Gray Media Inc (GTN.A) 2003 Q1 法說會逐字稿

Please be advised that this conference call is being recorded. Good morning, welcome to the Gray Television first quarter 2003 earnings conference call for Tuesday, May 13th, year 2003. Your host is Mr. Bob Prather Mr. Prather, please go ahead ahead.

Thank you very much, Arlene. I want to welcome everyone to the first quarter earnings conference call. I think I can speak for most of our managers and people we deal with. We feel a lot better about the economy and the future of the way the years are going to look than we did back in January.

I think everybody feels good that the war uncertainty is behind us, that we've had a great victory over there and hopefully they'll get the peace worked out, too, but I think that everybody feels there has been a burden lifted off the economy. So I think we're looking forward to having a good year in spite of it not being political this year.

We're very happy to report that we've got the stations holding, our benedict acquisition totally integrated. We formed six regions led by regional vice presidents and general managers that we feel very, very good about. I think the old benedict managers have fit in extremely well with our management and our philosophy. The station is doing good, so we feel very good about it from that standpoint.

We've closed their Chicago office down and are basically probably going to have a 4 million dollar plus annual savings and overhead this year going forward from that, and it looks like things we've done on a regional basis already with our six regions, we're probably looking at another $800,000 a year in operating expenses that we're able to save just in the early going, what I call picking up the low-hanging fruit fruit.

We feel very, very good about integrating the Benedict stations and it's going extremely well. We're very, very happy with the management team that we have in place.

We have appointed a new manager, Terry Kohl, who was our manager in Panama City is now the general manager in Wichita. And Matt James who was a former manager by hours of the station we sold several years ago in Monroe, Louisiana is back with us as the manager in Reno. Reno, by the way, is doing great.

We forecast our budget this year for over a million dollar increase in cash flows, and we're ahead of budget right now. So we feel very, very good about our Reno acquisition also. I think it's a great market and a great station and we really feel good about it.

We renegotiated our King World contract for Wheel of Fortune, Jeopardy and some Dr. Phil. We should have annual savings in that area over a million dollars a year, beginning next year, so we feel very good about getting that renegotiated.

At our HD, we currently have 21 stations and 21 markets up and broadcasting on HD. We should have all of our stations up by the end of the year, several under construction right now. We've got two that were late licensed so channel changes at Reno and Panama City, but they both should be up and running by the end of the year.

We feel very good about our HD. We spent about $50 million total on HD and now we've got to figure out how to make some money out of it. I think that's incumbent on our industry at this point to figure out how to make some money on that -- on our HD investment. I believe we will. I think multicasting could be one of the answers. We're looking hard at doing some things in that area. We will be totally in compliance with all of our markets by the end of the year.

I know one subject is on everybody's mind, deregulation. We kind of operate our business like it's going to be the same rules from now on. I think that's the best way. When the rules change, if it's something that makes sense for us, we'll look hard at it. We've talked about that before, duopoly. We're not sure exactly how that's coming down, but we think that we'll be -- opportunities in a good many of our markets, especially the larger markets. I think the cap here will be raised and the newspaper, TV, all of those things are going to be good for our industry, good for values, and I think multiples and values will both be going up in the years ahead because of this deregulation.

One other thing I want to mention, our earnings release seems to get thicker and thicker thanks to our friends in Washington and thanks to people like Worldcom, Enron and Tyco. They've made it hard for people who try to run an honest business, but our earnings release started looking like the Manhattan phone book, which we apologize for.

We try to air on the side of full disclosure normally, so there maybe more information than anybody wants to know in there, but we’ll try to cut through all that and explain it to you. We try to look at it on a what we call a pro forma basis based on like we owned all of the stations all the time because that’s the only way, and our newspapers, that’s the only way we really think to judge it. Jim will talk about that a little more.

The only other thing I've got to say is first quarter, we were right at the top of our guidance. We think we're going to have a good year this year, and we feel very good about possibly even being better than we thought back when we did our budgets back in October and November of last year.

So, at this point, I'm going to turn it over to Jim Ryan, who is our Chief Financial Officer and let Jim go through some specific numbers and then we’ll open it up for questions, Jim.

Thanks, Bob, good morning, everybody. As Bob said, I'm really going to limit the comments talking about the quarter to what we termed in the release and what we will be terming going forward the adjusted numbers which is really a synonym for what everybody used to hearing called pro forma numbers.

Obviously to help meet the new regulations under regulation G, there is, you know, the reconciliations of media cash flow, operating cash flow, and free cash flow. So we think we're in compliance with the regs and everybody can read through those if they want to, attached at the back of the release. As Bob said, we actually had what we considered to be a very good quarter.

We were pleased to be at the upper end. We were slightly exceeding the guidance we had issued during the quarter. High of $65 million total revenue, operating cash flow of $19.8 million, 12 months trailing operating cash flow of $112.2 million, leverage at the end of the quarter, net cash was at 5.65 times, which is already down from the 5.73 at the end of last year, so we're pleased with that. And the cash balance has grown nicely.

We've got about $22 million dollars of cash on the balance sheet right now. The quarter itself, again, comparing to last year, if we had owned Gray MidAmerican Reno for the whole year, total revenue was down slightly, but that was really at our expectation. Broadcast revenues, which is the main driver was down about a percent.

We went against 2.2 million worth of Olympic revenue from our first quarter last year, so, all things considered, first quarter this year, going against that kind of Olympic revenue, we're very pleased.

Our local revenues themselves were on the broadcast side up about a percent. National ended up being about flat. Certainly the war uncertainties probably had a dampening effect a little bit on national, but all in all, while those uncertainties didn't help help, we don't think we were seriously hurt either during the quarter.

The political revenue was a little bit stronger than we had expected. Obviously, this is an off year, but as we talked about in the fourth quarter call, both Kentucky and Mississippi have off-year Governor's race this year, so we'll have a little bit more than usual. Actually, we got pleasantly surprised in Wisconsin on some local races in some of our markets, city municipal type races that actually generated a few extra dollars. So our political number is at about $740,000, was a little shy but not much shy of the $900,000 from last year. So a pleasant little surprise in the quarter for us.

Publishing did well. Revenues were up about 3%. The retail business across the group increased about 6%. We were very pleased to see that that. Classified and circulation were about even, so actually publishing again another good quarter of performance and cash flows up about 9% over last years. So we're pleased.

Turning a little bit to some comments on second quarter, we did publish guidance in the release. It’s pretty straightforward. We're looking for a, I think a good quarter at or actually from a revenue standpoint slightly ahead of last year, and again, all of that is tracking to about where our expectations were at the beginning of the year, so we're pleased.

Second quarter revenues we're currently estimating to be between $76 and $77 million. Operating cash flow up somewhere between $29 and $30 million and broadcast numbers, $63 to $64 million of revenue with a broadcast cash flow of about $27 to $28 million. And it looks like political will continue to be a little bit better than we had anticipated. We're currently guessing that that would be a nice little $1.2 million, but, still, keep in mind well short of the $2.9 million we had second quarter last year.

Pacing for second quarter, we are pleased with it so far in the television side. For the whole quarter as of last Friday, we were up overall about 4%. This is local and national, excluding political. Let me make that clear. But we're pacing business and books about 4% ahead. Had about 80 -- high 80% about 87% of the budget in for the quarter, so we were pleased there. Local and national up both about the same percentage points. So far so good for second quarter.

Turning back again to the balance sheet for just a second, as I mentioned before, total leverage net of cash at the end of the quarter was about 5.65 times. Actual debt is at 656.5 and cash is at $22 million. Keep in mind that the cash balance seasonally would grow a little bit in first quarter as, you know, you collect fourth quarter receivables, fourth quarter tends to be pretty strong. Also, keep in mind, we have cash uses coming up during the second quarter.

We will have a semi-annual interest payment on our subordinated notes so, you know, a fair amount of cash uses during this quarter. Cap ex for the quarter was about $3.7 million. The DTV component of that was about $2 million for the quarter and regular cap ex was about a million-seven. For the whole year, we're going to increase our cap ex forecast slightly. Really, we've had the opportunity for two projects that have come along that we think we're going to take advantage of, so our total cap ex will go probably in the range of $18 to $19 million.

The real driver there is we were able to sign a very attractive lease arrangement for a new production facility for our Gwinnett paper. Plans are underway to actually move the paper and have it completely relocated, up and running by sometime in July. That's a project that actually we've been working on for some years and finally found a lease that made sense to us.

The other opportunity that's come along is an opportunity to pick up a broadcast tower and some real estate in our Tallahassee market and our long-term thinking there is that we would, a little farther down the road, probably build a new facility for our Tallahassee station. The facility we are in currently is a leased facility, so we would like to eventually get out of our lease and get into something we own.

So, cap ex will go up a little accordingly because of that. But DTV total year still is tracking in about the $12 million dollar range and then we'll finish up DTV next year for the balance of the cash that has to go out the door. At this point, Bob, I'll turn things back to you.

Thanks, Jim. Arlene, operator, at this point, we would like to open it up for questions.

Thank you, sir. ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press the star one on your touchtone phone. If you are using a speaker phone phone, please pick up the hand set and press star 1. If your question has been answered and you wish to withdraw your request, press star 2. Please go ahead if you do have questions.

Your first question is coming from Bishop Sheen at Wachovia Securities. Please proceed.

Good morning, Bob and Jim.

Bishop, I see you've still got the win in the fastest finger contest.

Yeah, the older I get, the faster I get. You guys seem to have a pretty good war. You topped your guidance and looking at Q2, can -- Jim did I understand you right, those numbers for Q2 suggest pro forma flat growth? Or what kind of growth or anti-growth is there in the Q2 guidance?

There is a little bit in the broadcast revenue. Everybody should keep in mind in the fourth quarter earnings release, we published a full pro forma for 2002 by quarter. It shows up on page 14 of that release, and it's still out on our web site if anybody wants to go out and refresh it, feel free.

Right. That was not just for broadcast, but you did it for the whole consolidated revenue?

Yes, similar to the current layout, quarter by quarter. It's a nice tool for everybody. It's out there to take advantage of. The guidance, Bishop, for broadcast, we're saying Q2/03 right now is looking between 63 and 64. The adjusted bases or “pro forma” basis from last year, we did broadcast revenue of about 62.3. So we're expecting a little bit of growth there. Broadcast media cash flow, somewhere between 27 and 28 and second quarter last year, we delivered, again, on an adjusted basis, about 26.4.

So we are we're looking to work out a little bit of growth there. Again, keep in mind there's about a million-seven of political that we don't expect to get back on a comparative basis.

Right, 1.2 versus 2.9. Are those numbers net or gross?

Those are net.

Those are net, okay. That's good apples to apples. One other question -- thank you, Jim, for those answers. Two questions, one is your credit facility. It's still $425 million in terms of size?

Yes, there is a $375 million in term loan B out. We have borrowing ability for $75 million of revolver and we have zero drawn under the revolver.

Okay. And on the preferred stock, you've consolidated, I think you had three flavors of preferred.

It's all now one series C. Liquidation value of that is $40 million. There hasn't been any changes there.

Same as it was at year end?

That's correct.

Thank you, that's all I have.

Thanks, Bishop.

Your next question is from Tracy Young at Bear Stearns. Please proceed.

Good morning.

Good morning.

How are you? I've got three questions. Could you review the elements of free cash flow first for the year, including expectations for interest expense and taxes? Also are you still seeing GM rollout dealer group money in some of your markets? Could you talk more broadly about the health of auto? And also finally, what relieve do you expect the FCC to grant the smaller market TV stations?

Let me answer the dereg first. The duopoly and smaller markets have been all over the board. We're not sure where it's going to come down exactly, but we're getting feedback from our Washington people that we're probably have about 14 out of half our markets will be available for due op, it looks like. We don't know exactly but that's the indication we're getting.

As far as free cash flow, if you -- if you look in our earnings release in the reconciliations that are required, we had and it shows up on page 11 of the release, but cash interest expense, that would exclude any deferred charge amortization running through it with about $10.8 million for first quarter.

Certainly you can take that as a proxy for the rest of the year. Now we would -- and that might even be a little on the high side. That is likely to -- absolutely levels of debt are likely to come down, but certainly they give you an indicator. Our common and preferred dividends for the quarter were about $1.8 million, and that would be pretty consistent going forward. Our $40 million of series C preferred is an 8% rate, and then historically, the company has paid a 2 cent a share common dividend as well.

As we already talked about cap ex for the entire year, we're projecting now with the two additional projects we've added for the year, projecting 18 to on the high side, 19 million and it was about $3.7 in first quarter. Cash taxes in first quarter were about a million dollars. That's really probably the high side for the year, just the seasonality is obviously making estimated payments for various states that all are due in first quarter.

So, I don't expect cash taxes for the rest of the year to really change from that number significantly one way or the other. As far as GM money, there's probably a little bit more that will creep in on second quarter. My recollection is that they phase that in and you know, multiple locations during multiple markets during 2002. So -- and it was pretty much all in place by mid-year '02. So there's probably a little more phase in there.

As far as automotive itself, for the quarter, we were up about 3% in the automotive category, and so, you know, we were relatively pleased with that. And that trend line, managers are telling me right now that that general trend seems to be holding for second quarter at least so far.

Great, thank you very much.

Your next question is coming from Jim Boyle with Wachovia Securities. Please proceed.

Good morning. In Q1, did you outperform your peers in your markets? And if so, by how much?

I think we did. How much I don't know, but just based on -- there are not many of our markets where we've got public competitors and very few of them put out individual market information, but just based on the overall strength of the economy and how we did, I think we did in most cases outperform our peers in most of our markets.

Okay. Are your advertising rates and inventory sellout percentage post war any difference from prewar or last year?

Well, last year is a hard comparison because of political, but I think that, you know, very very -- we did a lot of planning prewar to try to get ready. We basically missed two days when most of the networks first couple of days were pretty much around the clock without any advertising, but we had a lot of advertising programs and a lot of our markets planned to -- ahead of time where we convince people to go on the air with what I would call generic, almost patriotic kind of ads that a lot of car dealers, a lot of local call stuff I'm talking about mainly, where we lost some national, obviously, but I think our managers did a real good job of preplanning, so we didn't feel much effect from the war because of, you know, kind of being prepared, frankly.

Okay. And I'm just curious, almost none of the general interest groups provided Q2 revenue guidance, but you did. And when many TV and radio groups last quarter preannounced lower Q1, once more, you were in a small select group that reaffirmed. Is it your mid-markets? Is it your high percentage of lead and new stations or is it something else that just enables you to do what few seem to be able to do?

Well, first of all, I will give credit where credit is due. I think we got excellent managers. I think we do have excellent markets, and overall, and I think we -- the -- having number one news stations in 23 of our 29 markets clearly, I think, makes us a real hedge in a tough time, because a good example is during the war, people are interested in news, people are interested in local news.

We were very fortunate, for example, to have one of our weather men in Panama city got called up in the navy reserves and was in Qatar and called in weekly from and gave a weather updates and a war updates and several of our stations picked it up around the company.

So, you know, we try to localize the war news as much as possible and talk about -- and fortunately or unfortunately, we're in a lot of areas where we had pretty strong military presence up in North Carolina, I think 31,000 troops from that area. Fort Hood had close to 20,000. Colorado Springs had 7,000 or 8,000 from out there, all over in the gulf. So people were interested in what's going on and especially, here again, we try to always air on the side of local coverage. We try to make it as local as possible even though it was halfway around the world.

On the FCC dereg, if in one of those markets where a duopoly could actually happen, if you were unable to rationalize one of the other people if one of the other groups came at you with what you considered a right price, would you sell?

That's a good question. I hadn't thought much about it. I think it would be difficult for us to do one station deals. Fortunately, we like all of our markets and like all of our stations and we kind of take a warren buffet approach that we're not interested in selling off pieces ,but I would say I'll never say never because there are crazy people out there that may offer crazy prices but we're going to try to be very selective if a duopoly is available, which I think it be, and try to work out deals if we can that make sense for us.

We consider ourselves content providers. We've got plenty of content, and frankly, we could use more channel space. So especially in our college towns where we've got deals with universities and sports programs and also our news product. We've got a lot of news that we could be putting on at different times of day that we're prohibited from now because of the network schedule. We'll be looking at it closely, but we're going be very careful.

Okay, thank you.

Thanks, Jim.

Thank you, your next question comes from Drew Marcus with Deutsch bank. Please proceed.

Good morning, guys.

Hi, Drew.

Two quick questions, one, maybe I missed it, but did you give the cost savings of closing the Chicago office.

I did, but I'll give it again.

What was that, $3 million?

We're estimating a little over $4 million a year on annual basis, this year and going forward.

How much of that will we capture this year?

Virtually all of it.

Second. Can you give us a sense as the second quarter is panning out, is it, you know, kind of flattish throughout the three months? Is it accelerating or is it decelerating?

Actually, it's kind of a little bit of a curve shape. April appears to have done pretty well mid-single digit. May looks a little softer, but the pace in June is back up or slightly above April levels. And actually, kind of the same trend happened in first quarter now that I think about it. January was real strong. February was off and then March was coming back nicely and then obviously, you know, the war had a little bit of an impact, but March was not too bad all in all. Similar trend in Q2, pretty good April, mid-month of the quarter looks a little soft on a relative basis and then it looks like a pretty good finish to the quarter.

Great. Thanks, gentlemen.

Drew, luckily we've got a rich ego- maniac running for governor in Kentucky that has spend $4 or $5 million dollars of his own money. We love guys like that.

Good, so do I.

Your next question is coming from Andy Van Heutan at Deutsch Bank.

Thank you. I was wondering if you could give a little more color on the good performance of the Benedict stations, in terms of the successful integration. They had good news leadership in their markets, even though they were small. Is that the kind of thing that's continuing in terms of their performance today?

Andy, I will tell you I'm very, very pleased with their profile in a lot of their markets is very similar to us. I will tell you, I think all of their stations are operating at a level as high or higher than before we acquired in most cases the higher levels as far as operating margin and that kind of thing. They are actually our number one cash flow station last year was Omaha, which was a former Benedict station.

So we couldn't be happier with the group, with the management team, with the managers. We've named three of the old Benedict managers as regional managers. We've integrated the gray stations and old Benedeict stations within these regional groups. We're doing a lot, as I mentioned, work between the groups trying to come up with ways and we think we've already identified $800,000 in annual savings.

We have just scratched the surface here. I think we'll be able to achieve a good bit higher in the years ahead. We're very, very pleased. Virtually all of the Benedict stations have a very similar profile as far as being strong news stations and strong local leaders, and they've continued that since we've acquired them. We're very, very happy with the integration.

Great, thank you very much.

Your next question comes from Keith Fawcett with Merrill Lynch. Please proceed.

Hello?

Mr. Faucet, did you have a question? I'll move on to the next question, sir.

Okay.

Your next question is from Dennis Liebowitz with Acton Partners. Please proceed.

I had two related questions on the dereg situation. There has been some speculation they may still prevent a top 4 network merging with another one under the expanded duopoly rules. I was wondering what your insight was on that with how much of a difference it would make to you in doing duopolies. And second of all, when you said you were unlikely to sell individual stations, what’s your thought on how attractive enough an offer for the whole company.

First of all, same thing on the big four. Nobody knows for sure, but we've heard that which obviously basically in the markets we would be interested in would probably be a WB, UPN or an independent that we would have to look at. As far as selling the whole company, I repeat my same mantra as I repeated before. We like to buy stations at ten times and we're a seller if the market gets up in 14-15 times cash flow range. So we think we've got a great group of stations, but we're a public company, and we're obligated to maximize shareholder value if the right deal comes along.

We're going to keep operating just like we're operating. We think if we keep, as I say, sticking to our -- our company gets better and better, and it'll be more attractive as a buyer or a seller down the road. I do think this dereg is going to cause some consolidation and cause values to go up and we'll be looking very carefully at both sides of the equation.

Just on that first answer, where you said you would have to look at WB and UPN, which would you rather have?

I think it depends on a market by market basis. We ideally -- we don't consider ourselves fixer-uppers. We like to take good stations and make them better. We would ideally like to find stations like that that are already performing decently, by adding some programming and adding some sales and management talent, we could, you know, increase our values.

One of the things we want to be very careful you have of, though, we didn't get these 23 market leaders by accident. It's mainly because we've had managers, very, very focused on serving local communities and putting out a good news product on the air. We don't want to divert our attention from, you know, the goose that laid the golden egg so to speak. It's something we've got to be very, very careful about how we do, and ideally, we would like to, as I said, buy something that's okay and make it a lot better as opposed to buying a dog and trying to make it into a race horse.

Your next question comes from Harvey Sandler with Sandler Capital. Please proceed.

Could you give us an update on how the Feb. ratings were for your markets, anything that was unusual up or down?

I think in general all of our ratings were very, very good. There’s always anomalies here and there. Nothing we had that was a significant down. In most cases, most of us actually -- ratings improved pretty much across the board.

Here again, Harvey, that's probably, you know, there is a lot of lead-up to war talk going on then and I think in those kind of times, people, here again, they go to that local news leader to find out what's going on. So, we've talked about before the network ups and downs. Thank goodness, they don't affect us that much in most cases, and we always go back to depending on our local news being the real driving force in all of our markets. Hello?

Yes.

I feel our ratings overall were very good.

Good.

Does that conclude your question, Mr. Mr. Sandler?

Yes.

Thanks, Harvey.

Your next question is coming from Keith Fawcett's line. Please proceed.

You vanished a while ago. I'm glad we got you back.

I know, I feel like some sort of ghost here. I was pleasantly surprised actually with your conversation about Dr. Phil. What we're sort of hearing is that there were massive price increases put through on the renewal on that, and I was wondering if you could talk a little bit about how that negotiation went and how you are containing your programming costs a bit?

Keith, here again, nine out of ten times, we like to -- our stations operate very autonomously, but we had an opportunity to put together I think about 15 or 16 of our markets who wanted to, and went to King World, and basically got some extensions on renewals by, you know, and got some -- you know, there was a lot of trading back and forth frankly. We gave a little here, a little there in the long run wound up way ahead because King World wants us as bad as we want them or worse. They like those bottle minutes they got and they like to be on strong number one stations because it helps their national sales a lot better.

So here again, this is one case where I think we did use our clout and our market position to get a good deal out of King World. I think both sides were happy at the end. They got good extensions and we got, you know, lower price going forward over the next few years. I think both of us are very happy with it.

And was it a two-year extension or did it go further out?

I think it was over all -- was it 3 years, Jim?

The primaries were two years.

Two years, okay. Two years, I think it may have been three on a couple. But it was mainly two years.

Great, super job.

Ladies and gentlemen just as a reminder, for additional questions, please press star 1. Your next question is a follow-up from Bishop Sheen's line. Go ahead.

Robert, you not only a news leader in your market, you're a bit of a sports leader, too. You mentioned your content for -- we've heard from some of the networks and the bigger players that, you know, there is this argument that the cross point that they can sell their sports for has reached a maximum, although you wouldn't know it by talking to ESPN. Do you -- are you seeing any resistance in the pricing of your sports content, your various pre-game shows, coaches shows, et cetera?

Luckily, no, Bishop. I've been hearing sports maxed out for the last 15 or 20 years. As you can see by the price rise of sports franchises, they keep going up. Here again, we're obviously more tied to the university towns, you know, the word fanatic "fan" is short for fanatic and we haven't seen any resistance in these kind of markets. I think the biggest determinate frankly in most of the markets on how popular those things are is how good the team did the year before.

You know, they've had a good year, they can't get enough of it. If they've had a bad year, they are screaming for the coach's head, but hope always springs eternal, and everybody starts the season off thinking they are going to be the champion. Luckily, we've got a strong identification in a lot of these markets with these university teams, and those fans stick with them year in and year out, pretty much. They get mad every once in a while, but they don't stay gone for long.

And the coaches shows, pre-game shows, post game shows, reruns, you know, fortunately in some of our major cities, Lexington with University of Kentucky and Knoxville with Tennessee and Tallahassee with Florida state. Lincoln with the University of Nebraska, places like that are just very, very strong viewer and fan loyalty.

Yeah, well said. Well said. Makes sense. One other question. Because you are such a leader in your markets, and with dereg coming, do you feel any more particular or overall that you are carrying an extra bull's eye on your back for competition that is going to try and figure out how to unseat number one?

Well, I think we have that all the time, and we like it. I think our managers, at least I hope they do, they wake up scared every morning, and I want them too. I think you've got to run scared to stay on top. I think good competition is good for us, frankly and it makes us better, but I think it's something you've got to do on a daily basis, and we -- we certainly emphasize the importance of the news product and the on-air product, all of the local stuff we do.

The community related as well as the news, and I think when you've got 10 station that have been number one for 50 years or more, and 23 number ones over all, that's a long history of dedication to those markets that -- you know, we welcome pot shots, but we'll fight back. We think we've got ammunition to do it.

You mentioned before that you think overall, dereg is going to be good for the industry and good for the TV economy. How do you feel hypothetically if one of your markets, a strong number two and number three are allowed to gang up against the number one?

Oh, you know, I just say we’ll welcome the competition. I'm not sure, you know, 2 and 2 doesn't always equal 5. Sometimes it equals 3. But we'll be ready for that. And if it happens, like I said, we've got managers who are competitive and focused and they know what our goal is on a daily basis.

I'm not -- I don't think duopoly is a panacea, necessarily. I think if you think about it, there is a difference between a radio duopoly, especially where radio has a lot of different formats, as opposed to a news duopoly.

To give you a good example, Bishop, in Tallahassee, we've got a dominant station down there. The NBC and ABC station basically have gone together under some kind of hybrid type of setup but the NBC station actually dropped their news. So they didn't really -- they may have gained some operating efficiencies, but they certainly haven't made a dent in our news product down there. Because they actually -- there is one less news competitor in the market and this is a trend, I think that's going to continue, as I mentioned in Topeka, the ABC dropped their news.

In Omaha, our number one market right now, the CBS station they’ve just announced they are dropping their 6 p.m. newscast, which is just frankly mind boggling to me me, but we welcome those kind of things because we're going to be the beneficiary of both audience and advertisers when those kind of things happen. You'll see more of that, not less.

Interesting. We'll be looking.

Thanks, Bishop.

Ladies and gentlemen, for additional questions, please press star 1. Gentlemen, there are no further questions at this time. I will turn the call back to you you.

Thank you, operator. I just want to say to everyone, we appreciate your support. We appreciate your interest. Always try to tell you and I'll tell you again, Jim and I are easy to find. We answer our own phones. We're available to talk any time.

We're going to be getting out a good bit this year and visiting in conferences and things and look forward to seeing a lot of you people, but don't hesitate to call. We welcome people to come by to visit. We want you to know we feel good about the year ahead and we're going to keep doing business like we've been doing it. Once again, I want to thank everybody for their support. Operator, at this point, I'll turn it back over to you.

Thank you very much. Ladies and gentlemen, just as a reminder, a replay of today's conference call will be available until May 20th, 2003 at 1-866-518-1010.

That number again is 1-866-518-1010. And the replay is available until May the 20th, year 2003. This does conclude your conference call for today. We thank you for participating and ask that you please disconnect your lines. Thank you, gentlemen.