Evan Masyr - Chief Financial Officer Edward Atsinger - Chief Executive Officer David Santrella - President, Broadcast Media David Evans - President, Interactive and Publishing.

Michael Kupinski - Noble Financial Barry Lucas - Gabelli & Company Pete Enderlin - MAZ Partners.

Good afternoon. And welcome to the Salem Media Group Fourth Quarter 2014 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Evan Masyr. Please go ahead..

Thank you. And thank you all for joining us today for Salem Media Group’s fourth quarter 2014 earnings call. As a reminder, if you get disconnected at anytime, you can dial-in to area code (719) 325-2214 or listen from our website at www.salemmedia.com.

As usual, I'm joined today by Edward Atsinger, Chief Executive Officer; David Santrella, President of Broadcast Media; and David Evans, President of Interactive and Publishing. We will begin in just a moment with our prepared remarks. Once we are done, the conference call operator will come back on the line to instruct you on how to submit questions.

Please be advised that statements made on this call that relate to future plans, events, financial results, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on currently available information.

Actual results may differ materially from those anticipated and reported results should not be considered an indication of future performance.

We do not intend and undertake no obligation to update our forward-looking statements, including forecasts of future performance, the potential for growth of existing markets, the opening of new markets or the potential growth from future acquisitions.

More information on risks and uncertainties that may affect our business and financial results are included in our annual report on Form 10-K and other public filings we have made with the Securities and Exchange Commission.

This conference call also contains non-GAAP financial measures within the meaning of Regulation G, specifically station operating income, EBITDA, adjusted EBITDA and free cash flow.

In conformity with Regulation G, information required to accompany the disclosures of non-GAAP financial measures is available on the Investor Relations portion of our website at www.salemmedia.com. I will now turn the call over to Edward Atsinger..

Thank you, Evan, and thanks to all of you for joining today’s call. On today’s call I want to take a few moments to discuss our recent name change and then we will switch gears and look at fourth quarter financial performance.

I have a few comments on some M&A activity and when I’ll get through that I will hand it back to Evan to take a look at the performance in more detail. Last month we did officially change our corporate name from Salem Communications Corporation to Salem Media Group, Inc.

We believe this name more accurately reflects the diversity of our multimedia platform today. Despite the name change, however, one thing remains the same that we will continue to focus on the two main audiences that we target, those interested in Christian content and those interested in conservative content relating to public policy and politics.

Over time, we become the preeminent trusted provider of audio, video and text for Christian-themed content and conservative-themed news, analysis and commentary.

Our business model and media platform is unique in that our multimedia approach is integrated, that’s the key word here ‘integrated’ with all of our businesses serving or [growing] [ph] far more too those two audiences. With that comment, let me now take a look at the Q4 results.

Total revenues were up 5.2%, recurring operating expenses increased 11.7%, which resulted in a decline of 16.7% in adjusted EBITDA. We’ll take a look at the numbers in more detail starting with revenue. We -- I had have to recognize that the fourth quarter was particularly challenging for us and for the entire radio industry.

According to the Radio Advertising Bureau the industry for the fourth quarter was flat in markets in which Salem does business according to [Miller Capital] [ph] data. Our revenues in most cities were down 0.8% overall. Our Broadcast revenue was flat in line with the overall industry.

We did see broad programming business continue to hold up fairly well with an increase of 2.2%. Our spot advertising revenue, however, declined 2.6%, little more on the national side it was down 4.4%, little less on the local side it was down 2.2%.

We probably should focus right now at this point on political revenue and the slowdown that we saw in Q4. When we reported on our last call, we commented the 2014 political revenue was pacing with the last midterm elections cycle of 2010. In fact, revenue was $2.4 million in both the nine months ended September 2014 and September 2010.

In the fourth quarter of 2010 we had $1.4 million political revenue. This fourth quarter was only $900,000 or a 39% decline. In our opinion based upon the best evidence available to us that much of this decline is due to greater competition for these dollars from Digital Media for advertisers is pretty clear.

Digital Media revenue by the way for the quarter was up 14.7%, driven by the acquisition of the website’s RedState and Human Events and the Financial Publications newsletter business in early 2014. Organically, Digital Media revenue was down 10.1%.

On our last quarterly call, we discussed a boost we received in the fourth quarter of 2013 due to a temporary Facebook algorithm change that lasted for about two months and then very abruptly disappeared. But this caused a significant spike in page views during those two months and in revenue for some of our websites.

The end result was we had an extra $800,000 digital revenue in Q4 2013. Obviously, it makes for a very bad comparison when we you get a kiss like that and it doesn’t repeat itself. So the biggest challenge, if you exclude that spike, the organic performance was revenue decline of 3.2%. So there is still some decline.

The biggest challenge faced by our new media business is the ongoing evolution of website usage from desktop to mobile devices. Nothing new, all of our peers are experiencing the same kinds of challenges. And we’ll continue to work on ways to improve mobile modernization and it is a primary focus for us today.

So in fact, over the medium and long term, we see mobile as a growth opportunity as we figure out how to monetize it at the same level as we’ve been able to monetize desktop in the past. Finally, on the revenue side, our publishing division was up 47%. Regnery Publishing, which we acquired in January 2014 had no big releases in the fourth quarter.

Mark Steyn's The Undocumented Mark Steyn, which was released in early September, was our biggest release in the fourth quarter but this was a compilation of previously published columns that wasn’t new material although it performed in line with our budget.

Looking ahead, the history of Regnery shows that it performs better in election years than non-election years.

And that being said, we are still quite enthusiastic about the lineup of books that we have scheduled for 2015, including books by such headliners as Kirsten Powers, Dennis Prager, Ann Coulter, Stacy Dash, Ed Klein and David Limbaugh and there will be some others. And frankly, the political season seems to be stirring up a little earlier this time.

So maybe we’ll get a little additional momentum out of an early political cycle. A full year now has elapsed since the acquisition of Eagle Publishing for 2014, Eagle generated approximately $24 million of revenue and $2 million of profit on a purchase price including the eliminated contingent -- including the estimated contingent incentive payment.

Recall that we provided with sellers some additional motivations if we hit certain revenue benchmarks. So including that, the purchase price is $11.2 million, representing 5.6 acquisition multiple in year one.

This solid performance is consistent with the assumptions we made about the synergies between the sale of assets with its significant marketing platform and the Eagle’s businesses. In fact, nothing in our first year’s experience invalidates the assumptions we made when we evaluated this acquisition opportunity.

First, our marketing platform including our nationally syndicated network host, our local radio stations, 27 of which are in a conservative news platform [indiscernible] and our conservative websites like Townhall, HotAir and RedState can take a great book and when it’s a great book, make it even more successful.

Second, that success helps with the acquisition of future offers and books to grow revenues in the future and profits and we’re seeing that trend gain momentum.

Let’s take a quick look at expenses, recurring operating expenses including the impact with acquisitions, we are up 11.7% for the quarter and evaluating this expense increases, it’s important to exclude expenses related to the Eagle businesses. Organic expenses excluding the impact of acquisitions were up only 1.3%.

It has included a few one-time expenses including the accrual of severance for our former President and Chief Operating Officer. Excluding those one-time items, our recurring expenses were up at only 0.6%, so even less.

Even so, we are concerned about the fact that we had little organic revenue growth at this stage and that our EBITDA decline from 2013 to 2014 accordingly and we take some steps to reduce our expenses at a growing forward basis and Thursday, last week, for example, we laid off a number of people across the company.

These layoffs that combined with other actions taken during the fourth quarter of last year will result in a savings of approximately $2.5 million annually. Clearly, revenue growth is fundamental to the health of the business.

Looking ahead, we continue to believe that we have newly build revenue growth opportunities in our digital businesses, both on our national websites and our local radio station sites, which has been the fastest-growing area of our business for a number of years.

And we see the current modernization challenge caused by the shift to mobile as a temporary situation, which we think we will overcome, particularly as we see page views -- mobile page views accelerate well beyond what they were with desktop.

We also see a good upside potential from our recent radio station, digital and publishing acquisitions, most notably Eagle Publishing. For the year, free cash flow increased 5.1% to $26.6 million. Even though we had a 4% decline for the year -- for the entire year in adjusted EBITDA, we were able to grow free cash flow which was encouraging.

This improvement came from a combination of reduced interest expense as we continue to focus on paying down our debt and a reduction of capital expenditure retirements of $1 million. We have been quite busy recently on M&A front. We still find interesting strategically attractive tuck-in opportunities.

We have entered into agreements to buy three stations from Disney. The first is WDYZ-AM in Orlando for $1.3 million. We expect to close that acquisition at the end of the first quarter and we’ll program that station with our Spanish-language Christian teach-talk format. It’s a great facility.

It’s probably as good as facility -- AM facility as exists in Orlando. Certainly, it’s as good or better than any of the three that we already possess. In Pittsburg, we are buying WDDZ-AM for $1 million and we will program that station with our news/talk format.

I believe that Pittsburgh is a market of 24 or 25, so it rounds out again and other top 25 market with that particular format. Finally, we are buying WDWD-AM of Atlanta for $2.75 million. This station will feature our Christian Teaching Talk format but we already have a station, WNIV-AM at Atlanta in the format.

This station has far superior coverage and will allow our block programming industries to achieve far better results. We are very excited about these enhancements to our radio platform, particularly WDWD with a much broader reach day and night and what has been described as one of the most important Christian markets in all of America.

Atlanta often referred to as the heart of the Bible Belt. So, we’ll finally create demand for that facility and it will work out as a very good tuck-in acquisition. Let me make some final concluding remarks about a brief discussion on our quarterly cash distribution.

Our policy has been to distribute approximately 20% of our expected free cash flow, given that 2015 is not a political year, negatively impacting advertising revenue and broadcasting digital media in addition to the fact that Regnery Publishing routinely has stronger results in election years as I mentioned earlier.

The Board has decided to keep the distribution flat for the first quarter. Accordingly, we will be making a distribution of $0.065 per share on $1.6 million on March 31st. With that, I will hand the call back over to Evan for additional details on the quarter and for an opportunity to provide guidance for the first quarter 2015..

Thank you, Ed. For the fourth quarter, our total revenue increased 5% to $65.9 million. Operating expenses on a recurring basis increased 12% to $54.0 million and adjusted EBITDA decreased 17% to $11.9 million.

The net broadcast revenue remained flat at $48.8 million and broadcast operating expenses increased 5% to $35 million, resulting in station operating income of $13.8 million or a 10% decline. On a same-station basis, net broadcast revenue decreased 1% and SOI decreased 10%.

These same-station results include broadcast revenue from 99 of our radio stations and our network operations, representing 99% of out net broadcast revenue. I will now breakdown our broadcast revenue by format. 41 of our radio stations are programmed in our foundational Christian Teaching and Talk format.

These stations contributed 44% of total broadcast revenue and remained flat for the quarter. Our 27 News Talk stations had an increase of 10% in revenue for the quarter, in part due to an increase in the political revenue. Overall, these stations contributed 18% of our total Broadcast revenue.

Revenue on our 12 CCM stations Contemporary Christian Music stations contributed 22% of total Broadcast revenue and decreased 6% for the quarter. The nine stations that we have programmed in Spanish language, Christian Teaching and Talk grew its revenue by 11% and this format comprises 2% of total Broadcast revenue.

Finally, we have 10 stations in a business talk format. This format contributed 3% of total Broadcast revenue and decreased 1% for the quarter. Our network revenue declined 8% for the quarter and represents 8% of total Broadcast revenue. Publishing revenue increased 47% to $5.4 million and represents 8% of total revenue.

And finally, revenue from our Digital Media businesses increased 15% to $11.7 million and represents 18% of total revenue. During the quarter, we repaid $8 million on our term loan, leaving a balance of $276 million outstanding as of December 31st.

As a recap for the year, we repaid $15.25 million represents -- representing approximately 57% of our annual free cash flow for 2014. We also had $1.8 million drawn on our revolver at year end. Our leverage ratio increased from 5.42 as of last quarter to 5.45 versus a compliance covenant of 6.50.

For the first quarter of 2015, we're projecting total revenue to decrease 1% to 3% over first quarter 2014 total revenue of $62.3 million.

We are also projecting operating expenses before gains or losses on the disposal of assets, impairment losses, depreciation, amortization and stock-based comp to be up 3% to 4% compared to the first quarter 2014 operating expenses of $51.7 million. And this concludes our prepared remarks and now we would like to answer any questions.

Operator?.

Thank you. [Operator Instructions] Our first question comes from Michael Kupinski at Noble Financial..

Thanks for taking the questions. Just a housekeeping question, the pro forma first quarter publishing revenue for 2014, I think have about $900,000 from Eagle Publishing.

I was just wondering, if you can just clarify that for me?.

I don’t have that number in front of me but that sounds - that’s probably pretty reasonable. We didn’t have any big book releases in Q1 of ‘14..

Okay.

And remind me too, in terms of the book releases for 2015, are they pretty much evenly matched with those that were released in 2014?.

Are you looking for more books in …..

Q1 will be that same..

We better be that over..

Yeah. Pretty evenly matched with strongest quarters in 2014 were Q2 and Q3 with a much lighter release schedule in Q1 and Q4. In 2015, Q1 is going to be about the same, Q4 is going to be stronger than last year, Q2 and Q3 will probably end up being a little bit weaker.

And for the year as a whole with budgeting, revenues to be slight -- revenues and profits to be slightly down from the last year because last year was not an election year. And this year is a non-election year..

Okay.

And in terms of the headcount or [FTEs] [ph], could you tell me what they were at the beginning of 2014 and what you anticipate they will be at the end of let’s say, this quarter?.

Headcount are right around 1,600 employees total. I would say if I went back and I have to look at the K but probably a 100 to 150, that’s last year but that was before we bought Eagle and a couple of other businesses..

And can you just outline for us, given the fact that you’ve gone through this cost cutting and headcount reductions so forth what is included in the operating expenses to be up 4%?.

No, we just recently took action on the layoff and also included in the expenses in the quarter severance for those actions that we -- for those people we laid off in the last few days..

So the 4% increase in the first quarter you are saying includes the severance?.

Correct..

Okay, and in terms of the trends for the year would you say that they’d certainly then moderate from there, right?.

We would expect that too, correct..

Okay. And so in terms of acquisitions then, the recent acquisitions, can you talk about the multiple which you purchased the stations at or with or without synergies? I mean can you give us some idea, I know in the past you thought you gave some parameters on the multiple.

Do these stations fall in line with the parameters that you outlined for us in the past? And maybe shed a little color on what you anticipate how this would work for you in terms of the multiples?.

With regard to the three stations I referred to, our goal is to hit about a five multiple, a cash flow that’s equal of five multiple of the purchase price by year or two, and that’s a rough target for us. We feel pretty good about it on our pro formas with regard to the Atlanta acquisition and Pittsburg.

We got a little more due diligence to do in Orlando, but believe that we will get pretty close to that target as well..

Okay. That’s all I have for now. I’ll get back in the queue if there are other questions..

All right. Thanks Mike..

Okay. Thank you..

The next question comes from Barry Lucas at Gabelli & Company..

Good afternoon and thank you. Ed, maybe you could just talk a little bit to the extent you have some thoughts in terms of how to monetize the mobile traffic. Lot of it is moving in that direction but the change felt like it was a little bit more dramatic than we had seen in the past, particularly on the revenue front.

So how do you make that digital business get back into the growth trajectory that you’d had previously?.

I’m going to let David Evans, our President of that division address it. Part of the backdrop of course is that the traffic -- the mobile traffic is growing very rapidly and the issue is the fact that you can’t monetize at the same value, the old adage we used to say about analog dollars for digital pennies.

You’ve got that some of that same phenomena going on where mobile pages can’t carry the same value.

But David why don’t you comment?.

Yeah. The big upside opportunity with mobile is people can visit our website wherever they are, whereas with desktop, you have to be next to a computer. So, we expect more visits and therefore more page views because mobile facilitates website usage. So, yeah, that’s a big area of upside is sheer volume of traffic.

A slight negative is when people visit on a mobile device compared to desktop, they don’t spend that long on the site. They are on the go, they are doing a bunch of different things, so visit is typically a little bit shorter and they are therefore going to consume less advertisements. And that probably isn’t going to change, that is what it is.

A couple of things we are then working on is the Internet industry has spent 15 years, figuring out which ad units performed best on desktop. The industry now has to do that same process with mobile. We have to figure out which ad units work for advertisers that get noticed, that get clicks that people respond to.

So, we are going through a process of testing a number of different possible ad units to find those that work best for advertisers while at the same time are still a good user experience. So that’s a big current project and in the final pace, we have to work with our advertisers.

Many advertisers that we work with, they continued their website desktop-only. While if you go to a desktop website on a mobile phone and try music, it’s difficult.

So we are having to educate our advertisers on the need to have a mobile website that it has to be easy to use and as advertisers get more comfortable with mobile and embrace it and figure out how to get their ads to work, they will be prepared to pay more. So and we are not alone in that challenge.

The big boys, Google and Facebook have exactly the same process going on with their advertisers, with our advertisers. So those are the two things -- those are the key things we need to work on is what are the best ad units and working with our advertisers to make sure that they are set up to advertise effectively on mobile..

David not to be a spoil sport here, but Google and Facebook do have a little bit more in the way of financial resources to throw at an issue like that? So how do you, what is this specific that Salem can do with more limited resources?.

The good news is, whatever developments the industry as a whole come up with, they tend to get replicated throughout the entire world of the internet. So as they learn we learn and we are able to follow through on the things where they lead.

Now on our Christian websites in particular, almost all of our advertisers are Christian advertisers, who -- for whom we are a primary advertising vehicle. We have very good relationships with those advertisers. They see us as internet expert and we work in very close partnership with them to make sure their advertising is effective.

And we are well equipped to do that. It doesn’t take that much in the way of financial resources. It’s a process of our sales executives and our graphic designers and our marketing experts who are already on staff working with those advertisers to share best practices..

Great. Thank you..

[Operator Instructions] And our next question comes from Pete Enderlin at MAZ Partners..

Thank you. Good afternoon..

Hi, Pete..

Good to know that the organic expense trends in the fourth quarter were not as bad as they look on the surface.

But I wonder, was there issue of the timing with respect to the expense controls in the fourth quarter? I felt that you have begun to tighten up on the cost significantly around the middle of the fourth quarter and now we hear that you are making some layoffs and cost cuts recently last week? In other words, did you realize belatedly that the revenues are going to be less than expected and you couldn’t react quickly enough or at what point did your company sort of make the strategic decision to keep spending to support future growth?.

Pete, we did have some cost control measures going in in the fourth quarter and that’s why you see the organic growth rate of expenses in the 1.3% range. What we realized now is, we just need to go a little bit deeper and a little further and that’s what these layoffs pertain to. So we are getting as aggressive as we can on the expense side..

And then sort of strategically along the same line, when you look at the overall company structure and growth potential? Is it a matter of running the Broadcasting division primarily for the cash flow to support acquisitions either tuck-in acquisitions of Broadcasting or bigger acquisitions in the Digital Media and Publishing area or do you think you can sustain above average organic growth in station operating income on a standalone basis?.

Well, clearly, we are doing what we can to maintain our free cash flow as much as possible on the Radio side and certainly, that is how we are able to fund future acquisitions be it Radio or Digital. We are not satisfied with just keeping flat station operating income. We’d like to see that grow and that’s why we’re being aggressive on the cost cuts.

We’re doing things to round out our portfolio with that additional stations. And we’d like to see this free cash flow from station operating income from the broadcast side grow, not decline..

I guess, it’s sort of a question that time provided.

I mean, would you expect to continue sort of ratcheting down the expenses in the station operations over a long period of time or is this kind of one-shot deal?.

The answers time will tell, Craig. We stepped up our efforts to tighten up our expenses a bit more after earlier efforts in the fourth quarter, just simply because, some of these trends are hanging on a little longer.

And they appear they are going to be a little -- they are going to be linger around a little bit longer than we thought, particularly the transition. This will not affect radio as much directly but the transition from desktop to mobile.

Some of these trends that need an adjustment, looks like the adjustment period is going to go out a little longer than we anticipated. And so we’re trying to anticipate that to be a little leaner and meaner during that period of time until we get on top of those problems. At the same time, we are still allocating. We mentioned acquisitions.

We still are roughly allocating about 30% of our free cash flow for tuck-in acquisitions and other acquisitions that make sense. If an acquisition in our opinion is clearly accretive, it’s clearly not going to exacerbate our leverage. We may get a little more aggressive. But as a general rule, we’re trying to stick to the 30% of free cash flow.

We’re trying to continue to devote at least half of our free cash flow to debt retirement. We are able to get 58% of our free cash flow in 2014 committed to debt retirements. So we want to continue to get the leverage down. With the leverage down, then we can be a little more aggressive in some of the acquisitions in the future..

Okay. I know, you can’t be specific obviously.

But what are the prospects for sort of a transformative acquisition in the digital area?.

Well, it’s one that I always have my antenna way up high surveying the horizon to see if one such acquisition exists. But if we could find one and it was one of those game changers, it was one where we knew the marriage, the synergy would be such that you could stretch for it, we certainly would take a real hard long look at it..

It’s much more like clay. You’re going to see a number of, kind of, tuck-in digital acquisitions. So rather than one transformative digital acquisition, it’s more likely to be a series of smaller tuck-in acquisition as we round out our digital portfolio. That certainly been the pattern for the last several years.

And I think that’s what I expect to continue..

Okay. Thanks.

And then just one more on back to the broadcasting side, when you do your long-term planning process, what do you assume for industry growth of radio broadcasting overall and maybe then specifically your niche of radio broadcasting?.

Well, I think we approach radio as a mature business..

Yes..

But the opportunities are big. The byword that we used, integration, is still the thing we focus on. So it’s probably not a good idea to look at the radio revenue growth in isolation. You really got to couple it all up with digital, with print, with everything we’re doing because it’s all integrated.

It’s all working together and where we may see a very slow mature kind of pattern for the radio assets and same time they may be driving very effectively some of the new media assets with the ways that are quite satisfactory to us..

Sure..

So again, I think the key to the way we got to look at our business model, particularly because we are niche broadcasters because we super serve very specific target audiences that our content is directed to and our platform is directed to. Because that’s the case you got to keep an integrated model in mind and look at the total revenue picture.

And that’s hopefully we’re fortunate..

Okay. Thank you very much..

Our next question is a follow-up from Barry Lucas with Gabelli & Company..

Thanks for taking the follow-up. To jump off here, Ed, but looking at the trend in fuel prices in an economy, which has been steadily improving albeit at a relatively slow pace.

I mean, why -- given your typical listener, what are you seeing at ground level and what’s impeding the progress or what’s stopping your advertisers from stepping up and maybe spending a little bit more?.

Barry, it is Dave Santrella. We’ve seen, really just in the last few weeks the pick up in transactional business. So our radio stations that play for that larger transactional business, so guys like Home Depot or the car dealer associations, things like that.

We’ve seen a pick up in that business, that maybe a result of what they feel what looks like an improving economy. We always kind of play that cat and mouse game when transactional business is up. Many times you are looking at that more direct business, which makes up a good portion of our business.

Those guys intend to put their hands back in their pocket for a little while until they are forced to advertise because they are starting to feel the effects of larger change taking share from them. And I think at picture level, it’s a turf war going on for the advertising dollar.

And if you look at the massive growth in Facebook over the last few years and then the massive growth in mobile, both of which are free to use our advertising supported business models.

You’ve got a couple of pretty large new players going after advertising dollars and the advertising pie is growing by -- at the rates of inflation-ish or GDP-ish and there is a couple of new players in the mix.

That kind of turf war is going to make it challenging to grow your advertising revenue and that’s a macro situation that the media will face us..

I might add that we certainly saw this from M&A in fourth quarter with regard to political advertising. We have got several election cycles growing back for a number of years, so we pretty much could predict what kind of bump we would get in political dollars. It didn’t show up this time. The reason it didn’t show up as the turf war was there.

There was a lot more macro targeting a very narrow defined audiences that were using big data to drive it and the fact that the broadcast business, both radio and TV, their audiences, all the numbers indicate their audiences are holding up very well, some of the dollars are not.

The dollars are going to these new medium and we are going to have to figure out how do adjust for that and that’s part of -- again, part of the ongoing process that we are going through to figure out where our strengths that they can’t really duplicate.

What are the unique strengths of the broadcast, the radio model, for example the way it connects with its community is quite unique and we are back to the drawing boards, working on proposals that play to those strengths and we hope that we can get some of those dollars back over..

So you are clearly suggesting that starting with political wars being more visible and political and probably stretching elsewhere is that there is an ongoing secular shift and definitely more competitive environment from those in digital space that are pulling dollars away from traditional legacy medium..

Lot of the candidates or lot of the campaigns have decided that if they can target certain key precincts, with women 25 to 50-year for our single -- just a whole set of characteristics.

If they can very specifically narrow target that particular group then it’s more productive for them in doing even a more narrowly defined broadcast on a digital website and we are encountering that and what I think will happen is we’ll find out that that’s not the only way to win elections. So that’s one way to do it.

But the old-fashioned way still is important if you do it on a cost-effective basis. So there is a turf war going on as David said. We are trying to figure out how to play the large strengths in a unique way that delivers value for those advertisers so that they recognize.

We still have a very sizable audience with a very impressive reach, none of that has changed. So how do we get into the battle with a way that gets backed more of that revenue share? And that’s going to be the ongoing challenge.

So in the meantime we’ve tightened the belt, so they will be linear and linear as we kind of transition and figure some of those things out..

Thanks for that..

[Operator Instructions] Seeing no further questions, I would like to turn the conference back over to Edward Atsinger for any closing remarks..

Thank you, Operator. And thanks again to all of you for joining us for the call. We look forward to visiting with you again in three months when we report on Q1 2015..

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect..