Q1 2024 The E.W. Scripps Co Operating Results Call
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Operator: Continue to hold.
Speaker Change: Thank you everyone for standing by and welcome to the Scripps Q1 earnings Conference call now at this time all participants are in a listen only mode. Later, we will conduct a question and answer session instructions will be given at that time.
Operator: Thank you, everyone, for standing by, and welcome to the Scripps Q1 earnings conference call. Now, at this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. I will now turn the call over to your host, Head of Investor Relations, Carolyn Micheli. Please go ahead.
Speaker Change: I will now turn the call over to your host head of Investor Relations Carolyn Micheli. Please go ahead.
Carolyn Micheli: Thank you, Kevin. Good morning, everyone, and thank you for joining us for a discussion of the E. W. Scripps Company's financial results and business strategies. You can visit scripps.com for more information and a link to the replay of this call. A reminder that our conference call and webcast include forward-looking statements and that actual results may differ. Factors that may cause them to differ are outlined in our SEC filings. We do not intend to update any forward-looking statements we make today.
Carolyn Micheli: Thank you Kevin Good morning, everyone and thank you for joining us for a discussion of the E. W. Scripps company's financial results and business strategies, you can visit Scripps Dot com for more information and a link to the replay of this call.
Carolyn Micheli: A reminder, that our conference call and webcast include forward looking statements and that actual results may differ factors that may cause them to differ are outlined in our SEC filings, we do not intend to update any forward looking statements. We make today included on this call will be a discussion of certain non-GAAP financial measures that are provided as supplements to assist management and the public and there are now.
Carolyn Micheli: Included in this call will be a discussion of certain non-GAAP financial measures that are provided as supplements to assist management and the public in their analysis and valuation of the company. These metrics are not formulated in accordance with GAAP and are not meant to replace GAAP financial measures and may differ from other companies' uses or formulations. Included in our earnings release are reconciliations of non-GAAP financial measures to the GAAP measures reported in our financial statements.
Carolyn Micheli: <unk> assists in valuation of the company. These metrics are not formulated in accordance with GAAP and are not meant to replace GAAP financial measures and may differ from other companies uses or formulations included in our earnings release are the reconciliations of non-GAAP financial measures to the GAAP measures reported in our financial statements.
Carolyn Micheli: We'll hear first this morning from Scripps Chief Financial Officer Jason Combs, who will share financial results as well as color on the Scripps advertising marketplaces. Then we'll hear from President and CEO Adam Symson. Now, here's Jason.
Carolyn Micheli: We'll hear first this morning from Scripps Chief Financial Officer, Jason Collins, who will share our financial results as well as color on the script advertising marketplaces, then we'll hear from President and CEO, Adam Simpson now here, it's Jason.
Jason Combs: Good morning, everyone, and thank you for joining us. We are pleased to be delivering first quarter 2024 operating results that beat profit estimates driven by tight cost control. I will discuss both our Q1 results and guidance for local media first, and then the results and guidance for Scripps Network. Then I'll touch on a few other guidance items.
Jason Combs: Everyone and thank you for joining us we.
Jason Combs: We are pleased to be delivering first quarter 2024 operating results that beat profit estimate driven by tight cost controls I will discuss both our Q1 results and guidance for local media first and then the results and guidance for Scripps networks, then I'll touch on a few other guidance items.
Jason Combs: I'll conclude with capital allocation and our debt picture. For the first quarter of 2024, local media division revenue was up 13% from the year-ago period due to year-over-year growth in political and distribution revenue. Their political revenue, which was $15 million, saw strength from early U.S. Senate spending in Montana and Ohio. Local distribution revenue was up more than 20% again this quarter, fueled by 2023 renewals of their cable and satellite agreement. We also saw positive performance from our subscribers.
Conclude with capital allocation and our debt picture.
Jason Combs: For the first quarter of 2024 local media Division revenue was up 13% from the year ago period due to year over year growth in political and distribution revenue.
Jason Combs: Political revenue, which was $15 million saw strength from early U S Senate spending, Montana and Ohio.
Jason Combs: Local distribution revenue was up more than 20% again this quarter fueled by 2023 renewals of our cable and satellite agreements.
Jason Combs: We also saw positive performance in our subscriber numbers, our total pay TV subscriber count was up nearly 1% in the most recent quarter data, we've received and on a trailing 12 month basis, our pay TV subscriber count is down mid single digits in line with the trend we've experienced the last several years.
Jason Combs: Our total pay TV subscriber count was up nearly 1% in the most recent quarter of data we've received. And on a trailing 12-month basis, our pay TV subscriber count is down mid-single digits, in line with the trend we've experienced the last several years. In the first quarter, local core advertising revenue was down about 3% from the prior year period. Strong categories included Automotive up 6% and Home Improvement up 5%.
Jason Combs: First quarter local core advertising revenue was down about 3% from the prior year period.
Strong categories included automotive up 6% and home improvement up 5%.
Jason Combs: Services ended the quarter down slightly, but overall, core revenue from local businesses was up slightly for the quarter, while national advertising was down, largely due to sports betting. Local media expenses increased about 8 percent from the prior-year quarter, inclusive of our new sports rights agreements.
Jason Combs: Services ended the quarter down slightly but ended April up by double digits.
Jason Combs: Overall core revenue from local businesses was up slightly for the quarter, while national advertising was down largely due to sports betting decline.
Jason Combs: Local media expenses increased about 8% from the prior year quarter inclusive of our new sports rights agreements. So we came in better than the guidance. We gave in February of up 10%.
Jason Combs: So we came in better than the guidance we gave in February of up 10 percent. Local media segment profit was $66 million. For the second quarter, we expect local media division revenue to be up in the low to mid single-digit percentage. We expect local core ed revenue to be down in the low to mid-single digit.
Jason Combs: Local media segment profit was $66 million.
Jason Combs: For the second quarter, we expect local media division revenue to be up in the low <unk> low to mid single digit percent range.
Jason Combs: We expect local core AD revenue to be down low to mid single digits.
Jason Combs: We expect Q2 local media expenses to be up in the low- to mid-single-digit percentage. Turning to the full year, we now expect our local political advertising revenue to come in between $240 and $270 million. That is a significant increase from our earlier guidance of $210 to $250 million. And the high end of that range is above our 2020 presidential year revenue of $265 million. Adam will give more color on politics in a moment.
Jason Combs: We expect Q2 local media expenses to be up in the low to mid single digit percent range.
Jason Combs: Turning to the full year, we now expect our local political advertising revenue to come in between 240 and $270 million that is a significant raise from our earlier guidance of $210 million to $250 million and the high end of that range is above our 2020 presidential year revenue of $265 million.
Jason Combs: How do we will give more color on political in a moment.
Jason Combs: Also, for the full year, we expect our distribution revenue growth to be up in the low single-digit range, despite the fact that we renewed only 5% of our pay-to-be households this year. Now, I'd like to discuss the Scripps Networks Division first quarter results and second quarter guidance. In the first quarter, Scripps Network's revenue was $209 million, down about 3% from the year-ago quarter. Excluding the impact of the low-margin programmatic product we began to sunset in the second quarter of 2023, Scripps Network's revenues decreased by less than 1% year-over-year. The direct response marketplace continues to make a comeback in terms of both inventory demand and advertising rates.
Jason Combs: Also for the full year, we expect our distribution revenue growth to be up in the low single digit range. Despite the fact that we renewed only 5% of our pay TV households, this year.
Jason Combs: Now I'd like to discuss the Scripps networks Division first quarter results and second quarter guidance.
Jason Combs: In the first quarter Scripps networks revenue was $209 million down about 3% from the year ago quarter.
Jason Combs: Excluding the impact of the low margin programmatic product, we began to sunset in the second quarter of 2023, Scripps Networks' revenues decreased by less than 1% year over year.
Jason Combs: The direct response marketplace continues to make a comeback in terms of the inventory demand and advertising rates. It was up for the quarter for the first time in two years and it accounted for more than 40% of our networks AD revenue.
Jason Combs: It was up for the quarter for the first time in two years, and it accounted for more than 40% of our network's ad revenue. Scatter pricing was a good story in the first quarter as well, up nearly 40% from the pricing we were getting in last season's upfront. Connected TV was up 22% in the first quarter. If you back out the programmatic advertising product, we shut down.
Jason Combs: Scatter pricing was a good story in the first quarter as well up nearly 40% from the pricing we were getting in last season's upfront.
Jason Combs: Connected TV was up 22% in the first quarter, if you back out the programmatic advertising product we shut down.
Jason Combs: For the full year, we expect connected TV revenue to be about 30% above our 2023 revenue, again, backing out revenue from the programmatic product for both periods. In the first quarter, Scripps Network's expenses were $160 million. That's down more than 3% and reflects the end of the programmatic advertising product, which we began to phase out in Q2 of last year, as well as close management of expenses. Segment profit was $49.7 million. For the second quarter, we expect Scripps Network's division revenue to be down in the mid-single-digit range from last Q2, and we expect Network's expenses to be up in the low-single-digit range. Turning to the segment labeled Other, in the first quarter, we reported a loss of $6.4 million.
Jason Combs: For the full year, we expect connected television revenue to be about 30% above our 2023 revenue again backing out revenue from the programmatic product for both periods.
Jason Combs: First quarter Scripps networks expenses were $160 million, that's down more than 3% and reflects the end of the programmatic advertising product, which we began to sunset in Q2 of last year as well as close management of expenses.
Jason Combs: Segment profit was $49 $7 million.
Jason Combs: For the second quarter, we expect Scripps networks division revenue to be down in the mid single digit range from last Q2, and we expect networks' expenses to be up in the low single digit range.
Jason Combs: Turning to the segment labeled other in the first quarter, we reported a loss of $6 $4 million. We now expect the other segment to run at a $7 million to $8 million loss each of the remaining quarters of 2024, which is improved from our previous guidance.
Jason Combs: We now expect the other segment to run at a $7 to $8 million loss each of the remaining quarters of 2024, which is improved from our previous guidance. Shared Services and Corporate Expenses for Q1 were $21.6 million. For the second quarter, we expect that expense to again fall in the $22 million range. For the first quarter, the loss attributable to shareholders of Scripps was $12.8 million, or 15 cents per share. Pre-tax costs for the quarter included $5 million in restructuring charges. We also reported an $18 million investment. Together, these two items decreased the loss attributable to shareholders by $0.12 per share.
Jason Combs: Shared services and corporate expenses for Q1 were $21 6 million.
Jason Combs: For the second quarter, we expect that expense will again fall in the $22 million range.
Jason Combs: For the first quarter the loss attributable to shareholders of Scripps was $12 8 million or <unk> 15 per share pre.
Jason Combs: Pretax cost for the quarter included 5 million of restructuring charges.
We also reported an $18 million investment gain.
Together. These two items decreased the loss attributable to shareholders by <unk> <unk> per share and a reminder, that the preferred stock dividends still has a negative impact on earnings per share even if we don't pay it.
Adam Symson: And a reminder that the preferred stock dividend still has a negative impact on earnings per share, even if we don't pay. On March 31st, cash and cash equivalents totaled $30 million. Our net debt at quarter end was $2.9 billion, and total debt at the start of 2021, when we acquired IM Media, was about $4 billion. So we brought down our total debt by about 25% over those three years. In the first quarter of this year, we made $40 million in discretionary debt payments.
Jason Combs: At March 31, cash and cash equivalents totaled $30 million.
Jason Combs: Our net debt at quarter end was $2 9 billion scripts total debt at the start of 2021, when we acquired Io media was about $4 billion.
Jason Combs: So we brought down our total debt by about 25% over those three years.
Jason Combs: In the first quarter of this year, we made $40 million in discretionary debt paydown.
Adam Symson: We expect 2024 to be another year of significant debt reduction due to the robust political advertising cycle, incremental cash flow from other top-line revenue, proceeds from potential asset sales, and prudent expense management.
Jason Combs: We expect 2024 to be another year of significant debt reduction due to the robust political advertising cycle incremental cash flow from other topline revenue proceeds from potential asset sales and prudent expense management and now here's Adam.
Adam Symson: Good morning, everybody, and thanks for being with us. As Jason shared, we're off to a pretty good start this year. We see green shoots in the national advertising marketplace and an improved political revenue outlook, and the moves we've made to be a more efficient organization are helping us drive profit. Our top priority this year is reducing debt and optimizing the company's capital structure to move us further down to a level of leverage we're all more accustomed to at Scripps.
Adam Symson: Good morning, everybody and thanks for being with Us and as Jason shared we're off to a pretty good start for the year, we see green shoots in the national advertising marketplace, and an improved political revenue outlook and the moves we've made to be a more efficient organization are helping us drive profit.
Adam Symson: Our top priority this year is reducing debt and optimizing the company's capital structure to move us further down to a level of leverage we're all more accustomed to at Scripps.
Adam Symson: We're executing a strategy driven by both operating levers and non-operating levers, and that strategy gives me the confidence to know we're on the right track. A key part of that strategy is improving our operating performance, which includes a sharp focus on four key areas.
Adam Symson: We are executing a strategy driven by both operating levers and non operating levers and that strategy gives me the confidence to know we're on the right track.
Adam Symson: A key part of that strategy is improving our operating performance that includes a sharp focus on four key areas local and national advertising revenue political advertising revenue careful expense management.
Adam Symson: Local and National Advertising Revenue, Political Advertising Revenue, Careful Expense Management, and realizing a strong return on our investment from assets we've acquired. First, as a result of the actions we're taking and improvement in the marketplace, we expect strong operating performance this year, just as we did in the first quarter. As we move through the second quarter, we are seeing encouraging signs of improvement in national advertising at our networks in both direct response and scatter marketplace. Our direct response business is higher year-over-year for the first time in two years, and we expect that trend to continue in the second quarter. Also, scatter market CPMs are now nearly 40% over last year's upfront.
Adam Symson: And realizing a strong return on our investment from assets we've acquired.
Adam Symson: First as a result of the actions, we're taking and improvement in the marketplace. We expect strong operating performance. This year, just as we executed in the first quarter.
As we move through the second quarter, we are seeing encouraging signs of improvement in national advertising at our networks in both direct response and scatter marketplaces. Our direct response business is higher year over year for the first time in two years and we expect that trend to continue in second quarter.
Adam Symson: Also scatter market Cpm's are now nearly 40% over last year's upfront.
Adam Symson: We continue to build value from our leadership position in the women's professional sports movement. We launched the National Women's Soccer League on ION in mid-March, and those games have been drawing a younger and more affluent demographic to the network. More than half of the NWSL viewers are new to ION, so we're pleased that they're finding us and staying week-to-week. That's opened up the door for new to Scripps blue chip advertisers, including Ally Financial, Gatorade, and Meta.
Adam Symson: We continue to build value from our leadership position in the women's professional sports movement, we launched the National Women's Soccer League an eye on in mid March and those games have been drawing a younger and more affluent demographic to the network.
Adam Symson: In addition, we're capturing average unit rates for NWSL games that are 65% higher than our AURs for non-sports ION primetime programming. Coming up on May 17th, we tip off our second season of WNBA Basketball, certainly the most highly anticipated season in league history due to the league's rookie class, including, of course, Kaitlyn Clark, Angel Reese, and Camila Cardozo.
Adam Symson: More than half of the NWS sell viewers are new to ion. So we're pleased that they are finding us and staying week to week.
Adam Symson: That's opened up the door for new to Scripps Blue chip advertisers, including ally financial Gatorade and meta.
Adam Symson: In addition, we are capturing average unit rates for NWS sell games that are 65% higher than our AUR for non sports ion Prime time programming.
Coming up on May 17th we tip off our second season of WNBA basketball certainly the most highly anticipated season in league history due to the league's rookie class, including of course, Caitlin Clarke Angel Reese and Camila Cardoso.
Adam Symson: We're pleased State Farm is back as our title sponsor and sales for the games have been strong. We're also creating new opportunities for advertisers by introducing dedicated studio shows this year. Our commitment to women's sports through the WNBA and NWSL featured prominently in our network's recent upfront presentations in New York, Chicago, and Los Angeles.
Adam Symson: We're pleased to state farm as back as our title sponsor in sales for the games have been strong.
Adam Symson: We're also creating new opportunities for advertisers by introducing dedicated studio shows this year.
Adam Symson: Our commitment to women's sports through the WNBA in NWS L featured prominently in our network's recent upfront presentations in New York, Chicago and Los Angeles.
Adam Symson: Our team set a whole new tone this year, punctuated by a more aggressive, chest-forward sales and marketing approach. Now, looking ahead on political advertising revenue, our second area of focus, we're pleased to raise our guide for the year after seeing Senate races heat up in Montana and Ohio, and Florida place abortion on its ballot. Our new guide of $240 to $270 million now includes the impact of the Florida ballot measure. Arizona is likely also to add a similar high-spend referendum to the ballot.
Adam Symson: Our team set a whole new tone this year punctuated by a more aggressive chest forward sales and marketing approach.
Adam Symson: Now looking ahead on political advertising revenue our second area of focus we're pleased to raise our guide for the year after seeing Senate races, heat up in Montana, and Ohio, and Florida placed abortion on its valid.
Adam Symson: Our new guide of $240 million to $270 million now includes the impact of the Florida ballot measure.
Adam Symson: Arizona is likely also to add a similar high spend referendum to the ballot.
Adam Symson: And that issue gets if that issue gets cleared onto the ballots in the script states of Colorado, Missouri, Montana in Nevada, we could see even more upside in our political revenue performance.
Adam Symson: And if that issue gets cleared onto the ballots in the Scripps states of Colorado, Missouri, Montana, and Nevada, we could see even more upside in our political revenue performance. The presidential election typically makes up about 20% of our total, and while we're seeing less spending there than we have traditionally, we do expect to benefit in the swing states of Arizona, Michigan, Nevada, and Wisconsin.
Adam Symson: The presidential election, typically makes up about 20% of our total and while we're seeing less spending there than we have traditionally we do expect to benefit in the swing states of Arizona, Michigan, Nevada and Wisconsin.
Adam Symson: And we're seeing strong political spending in Montana and Ohio, where Republican Senate candidates and their PACs are looking to unseat longtime incumbent Democrats. These are two states where Scripps has a big footprint. While most of the political revenue will come in the third and fourth quarters, we now have enough visibility to confidently say that we expect to exit the first half of this year having generated more political revenue than we did during the first half of 2020.
Adam Symson: And we're seeing strong political spending in Montana, and Ohio, where Republican Senate candidates and their packs are looking to unseat longtime incumbent Democrats.
Adam Symson: These are two states, where Scripps has a big footprint.
Adam Symson: While most of the political revenue will come in the third and fourth quarters. We now have enough visibility to confidently say that we expect to exit the first half of this year, having generated more political revenue than we did during the first half of 2020.
Adam Symson: Our third area of focus is prudent expense management. While I'm optimistic we're beginning to see some rebound in advertising on the top line, we will also continue to pursue generating higher EBITDA through expense management. This ongoing expense management is above and beyond the $40 million in savings we are realizing from the reorganization of the company we initiated last year.
Adam Symson: Our third area of focus is prudent expense management.
Adam Symson: Im optimistic we are beginning to see some rebound in advertising on the top line. We will also continue to pursue generating higher EBITDA through expense management.
Adam Symson: This ongoing expense management is above and beyond the $40 million in savings we are realizing from the reorganization of the company we initiated last year.
Adam Symson: Finally, another important deleveraging and debt reduction strategy is realizing a strong return on our investment from assets we have acquired. We announced in mid-April that a process was underway to explore the sale of the Bounce TV network, prompted by increasingly strong inbound interest from qualified potential buyers. The selling balance is entirely consistent with Scripps' long history of buying and creating businesses, growing the asset's value, and then divesting at the right time for a strong ROI.
Adam Symson: Finally, another important deleveraging and debt reduction strategy is realizing the strong return on our investment from assets we have acquired.
Adam Symson: We announced in mid April that a process was underway to explore the sale of the balanced TV network prompted by increasingly strong inbound interest from qualified potential buyers.
Adam Symson: Selling balance is entirely consistent with Scripps has long history of buying and creating businesses growing the asset value and then divesting at the right time for a strong ROI.
Adam Symson: In recent years, examples of this include our sale of podcasting businesses Stitcher and Midroll and digital audio business Triton. Since acquiring Bounce in 2017 as part of Cates Networks, we have significantly increased the audience, doubled the revenue, and increased its profit contribution. Under our stewardship, Bounce has become a more important brand in the black community. An entertainment outlet that tells the complete story of the African American experience, from original shows like Johnson to beloved movies and syndicated programming.
Adam Symson: In recent years. Examples of this includes our sale of podcasting businesses, Stitcher and mineral and digital audio business.
Adam Symson: Since acquiring balance in 2017 as part of the case networks, we have significantly increased the audience doubled the revenue and increased its profit contribution.
Adam Symson: Under our stewardship balance has become a more important brand in the black communities.
Adam Symson: In entertainment outlet that tells the complete story of the Black American experience from original shows like Johnson to beloved musical mute to <unk> 11 movies and syndicated programming.
Adam Symson: We want to make sure Bounce is in a position for that growth, and we anticipate that new owners could unlock even more value. We expect to have an update on that process for you later this summer.
Adam Symson: We want to make sure our balances and are positioned for that to grow and we anticipate that new owners could unlock even more value we.
Adam Symson: We expect to have an update on that process for you later this summer.
Adam Symson: Adding to the opportunity to generate proceeds to deliver, we're also exploring the sale of some smaller, non-strategic real estate assets. Turner has been here serving American audiences and advertisers for more than 145 years. There are many reasons for the company's longevity and track record of success, creating value in the dynamic media landscape time and time again. From our clarity of mission and our values to our risk tolerance and willingness to focus on the long term, but especially salient today is the long-held view inside Scripps that businesses operate in seasons.
Adam Symson: Adding to the opportunity to generate proceeds to delever.
Adam Symson: We're also exploring the sale of some smaller non strategic real estate assets.
Adam Symson: Scripps has been here, serving American audiences and advertisers for more than a 145 years. There are many reasons for the company's longevity and track record of success, creating value in the dynamic media landscape time and time again.
Adam Symson: From our clarity of mission and our values to our risk tolerance and willingness to focus on the long term.
Adam Symson: But especially salient today is the long held view inside scripts that businesses operate in seasons.
Adam Symson: Today, during the season we're in right now, our management team is focused on executing against the plan I've shared with you that will lead us to pay down debt and improve the balance sheet for the benefit of our company, our employees, our mission, and the partnership we have with shareholders that creates value. And now, Kevin, we're ready for your questions.
Adam Symson: Today during the season, we're in right now our management team is focused on executing against the plan I have shared with you that will lead us to pay down debt and improve the balance sheet for the benefit of our company our employees our mission and the partnership we have with shareholders that creates value.
Adam Symson: And now Kevin we're ready for your questions.
Operator: Thank you. Now, if you have not already done so and you wish to ask a question, please press 1 then 0 on your telephone keypad at this time. Once again, for questions, please press 1 followed by 0. And we'll go to the line of Dan Kurnos. Benchmark. Please go ahead.
Kevin: Thank you.
Kevin: Have not already done so and you wish to ask a question. Please press one then zero on your telephone keypad at this time.
Speaker Change: Once again our questions. Please press one followed by zero.
Speaker Change: Okay.
Speaker Change: And we'll go to the line of Dan Kudos.
Daniel Kurnos: Benchmark. Please go ahead.
Daniel Kurnos: Adam, I know you said you'd update us this summer, but is there any way to get metrics around bounce? I mean, we know kind of directionally from when you bought it, part of Kate's a while ago, but just curious if you can help us think about that and or the real estate, just sizing one.
Daniel Kurnos: Okay.
Daniel Kurnos: Adam I know you said Youll update us this summer or is there any way to get metrics around balance I mean, we know kind of directionally from when you bought it.
Daniel Kurnos: Part of the case, a while ago, but just curious if.
Daniel Kurnos: If you can help us think about that <unk>.
Daniel Kurnos: The real estate just sizing wise.
Adam Symson: Yeah, I mean, look, the inbound interest that we've had has been strong. It was strong before the news of the sale process went public, and it's really only gotten more robust.
Adam: Yes, I mean look the inbound interest that we've had has been strong it was strong before the news of the sale process went public and it's really only gotten more robust.
Adam: I have a lot of confidence that will identify the right next home for the network and I expect it to be an excellent return for shareholders, obviously a deleveraging.
Adam Symson: I have a lot of confidence that we'll identify the right next home for the network, and I expect it to be an excellent return for shareholders. You know, obviously a deleveraging event with proceeds used to pay down debt and a very good outcome for the company. Relative to metrics, I think there have been some press reports out there that we would expect the proceeds to be in the hundreds and hundreds of millions of dollars.
Adam: Event with proceeds used to pay down debt.
Adam: And a very good outcome for the company.
Adam: Relative to metrics I think there have been some press reports out there.
Adam: We would expect proceeds to be in the hundreds and hundreds of millions of dollars.
Adam Symson: Relative to the asset sales, you know, I would think that those are a lot less material than the sale of bounce. We've also said in the past that we're sort of always in the process of optimizing our portfolio and would certainly be open to, you know, looking at other assets as well.
Adam: Relative to the asset sales.
Speaker Change: I would think.
Speaker Change: Sure.
Speaker Change: No.
Speaker Change: Those are a lot less material than the sale of balance.
Speaker Change: We've also said in the past.
Speaker Change: We're sort of always in are in the process of optimizing our portfolio and would certainly be open to.
Speaker Change: Looking at other assets as well.
Adam Symson: And then maybe to touch on your expense comments, it sounds like you have identified a line of sight on more costs. So, I guess either for you or Jason, probably early to size those, but just kind of curious how you're thinking about how much leverage you still have on the bottom line on the cost side.
Speaker Change: Perfect and then.
Speaker Change: Just maybe to touch on your expense comments it sounds like you have.
Speaker Change: <unk> line of sight on more costs, I guess, either for you or Jason probably early to size those but just.
Speaker Change: Just kind of curious how youre thinking about how much leverage you still have on the bottom line and the cost side.
Adam Symson: Yeah, so it probably is too early to size those, but what I would say is we think we have the ability as we move through the rest of this year to manage things really tightly, whether that is pushing out discretionary spend or identifying continued process efficiencies that drive savings for us. And so I'm optimistic those are things that beyond the revenue growth items we talked about in the script, beyond the asset sale, I think expense management is another lever that we are going to pull that's going to drive deleveraging by the end of this year.
Speaker Change: So it probably is early to size those but what I would say is we think we have the ability as we move through the rest of this year to manage things really tightly.
Speaker Change: Whether that is pushing out discretionary spend we're identifying continued process efficiencies that drive drive savings for us and so I'm optimistic those are things that.
Speaker Change: Beyond revenue growth items, we talked about in the script beyond the asset sale I think expense management is another lever that we are going to pull that's going to drive deleveraging by the end of this year.
Lisa Ann Knutson: Great. On CORE, can you just talk through, I mean, you said services. I think you said double digits in April. We continue to hear that 2Q is better than 1Q, and there are some suggestions that CORE could actually be pretty strong in the back half of the year. I know you guys have, you know, a different footprint, and so you might be more exposed to crowd out, but just how should we think about your expectations for CORE, both in 2Q and the back half of the year?
Speaker Change: Great.
Speaker Change: Core can you just talk through I mean.
Core: You said services I think you said up double digits in April we continue to hear that <unk> is better than <unk> and there are some suggestions that core could actually be pretty strong in the back half of the year I know you guys have.
Core: Different footprint and so you might be more exposed to crowd out, but just how should we think about your expectations around core both in <unk> in the back half of the year.
Lisa Ann Knutson: Hey Dan, it's Lisa Knutson. Sorry.
Core: Hey, Dan, It's Lisa Knutson sorry.
Lisa Ann Knutson: Take that question. So we are.
Lisa Ann Knutson: I'll take that question. So we are definitely seeing some improvement in categories. You know, as we've said, the automotive industry was up in Q1. It's, you know, in 2023, I think, it was up 10% for the full year. In terms of other categories, you know, services in April were down slightly, but certainly in the first quarter, we continue to see improvement there, as well as home improvement, which, again, was up in Q1, and we're seeing it up in April.
Lisa Ann Knutson: Definitely seeing some improvement and categories as we have said automotive was up in Q1.
Lisa Ann Knutson: In 2023, I think was up 10% for the full year.
Lisa Ann Knutson: In terms of other categories and services.
Lisa Ann Knutson: And April was down slightly but certainly in first quarter, we continued to see.
Lisa Ann Knutson: An improvement there as well as home improvement, which again was up in Q1, and we're seeing it up in April I think crowd out we anticipate crowd out in Q3 and Q4 because of political advertising so and remember those are high margin dollars and we will take those.
Lisa Ann Knutson: I think crowd out, we anticipate crowd out in Q3 and Q4 because of political advertising. So, and remember, those are high-margin dollars that we're finding alternatives for them in terms of the crowd outfit. Definitely with the political numbers that we just guided to, we expect to see that probably starting in Q3 and definitely in the first part of Q4.
Lisa Ann Knutson: Certainly we work with advertisers to make sure that they're at.
Lisa Ann Knutson: Yes.
Lisa Ann Knutson: Finding alternatives for them in terms of the crowd out that definitely with political numbers that we just guided to we expect to see that.
Lisa Ann Knutson: Probably starting in Q3 and definitely in the first part of Q4.
Adam Symson: Dan, it's Adam. I think the general theme you're seeing is that, you know, as part of CORE, local is hanging in there pretty nicely, doing well, and there's still some softness in CORE associated with national. And for us... It's really the comps around sports betting that have driven, I think, that performance on the national side.
Lisa Ann Knutson: Dan It's Adam I think the general theme, you're seeing is that as part of core local is hanging in there pretty nicely.
Daniel Kurnos: Got it. That's super helpful.
Adam: Doing well.
Adam: And there is still some softness in core associated with national and for US. It's it's been really the comps around sports betting that has driven I think that performance on the national side.
Daniel Kurnos: All right. I won't hog the call. I'll get back in the queue and see if my other questions are asked. Thanks, guys.
Speaker Change: Got it that's super helpful. All right I want to hog the call I'll get back in the queue and see if my other questions were asked thanks guys. Thanks, Dan.
Operator: And we'll go to the next line, Steven Cahall of Wells Fargo. Please go ahead.
Speaker Change: And we'll go to the next line of Steven Cahall of Wells Fargo. Please go ahead.
Speaker Change: Yeah.
Steven Cahall: Thank you. Lisa, I'm having a little trouble understanding the Networks Revenue Guide for Q2. Adam, I think you said the direct response and scatter are pacing up quarter to quarter, or, sorry, year on year in the second quarter, and then the guidance is for networks revenue down mid-single digits. So, I just want to understand what I might be missing there.
Thank you.
Steven Cahall: I'm, having a little trouble understanding the network's revenue guide for Q2.
Adam I think you said the direct response in scatter pacing up quarter to quarter or sorry year on year in the second quarter and then the guidance is for networks revenue down mid single digits. So just wanted to understand what I might be missing there.
Steven Cahall: And then, Jason, you know, your first sentence mentioned tight cost controls. I think some of that is going to come up in the shared services or other lines in your segment profit, but can you just detail what you're doing differently and maybe any run rate savings that you're looking to achieve through these initiatives? And then, finally, I don't think you've got a free cash flow guide out there right now. So, just wondering if we think about free cash flow that you think you can use to pay down debt this year, if there's any range or numbers you might be able to guide us to. Thank you.
Steven Cahall: And then Jason your first sentence mentioned tight cost controls I think some of that is going to come up in the.
Jason: <unk> services or other line in your segment profit, but can you just detail what youre doing differently and maybe any run rate savings that youre looking to achieve through these initiatives and then finally.
Jason: I think you've got a free cash flow guide out there right now so just wondering if we think about free cash flow that you think you can use to pay down debt. This year. If there is any range of numbers you might be able to guide us through thank you.
Adam Symson: So, Steven, thanks for the question. You know, look, we are seeing some nice, I would say, rebound momentum in direct response and in the scatter market, but we also still have to contend with the upfront from last year, which laid in, you know, a fair bit of inventory at lower rates. So the good news is scatter rates today are 40% above those rates, and direct response makes up a very big chunk of our inventory.
Jason: So Steven Thanks for the question.
Jason: We are seeing some.
Steven Cahall: Some nice I would say rebounded momentum in direct response and in the scatter market, but we also still have to contend with the upfront from last year, which laid in.
Speaker Change: Fair bit of inventory at lower rates. So the good news is scatter rates today are 40% above those rates and direct response makes up a very big chunk of our inventory, but we still we still are dealing with the impact I would I would expect if the rebound continues on track that what we would.
Adam Symson: But we're still dealing with the impact. I would expect, if the rebound continues on track, that what we would see by the fourth quarter would be indicative of the strength of this year's upfront, and hopefully consistent with the rebound we're seeing in scatter and direct response.
Speaker Change: C by the fourth quarter would be indicative of the strength of this year's upfront and hopefully hopefully consistent with the rebound we're seeing in scatter and direct response.
Jason Combs: Yeah, I think from an expense standpoint, I mean, I think there are a variety of places we're looking, you know, which we did in Q1 and we're doing in Q2 as well around, you know, whether it's employee costs, you know, trying to, you know, manage open positions, trying to identify areas of opportunity. But another thing you heard on the call today was I updated our guide for the other segment, which had previously been a loss of $7 to $10 million.
Speaker Change: Yes, I think from an expense standpoint, I mean, I think there are a variety of places we're looking which you saw we did in Q1 and we are doing in Q2 as well around whether it's employee costs.
Speaker Change: Lying too.
Manage open positions trying to identify areas of opportunity with another thing you've heard on the call today with I I updated our guide for the other segment, which had previously been a loss of $7 million to $10 million, we tighten up to $7 million to $8 million, that's really tied to a little bit of a slowdown in the rollout of tableau, because we're looking to direct more of more describe.
Jason Combs: We've tightened that to $7 to $8 million. You know, that's really tied to a little bit of a slowdown in the rollout of Tableau because we're looking to direct more of a more discretionary cash towards that pay down in the short term. And, you know, specifically the free cash flow guide, we're not giving out any kind of specific number for the year. There are still a lot of variables, you know, including a wide political range we gave, you know, and a variety of other factors.
Speaker Change: Larry cash towards debt Paydown in the short term and free.
Speaker Change: Free cash flow guide, we're not giving out any kind of specific number for the year. There are still a lot of variables, including a wide political range we gave.
Speaker Change: And in a variety of other factors in there, but what I would say is.
Jason Combs: But what I would say is, you know, we believe we have the opportunity through politics, through the rebounding advertising marketplace, through things like the asset sales we talked about to generate a significant amount of cash this year and direct all of that to pay down that debt as we've done in the last couple of years and make a meaningful improvement in leverage by year-end. Just a little bit more color on Tableau. First quarter, Tableau
Speaker Change: We believe we have the opportunity through political through a rebounding advertising marketplace through things like the asset sales, we've talked about to make to generate a significant amount of cash this year and direct all of that to debt pay down as we've done the last couple of years and make a meaningful improvement in leverage by year end.
Jason Combs: Just a little bit more color on Tableau. First quarter, Tableau hit our plan on consumer sales, but this is a new business for us, and the change you're seeing in the other segment reflects essentially expenses moderating because we're able to lower our average customer acquisition cost and spending.
Speaker Change: Just a little bit more color on tableau first quarter tableau hit our plan on consumer sales, but this is a new business for us and the change you're seeing in the other segment reflects essentially expenses moderating because we're able to lower our average our average customer acquisition cost and spending.
Speaker Change: Yes.
Speaker Change: Great. Thank you.
Speaker Change: Thanks, Steven Thanks, Steven.
Michael Kupinski: Michael Kupinski, Nobel Capital Market
Speaker Change: And we will go to the next line.
Speaker Change: Michael Kaplinsky Noble capital markets. Please go ahead.
Michael Kupinski: Questions, and good morning. I know in the past you've been kind of reticent to raise expectations for politics. I know you have a person dedicated to politics, so I might offer you some insights there. And you've identified some hot races and ballot issues, but I'm wondering, are you seeing politics being booked into the second half already? I'm just wondering how much visibility you actually have into the second half.
Michael Kupinski: The questions and good morning.
Michael Kupinski: I know in the past you have been kind of reticent to raise expectations for political I know you have a person dedicated to political semi offer you some.
Michael Kupinski: It's there and you've identified some hot races, and valid issues, but I'm wondering are you seeing political being booked into the second half already I'm just wondering how.
Michael Kupinski: How much visibility you actually have into the second half.
Lisa Ann Knutson: Hey Mike, it's Lisa. I think that why we were comfortable with increasing our guide here now is because we're seeing those bookings into the third and fourth quarter. And so that gave us confidence, as Adam mentioned, and I think Jason mentioned, in his prepared remarks, the Senate races in Montana and Ohio, as well as the abortion issue in Florida. Remember, in Florida, we cover 85 percent of the eyeballs, the households in Florida. So that's another reason we were able to increase guide prices.
Michael Kupinski: Hey, Mike, It's Lisa and I I think why we were comfortable with increasing our guide and <unk>.
Lisa Ann Knutson: Now its because were seeing those bookings.
Lisa Ann Knutson: Into third and fourth quarter, and so that gave us the confidence.
Lisa Ann Knutson: Adam mentioned and I think Jason mentioned in the prepared remarks.
Senate races, in Montana, and Ohio, as well as the.
Lisa Ann Knutson: The abortion issue in Florida remember in Florida, we cover 85% of the eyeballs to households in Florida and another.
Lisa Ann Knutson: And then I think there are a number of things in the back half of the year that we're keeping an eye on in terms of other issues, certainly abortion issues in other states where we do business that we are anticipating will also be, you know, good money in the back half of the year, so to speak. I think the Senate races in terms of, obviously, I said Ohio and Montana, but there are certainly other states that we expect to see spending starting mid-year and into the fourth quarter and really ramp up there as well.
Lisa Ann Knutson: Another reason, we were able to increase guide and then I think there are a number of things in the back mid year and that we're keeping an eye on in terms of other issues.
Lisa Ann Knutson: Certainly abortion issues.
Lisa Ann Knutson: And other states, where we do business that we are.
Lisa Ann Knutson: Anticipating will also be.
Lisa Ann Knutson: Good money in the back half of the year, so to speak I think the.
Lisa Ann Knutson: The Senate races in terms of.
Lisa Ann Knutson: And obviously, I said, Ohio, and Montana, but there are certainly other states that we expect to see spending in starting midyear and into the fourth quarter and really ramp up there as well, but where we are booking for sure and have great visibility into the back half of the year.
Lisa Ann Knutson: But we are booking for sure and have great visibility into the back half of the year, including, I think, CTV, which is going to be a great story for us, which is included in that guide. Just one other point, just to reiterate. We expect our first half of this year to be better than our first half of 2020, which I think is a pretty significant statement. So we are seeing bookings for the first and second quarter. Obviously, you know, we have the confidence enough to raise the guide based on what we are seeing in the third and fourth quarters.
Lisa Ann Knutson: Including I think CTV, which is going to be a real great story for US which is included in that guidance. Just one other point just to reiterate we expect our first half of this year to be better than our first half of 2020, which I think is a pretty significant statement. So we are seeing the bookings for <unk>.
Lisa Ann Knutson: First and second quarter obviously.
Lisa Ann Knutson: We have the confidence enough to raise the guide based on what we're seeing in the third and fourth quarter.
Adam Symson: Just one other sort of point I'd make about the ballot referendums. You know, it's sort of conventional wisdom that abortion on the ballot is likely to motivate the electorate in a way that potentially, and even the Democratic electorate, that possibly Biden on the ballot does not. And so there's some notion that abortion has the opportunity to even create a more competitive environment for additional down-ballot races, opening up the opportunity for additional spending on those down-ballot races that might otherwise be too wide or too far apart.
Lisa Ann Knutson: Just one other sort of point I'd make about the ballot referendums.
Lisa Ann Knutson: Conventional wisdom that abortion on the ballot is likely to motivate the electorate in a way that potentially.
Lisa Ann Knutson: And even the Democratic electorate that potentially biting on the ballot does not and so there is some notion that abortion has the opportunity to even create a more competitive environment for additional down ballot races opening up the opportunity for additional spending on those down ballot races that might have otherwise been.
Adam Symson: But if abortion motivates the Democratic electorate to come out, there is some view that that has the potential to, you know, obviously impact the broader races. And that, we hope, will change the spending picture as well. So that's, I think, you know, part of the enthusiasm we're reflecting in our guide change.
Lisa Ann Knutson: Too wide or too far apart, but if abortion motivates the democratic electorate to come out.
Lisa Ann Knutson: There is some.
Lisa Ann Knutson: Some view that that has the potential to obviously impact the broader the broader races.
Lisa Ann Knutson: That should change we hope will change the spending picture as well. So that's I think part of the enthusiasm we're reflecting in our in our guide change.
Michael Kupinski: That's a good point, Adam, and I hope that you can exceed your expectations and raise it again. Another question I have is, typically, advertisers buy across platforms, and you may sell some of your weaker networks alongside some of your stronger ones. And I'm just wondering, in terms of the prospect of selling bounce, do you have a sense of how much of an impact you might have on the sale of bounce through advertising on your other networks?
Speaker Change: It's a good point, Adam and I hope that you can exceed your expectations or raise it again another question I have.
Typically advertisers buy across platforms and you may sell some of your weaker networks with some of your stronger ones and I am just wondering in terms of the prospect of selling balance do you have a sense of how much of an impact you might have on the sale of balance on advertising on your other networks.
Adam Symson: Yeah, I mean, I look, I think you're pointing out an important point about our sales strategy. I would say that's one element of it.
Speaker Change: Yes, I mean, I look I think youre pointing out an important point about our sales strategy I would say.
Speaker Change: That's one element of it the other element of it has been an omnichannel approach in which we have been.
Speaker Change: <unk> focused on selling.
Speaker Change: Selling across platforms not just across networks and then finally I'd say ion is by far the biggest driver.
Speaker Change: In general.
Speaker Change: And ion itself does very well in the multi in the multiple multicultural audiences and the moves we've made with spores have diversified audience ions audience. Even further when we've looked at the WNBA from last year for example, the WNBA audience was.
Adam Symson: The other element of it has been an omni-channel approach in which we've been focused on selling across platforms, not just across networks. And then, finally, I'd say ION is by far the biggest driver in general, and ION itself does very well with multicultural audiences. And the moves we've made with sports have diversified ION's audience even further. When we looked at the WNBA from last year, for example, the WNBA audience was significantly more diverse.
With significantly more diverse ion was already a diverse audience and the WNBA audience opened up additional opportunities for us to sell younger audiences and more multicultural audiences. So I'm not particularly concerned about the bundling effect are losing the bundling effect because its generally ion that drives that and we are now looking in the upfront.
Adam Symson: ION was already a diverse audience, and the WNBA audience opened up additional opportunities for us to sell younger audiences and more multi-cultural audiences. So I'm not particularly concerned about the bundling effect or losing the bundling effect, because it's generally ION that drives that, and we're now looking at the upfront, as well as the scatter market, to use that to drive additional direct sales value for CGB.
Speaker Change: As well as the scatter market to use that to drive also additional direct sales value for CTV.
Michael Kupinski: Gotcha. Okay. Well, that's all I have. Good luck. Thank you.
Speaker Change: Got you, Okay, well, that's all I have good luck. Thanks.
Speaker Change: Thanks, Mike.
Operator: Okay, our next question will be from the line of Craig Huber, from Huber's Research Partners. Now before going to Mr. Huber, I will remind other participants to press 1 and 0 if they have a question at this time. And we will now go to Craig Huber. Please go ahead, sir.
Speaker Change: Okay. Our next question will be from the line of Craig Huber Huber Research partners now before going to Mr. Huber, a world where mine other participants to press London Zero. If you have a question at this time.
Speaker Change: And we will now go to Craig Huber. Please go ahead Sir.
Craig Huber: Let's take them one at a time, if I could. I think you said SCATR was up 40% versus the front a year ago. Can you maybe talk about how that 40% number compares? What is scatter versus noise?
Craig Huber: Let's take them one at a time if I could I think you said scatter was up 40% versus the upfront a year ago can you maybe talk about how that 40% number comparison.
Craig Huber: The year before where it was tracking at Fordham would also what is scatter versus scatter pricing that and how is that tracking right now yes, just to clarify we were.
Craig Huber: Yeah, just to clarify, we are scatter-pricing, and it's up 40% over upfront pricing from last year. It's not that scatter is up 40% over a year, yet not understood. Okay. What was that a year ago? What was the scatter at that point versus the prior up front? Is that trend pretty similar, or is that a better trend?
Craig Huber: Our scatter pricing is up 40% over upfront pricing from last year.
Craig Huber: It's not that scatter is up 40% over a year ago.
Speaker Change: Good okay.
Speaker Change: So can.
Speaker Change: Can you.
Speaker Change: What was that a year ago, what was the scattered at that point versus the prior upfront so as that trend pretty similar which Oh, we got a better trend.
Lisa Ann Knutson: I would say it's a slightly better trend than last year in terms of, because we've seen certainly that upfronts over the last two years have been weaker, and so this trend is slightly better than last year.
Speaker Change: I would say, it's a slightly better trend than last year.
Speaker Change: In terms of because we have seen certainly in the upfronts over the last two years.
Speaker Change: They have been weaker and so that this trend is.
Speaker Change: Is slightly better than than last year.
Lisa Ann Knutson: And it is getting better, I would say, on the national side because of sports.
Speaker Change: And then how much.
Speaker Change: Better and getting better I would say that because on the national side because of sports.
Lisa Ann Knutson: What is scatter versus scatter? And how's that trending right now?
Speaker Change: Okay, and then also if I could ask what is scatter versus scatter so like versus like.
Speaker Change: How is that trending right now.
Speaker Change: First a year ago.
Lisa Ann Knutson: Yeah, I don't think that's anything we've given out before. So I don't think we were going to be giving out that number. But I would just reiterate what Lisa said. We are seeing a stronger scatter market now than we have seen in the last couple of years.
Speaker Change: Yes, I don't think Thats anything we've given out before so I don't think we are going to be giving out that number but I would just reiterate what Lisa said, we are seeing a stronger scatter market.
Speaker Change: Now than what we've seen the last couple of years.
Lisa Ann Knutson: And, you know, look, I mean, the scatter market is stronger, and the DR market is stronger. As we said, the DR market is up for the first time in two years. So I think, you know, you sort of put those things together, and you recognize that, in general, demand is higher, and prices are better than they were last year. And maybe to put a finer point on DR, you know, DR was up for the first time in two years in Q1, and it's pacing up even more in the second quarter.
Speaker Change: Look I mean, the scatter market is stronger and the Dr market is stronger as we said the Dr market is up for the first time in.
Speaker Change: Two years, so I think you sort of put those things together and you recognize that pricing in general demand is higher in pricing is better than it was last year and maybe to put a finer point on the R&D. Dr was up for the first time in two years in Q1 and is pacing up even more in the second quarter.
Lisa Ann Knutson: How about the other 60% on the Scripps networks? How's that trending here, on the brand side of things?
Speaker Change: How about the other 60% on the Scripps networks, how is that trending here the brand side of things.
Lisa Ann Knutson: That is all-inclusive. So when we're talking about scatter, we're talking about across the networks. And when we're talking about DR, it's across the networks. Like, for example, Bounce is 50% DR. Grit is 100% DR. So what we're seeing is that strength flow through to all the networks pro rata based on sort of how their inventory is set up.
Speaker Change: That is all inclusive yes.
Speaker Change: So when we're talking about scatter, we're talking about across the networks and when we were talking about Dr. It's across the networks like for example balances 50%. Dr. Grid is 100% Dr. So what we're seeing that strength flowed through to all of the networks Pro rata based on sort of how their inventory is split I would say Craig the one thing we haven't talked about.
Lisa Ann Knutson: I would say, Craig, the one thing we haven't talked about is we talked about the scatter piece. We talked about DR.
Lisa Ann Knutson: In our prepared remarks, we also talked about the upfront, which is really the other piece. And we, as you heard in our comments, were really pleased with the reception so far from the upfront presentations that we did over the last month. That'll take a couple of months to kind of play out in terms of what gets booked, but I would say the tie-in with the sports, specifically the NWSL and WNBA, I would say has us pretty optimistic coming out of this.
Speaker Change: We've talked about in the scatter piece, we've talked about in.
Speaker Change: In our prepared remarks, we also talk about the upfront, which is really the other piece and we as you heard in our comments, we were really pleased with the reception so far from the upfront presentations that we did over the last month.
Speaker Change: That'll take a couple of months to kind of play out in terms of what gets booked but I would say I think the tie end with the sports because we ended up the Nw's Alan WNBA I would say Evan has us pretty optimistic coming out of this and then look there's no question that the networks business is still contending with last year's upfront that's.
Lisa Ann Knutson: Yeah, and look, there's no question that the networks business is still contending with last year's upfront. That's, to Steven's point, that's why we're seeing positive momentum and yet still have commitments from advertisers at last year's rates.
Speaker Change: Stevens point, and that's why we're seeing positive momentum and yet still have commitments from advertisers at last year right.
Craig Huber: Jason, if I could ask you, your outlook for net retransfer this year is still up about 1-2%.
Speaker Change: Jason if I could ask thank you for that and if I could ask you your outlook for net retrans for this year.
Jason: So up about 1% to 2%.
Jason Combs: Both gross and net distribution is projected to be up in the low single-digit range, correct? And that's despite the fact that we really only have 5% of our sub-base renewing this year.
Speaker Change: Yes, both.
Speaker Change: <unk> and net net distribution.
Speaker Change: Are projected to be up in the low single digit range correct.
Speaker Change: And I think that we really only have 5% of our sub base renewing this year.
Jason Combs: Okay, cool. Thank you, guys.
Okay cool thank you guys.
Speaker Change: Thanks, Craig.
Operator: Okay, now at this time, we have no further questions in queue.
Speaker Change: Okay now at this time, we have no further questions in queue.
Adam Symson: Great. Thank you so much, Kevin. Thanks to everyone for joining us today. Have a good day. And thank you. Ladies and gentlemen, that does conclude your conference. You may now disconnect.
Speaker Change: Thank you so much Kevin and thanks to everyone for joining us today have a good day.
Operator: And thank you. Ladies and gentlemen, that does conclude your conference. You may now disconnect.
Speaker Change: Thank you, ladies and gentlemen that does conclude your conference you may now disconnect.
Speaker Change: Yeah.
Operator: We're sorry, your conference is ending now. Please hang up.
Speaker Change: We're sorry your conferences ending now please hang up.