Alfred Liggins - CEO Peter Thompson - CFO Jody Drewer - CFO of TV One.

Ben Briggs - GMP Securities Lance Vitanza - Cowen Juliano Torii - Descartes Michael Kupinski - Noble Financial.

Ladies and gentlemen, thank you for standing by. Welcome to Urban One's 2017 Year End Earnings Conference Call. At this time, your telephone lines are in the listen only mode. Later, there will be an opportunity for question-and-answer session with instructions given at that time. [Operator Instructions] Today's conference call is been recorded.

I've been asked to begin this conference call with this following Safe Harbor Statement. During this conference call, Urban One will be sharing with you certain projections or other forward-looking statements regarding future events or its future performance.

Urban One cautions you that certain factors, including risks and uncertainties referred to in the 10-Ks and 10-Qs and other reports it periodically files with the Securities and Exchange Commission could cause the Company's actual results to differ materially from those indicated by its projections or forward-looking statements.

This call will present information as of March 6, 2018. Please note that Urban One disclaims any duty to update any forward-looking statements made in the presentation. In this call, Urban One may also discuss some non-GAAP financial measures in talking about its performance.

These measures will be reconciled to GAAP, either during the course of this call or in the Company's press release, which can be found on its website at www.urban1.com. A replay of the conference will also be available from 12 Noon Eastern Time on March 6, 2018, until 11:59 PM on March 9 of 2018.

Callers may access the replay by calling 1-800-475-6701 in the U.S. International callers may dial direct at area code 320-365-3844. The reply access code is 444141. Access to live audio and a replay of the conference call will also be available on Urban One's corporate website, at www.urban1.com.

The replay will be made available on the website for seven days after the call. No other recordings or copies of this call are authorized or maybe relied upon. I will now turn the conference call over to Alfred C. Liggins, Chief Executive Officer of Urban One, who is joined today by Peter D. Thompson, Chief Financial Officer. Mr.

Liggins?.

Thank you very much, operator, and welcome everybody to our year end 2017 results conference call. Also joining us today is Jody Drewer, who is the CFO of TV One for any detail questions about our cable television unit.

A year ago at the top of 2017, we committed to growing the Company's adjusted EBITDA even in the phase of a non-political year and even though the year was challenging from an environmental standpoint. We were committed to that and I'm happy to report that we were able to do that in the analysis.

We continue to remain very diligent in our cost containment, our diversification strategy, rationalization, our portfolio and our efforts to grow in verticals where we believe the future has upside including our investment, our further investment in our digital business.

And that as I noted in the press release, we made small acquisitions in our digital vision that actually turned out to be very timely and has been helpful in the success today. I'm going to let Peter walk you through the details of the numbers and then I'm going to come back with a little more color and then we're going to go questions..

Thanks, Alfred. Net revenue is down 4% for the quarter ended December 31, 2017 at approximately $109 million or up 0.3% excluding political revenues. Breakout revenue by source can be found on Page 5 in the press release and a breakout by segment can be found on Page 7.

The radio segment net revenue was down 7.5% in the fourth quarter and radio advertising revenue was up 0.6%, excluding political. Dallas, Houston, Richmond and Washington D.C. posted net revenue growth for the quarter. Excluding political Baltimore, Cleveland, and Philadelphia also posted net growth for the quarter.

Advertising sales were up and the entertainment, food and beverage and services sectors while retail, telecom, government and public healthcare, auto financial and travel transportation sectors were all down.

For the first quarter, our radio stations are currently pacing down slightly down 0.7%, so less than 1% and that steadily being improving since the beginning of the year. January had a soft start and our markets were down 4.3%. The February we finished up 2% and March is pacing up mid-single digits.

Net revenue for Reach Media was down by 12.5% for the fourth quarter due to lower unit rates driven by weaker demand in the multicultural network market. Net revenues for our digital segment increased 43.1% in Q4, driven by revenue from the newly acquired Bossip, Hip Hop Wired and Madame Noire brands.

Excluding this acquisition, digital revenue was up approximately 3.8% year-over-year. We recognized approximately $45.2 million of revenue from our cable television segment during the quarter, compared to approximately $48 million for the same period in 2016, a decrease of 5.8%.

Cable TV advertising revenue was down 18%, driven by lower total day delivery in P2554 and P1849 demographics. Cable TV affiliate sales were up 4%, driven by contractual rate increases. And cable subscribers as measured by Nielsen finished Q4 2017 at 59.0 million, which is down from 59.8 million at the end of Q3.

We recorded approximately $1.6 million of cost method income for our investment in the MGM National Harbor casino, equal to 1% of the net gaming revenue reported to the state of Maryland. Operating expenses excluding depreciation, amortization, impairments and stock-based compensation, decreased by 9.7% to approximately $77.2 million in Q4.

Radio operating expenses were up 0.8%. The increase in the radio programming and technical expense is mainly due to the addition of GMR music licensing fees and also the tower leaseback expense Radio SG&A expenses were down mainly due to the lower incentive compensation and reduced marketing spend.

Reach expenses were down by $1.1 million driven by savings in commissions, bonuses and employee benefits. Operating expenses in the digital segment were up 22.8%, expenses from the newly acquired Bossip, Hip Hop Wired and Madame Noire brands totaled about $2.1 million in fourth quarter.

Excluding this, digital segment expenses were down about $400,000. Cable TV expenses were down by $7.8 million year-over-year, primarily in programming and technical due to lower content amortization expenses.

Airing more original HD content versus acquired standard definition content has pushed content amortization expense further into the future and reduced the expense recognized in the present quarter. Corporate SG&A expenses were down by $2.6 million.

The corporate bonus expense down by $4.4 million across the divisions; however, the non-cash charge for the change in the value of the CEO's TV One Award was up by $2.6 million. For the fourth quarter consolidated broadcast and Internet operating income was approximately $44.3 million, up 2.8% from $43.1 million in 2016.

Consolidated adjusted EBITDA was $38.7 million, and increased 25.6% year-to-year. Interest expense was approximately $19.3 million for the fourth quarter compared to approximately $20.1 million for the same period in 2016. Company made cash interest payments of approximately $18.9 million in the quarter.

The Company repurchased $20 million of our 9.25 2020 notes at a discount, which resulted in a gain on retirement of the debt in the amount approximately $1.2 million. Company recorded a non-cash benefit from income taxes of approximately $117.2 million in the quarter due to the impact of the 2017 Tax Cuts and Jobs Act.

This analysis is provisional as we continue to work through the impact of new legislation with our tax advisors. Company received a net cash tax refund of approximately $89,000 in the quarter. Net income was app $121.3 million or $2.63 per share compared to a net loss of approximately $3.4 million or $0.07 per share for the fourth quarter of 2016.

The fourth capital expenditures were approximately $2.9 million. Including a building purchase of $1.5 million in our Raleigh market compared to $1.1 million in capital expenditures in the fourth quarter, '16. The Company repurchased 312,409 shares of class D common stock in the amount of approximately $597,000.

Company also purchased 8961 shares a common stock in amount of $19,000 to satisfy employee tax obligations in connection with 2009 employee stock plan. Company will be filing a $50 million S-3 stock registration. This is purely a shelf registration and there are no current plans to utilize any of those shares.

For bank and purposes pro forma LTM bank EBITDA was approximately $129.5 million and net senior leverage was 5.11 times against the covenant of 5.85 times. Net debt was approximately $947.2 million compared to $137.1 million of adjusted EBITDA for a total leverage ratio, net leverage ratio I should say of 6.9 times approximately.

And with that, I will hand back to Alfred..

Thank you, Peter. Q1 Radio obviously radio is a huge part of our business and we went into the year very optimistic about radio and reach's ability to grow their cash flow, this year given that it is the political year and we've had some of our competitive challenges, but tax now stabilized.

We continued to be optimistic about radio's ability to grow this year. Even though we are really disappointed about January, January was up month, this suspect there was an up month for everybody across the board but then February and March have steadily picked up.

Something that I'd like to note for us in particular, our Q1 pacing would be even better that wasn't for one very large client, maybe actually our second large clients in the Company and that's McDonald's, which has historically been a stalwart advertiser in Urban Radio.

They need to be caught out in particular because they swift agencies and strategy and there was a significant cut in the local radio budget from a strategy standpoint, which affected everybody in the industry in Q1 and in particularly hit us hard because they're a big Urban Radio advertiser.

So with the category in particular client in that category that we took really large shares out of, so if we had normalized for what McDonald's had you normally spent in Q1, I think we got like $1 million in Q1 across the Company just in Radio last year and it was a fraction of that, this year, than we'd have an even better story for Q1.

This is a long winded way of saying that we continue to be optimistic about Radio. I think that the underlying help of the industry and the business is even better than sort of our current casing are showing. So we think we are finished about flat in Q1, but we should have been up handsomely if McDonalds had have been there.

TV One continues as the industry is continuing to have ratings challenges whether or not you feel that it's measurement or cutting -- cost cutting, excuse me.

The industry is still under pressure, so the game there is to continue to manage our programming expenses, expenses look to -- for programming strategies, lower cost programming strategies that help mitigate those losses in audience and stabilize even with that again we have got strong affiliate contracts.

We still feel comfortable with our ability to grow TV One's EBITDA. Again in 2018, we feel that the network would do EBITDA in the mid 80s.

In 2018, we also are feeling optimistic about our interactive division, particularly as I noted earlier at the top of the call with our acquisition of one of our smaller competitors, but that acquisition has given us just about the right scale at the tipping point of call it 20ish million unique visitors, such that we are starting to see some really significant revenue growth in our direct sales line and I think we have got a good stable management team in there.

So we expect we are going to see positive EBITDA upticks there.

So with that, we are again as we said a year ago about 2017, very comfortable with our ability to grow our adjusted EBITDA across the enterprise in 2018, and we are really focused on de-levering as you can see from our continuing bond repurchases I think we are down on the face value of 9.25 notes from 330..

375 to 275..

To 275, our goal and our plan is to continue to use our free cash flow to de-lever, I wouldn't rule out more open market purchases. In bonds, we got to refinance in many ways, and so we know that. So we are focused on that.

Even if you're going to see reported bank leverage below seven times at year end, if we -- even if we have flat EBITDA, which we don't believe that we will in 2018 and if we use our free cash flow, to continue to de-lever as we have been, I think you are going to see leverage start to come down around the mid 6s.

And that absent any sort of strategic kind of effort to solutions whether it's any kind of cost saving JV or disposition of any asset. We feel leverage can get down to the mid-60s just by keeping cash flow flat and using the free cash flow to de-lever. And so that's our game plan and we continue to be focused and diligent.

And operator with that, I'd like to open it up for questions from the lines..

[Operator Instructions] Our first question will come from the line of Ben Briggs with GMP Securities. Go ahead please..

I just wanted to touch on radio pricing pressures a little bit. You'd mentioned in previous calls that you've got a lot of pricing pressures some times in larger competitors..

Yes..

I just wanted to try to get a sense of how that's currently impacting you guys? And how you feel that may impact to you in the future? And then after that I have one follow-up..

Yes, look, radio is a mature business and it's a mature business, it's a good business. I mean it's interesting, you see the report in the financial news about Liberty Media being interested in iHeart and now you've read a quote from Maffei, the CEO, he talked about the strong free cash flow characteristics of the radio business.

So John Malone in Liberty think that the radio is a decent business, it just got a problem with the balance sheet. And so we've been living with pricing pressure in this business for quite some time, the Internet came along and now there is another add vertical that gets billion of dollars, they got to come from somewhere.

So traditional medium like radio is going to suffer, radio has suffered less. And then you have the added situation of the structure of the industry one big player iHeart, now you've got two big players with the Intercom's CBS.

And they are going to pressure the smaller guys, but that environment has been what it is and that's the reason that radio can't as an industry get a lift, if you will from industry revenues because we are still drastically underpriced compared to other medium.

With that said, I do believe that for sure, this is David Field of CBS' mantra, we're underpriced we need to get better pricing. So now that he controls more assets hopefully that helps with the pricing pressures. Just out of their pure scale, they are going to take more share but they need to grow as well.

If iHeart gets restructured and they can be more thoughtful in terms of how they view what long-term rate floors are in the industry that could be helpful, cumulus gets restructured. Then you don't have balance sheet pressures, you can act more rationally and take more chances.

When you're highly levered, you can afford to take changes, you got to get as much cash as you can at any cost. So we have been in this pricing pressure game, and I think that it ultimately mitigates particularly the industry starts to sort itself out, again I continue to be really pleasantly surprised at the resilience that broadcast radio has had.

And again I think the Liberty Media interest and the commentary around their interest in their offer underscores that there's some really smart out there who think the same way..

Do you think the industry consolidation is a possibility? And if so would you….

Yes -- no, no, I know it is. I don't -- I think you are already seeing Intercom has started to pick up the few things, I think they acquired some stations in St. Louis from -- St. Louis and Entercom and Hubbard got bigger. In particular, Cumulus is subscale in a lot of the larger markets that they are in.

Once they get there balance sheet restructured, I think they are going to be in a position to do some accretive M&A transactions and there's two sides of the accretive M&A transactions, right, the seller and the buyer.

So, yes, I think people need to look at market where they're not doing great, and they either need to get bigger in those markets, so they get out of those markets.

We all have to rationalize our radio portfolios in a rationalized market, a good business can turn into a great business and then ultimately create sort of pricing stabilization, it's got -- radio has got amazing reach and people recognize it.

Otherwise, it would be falling considerably faster than it has been actually, and it's falling, I think this has been treading water..

I'll make this the last one. Just regarding the MGM investment that you guys doing, I know that's basically performing right in line with where you guys projected that it would. Are you -- is monetization of that asset possibility…..

So, look, that's interesting that you do as that question because in uncertain environments which is what I would classify the entire media business as right now, it's good to have options and levers. And certainly that investment for us is doing quite well, and I -- we are open to explore what opportunities there are to monetize that investment.

Literally, the only for sure way to monetize it is we have a put to MGM at the end of year three. So that's two years away. You certainly could have a conversation with them early about that we have not, at this point in time.

The very first thing we wanted to do lately as it related to MGM just to make sure that they're new reach structure didn't impact the future value of investment. And we were able to that successfully resolved from contractual standpoint.

But a certainly a conversation with them about options on early monetization is something that we should explore they may or may not be interested, right. And usually if people are interested, they are interested at discount, and we may or may not like the discount.

Something that's come up from other investors, if could we somehow securitize the cash flow streams and it is on restricted sub, right now we're are bringing that cash all into the parent company.

I think our initial view is that securitization in traditional institutional sense would be difficult for this single asset, single stream asset, but that doesn't mean that we couldn't find some investor that would investor that would give us some larger lump sum money against pledging this cash flow stream.

And if we could make that arbitrage work, meaning the cash flow comes out of our EBITDA, but we get a big enough lump sum payment because the investor is happy with the return that they are getting on that that helps us in our refi, we would consider that and that's one other thing that, I think that we will look at now that we're starting to get closure to having to do that refi.

I think in the past we've proven that all things are on the table at this company in order to achieve our goals and to get to the finish line on what the immediate tax at hands happens to be and delivering and successful review at a reasonable rate is immediate goal..

Do you think that refi happens in 2018?.

Yes I do, I mean I think technically we had somewhere into first quarter. Technically, we have to get it done by the in the first quarter of 2019. So we don't have to have any sort of conversation with orders about debt coming current. So, we will be looking to pick our spot in '18 as right time to get that done..

We will go to next line of Lance Vitanza with Cowen. Go ahead please..

I sorry to hear about the McDonalds loss, just to clarify, did you say that was the million of revenues last year, was that sort of the first quarter or was that for January, I couldn't quite catch right?.

That was for Q1..

I figured as much.

Are you -- I suppose you would have mentioned this, but are you aware of other of your larger clients that may have announced that they are planning agency changes and then we should then think it's being potentially at risk?.

No I mean agency changes and review happened all the time, but oddly enough whenever there is an agency change, it's rare that the strategy changes so dramatically. And who knows how long McDonald is going to stick with this, right.

They -- Urban -- black people have been the core of that consumer base for a very, very long time and they have been very committed to this audience, and so I don't think they're less committed to the audience, they just become less committed to local radio.

And it's kind of intricate and political because they went down from I forgot how many but like 10s of different agencies that all handle different local coops and they consolidate dated down to a single digit number but in the McDonald's system, a lot of the -- the owner operators have had a lot of say in those coops, so they work with local radio and on different things, so a huge change for the, and who knows that ultimately reverses, but new agency, new strategy radio gets hit and it just happens to be a big black radio spender.

I think it's anomaly, put it this way, if you had said to me, what's the last account that you are going to have an issue with, in Urban Radio, I would have told you was McDonald's because they've been in the business 30 something years and they have been strong in local radio, my entire career..

Do you see any opportunity, I mean I am presuming that money is going from radio into social media maybe that's a wrong assumption, but is there an opportunity for you to recapture some of that revenue in your digital platform?.

I mean it's a good thing, I mean glad you brought it up, yes, I mean we were doing better at TV One and doing better at digital, with McDonald's but unfortunately they are up in TV and digital doesn't offset the balance in radio..

So, then how would you best explain the improvement I mean it's substantial improvement throughout the quarter, I mean it's not as though well, was it just as the Mcdonald's spending was heavily lumped into the first month of the year last year I mean I am assuming that that's not coming back then?.

No, no, no, look, I can't explain why January bound like high single digits and then all of the sudden February up low single digit and then March is up mid single digits.

I -- yes McDonald's is a mere but that doesn't tell me why January was still -- even if you laid McDonald's across, January still would have been a disproportionately bad month in the quarter. And I don't know why that is. I am just happy that the trends are getting better, and so….

Let me turn to the TV side, you mentioned the lower content amortization expense Peter in Q4 that's non-cash right? So, normally I would look to add back when I am thinking about EBITDA I would look to add back the non-cash amortization and then subtract whatever capitalized cash programming expenses you had for both periods and then kind of compare what you might call more of a cash EBITDA basis.

But is there -- in your opinion, is there any reason that we should not be doing that here? Or if we should be doing here, can you break out for us how much you actually spent on content in fourth quarter of '17 versus fourth quarter of '16?.

It's a great question. So, I don't have the fourth quarter to fourth quarter comps from a cash standpoint. Jody may have it and we can speak to that. I know for the full year that the cash program and spends was approximately $9 million higher than the amount. So there is a delta to answer your question.

And I think that normalizes as you get through '18 or be it that we're going to lay down some programming for '19 as well. So cash is….

Yes, and there was -- in fourth quarter if you look at, we had like 19 million in cash for fourth quarter, but that is because we signed up long-term contracts with two of our production companies in order to get economies to scale for programming this is going to take about through '19 and some even as '20..

So it did really it seems like it got some timing and some lumpiness whether you look at cash versus accrual isn't going to really help us that much..

I think as we think about ‘18 and what the current run rate programming, they numbers we're looking at probably on a amount basis $3 million to $4 million higher right now, so a modest increase.

But I think that's a level that we can flex a little up and down dependent on how rates performed and how revenues performed throughout the course of the year, but right now we're looking at probably $4 million more in programming and year-to-year..

Just if I can get one or two more on the balance sheet, the 20 million of bond repurchases. I think in each of the last two quarters, I don't recall you have done any in the first half of '17.

So as about '18 was that coincidental, was that coincidental that they just happen to be in the back half? Or was that due to the seasonality of cash flows? Q4 obviously so forth being stronger than Q1, and basically I'm try to get as we think about 2018.

Should we expect sort of a similar seasonal pattern with greater amount of debt repayment in the back half versus the first half of the year?.

No, I think we've got enough cash on the balance sheet that we could take down more of those notes, if we want to. And I think we find the pricing attractive right now, so I would think we're going to do that sooner than later..

Look the reality is that we have to refinance those bonds, right. So, we're just going to start our refinancing process by purchasing them in the open market. Before and I'm talking off-the-cuff, right now, it appears like looking at….

Careful what you say..

Be careful I say, but before we were buying bonds when they were opportunistically priced, right. And so, was it 93, was it 96. I think now just practically, they got to come out, right. I mean so I think we're buying them and did the same thing, so as opposed to waiting, particularly if that's what we're committed to and it is..

Peter, do you happen to have the run rate interest expense for where you are today given the most recent bond repurchases..

It's around 75 but let me, Lance, let me get....

That's close enough. I mean I don't need to dump looking for a pinpoint, but just, so. Okay so 135 to 140 of EBITDA, 75 million of cash interest expense, I don't know 5 million to 10 million of CapEx. So as we think about free cash flow that's probably. Now cash taxes, I guess and this is my last question I promise.

The language in the press release suggested some uncertainty as you think about the limitation on interest deductibility versus the lower statutory rate.

How should we be thinking about the cash line in 2018 and cash taxes in particular?.

Yes and just to be specific around that language, we have gone into depth with our auditors on this. I think their national office is not quite signed up and it's really just the time. We have put that in as a precaution because they're still reviewing.

I think we are comfortable with the acquisition and then to answer your question, we still got over $700 million of NOLs brought forward, so what we think the way the new law is going to impact this, we are going to start to burn through those faster because of the interest deduction limitation, and then we will have unused interest that we can carry forward to future years.

So, we don't anticipate it having any kind of material cash pay tax impact on us in the near or medium term, so we shouldn't be paying cash taxes..

We will now go to line of Juliano Torii with Descartes. One moment please..

I see some good cost control on your business.

Do you think that you're able to maintain this or do you think that you come back with the bonus this year? And also if you could discuss a bit of content, do you see your competitors also cutting costs on content? Or do you think that you have been cutting more than the other your competitors?.

The first part of the question..

Well, I'll deal with the first part, so obviously we would like to earn our bonuses this year. I think everybody would include and all of the staff, and we will do that by growing our cash flows, Alfred said at the top of the call.

So when Alfred said we are committed to drawing our adjusted EBITDA for the year that would include whatever reasonable bonus provisions we think need to be made. So, we have to -- we have an internal budget that we have agreed with our board to grow by and then providing we can hit that then that is inclusive of any bonus approvals.

So I hope that answers the first part of the question.

Then would you mind just repeating the second part on the content?.

Yes, it looks like yes the constant cost that you had been using.

how does that compare with your competitors?.

So, look, we are in a different situation then our competitors, our competitors are well we have some smaller competitors which essentially don't really -- most of them have very small programming budgets compared to ours and very little original programming. And then our competitors split to the big giant media companies.

So BET is our direct competitors, they're owned by Viacom. So they're actually spending more money on content at BET, but their programming budget is already six times, what ours is, probably and then the own network owned by Discovery open network. VH1 also owned by Viacom.

So I think our competitors are largely spending more money on content, but and those guys are levered at three and four times. We have got a different profile. We got a different size. So our strategy has to be different in order for us to be successful.

So our strategy in 2017 we ended up lowering our content cost because we thought like, we could and we wanted to commit to EBITDA growth. We’ve increased our content budget for 2018 but it's always a lever that we move up and down to try to manage for the result.

When we get -- so the type of content that we have to create is got to be higher volume, lower cost content that gives a number that allows us to differentiate the network and to continue to be of value to advertisers, we don't really have the luxury of so own bunch of money into the programming budget and taking creative shots to get a big gigantic hit.

And by the way, a lot of times at the crapshoot anyway, I mean WG in America which was a Tribune that was there strategy, high cost original and they successfully, the old management there and that cash flow down. I don’t know exactly what it was. I heard it was about 100 to zero.

Now, they switched the strategy back to lower cost high volume, and my understanding the important pretty good numbers and a lot of the big part of that is WG in rebound.

So our world is our world and so really yes it challenging that we compete against bigger guys to spend more money on content and then going after this audit, but there is still a place for us in this ecosystem.

We got a unique strategy in that we got multimedia platforms are targeting the same audience, and we’ve always competed against the larger guys and they always have bigger programming budget than we have.

And once we get our leverage down to a level, that is reasonable then we can rethink our content and investment as well, and we will do that and we continue to look for different partnership that might help us ramp up our content offering faster and more economically efficient. But it's a slow and steady grind.

Leverage has come way down from your own five years ago. Forgot where we were at our Zina [ph], but we continue to be focused on that. And our strategy has to fit -- our operation strategy at this point time has to fit what our leverage goals are at this point in time..

We will now go to line of Roland Williams a Private Investor. Go ahead please. Mr. Williams please check your mute feature. We’re not able to hear you. Once again Mr. Williams, your line is we’re not able to hear you on this line..

My first question is this. I've heard you made some cost cutting, agency changes in consolidation.

With all that said, what do you see the Company's the biggest vulnerability? And how do you plan to address that vulnerability?.

Our biggest vulnerability is size, right. Are two things, leverage and size, but that's the commentary that I just gave. And I think that in everything that we do, every sphere that we operate in we got to figure out how do, we become more efficient.

So I think in our radio business when I said that people have got to look at either getting bigger in markets or getting out, we have got to do that same analysis and not be wedded to a particular asset. We need to be wedded to success. We need to look at that in the digital business we bought one of our competitors.

We need to look at that in our cable business. There we could get bigger and get more efficient and more profitable or we could do some sort of we've talked about doing JVs with different people and stuff. So we got to find the right opportunity that makes the most amount of sense for our shareholders.

So, there is -- there're few things on the table now, that we -- it's not appropriate to talk about at this time, but just for us to be sure that we know what all of the options are, and we are exploring every last one of them because the ultimate job is to be successful and to reach our goal, so that's pretty much the extent what I think makes sense on this call at this time..

The second question is.

What have you learned last year that is going to inform the Company this year?.

I think that the number one thing is that the media market place is changing less so in radio, radio doesn't -- the technology in radio is what it is, it's pretty simple, we are largely delivering music which is largely other people's content, so that I think that's just from the structural standpoint just needs to play stuff out on the radio side.

On the television side, I do believe we need to figure out the way and partnerships to be able to invest more in programming, if we had more platforms, another platform another network another two networks.

Then you would invest more in programming and you can and the more you can invest in that content and leverage it and amortize it over multiple platforms, the better off you are. Rupert Murdoch who is arguably one of the greatest media minds of this century, made a decision that his asset needs to be part of a larger scale situation.

We got to figure out and I’m not suggesting that we’re going to sell today, but we certainly are having conversations about partnering with folks from different things in order to gain that scale. We’re having conversations about partnering with other networks and launching other networks, and we looked at buying other networks.

Anything that you can do to get more efficient is a kind of priority. And so, what I think I've learned over last year that this changing landscape is here for real and to stay, and we need to figure out a way to create more programming that could be monetized and amortized over more platforms..

And with that said about the monetization of programming, the core cut increasing, what is the possibility of launching a TV One subscription based app, something like Hulu or Netflix?.

First of all you got to have a lot of programming to do that, we don’t have those kind of programming assets. I mean that’s kind of what the Disney Fox deal is about. I think for us the first step that would be a long term project, not an immediate solution.

I think the first step for us is to figure out how to find more platforms to monetize content that we can invest in today and monetize it over to those platforms immediately as opposed to having to build out another OTT business run a bunch of losses for a significant period of time.

So I think we need more media solutions subscription service and also not bullish that everybody in America is going to want to pay for 499 for whatever their favorite genre of Television is among.

I believe TV is going still continue to be bought largely in bundles, some skinnier bundles going forward but I don’t believe the 499 app is an answer for us right now..

Well thank you. This is my last question.

I want to ask you since you guys, how are you, from a content standpoint, how do you had the top talent while reducing cost? I know you need some partnership but that’s still like some kind of cost, right?.

Repeat that question one more time please..

From a content standpoint, how do you attract the top talent while still reducing cost?.

That’s not the game that we’re in, I mean we’re not -- we get good talent and we’ve got some great talented people who work for us like DL Hughley and Rickey Smiley.

But if you classify top talent as Denzel Washington and Chadwick Boseman and Kevin Hart, we're -- we don’t have the ad budgets to go out and do a show with Kevin Hart like BET did, a few years ago. So we don't plan that, we’re not going to play the arena.

When we get to a point where we can't and then we'll have those conversations, but by the way the talent is on the network is a lot better than talent that we had seven years ago. You know or five years ago.

It continues to improve but as Clint Eastwood starring as Dirty Harry said in one of his movies, "A Man's Gotta Know His Limitations." And I think the business also has to know what its limitations are in that particular moment in time, if you don't deal with reality, you can't actually react appropriate to the market place..

[Operator Instructions] Meanwhile, we will go to line of Michael Kupinski with Noble Financial. Go ahead..

I know that at least one other TV broadcaster also mentioned McDonald's has been a problem in the quarter and so the question is more goes back to the earlier question.

Do you think that it's a shift more towards data driven media buys? And to what extent can radio, and not specifically radio, what can they do to embrace data driven analytics? I know that some of the other larger broadcasters are looking to invest in that area.

Is there something that you can do that can kind of counteract some of the movements and shifts that we are seeing in the advertising?.

Look we are smaller player in the radio business, and so we are going to end up having to attach ourselves to whatever industry -- larger industry wide data solution ultimately arises.

Just million at MS has got NextRadio and he believes that it is a very good data solution for the radio industry, everybody that's not iHeart because iHeart's got their own data platform. I don’t know what David Field is going to do, but at the end of the day, Urban One is not going to create their own data platform.

We have -- because we also don't -- we are not big in audio streaming. We have got data as it relates to our digital platform, that's a different story but I think from the radio standpoint the industry needs to figure out what's going to be the independent data platform and we’ll be part of that.

Again I think that I think you are going to see a lot of stuff evolve now that there's two big players, right. And then ultimately there probably should be three big players and who knows maybe all three of the big players have their own individual data platforms and then smaller companies like us to choose which one of those we want to sign up..

And Alfred, then just going back to the previous question now some of the recent developments in the industry, has been in the urban subscription OTT space, with AMC potentially buying RLJ for instance. Is there any interest in moving into the space possibly partnering with other companies like E/W.

Scripps, with KATE or even their OTT African-American service or RLJ?.

Yes I mean look, we could talk about it but I believe that RLJ, the AMC RLJ acquisition really was largely about Acorn, which is a British service that's got the Agatha Christie Library and it got 700,000 subscribers and I know from Hammond conversations with folks in the industry kind of like the -- I don’t want to call it Nirvana, but critical mass for NOTT services like a million subscribers.

But conversely, urban movie channel that’s part of RLJ my understanding from the data that I've seen out there is they got like $50,000 subs, which is not the reason AMC bought back now. Now, they may have hope for the future what it could be and we talk folks about partnering and some like that. We talked about some other people, about partnering.

But it's largely post taking a stake in the ground, urban movie channels not a business today. And I hope that I been clear and focused with my message about what our priorities and our priorities are getting down from 69 to 65. I got it resolved that path first.

So I can then start look at where we put stakes in the ground and thinks like that, I’ve got more immediate goal. So any think that I do, we do needs to have a near-term impact.

And yes sacrificing the future right this second for short term but if you don’t care of the short term needs, sometimes you don’t get an opportunity there to play in the long-term game..

Exactly and just a quick question the agreements with TV One with the cable operators that doesn’t prohibit you from getting into the OTT subscription services business?.

Not at all..

Alright thanks for the question..

Operator, it is 11 o'clock. Are there any more questions? We will take one more..

We have no further questions in queue at this time..

All right, great. Thank you folks as usual we’re available offline. Thank you..

And ladies and gentlemen, that will conclude your conference call for today. Thank you for your participation and for using AT&T Executive Teleconference Service. You may now disconnect..