Ken Silver

Ken Silver asked for clarification on whether the Q1 core advertising guide of up mid-single digits included the Super Bowl and Olympics, and if so, how much it would be up excluding those events. He also inquired about the expectation for lower reverse network affiliate fees.

Answer

CFO Jason Combs confirmed the Q1 core advertising guide included the Super Bowl and Olympics, noting strong Olympics revenue (up 13% vs. 2022) and a Super Bowl lift, but did not break out the impact of excluding these events. President and CEO Adam Symson added that local live sports partnerships were also driving significant Q1 growth. Jason Combs explained that affiliate fees are expected to decline due to subscriber churn, less exclusivity in network product, and successful negotiations for decreases, leading to low single-digit top-line retrans revenue growth but declining affiliate fees.

Ken Silver from Stifel Financial Corp asked about the significant drop in sales and marketing expenses, the underperformance of National Radio versus the market, and the availability and covenants of the ABL facility.

Answer

EVP & CFO Peter Thompson attributed the expense decline to timing differences in TV One marketing and general belt-tightening. CEO Alfred Liggins added that the reduction is also tied to lower variable sales commissions and that the company is not cutting sales staff. Liggins and Thompson explained that National Radio's underperformance stems from secular industry pressure, a pullback in DEI-related advertising, and exclusion from some AI-driven marketing campaigns. Thompson confirmed the ABL is fully available with significant headroom on its fixed charge ratio covenant.

Ken Silver of Stifel requested a breakdown of cable TV revenue, details on the MVPD renewal schedule, clarification on TV One's ratings performance, and the company's strategy for programming expenditures.

Answer

Executive Peter Thompson provided the cable TV revenue split, noting affiliate fees are now slightly less than 50% of the total. Executive Alfred Liggins outlined the renewal schedule, with Charter, Verizon, and NCTC due this year. Liggins clarified that TV One ratings have stabilized after prior declines and are exceeding budget, and stated that future content investment will focus on new FAST/AVOD distribution rather than just linear networks.

The analyst, identifying himself as Ken Silver, asked for a full-year revenue guide, the outlook for the Reach Media segment, and for details on any additional headwinds facing the digital business beyond previously mentioned issues.

Answer

The company declined to provide a revenue guide. They stated that for Reach Media, the top line is expected to be down slightly, but the bottom line should be up a little. For the digital segment, they identified additional headwinds including significantly lower organic traffic from platforms like Google and Facebook and a general softening in advertiser demand as the "DEI wave" has receded.

Ken Silver of Stifel Financial Corp asked for clarification on the wide $40 million Q3 EBITDA guidance range, the expected net cost savings in Q3, the nature of a negative $10 million item on the EBITDA bridge, and any updates on programmatic advertising.

Answer

President, COO, and CFO Rich Bressler attributed the wide EBITDA range to potential revenue mix shifts between business segments and confirmed Q3 net cost savings are expected to be $40 million, in line with the annual plan. He identified the negative $10 million item as a non-material true-up for employee benefit costs. Chairman and CEO Bob Pittman stated that new Chief Business Officer Lisa Coffey will lead the monetization of their ad tech platform, which has already made progress integrating with demand-side platforms.