can quickly can conclude that opportunistic refi.

James C. Ryan: Got it. Thanks, Stephen. Thank you. Talk to you soon. Listen, and thank all of you for being here this morning. We really do appreciate it.

Got it thank you.

Steven you talk to you soon listen and thank all of you for being here. This morning, we really do appreciate it we can't wait to talk to you about our first quarter of 2024.

Hilton Howell: We can't wait to talk to you about our first quarter of 2024. It's wonderful to bring 2023 to an end. As you all recall, we began, everybody was nervous, we were going to have a recession, and it was going to be a bad year. It turned out to be a fabulous year. I expect the same thing to happen in 2024.

It's wonderful to bring 2023 to <unk> and as you all recall, we began and everybody was nervous we're going to have a recession gonna be a badge it turned out to be a fabulous year I expect the same thing to happen in 2024, So talk to you next quarter Bye bye.

Operator: So talk to you next quarter. Bye-bye. Okay, this concludes your call. You may now disconnect.

Okay. This concludes our call you may now disconnect.