David Smith - President & CEO Chris Ripley - CFO David Amy - EVP & COO Steve Pruett - Co-COO, Television Steve Marks - Co-COO, Television Lucy Rutishauser - SVP, Corporate Finance and Treasurer.

John Huh - Wells Fargo Davis Hebert - Wells Fargo James Dix - Wedbush Securities Tracy Young - Evercore Lance Vitanza - CRT Capital Group Howard Rosencrans - Value Advisory.

Greetings and welcome to the Sinclair Broadcast Group Third Quarter 2014 Earnings Conference. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr.

David Amy, Executive Vice President and Chief Operating Officer at Sinclair Broadcast. You may begin. David Amy Thank you, operator, and good morning everyone.

Participating on the call with me today are David Smith, President and CEO; Steve Marks and Steve Pruett, Co-Chief Operating Officers of Sinclair’s Television Group; Chris Ripley, Chief Financial Officer, and Lucy Rutishauser, Senior Vice President, Corporate Finance and Treasurer.

Before we begin, Lucy will make our forward-looking statement disclaimer..

Thanks, Dave, and good morning, everyone. Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results. Such statements are subject to a number of risks and uncertainties.

Actual results in the future could differ from those described in the forward-looking statements as a result of various important factors. Such factors have been set forth in the company’s most recent reports as filed with the SEC and included in our third quarter earnings release.

The company undertakes no obligation to update these forward-looking statements. The company uses its website as a key source of company information, which can be accessed at www.sbgi.net. In accordance with Reg FD, this call is being made available to the public.

A webcast replay will be available on our website later today and will remain available until our next quarterly earnings release. Redistribution of this call is prohibited without the express written consent of the company.

Included on the call will be a discussion of non-GAAP financial measures, specifically television broadcast cash flow, EBITDA, free cash flow and leverage. These metrics are not meant to replace GAAP measurements but are provided as supplemental detail to assist the public in their analysis and valuation of our company.

A reconciliation of the non-GAAP financial measures to the GAAP measures in our financial statements is provided on our website under Investor Information, Reports & Filings..

Thank you, Lucy. Before we go through the results let me review some of the activities that have taken place since our last earnings call. On the network affiliate front, we renewed our FOX affiliation agreements in four markets that expired that summer with a new expiry of December, 2015.

Our JSA partner in Champaign/Springfield also renewed their affiliation agreement. The majority of our remaining FOX affiliations do not expire until the end of 2017. We also renewed 13 ABC affiliation agreements that were expiring in 2014 and 2015 with new five-year agreements expiring in 2019 and 2020.

The renewal terms were in line with our expectations. Our next group of ABC affiliation agreement do not expire until the end of 2017.

On the acquisition front, in September, we closed on the previously announced acquisition of WGXA, the FOX/ABC combo in Macon, Georgia and closed on the previously announced sale of WHTM, the Allbritton ABC in Harrisburg, PA to Media General. We continue to have the CBS and CW stations in Harrisburg.

We also announced that we entered into an agreement to sell our television stations WTTA, the MyNet in Tampa and KXRM, the FOX station and KXTU, the CW station in Colorado Springs, Colorado to Media General.

At the same time, we announced that we would purchase the broadcast assets of WJAR, the NBC in Providence, Rhode Island owned by Media General, WLUK, the FOX and WCWF the CW in GreenBay, Wisconsin owned by LIN Media, and WTGS, the FOX in Savannah, Georgia owned by WTGS Television, LLC and operated by LIN through a shared services arrangement.

The transaction is expected to close in the fourth quarter of 2014. In November, we closed on the previously announced purchase of the non-license assets of KSNV, the NBC in Las Vegas, as well as the purchase of the non-license assets of eight stations in three markets from New Age. Those markets are (inaudible) Tallahassee.

Our content initiatives continue to be successful especially as they pertain to the American Sports Network and the Ring of Honor. On the ASN front we continue to expand the brand and have now entered into syndication right agreements with six RSNs and 47 TV stations to broadcast ASN’s collegiate games in non-Sinclair markets.

We've also signed the Western Athletic Conference, the Horizon League, and the Ohio Valley Conference bringing to eight the number of NCAA Division One conferences sharing games with us.

ASN now reaches over 90 million households bigger than all regional sports networks and reaching slightly fewer homes to only ESPN and FOX Sports 1, and we are pleased to report that we are achieving competitive ratings on our games.

ASN also secured multi-year rights to the International Motor Sports Association Porsche GT3 Cup Challenge USA races and this morning we reached agreement with the Atlantic 10 conference.

Ring of Honor, our wrestling franchise also entered into its first indication agreements with five different broadcasters and expanding into five markets and adding over 3 million TV households.

In addition, FOX Sports Television and Regional Sports Network is airing ROH in 12 markets reaching over 4 million cable homes including Cleveland, San Diego and New Orleans. ROH also entered into a licensing agreement for a line of collectible ROH figures and accessories extending their brand recognition.

We launched an original program and division that will focus on the creation and development of low-cost original entertainment in long form content.

With the additional stations closing we are now producing approximately 2,000 hours per week of original local news content making us one of the largest, if not the largest producer, of local news I the country. Also, we announced the multicast character of Grit TV in 47 of our markets. Grit is a male-centric over-the-air broadcast television network.

Finally, we continue to meet our milestones on developing the next generation of broadcast transmission technology which our subsidiary ONE Media will be demonstrating this month. Now Chris will take you through the third quarter results..

Thank you, Dave. Net broadcast revenues for the third quarter were $448 million, an increase of 48% or $145 million higher than third quarter 2013. Television operating expenses in the third quarter, defined as station production and station SG&A expenses before barter, were $248 million, up 50% or $83 million, up from the third quarter last year.

Corporate overhead for the quarter was $17 million, up $1 million versus the same period last year due to primarily one-time acquisition expenses. Television broadcast cash flow in the quarter was $184 million, up $64 million or 54% higher than last year's third quarter BCF.

The broadcast cash flow margin on net broadcast revenues for the quarter was 41%. EBITDA was $172 million in the quarter, up $65 million or 61% higher than the same period last year and higher than our guidance. The EBITDA margin on total revenues was 35% for the quarter.

Net interest expense for the quarter was $48 million, up $8 million versus the third quarter last year. The increase was due primarily to the acquisition financing. Our weighted average cost to debt for the company is approximately 5%. Our most expensive debt, the 8-3/8ths senior unsecured notes, was called in October.

Lucy will take you through the details of this transaction in our balance sheet highlights. Diluted earnings per share on 98 million weighted average common shares outstanding was $0.49 for the quarter. We generated $71 million of free cash flow in the quarter and converted 55% of our EBITDA into free cash over the trailing 12 months.

Our after-tax free cash flow yield is approximately 13% and our dividend yield is 2%. Now Lucy will take you through the balance sheet and cash flow highlights..

Thank you, Chris. At September 30, total debt was $3.788 billion. Included in that amount was $109 million of non-guaranteed and VIE debt that we are required to consolidate on our books. We ended the quarter with $99 million of cash on hand.

As Chris mentioned, in October, we redeemed in full the $237.5 million of 8-3/8% senior unsecured notes due 2018. The notes were called at 104.1875% of their par value. The redemption was funded through previously raised bank debt and cash on hand. The redemption will add approximately $0.09 of incremental annualized free cash flow per share.

Capital expenditures in the third quarter were $32 million. Our full year guidance is for $76 million which includes all Allbritton and Macon. Cash programming payments in the third quarter were $22 million and our full year guidance remains relatively unchanged at approximately $93 million.

Cash taxes paid in the quarter were $26 million and for the year are expected to be $105 million due to timing on the sales of WHTM in Harrisburg and WTAT in Charleston, South Carolina. Total net leverage in the holding company at quarter end was 4.9 times. This excludes the VIE and non-guaranteed debt and is net of cash.

The first lien indebtedness ratio was 1.8 times on a covenant of 4 times and we expect proforma year end 2014 total net leverage including pending acquisitions to be approximately 4.7 times.

Since our last call we repurchased $50 million or 1.9 million shares of our equity at an average price of $25.85 per share and have $135 million of remaining authorization. For 2014, the company repurchased a total of $133 million or 4.9 million shares.

When combined with the $61 million in dividends expected to be paid this year we are on track to return a total of almost $200 million to our shareholders this year representing over 50% of our estimated as reported free cash flow. David Amy will now take you through our operating performance..

Thanks Lucy. For the third quarter net broadcast revenues excluding political were up 38% versus the third quarter of ’13. Political revenues were $34 million as compared to $3 million in the third quarter of ’13.

Proforma core advertising was down low single digit percent in the quarter on a soft national advertising and political displacement of normal advertisers. During the quarter, our fastest growing categories were political, medical, telecommunications, furniture and drugs and cosmetics. Direct response, automotive, restaurants and fast foods were soft.

Turning to our as report outlook which does not included the Las Vegas, New Age or swap transaction. For fourth quarter of ’14, we are expecting net broadcast revenues to be approximately $534 million to $536 million, up 40% as compared to the fourth quarter of ’13. This assumes $78 million of political versus $7 million in the same period last year.

Categories expected to do well in the fourth quarter are political, auto, fast food and furniture. Services, school, telecommunication and medical are expected to be soft. For full year ’14, we’re expecting net broadcast revenues to be approximately $1.760 billion to $1.763 billion, up 45% as compared to full year ’13.

Included in that estimates is full year political of $130 million. On a proforma basis including the pending transactions, we expect 2014 net broadcast revenue to be approximately $1.989 billion to $1.992 billion. On the expense side, we are forecasting TV production and SG&A expenses in the fourth quarter to be approximately $268 million.

For the year, TV expenses are forecasted at $942 million. Full year 2014 proforma TV expenses are estimated at $1.066 billion. We expect EBITDA in the fourth quarter to be approximately $236 million to $238 million, an increase of 52% to 53%.

For the full 2014 we expect EBITDA to be approximately $699 million to $702 million, an increase of 49% from 2013 and on a proforma basis we expect 2014 EBITDA to be $796 million to $798 million as compared to $705 million proforma 2013.

Based on our guidance, free cash flow in the quarter is expected to be approximately $126 million to $128 million and $362 million to $365 million for the full year 2014. On a proforma basis we expect 2014 free cash flow to be approximately $408 million to $410 million or $4.25 per share as compared to 2013 proforma free cash flow of $367 million.

So with that, I would like to open it up for questions..

(Operator Instructions). Our first question is from John Huh with Wells Fargo. Please proceed with your question..

Hey, guys. Just stepping in for Marci Ryvicker real quick, have a bunch of questions. So I know the content creation stuff has been around but you guys announced a bunch of new stuff.

How do we think about those longer term from a modeling perspective when we think about revenue and expenses?.

John, can you repeat your question again?.

Yes, I just wanted to get some color on how we might think about modeling ASN grids and your Ring of Honor syndication deals generally..

Generally to speak on the ASN side, it’s just being launched and we wanted to make a point there that we’ve already reached that 90 million homes in terms of our total reach and coverage in the number of television stations and other regional sports networks that have signed up with us so far. So we’re off to a real good start.

But you have to consider that it’s a launch we’re looking to, as we mentioned, the number of conferences that we’ve signed so that the way that you can look at that is we’ll have significant number of games going into not only the balance of this year in terms of football but next year in regards to basketball and football, etc.

So expect to model that from the standpoint of the first full year being a loss and what we’ve been talking about is somewhere in the $10 million neighborhood internally here. So somewhere around there is probably a safe place to be for the first year.

We’re seeing like we mentioned some better than expected numbers and that may turn out to really help mitigate that initial loss. On the Ring of Honor side that continues to grow.

It's kind of it is what it is and in that regard it's so small, I don't know that you really, we would look at that and try to model Ring of Honor specifically as far as beyond what you have and beyond what the guidance that we are giving you those numbers are already included in there.

And then as far as that the multicast stations, those are -- that's a growing area and right now we are not including and have not included the upside potential of those multicast in any of the forecasts that we have given you.

So that will be - I don't what to over characterize it is a lot of money but it's a nice amount of cash, it will be generating of those multicast station. So going forward, there is not a whole lot of expense that we have to incur. It's primarily an add-on to our existing station.

So most of that book money, that revenue that is generated come right to the bottom line. So you can look for probably next year or somewhere in $4 million to $7 million range somewhere like that..

Got it. And then moving to ratings. Fox ratings have been pretty bad.

So far I mean you guys are a lot more diversified then you have been in the past, but how the ratings kind of impacted you and how should we think about that going forward?.

Well, I think it's obviously that Fox has had some difficulties and as you follow the networks, typically the networks go in cycles and Fox unfortunately is in a cycle that's negative. But they did launch a couple of shows and Gotham is a legitimate hit at this particular point.

And it solidifies Monday night and there were off to actually a pretty good story. Our billing in terms of the Fox network stuff and our resume of Fox stations is actually picking up in fourth quarter compared to previous quarters. So there’s some light at the end of the tunnel.

I think the rest of the networks are putting some decent shows upon the board, Flash on the CW for argument sake is a legitimate hit. We have a lot of CW affiliates. They are doing a legitimate rating that's got everybody's attention.

So we are off to the races on that one and we are watching it very closely, but in terms of Fox specifically the fourth quarter interestingly enough, it is one of the best quarters that we have had since first..

Okay. And then if I could just get one more in here. How do you think about auto going into next year? We have been hearing, there are some concerns that it has been a relatively weak category and we are trying to figure out if this is more of a secular issue or if there is dollars moving to digital or it's more of a macro issue? Thank you..

I think first of all the shifting of digital billing is not a negative to our industry and we're offer a host of digital solutions to the advertisers we call on and they're buying them. We can offer free stream solutions and we do and it's the fastest growing part of our billing and will continue to be.

This is not a negative, it's positive for our industry. In terms of auto itself, I think the category has been really, really good.

We have a little bit of a blip in third quarter but that is due to quite frankly in our two biggest markets having less Ohio State football games which is significant billing for us and in San Antonio, our biggest billing market next to Washington DC, there was a crowding out factor and the largest local car dealer set on the sidelines of third quarter.

Just between those two markets along there was $1 million shortfall plus in terms of our expectation. We will get that back in fourth quarter and we’re already pacing positive fourth quarter and we will have more Ohio State games in the fourth quarter. So we’re expecting a reversal and continued plus increases in that category..

Yes, I think that's really incorrect characterization to call auto weak, and it slowing down perhaps is a way to describe it versus the growth that we have enjoyed over the last couple of years, but certainly using the term weak to describe auto is a mischaracterization of what's happening.

And if you remember whatever four years ago, five years ago time flies by, auto did become weak. It was a declining advertising category for us and it was something that everybody took notice of and the environment that we are in today it's nowhere near what we saw years ago when auto, what could have been characterized as weak.

And in fact if you are seeing some of the trades that relate to auto one of the concerns that is out there with the growth in the number of units approaching 17 million new auto units is that where the parts and suppliers, are they going to be able to keep up with what's going on out there.

So right now the question is kind of turning the attention to not just the strength of our new autos but how to -- the maintenance companies, auto part suppliers keep up with what's going on out there. So I mean it's probably a good problem for the economy to have and not a bad problem. So again I think that characterization is just incorrect..

Got it. Thank you..

Our next question is from Marci Ryvicker with Wells Fargo. Please proceed with your question. Our next question comes from the line of Davis Hebert with Wells Fargo. Please proceed with your question..

Good morning everyone. Thanks for taking the questions. On the same conversation as ratings just following upon John's comment on Fox, CW has actually had a really strong start to the fall season.

Just curious what that means for you in terms of ad spending or maybe potential retrans down the road?.

As I mentioned, we are excited about it. We have a lot of CW stations on our resume and Flash is a legitimate hit, would rival the other major networks and we are out there selling it and getting rates that either similar to what you would see on primetime of AS4[ph] the four major networks. So we are extremely excited about that.

We have a lot of exposure with CW and it's important that they perform well on prime and this is very exciting stuff for us actually. They’re off to a good start as I could remember in quite some time..

That hedged a little bit on the conversation of American Sports Network as far as the revenue potential but that's one area that we can highlight as well is that with American Sports Network showing up on our (inaudible) and our CW is that that creates additional value to our MVPD and that will help in terms of creating value in regards to the retrans rates that we will be earning on those stations..

i:.

Steve Pruett:.

So the Barrington in particular had good news positions but they had been underfunded and we have now added personnel, we have done many digital upgrades to HD and digital upgrades.

In addition and almost, with the exception of Fisher, in almost every case we have brought in Cox of course, but all the other acquisitions we brought much more advanced digital three and four screen solutions and we continue to grow our digital program which is now based out of Seattle. So we have a lot of positives on that front..

So the Barrington in particular had good news positions but they had been underfunded and we have now added personnel, we have done many digital upgrades to HD and digital upgrades.

In addition and almost, with the exception of Fisher, in almost every case we have brought in Cox of course, but all the other acquisitions we brought much more advanced digital three and four screen solutions and we continue to grow our digital program which is now based out of Seattle. So we have a lot of positives on that front..

And in our larger market too we see real success Salt Lake City, we think we are the number one news operation there at Seattle, growth in our Seattle market. .

Absolutely, Portland..

Portland, yes, it’s just one good story after another..

And we anticipate Las Vegas being a good story..

Yes, and then now with Washington with WJLA, the Allbritton folks they have left us with some great properties but in Washington the focus was on political, but was simply not on WJLA news. And we put our money where our mouth is and just anecdotally we brought in all new cameras for those guys since we acquired just a few weeks ago.

So its -- field cameras, that's what I am talking about. So a lot going on there and we see significant upside in the DC market as well..

Okay. That's all a really help commentary.

And the CBS all access announcements, can you just remind us what your, I guess local distribution rights are and whether you would have an interest in partnering with CBS on that product?.

Oh, yes, sure, it's kind of the over the top type of stories what you are talking about there and CBS is coming out with and over the top product that we are looking for about $6 a month for their service that from a initial start it's just in the O&O markets and from there it will be looking to expand that to include the affiliate group.

And with that we would anticipate to the extent that we can participate and that would be with, and like we just talked about it and would include our local news etc., that the partnership that has always existed between network and local affiliate can be further enhanced by continued improvement and greater distribution.

So we could see it is positive from our standpoint. Anytime that we can find other sources and methods of distributing our content we see that as positive. So details as far as what the terms are and how that will work out with CBS are still to be determined..

Okay. Another question on over the top. Dish is also looking to launch their product by the end of the year.

Is that something you would look to partner with on that on the local front?.

Any OTT project out there, and there’s several that had been announced, when you just think about it from an industry perspective and a Sinclair perspective if they want our local live stream or any other local content they will have to partner with us.

And so we are not at liberty to say whom we had discussions with but there has been multiple discussions on that front. And I think the easiest way to understand is they said that if they want our content or our live stream they will have to compensate us or partner with us..

Okay..

We are active on every affiliate board and we feel it's the intention to partner with us based on that information..

Okay, good to hear. Last question for me and then I will let some other people get in here. Lucy, you mentioned 4.7 times net leverage. Just want to confirm is that based on LTM or forecasted ’14 EBITDA..

That is the 4.7 is proforma so including the pending transactions and that would be year-end 2014..

Okay.

And not sure if you track this, but do you have any sort of estimate for what to your average would look like?.

2013 and ‘14 average is about five times..

Our next question is from David Bank with RBC Capital Markets. Please proceed with your question..

Hi. Good morning. This is Leo (inaudible) for Dave.

Could you just give us little color about your ATSC 3.0 out in Baltimore? What exactly that's going to do? What spectrum requirements are there, and what sort of the longer term revenue opportunity, and also how long will it take for you to roll it out more broadly across your station base?.

Well, that's about a three hour discussion. So let me try and condense it down for you in a minute. The ATSC 3.0 platform is yet to be finalized in terms of one stop platform versus another. That's a process that's underway currently in the ATSC standards committee.

ONE Media which were (inaudible) is a player in that space, as well as a number of other players from foreign companies. We demonstrated yesterday kind of a milestone in that we’ve now fully demonstrated in our offices and also in Texas a working platform that, as we've suggested to the industry, will essentially to deliver and we said would do.

We are now gearing up to over the next probably 30 to 45 days to bring in any number of people from within the industry and from with -- outside the industry that has a technical capability to understand and see what we are doing to try and confirm what we believe to be the case.

And then, sometime before year-end, we expect to be doing a full blown demonstration in also in Austin, Texas, a live demonstration over the year to really allow people the opportunity to see what are the possibilities with the right technology.

The long-term consequences, assuming that the ONE Media platform is adopted by the industry, the long-term benefit and consequences to the overall broadcast industry are too vast and enormous benefit through the economics of that.

But I can only tell you just in a macro sense that if the industry makes the right decision it would be a watershed event for the broadcast industry and the future of the broadcast industry. I think that’s really kind of (inaudible)..

Our next question comes from the line of James Dix with Wedbush Securities. Please proceed with your question..

Yes. Good morning. I had three things. First, you mentioned sounds like auto is improving as you move into the first quarter in terms of its growth versus the third.

I guess this is more broadly how our local trend is changing as you go over to the fourth quarter versus the third? And also, national which has been kind of tough all year, are you seeing any change in trend as you move into the fourth quarter there? And then, I had just two others..

Yes. As I mentioned, national interestingly enough we have the highest percentage of station showing an increase in national since first quarter. That's taking place as we speak. So that's encouraging. You have to keep the mind that in first quarter of 2015 we don't have the Olympics to go up against.

That's going to bode very, very well especially, for CBS and ABC stations. So we are optimistic that we are on the right track nationally and it's moving in the right direction. And as I mentioned in terms of auto, well we are showing presently a positive pace for fourth quarter and we expect that to continue as well going into 2015..

And it is local pacing up as well in the fourth quarter?.

Local right now interestingly enough for November. It is our best core pacing month of the quarter. I think you would probably expect that. There is a tremendous amount of crowding that goes on. When we give you the number of dollars that we’re billing politically, you could imagine the displacement that takes place.

And what you also have to understand is that there is a high percentage of advertisers that book their advertising on a quarterly basis, not necessarily on a monthly basis and that affects the core billing. So we are optimistic to that core billing, is also moving in the right direction..

Okay. And then, I guess secondly, in terms of the dynamics of the local add market, I mean there has been lots of discussion about potential secular shifts out of local broadcast TV.

Well, where do you think you are potentially still poised to get share gains, particularly in the local market? Because it seems like the dynamics for local broadcast advertising might be slightly different than for network particularly, in terms of the dynamics, what's going on in print.

So I am just curious as to what you are seeing in terms of potential pools of dollars, which you are pulling in from others?.

I see local as still having a lot of growth, potential. When you look at the local add pie, television is 15% of that. So 85% is divided up, still by direct mail, print, radio, outdoor about 10% of that digital, local digital.

With the digital products that we have now and well are improving constantly and in 2015, we anticipate several new products to hit the market, I think we'll be able to go more directly at direct mail, which right now is 28% of a local add pie. That's a huge number, that's a double what television has.

So I think it's the other categories that need to be worried about us. Because if we can systematically learn to take a point out of that other 85, I'm speaking of 10 point, that's a nice local growth for us. And the way we do that is by providing digital and TV marketing solutions to both agencies and to local direct advertisers.

Local direct advertising is about 16% of our business. I believe we can grow that systematically over the next five years by combining digital and TV. We also have some core digital agency, which is a white label agency product that allows small local agencies to operate like a sophisticated digital agency.

So we are able to provide entire solutions to the local advertiser. And as Steve Marks often reminds us, that these local advertisers want digital products.

And so, by creating a digital agency, by creating four screen solutions, by launching new CMS in 2015, having a more interactive set of products that we can combine across the platform, I think we are leading an incredibly strong local presence.

The other thing we are doing locally is in markets, where we have relationships with second stations that are CW and My, as we're launching news on those stations. And then adding the ASM sports, which is not only college sports but motor sports.

And our phone is ringing quite frankly with people who have live sports content that they want to offer to us.

So on the local front -- and also let me say that high school football, we have -- we are building a national high school football and basketball brand, and we are just reaching the scale where that is really beginning to be interesting to national advertiser such as GEICO and major names Frito Lay and Mountain Dew, PepsiCo that are getting very excited and in particular auto dealer get very excited about local live sports.

My experience being mostly small markets, I've always found that local live high school in small college is a very saleable product to local advertisers because they want to support the community and the region. So I am generally very optimistic about local and our ability to grow local based on the combination of digital TV and marketing products.

And I think getting in front of franchisees we've learned that we can get in front of franchisees and so regionally and shift hours around and I think our market power is growing..

Great, thanks very much. And then just -- sorry, just an echo. Last question, what types of upside do you see in terms of improved local measurement of your stations? I mean do you think there is money that’s quantifiable, that’s being left on the table there, and what’s the prospect for improvement there? Thanks..

Let me just address that from my perspective.

One of the applications that was just inside of the new television transmission platform will give us the ability to not only top every device that exist in the marketplace but it will also provide us the capability to sense and monitor precisely when, where and under what circumstances and whom are watching television.

So there will be no more guess work from the standpoint of looking at what the current rating on operations are which is if you look at the industry standard today Nielson any market in USA where they put out 500 or 1000 diaries or meters into a home and they say that’s a representative of market that’s got 2.5 million people I prefer to believe that half a million people with phones or pads or whatever the devices are they’re watching television will rely on.

So I think going forward over the longer term you’re going to see technology advantages since its going to point out that there is a whole lot more people watching television in the current offerings that we’ll suggest..

Our next question comes from the line of Tracy Young with Evercore. Please proceed with your question..

Hi, thanks for all the color on the digital business. I don’t know if you’d be willing to give any sense as what the percentages of digital as a percentage of your total revenues but that might be interesting. Also, could you just tell us how telecom did in the quarter? And I’ve got two more questions. Thanks..

The telecom was way up for us in the third quarter; it’s a terrific quarter for us, double digit growth plus, very strong. And in terms of the digital stuff what I like everybody to understand is that digital is not the boogeyman to this industry, it’s a friend to the industry.

This is what we do, we offer advertising solutions over multiple screens, digital advertising is tailor made for us, we have a solution and we include TV with it which nobody else could do. So when we’re reading all of these things about budget being diverted and while that’s made it’s just not the case.

The fastest growing part of our business is digital advertising. And that’s going to continue for quite some time. That’s where the business is going and we’re prepared for it..

Couldn’t agree more and I think it’s very important to note that digital leverages television.

It’s not important what percent it is even though we look at it as there are some revenue stream the unknown factor is just how much having the digital platform we have leverages results for people by providing different marketing solutions and the growth area is also in the streaming and non-linear content which we’re entering.

So it’s very important to remember that all advertising is generated by a local business. Whatever you call it local, national, regional, all advertising is generated by a local business.

And we’re there, we get NTR business from I don’t really want to say the accounts because others may not be getting them but from big boxes often by having local solutions that we present to the regional managers.

So all our advertising is ultimately local, however it is placed, and having the combination of digital and TV has proven, as Steve says, to be an incredible leveraging point..

Okay, thank you. Turning to political, I wanted to see if you can give some color on sort of what happened in terms of the growth during the quarter Q3 I would have expected a little more of an incremental boost from Allbritton. I unfortunately raised my numbers a little bit on that yesterday.

And then also I am getting questions on the comments and the press release from David Amy, regarding the way that thought as came in were not as anticipated - possibly a little bit slower than what had been expected.

Can you give some color on may be the markets that didn’t necessarily perform well etcetera?.

Yes, I think when you break it down -- first of all, I am very pleased with political billing. When you look at it if there was a soft spot for us it was in Columbus, Ohio and in Texas, two of our biggest billing markets where we have a lot of density in terms of our television stations.

The governor race in Ohio turned out to be just short of a land slide so that race was determined to who the victor was going to be quite a while ago and, therefore, the spending just stopped and it’s a very critical market for us, the State of Ohio and some very strong television stations that we have in our resume there.

So we were below expectation in Ohio and likewise in Texas, where we also have a lot of representation in terms of our stations and strong stations. And there are two also interestingly enough there the big unit rate market. So the budget that typically go into those marketplaces are extensive and the races just didn’t materialize.

And then on the other hand of that we obviously had races that fared much better than we expected, most of that came out of Iowa, and our stations in Iowa and the market sizes in Iowa and at the same market sizes as Ohio and Texas.

So it sort of balanced it off and at the end of the day we’re pretty pleased with where we wound up given those circumstances..

And Tracy, I would just add to what Steve, is saying that hearted part for us the forecast or the issue money. And what ended up materializing in our market is that we had substantially fewer issues that made it to the ballot this year than what we had in 2010. We had about 97 ballot issues versus about 124 in 2010 in our markets..

Okay, great. Thank you. And my last question, you announced that you had repurchased 1.9 million shares. The last two quarters of the year are going to represent over a $100 million in free cash flow. I think it would be helpful to get a sense of some of the priorities that you have in terms of return on capital or investments that you’re making.

Thank you..

Sure. So when you take a look at this year we have just between dividends and share repurchases, we've distributed out of 50% of our free cash flow for the year. Also when you take all of the acquisitions we've done that have actually leveraged us up through the year we've spent more than our total free cash flow.

So from that perspective, we’re not looking to deploy additional free cash flow for our shareholder return through the end of the year unless it was an opportunistic situation which is what arose in October in terms of market weakness that’s why we entered the market.

Going forward we’ll keep a healthy balance between dividends share repurchases, core acquisitions and adjacencies..

Our next question comes from the line of Lance Vitanza with CRT Capital Group. Please proceed with your question..

Hi, thanks for taking the question here. So same station core ad revenues were down low single digits. I know you talked about political crowding out. I guess I’d like to try to better understand the impact there. If you could give us some color would be helpful.

I know Gray reported this morning; they reported core down 3% on a reported basis but if 15% to 25% of their political dollars crowded out core spending, well then the underlying core trend was actually up 1% to 3% year-over-year.

So can you quantify how much crowding out you saw or if not can you kind of tell us what you’re core growth would have been if we were to assume say 15% to 25% of your political represented crowding out?.

I think probably off the top of my head I would say very similar to what you just heard for Gray. Well we missed core by just a pinch and the crowding out on the billing that we enjoy is very significantly political and there is a factor there.

So I do believe we would have been on the positive side on the core business without the crowding out factor I do believe that..

Okay. And then on the new Fox affiliation deal, I noticed that unlike the ABC deals the tenure there is so short.

Should I presume that’s because they wanted to keep it short, and well what’s the logic there what does that suggest for the outlook going forward?.

We had several other Fox affiliations that were coming due at the end of ‘15 so that was just a short renewal to line up with our other expirations for bigger deal for Fox..

Do you think we should, I mean should we expect then in more of a four to five year deal when you renew those deals eventually?.

It all depends; every network is different right now. We just did a five year deal with ABC and depending on the network they have different preferences to how long or short they want to go. Right now Fox has been preferring short. So we’re flexible though, there is pluses and minus to short and long from our perspective.

So it’s not like one is better for us versus the other..

With noise around Fox’s Seattle outlet in Tribune and so forth there has obviously been a lot of conversation about potential changes in the stance between the networks and the affiliates.

Have you seen any of that in your dealing with ABC with Fox with any of these guys?.

No, we haven’t seen that. From our perspective, it’s been business as usual and every so often you do see tensions rise between the affiliates and the networks and - but from our perspective they’re lost and there is value destruction on either side to the extent that switches happen.

So we expect it to be a long term trend and business as usual from our perspective..

Yes, I’ll throw a little more color in there, Chris. In the case of ABC we were basically they had expired. We were just week to week, and there was never any concern on our part that we were losing our affiliations or anything like that was, we just continue to be ABC affiliates and work through our - through the agreement and finalized it so.

That risk that you’re trying to get your hands around, Lance, is not anything that you should be concerned with..

And last one from me then related to that then, the outlook for retrains growth versus reverse comp growth. I know recently you’ve suggested that you still expect to grow grocery trends more than your increases in reverse comp.

Is that still the case and is there a point in time where that dynamic changes market?.

We fully expect net retrans to continue to grow for the foreseeable future. And as far as we can see we don’t see that trend changing..

Our next question is from the line of Howard Rosencrans with Value Advisory. Please proceed with your question..

Hi, thank you.

I am not sure if you provided pacings for the fourth quarter but specifically I would be interested in what you’re seeing on the books for November and December following the election?.

November right now from a core standpoint is the base pacing month that we have. I don’t think that’s too unusual. December quite frankly every year the advertisers look to adjust their schedules and you have to deal with cancelations and so on and so forth.

But what I mentioned earlier is there is a significant portion of our business that’s placed on a quarterly level especially national business where it represents 30% of our billing. So those people that sat out on the sidelines that place quarterly typically they sit out on the sidelines for the entire quarter and that affects the core business.

It’s not unusual; it happens all the time in the industry and there is no difference this year than past years..

Characterize if, sort of characterizing all of your view on the first quarter pacing and with where we stand?.

Well my view on as I mentioned before is if there wasn’t a crowding out figure I believe we’re in the positive category..

It appears there are no further questions at this time. I would like to turn the floor back over to management for closing remarks..

Okay. Thank you, operator. Thank you everyone for participating on our earnings call this morning and if anyone has additional questions please feel free to contact us..

This concludes today’s conference. Thank you for your participation. You may disconnect your lines at this time..