Gray Media, Inc Q3 FY2024 Earnings Call

Welcome, ladies and gentlemen to Gray Media's Q3 2024 Earnings Call. I will now turn the program over to Chairman and CEO, Mr. Hilton Howell, Jr.

Thank you, operator and good morning, everyone, and thank you all for being here. As the operator mentioned, I'm Hilton Howell, the Chairman and CEO of Gray Television. And 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 Jeff Gignac, our Chief Financial Officer. As usual, we will begin with a disclaimer that Kevin will provide.

Thank you, Hilton. Good morning, everyone. Gray Television, Inc., commonly known as Gray Media or Gray, uses its website as a key source of company information. The website address is www.graymedia.com. We will file our Quarterly Report on Form 10-Q with the SEC today. Included on the call may be a discussion of non-GAAP financial measures and in particular, adjusted EBITDA, leverage ratio denominator and certain leverage ratios. These metrics are not meant to replace GAAP measurements, but are provided as supplements to assist the public in its analysis and valuation of our company. Included in our earnings release, as well as on our website are reconciliations of these financial measures to the GAAP measures reported in our financial statements. Certain matters discussed in the 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 in the company's most recent reports filed with the SEC, including our most recent Quarterly Report on Form 10-Q and our most recent earnings release. The company undertakes no obligation to update these forward-looking statements. And now, I'll give the call to Hilton.

Thank you, Kevin. Gray Media is a robust company that continues to grow, invest, and adapt to the challenges and opportunities in our dynamic industry. We take great pride in reporting each quarter the successes we have in serving our communities and delivering strong financial results to our stakeholders. As noted in this morning's earnings release, Gray had a successful third quarter with revenues mostly aligning with our expectations, aside from slightly lower political advertising revenues than anticipated. Additionally, our expenses were significantly below the lower end of our guidance range as we work towards greater efficiency. Specifically, for the quarter, total revenue reached $950 million, an 18% increase from the third quarter of 2023, driven by an uptick in political advertising. We reported a net income attributable to common shareholders of $83 million for the third quarter, in contrast to a net loss of $53 million in the same quarter last year. Adjusted EBITDA rose to $338 million, marking a 61% increase compared to the third quarter of 2023. Core ad revenue stood at $365 million, representing a 1% increase from the prior year. Political ad revenue for the third quarter was $173 million, slightly under our guidance, yet only $17 million shy of our record year in 2020. By the end of the quarter, our leverage ratio, calculated in accordance with our senior credit agreement net of cash, was 5.67 to 1.00, as we repaid nearly $250 million during the quarter and are aiming for a total repayment of $0.5 billion by year-end. We are pleased that we managed to increase core ad revenue despite facing some headwinds and political shifts. Our strong station sales teams continue to drive growth in core ad revenue, especially in digital and new local direct sales channels, by maintaining our focus on delivering exceptional value to our advertising clients. In many of our Southeastern markets, there was a temporary suspension or reduction in commercial airing as we heightened coverage concerning Hurricane Helene and the resulting devastation. We believe our commitment to these communities significantly impacted the outcomes before and after the storm, possibly saving lives in the affected areas of Florida, Georgia, and North Carolina. Our political ad revenue was robust in the first half of the year compared to 2020, adjusting for the lack of competitive presidential primaries. We entered the third quarter with optimism, identifying all the factors for a record political cycle. However, similar to two years ago, many anticipated competitive races were not as competitive by Labor Day, leading to a substantial portion of political ad spending focusing on fewer competitive races outside of our station's coverage areas, particularly in Montana and Pennsylvania. Ultimately, while our third-quarter political ad revenue remained strong, it did not reach the levels seen in the record third quarter of 2020. For the full year of 2024, we expect around $0.5 billion in political revenue, positioning us as a leading recipient of political advertising dollars in the television broadcasting sector, both in total and per TV household. We take pride in achieving this, as our reach is significantly greater than some competitors. Our earnings release today also emphasizes that we are actively developing local, direct, and digital business opportunities across our stations. We continue to produce news and investigative content that resonates with local audiences. Recently, five of our stations in our national investigative unit, InvestigateTV, received the 8th National Edward R. Murrow Awards for Excellence in Journalism. Additionally, we are expanding our local sports broadcasts. On the expense side, we initiated a significant cost containment effort in August that affects nearly every aspect of the company. As Pat will elaborate, our leadership team is dedicated to finding more efficient ways to provide high-quality service to our communities and customers while maintaining our values and commitment to local journalism. Reducing our debt and leverage is a top priority in our capital allocation strategy. We have made tangible efforts towards this goal and will persist until we achieve our targets in this domain. Our earnings release outlines our recent initiatives, which Jeff will discuss further during the call. Looking forward to 2025 and beyond, we are implementing the necessary actions to reinforce our strength, efficiency, and impact as a company that is well-prepared for the evolving business landscape. What you read in today's press release and what will be discussed today will affirm our commitment to positioning the company for long-term success. Now, I will hand the call over to Pat for more insights on our operations.

Thank you, Hilton. Our core ad revenues this quarter were 1% higher than the third quarter of 2023, which is also 1% ahead of the third quarter of '22. As Hilton mentioned, our core ad revenue strength occurred despite a number of headwinds, particularly political displacement. This achievement is driven by our success in recruiting new local businesses to advertise on our stations and/or digital platforms. Our new local direct business in Q3 2024 was up almost 14% over Q3 2023. In our local markets that are audited by a third party, the audits show that we increased our share of the total local TV ad markets to a new third quarter record. These results are very encouraging and gratifying, especially because many stations posting share growth in these audits did so as affiliates of CBS, ABC and FOX competing against the record viewership of the Paris Olympics this summer. Our NBC stations performed well at the Summer Olympics, generating north of $20 million, some of which was political advertising. Digital ad sales continue to be a bright spot for us. We are seeing year-over-year double-digit growth rates and new records for digital ad revenue, and new digital accounts nearly every month. In the third quarter, we had 22 markets that generated more than $1 million in digital ad sales, which is a new record for us. In terms of political ad revenue, Hilton provided a good description of the political ad landscape for us. Our political ad revenues were, from a historical basis, quite strong going into the third quarter. As the third quarter progressed, it appears that political parties felt there were fewer truly competitive Senate and gubernatorial races in our footprint. We expect that when the year ends, we will see our political ad revenue in 2024 meeting or exceeding 2020 numbers at the present level, the house level, state and local level, as well as issue and ballot initiatives. The only category where we saw revenue decrease occurred in Senate races, which has long been our largest political ad category. In 2020, our current station portfolio had about $331 million of political revenue from Senate races, including the two Georgia runoffs versus $121 million of political ad revenue for Senate races this year. The $200 million difference resulted from less spending in some competitive Senate races in our footprint this year compared to 2024. In the end, we brought in about $0.5 billion, which is a lot of money, which we'll use to pay down debt. In most quarters since the end of the pandemic, Gray has beaten the public peer group average year-over-year in core ad revenue performance, and it appears that we led the peer group average again in the third quarter. Despite this momentum, we anticipate that core ad revenues in the fourth quarter will be down compared to '23. For context, in 2020, core ad revenue from our current station group declined 10% in the fourth quarter from the prior year due primarily to total displacement and COVID pressures. In Q4 '22, our core ad revenue declined 4% from Q4 '21. We also attribute a significant piece of our core ad revenue slowdown to the move of Southeastern Conference Football from CBS to ABC. We are the largest CBS affiliate owner and we have CBS as our affiliation in many Southeastern markets; think Atlanta, Knoxville, Baton Rouge, Lexington, Waco, College Station, among others. The replacement of SEC with Big 10 will reduce core and political ad revenue in the fourth quarter. Overall, for the full-year 2024, we expect core ad revenue to be down slightly, which is not unusual in the political year. On the expense side, for the third quarter of 2024, our broadcast operating expenses and corporate operating expenses were $14 million and $3 million below the low end of the expense guidance ranges respectively. For full-year '24, we currently expect broad CapEx and corporate OpEx to be significantly below our initial full-year guidance provided in February. To prepare for 2025, we launched a major effort in August to review spending across the company and to find ways to streamline operations without cutting back on the mission to serve our communities. Since August, we've identified and begun implementing various initiatives that will allow us to reduce our operating expense run rate by approximately $60 million on an annualized basis. We're also closely evaluating our capital expenditure needs for 2025. Most of our expense reductions involve non-personnel expense categories. We've also taken steps to reduce our personnel expenses. Beginning in August, we eliminated positions by suspending recruiting and by not filling certain positions following attrition in the ordinary course. We also made some targeted reductions in headcount. Every individual who is directly affected has played an important role in the success of our company. These actions are personally difficult for everyone at Gray and particularly painful for those impacted by the job restructurings. They are, however, looking for the company to operate more efficiently for the long-term benefit of all other employees and the communities that depend on us. Sandy will now address some important operational developments.

Thank you, Pat. Once again, in the third quarter and into the fourth quarter, our stations along the Gulf Coast served as a critical lifeline of information for communities dealing with devastating storms. Our trusted news and weather teams provided around-the-clock coverage of Hurricanes Francine, Helene and Milton, even while some of the homes of our own employees suffered damage from those storms. But we didn't let that slow us down. In late September, we announced a significant media rights deal with the New Orleans Pelicans. It brings every non-national Pelicans NBA game to 4.1 million households through Gulf Coast Sports and Entertainment Network, our new multi-state distribution venture that is anchored by our New Orleans television station. Continuing with this momentum, our stations will be broadcasting an ever-increasing number of local and regional games from professional and college teams through this fall and next spring, from the Chicago Bulls, Blackhawks and White Sox games to the NBA Mavericks and the NHL Kraken. Finally, this brings me to a question regarding the value of local broadcast television.

Hello. This is Hilton Howell. Apparently, we got cut off right as we believe, where Sandy began her comments. And so, once again, let me turn it over to Sandy Breland, our Chief Operating Officer, for her to reboot and restart. Thank you.

I hope it wasn't something I said. Once again, in the third quarter and into the fourth quarter, our stations along the Gulf Coast served as a critical lifeline of information for communities dealing with devastating storms. Our trusted news and weather teams provided around-the-clock coverage of Hurricanes Francine, Helene and Milton, even while some of the homes of our own employees suffered damage from those storms. This is where local broadcasters best serve their community. But we didn't let the storm slow us down. In late September, we announced a significant media rights deal with the New Orleans Pelicans. It brings every non-national Pelicans NBA game to 4.1 million households through Gulf Coast Sports and Entertainment Network, our new multi-state distribution venture that's anchored by our New Orleans television station. Continuing with this momentum, our stations will be broadcasting an ever-increasing number of local and regional games from professional and college teams through this fall and next spring, from the Chicago Bulls, Blackhawks and White Sox games to the NBA Mavericks and the NHL Kraken. Finally, this brings me to a question we get asked sometimes by investors as to why businesses, political campaigns and local sports teams want to be on local television. We keep sharing our news ratings results, including a deep dive in an October 2023 investor deck. Still, I think it's worth answering this question with an interesting comparison between the top-rated cable news show and our own local newscast. In the third quarter of 2024, the FOX News program pulled in more viewers than any program on cable with an average of 3.5 million viewers. That's impressive, but not nearly as impressive as Gray's 5 PM newscast, which is available in 36% of U.S. households. Collectively, our 5 PM newscast averaged 4.4 million viewers. That's 25% more viewers than the five despite reaching less than one half as many homes. Think about that. That is the power and reach of local broadcast television, and that's the reach that local businesses, political campaigns and local sports teams need, want and can get from Gray Media. We're obviously very proud of the great work of our news teams from coast to coast. And these ratings show our loyal viewers appreciate and depend on their important work. I now turn the call over to Jeff.

Thank you, Sandy. The team has already covered our Q3 and our outlook. So, my comments will focus on our balance sheet. As Hilton mentioned earlier, reducing debt and leverage remains our top capital allocation priority. We continue to improve our balance sheet in Q3. During the quarter, we reduced our outstanding debt principal balance by $246 million, returning our first lien and total leverage levels to 3.0 and 5.67 times respectively. This is in line with the levels following our early June refinancing and a sequential improvement of approximately a quarter turn of leverage from June 30, 2024. The debt reduction during the third quarter was completed through a combination of open market repurchases under our previously-announced board authorization and repayments at par. In addition to the previously-announced $29 million repurchase of our 2027 notes at 92.1% of par, we repurchased approximately $16 million of our 2021 Term Loan D at an average price of just under 91% of par. During Q3, we repaid the full $200 million that was drawn under our $680 million revolving credit facility at June 30. Also during Q3, we entered into agreements whereby we will retire an additional $39 million of our 2021 term loan at an average price of 92.6% of par, which we expect to close in November of 2024. Looking forward for full-year 2024, we expect to reduce our total net debt outstanding by approximately $500 million. We announced this morning that our board has authorized a reset of our open market repurchase authorization to $250 million. And we will continue to take a balanced approach and look to capitalize on opportunities to efficiently reduce our debt. One notable input to our free cash flow outlook that I'd like to highlight is on the tax side. As you may have seen in our release, we determined during the course of filing our 2023 tax return that the portion of our interest expense attributable to real estate primarily due to Assembly Atlanta coming online is fully deductible rather than limited under IRS rules. As a result, we expect to benefit from that deduction in our cash tax payments this year and on a go-forward basis. So, to summarize, we're continuing to execute on the plan and pulling the levers that we have available to us to generate cash flow. The actions that we've taken on the expense side, a closer look at our capital needs and repaying our debt to reduce our interest burden all enhance our cash flow profile going into 2025. This concludes my remarks. And I will now turn the call back to Hilton for some closing remarks.

Thank you, Jeff. Operator, at this time, we ask you to open up the line for any questions for any of our leadership team.

And we'll take our first question from Aaron Watts of Deutsche Bank.

Hi, everyone. Thanks for having me on. I have a couple of questions. The first is a question around your core ad guidance. I'm hoping you can parse out your 4Q down 10.5% guide a bit more. Are you able to say how much of that was weather related? And it'd be really helpful to hear what you're seeing in the post-election core ad environment generally, areas of strength, weakness et cetera and how things feel turning the corner into 2025? I guess, second, Jeff, I'd point your way with regards to the $60 million of run rate savings you announced. How should we think about the timing of that phasing in and hitting the P&L over the next several quarters? And are there any further cost actions you're exploring in any ways to kind of frame that incremental opportunity? And then finally, just regarding capital allocation, it sounds like the focus remains on debt reduction. Do you envision continuing to be in the market repurchasing front-end loans and bonds? How do you think about the timing of potentially accessing the capital markets to address your first maturities? And has there been any further consideration on reducing the dividend? Thank you.

Thanks, Aaron. It's Pat LaPlatney. I'll start. In Q4, several factors are at play. There’s the impact of political crowding out, and we discussed the significance of the SEC for us. Looking ahead, I would say we are cautiously optimistic about the remainder of the quarter. We have noticed some positive signs just in the last few days, which we believe is encouraging and not entirely unexpected. The more improvement we see in Q4, the more hopeful we become for Q1 2025 and beyond. So, I think there’s some reason for optimism there. Jeff, I know you have several questions.

Yes, Aaron, I made a note of several points, so I'll go through them in order. If I overlook something, feel free to chime in. First, regarding the $60 million in run rate savings and the timing, most of that, particularly the personnel aspect, is already completed. We've achieved that, and it's behind us now, which will start to show results. You should consider this as primarily a way to lower our expenses. Over the past few years and quarters, we've observed a decrease in our expense growth rate, and this trend will continue as a result of these actions. We've implemented several changes, including renegotiating contracts and adjusting workflows. These will take a bit longer to manifest, but we expect progress to begin in the first quarter of next year. As for ongoing cost measures, we are continually keeping an eye on the situation, although nothing specific has been identified at this moment. We will keep evaluating options, but we do not have any new plans currently. Regarding capital allocation, we have renewed the $250 million authorization from the board and will continue to focus on where we can find good value. We are not tied to any specific debt tranche and will assess market conditions. If there's an opportunity to access the capital markets at a reasonable price that supports our cash flow and debt reduction, we will consider it. As for the dividend, Hilton can add more on this, but we evaluate it on a quarterly basis. As of now, we are comfortable maintaining it for this quarter. Hilton, feel free to share any additional thoughts.

No further comment right now.

All right. Thanks guys. Appreciate the thoughts.

Thank you, Aaron.

Thank you for taking my questions. You actually just addressed many of them. A quick one though, in terms of the political, is it possible to provide some number around potentially the impact from the hurricane specifically? Meaning what would political have been without that hurricane impact? Thank you.

It's a few million dollars.

Okay, great. Thank you. All right.

Thank you. I was wondering with the political, if you're seeing any difference between maybe local affiliates and networks and just sort of your opportunities within selling on the station apps and the ability that you're able to capture some viewing share shift there?

Patrick, we didn't, you kind of cut in and out there. Could you repeat that question? I'm sorry.

Yes. I guess what I was trying to ask was, is there any sort of shift between political and buying local stations versus networks trying to reach buying on the networks versus and your ability to sell political inventory on the station apps versus in the linear broadcast and being able to capture any of that share shift there?

Yes. So, if you look through our political results, we talked about this a little bit. All of our categories were up, all the different categories of political spending were up with the exception of Senate, which historically has been far and away our largest. So, the money was there in the market. It just got shifted out of our footprint essentially. And a lot of it, as Hilton mentioned, landed in Pennsylvania and Montana.

Okay. And then just within the core ad verticals, are you seeing any sort of strength or weaknesses across different categories or industries?

Yes. So during Q3, it was a mixed bag. Auto has been weak for us. It was weak in the third quarter. Candidly, it's weak in the fourth quarter. Communications category has been somewhat weak. And then look, given we talked a little bit about political crowd out, but there was also political hesitancy as well. People held on to their money, either not wanting to be on the air during the influx of political ads or not really understanding what the economic outlook would be depending on which party prevailed in the elections, right. So that impacted a lot of different categories. As we talked about before, we're starting to see some green shoots coming out of the election. And so, we're cautiously optimistic, but we would expect most of those categories to improve for the remainder of the fourth quarter that pick up next year.

Yes. And just one other interesting note on that, even with the strong political in October, our new local direct is up year-over-year, fueled mainly by digital and that's consistent with the laser focus we've had on growing new local direct.

Okay. Thank you.

All right. Next up, we have Doug Pardon of Brigade Capital Management.

Hi, good morning, everyone. I wanted to shift gears a bit, as we've had some challenges, possibly due to political factors and the hurricanes. It seems like our retransmission has exceeded our expectations both in gross and net figures, and I believe retransmission expenses may decrease this year. Could you elaborate on that? It’s an issue you’ve previously addressed, and I’d like to know your thoughts and confidence regarding retransmission for next year, as I think that's a major concern for investors. I have a few more questions after that.

Hi, Doug. This is Kevin. Our core retransmission revenue has been in growth mode for quite some time. However, this year, we shifted from significant growth to a slight decline. We've mentioned in previous calls that we've managed to achieve some rate increases, but we've been facing challenges with subscriber erosion. This trend is evident across all media companies as subscriber numbers have not been improving much. There are some encouraging signs from recent reports by Comcast and Charter, suggesting that their subscriber losses may have stabilized. We initially predicted that subscriber declines would stabilize earlier this year, but it now appears that this may occur later in the year or possibly next year, which could slow the rate of growth. Our revenue in this area relies on a straightforward calculation: a rate multiplied by the number of subscribers for each operator. As the decline in subscriber numbers decreases, our growth will improve, although this is beyond our control. We've discussed our expectations for slower growth, and we're optimistic that we've seen the worst of the situation and will move toward a future where subscriber declines are less pronounced. Some of our competitors and third-party analysts have echoed this sentiment. Regarding network fees, we have previously stated that they need to be reduced, as they were set based on outdated factors. We’ve had some success renegotiating contracts to lower those fees, but there’s still more work ahead, particularly over the next 14 months as we renegotiate with all four networks for the next round of contracts. We are committed to reducing costs, as we have emphasized in every quarterly report, and our recent actions make it clear that we’re focused on lowering both operational costs and network fees. While we aren't providing guidance for next year, these are the factors we are considering.

Yes. Let me just emphasize one point that Kevin made. The $60 million does not include anything related to any network agreements.

Great. And then just changing gears. On the political side, is there anything structural about your footprint that causes you concern? Or is this just simply a case of bad luck?

Actually, we didn't experience any bad luck. We generated $0.5 billion, which is the highest total for political ads among our peers in the broadcast sector. So, the main difference is...

Okay. That said, you did somewhat miss expectations, and I believe it's due to the outcomes of certain races. I'm just trying to understand that a little better.

This is Kevin. We earned more money in Presidential races than four years ago and also in state and local races, house races, and ballot initiatives, all of which aligned with our expectations for the year. Our internal expectations, where we believe most others miscalculated, were around the Senate. Looking at the results, we observed very close outcomes in states where Gray has a significant presence, such as Arizona, Nevada, Wisconsin, and Michigan. The spending from both sides did not correlate with the poll outcomes, which is an occurrence that happens at times. Some races see large amounts of money spent despite a candidate being clearly ahead, resulting in wasted funds. Conversely, there are instances where not much money is spent even though expectations based on polls indicate otherwise, only to discover that the competitor was much stronger and the race tighter than anticipated. Unfortunately, this was the case in four Senate races located in states where Gray has stations in almost all markets. This situation primarily revolves around Senate races for Gray and does not involve money leaving our markets; we maintained the same political share of dollars as four years ago and excelled in all categories. However, there was a shortfall in a few costly Senate races compared to what we expected. This situation is not due to overly high expectations of our own; we maintain internal expectations that we do not share, as predicting these races accurately is extremely challenging. We emphasized this point in 2022, while others have felt confident providing political guidance, which is their prerogative as they make estimates based on broadcasters. We have warned that the unpredictability of these races means that while some may exceed expectations, others may fall short due to factors completely out of our control. This trend is not unique to Gray and our Senate performance; it can be seen across the entire sector, with some entities outperforming market expectations while others did not. As long as we continue to capture our market share, we are doing all we can. However, we cannot compel a party to invest an additional $100 million in Nevada, which may or may not influence the election outcome there.

That context is exactly what I was looking for, super helpful. So, long and short of it, no structural issues with the footprint. My last is just more a comment. I know people asked about the dividend. We are shareholders. I would just point out that we think the ability to take some of that cash and buy back debt at significant discounts is really helpful for shareholders, reduces interest expense and you kind of compound that over time. It could really help with your deleveraging strategy. But thank you guys for the questions.

Thanks, Doug. Appreciate the comments.

All right. Next up, we have Craig Huber of Huber Research.

Thank you. I'll try to make this easy for you. I'll go one question at a time. On the regulatory front with the new administration starting January 20th here, what are your expectations for any potential changes with the ownership cap, regulatory environment here for M&A in the broad media space in general? Let me start there, please.

We would expect that the FCC will be deregulatory on ownership and much just as importantly, if not more importantly for our future on ATSC 3.0 NextGen Matters, and a series of operational issues for broadcasters and other regulated entities. In terms of specific policies, that's going to depend on the outcome of some pending court cases, further guidance from the courts on the SEC's actual jurisdiction and absolutely, who the commissioners are going to be. So, I would say broad strokes headlines, we see a deregulatory SEC coming, but I don't think we're really in a position to be handicapping specific policy issues right now.

And then longer-term, what is your goal here for your net debt-to-EBITDA ratio on a two-year basis?

Yes. Over the next two years, Craig, the company has taken on debt to make acquisitions and has actively worked to repay that debt. We are demonstrating our commitment to reducing debt with our actions thus far and our plans for the remainder of the year. In the long term, I feel more at ease when we're below a four times ratio, though I acknowledge that it may take some time to reach that point. We have the necessary liquidity and a solid maturity profile to achieve this. It will require going past the 2026 political cycle before we see a significant influx of cash that can help lower us back to the four times ratio, which is ideally where we want to be in the long term.

All right. The next question, guys. On the cost-cutting front, you talked about the $60 million. I appreciate that. Do you feel there's significantly more cost that you could take out in another round here if you take out over the next 12 plus months without doing damage to the business, of course?

Yes, I believe we can. We conducted a thorough review and will continue to monitor the situation, being proactive in renegotiating as needed. The main area for potential cost savings will come from our affiliate renewals, which are due in 2025. We will be renewing all of them in the next 14 months, so that's the next topic we need to address.

I have one final question about the core advertising outlook for the fourth quarter, which is projected to be down about 10%. If you could adjust for the impact of political advertising and SEC Football, where do you think that number would land? Would it be close to flat or slightly down? What are your thoughts?

The crowd out from SEC?

The crowd out plus SEC, where do we landed?

Yes.

We would have much more inventory to offer if it weren't for the political crowd out. Additionally, the SEC's shift to the Big 10 on CBS has cost us a few points in overall revenue.

You take that and again, the political crowding out, if you could remove those, you think you'd be much closer to flatter. And so, when you get to what do you think the underlying growth is right now in the marketplace for your TV advertising just for those two items?

There's a lot of uncertainty at the moment, making it difficult to pinpoint a specific figure. Historically, we haven't calculated what we believe the crowd out number is. What we can share is based on the data we have today. As Pat mentioned in our guidance, there are reasons to be cautiously optimistic based on our observations. However, there is some reluctance to make commitments in the short term. We are starting to notice some trends, but it's challenging to provide a specific number at this time.

Okay, fair enough. Thank you, guys.

Thank you.

All right, ladies and gentlemen, this does conclude your call. You may now disconnect your lines and thank you again for joining us today.