Alfred Liggins - Chief Executive Officer, President and Treasurer and President, TV One Peter Thompson - Executive Vice President and Chief Financial Officer.

Timothy Stabosz - Private Investor.

Welcome to Radio One's fourth quarter conference call. I have been asked to begin the call with the following Safe Harbor statement. During this call, Radio One may share with you certain projections or forward-looking statements regarding future events or its future performance.

The company cautions you that certain factors, including risks and uncertainties referred to in the 10-Ks, 10-Qs, and other reports periodically filed at the Securities and Exchange Commission could cause the company's actual results to differ materially from those indicated by its projection or forward-looking statement.

This call will present information as of February 25, 2016. Please note that Radio One disclaims any duty to update any forward-looking statements made in this presentation. In this call, Radio One may also discuss some non-GAAP financial measures in talking about its performance.

Its 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 the website at www.radio-one.com. An audio replay of the conference call will also be available at Radio One's corporate website at www.radio-one.com, under Investor Relations section of the webpage.

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 made relied upon. I will now turn the conference over to Alfred C. Liggins, Chief Executive Officer of Radio One, who is joined by Peter D. Thompson, the company's Chief Financial Officer. Mr.

Liggins?.

Thank you very much, operator. And welcome to the fourth quarter results conference call, which obviously is also our 2015 yearend conference call. We've had a year that we're proud of, because we had a lot accomplished, particularly with the buyout of Comcast as TV One stake and the refinancing of our debt, particularly ahead of the market turmoil.

And TV One's continued strong performance in 2015, led by an increase of ratings by about 15% and an increase in our affiliate fees. We finished the year with about a $125.5 million of EBITDA.

The bad news is our radio business, which most of you on the call know was soft and a large amount of that was ratings related, which we've gotten turned around and we're showing improving ratings continuing into first quarter. However, we still haven't been able to hit the inflexion point yet on monetization.

TV One's performance is offsetting radio's poor performance, but a 100% of our focus at this point in time is stabilizing the radio business and then growing that cash flow. We've made some progress in a number of markets, but two of our big markets, Houston and Atlanta, and one of our middle markets, Indianapolis, continue to struggle.

So the focus is there. Washington is doing fantastic. And actually Baltimore in Q1 is also really stabilizing, and I'm very happy with that trajectory. We're going to talk a bit more about TV One in 2016, before we get to question-and-answer, but I'm going to turn it over to Peter, who is going to get into the details of the numbers..

Thank you, Alfred. Net revenue was relatively flat for the quarter ended December 31, 2015, at approximately $109.4 million, an increase in affiliate revenue from our Cable Television segment was offset by declines in the radio and interactive divisions. And a breakout of revenue by sourced can be found on Page 5 of the press release.

Net revenue for the radio division was down 9.1%. Dallas and Washington D.C. clusters showed the most significant revenue growth in the fourth quarter. However, this was offset by declines in our other clusters, most notably in Houston, Atlanta, Baltimore and Indianapolis.

And the fourth quarter local revenues was down 8.8% and national revenue was down 6.2% for our radio stations. According to Miller/Kaplan, the radio markets in which we operate were down 2% for the quarter compared to minus-7.3% for our clusters. Looking by category.

Revenue was up 13% in the automotive category and up 10% in the services category; government category was down by 17%, driven by political; entertainment was down by 15%; food and beverage was down 13%; healthcare was down by 12%; and retail was down by 6%; telecommunication was flat. Our radio ratings continue to show steady growth.

Fourth quarter ratings were up for Atlanta and Baltimore by a-third in the 12-plus demo. And overall, our ratings were up 10% for the fourth quarter in the 25 of 54-demo. For Q1, our Cable Television advertising revenue is pacing up double-digits, although we expect that to flatten out as the quarter progresses.

And our radio advertising business is pacing down 4.3%. For January 2016, the markets in which we operate for radio were down 3.3% compared to our clusters down 6.1%. The underperformance was concentrated in Huston, which was down double-digits in January. Excluding Huston, we performed in line with the market for January in our remaining clusters.

We currently expect a strong first quarter performance from TV One to more than offset declines in radio, leading to the resumption of growth in adjusted EBITDA. Net revenue for Reach Media was up by 1.3% for the fourth quarter.

Net revenues for our Internet business decreased 12.1% for the quarter, mainly due to a decline in alliance revenue, as we reached the end of our diversity recruitment deal with Monster.

We recognized approximately $44.7 million of revenue from our Cable Television segment during the quarter compared to approximately $40 million for the same period in 2014, an increased of 12%. The increase was driven by an increase in affiliate subscriber rates.

TV One posted 11% growth in gross time sales for the fourth quarter, but this was offset by under-delivery against rate card, and the additional ADU liability resulted in a 3.5% decline in the net advertising sales for the cable network. Affiliate sales were up 27.5% year-over-year.

Cable subscribers, as measured by Nielsen, finished the quarter at $56.1 million, unchanged since the end of September. Operating expenses, excluding depreciation, amortization, impairments and stock-based compensation, increased by 5% to approximately $83.7 million in Q4.

Corporate SG&A expenses increased mainly due to approximately $2.5 million of annual corporate bonus expenses being recognized in the fourth quarter compared to zero in the previous year. Radio operating expenses were down 0.6%. And lower variable sales expenses were offset by higher marketing expenses, music royalties and bad debt expense.

Reach expenses were down 8.3%, primarily from lower contractual talent costs. Operating expenses at Interactive One were down 4% year-to-year, due to lower traffic acquisition costs. And TV One expenses were up 9% year-over-year, driven by higher content amortization in the prior year.

For the fourth quarter, consolidated station operating income was approximately $41 million, down 3.5% from last year. Adjusted consolidated EBITDA was $28.9 million, a decrease of approximately 11.9% year-to-year.

Interest expense was approximately $20.4 million for the fourth quarter, up from approximately $19.3 million for the same period last year. Company made cash interest payments of approximately $17.7 million in the quarter.

Net loss was approximately $24.3 million or $0.50 per share compared to a net loss of approximately $13.5 million or $0.28 per share for the same period in 2014. For the fourth quarter, capital expenditures were approximately $1.5 million compared to $1.3 million for Q4 2014. Q4 cash taxes paid were approximately $12,000.

There were no stock repurchases during the quarter. As of December 31, 2015, Radio One had total debt, net of cash balances, OID and issuance costs of approximately $957 million.

For bank covenant purposes, pro forma LTM bank EBITDA is approximately $126.6 million and net debt for that calculation is approximately $979.1 million for a total leverage ratio of 7.73x and a net senior leverage ratio of 4.99x..

Thank you, Peter. As Peter outlined, radio in Q1 continues to struggle, although it's really about Houston. And if you x out Houston, we're actually performing in line with the markets. But the markets are still slightly down, not disastrous, about 3%, but down just the same.

If we can get Houston pulling to being down with what the market is, that's going to be a big lift for us. Atlanta also down much more than the market in January. The good news, I think the market was down 1.7% or 2%. We're probably down 7% or 8%, even though we've got a very strong ratings increase in Atlanta, and we've also repositioned our stations.

We had a simulcast of two signals in that market, and we split that simulcast. So we've launched a fourth brand on a significant signal that covers the market in Atlanta, and that just launched in mid-January. So we're very hopeful there that we've got a strategic plan that's going to get us back to resume growth in Atlanta.

And also ratings have stabilized in Indianapolis, even though we're underperforming there significantly. We continue to work to monetize those ratings and stabilize that platform and get it back to growth. So that's the bad news about the radio division.

I was hoping that the turn was going to come for us in Q1, because of the ratings trajectory we've had. But we're not quite there yet. However, TV One continues to do well and it's doing well. And the backdrop is it's a very strong ad environment in scatter for cable right now and TV One is well-positioned.

Although, our rating were up about 15% from last year, and we lost [ph] Martin in October, actually at the end of September, and it was about 38% of our prime schedule. And so we've taken a hit for that and we planned on that. We knew we were going to take the hit.

So right now, going into Q1, we're seeing ratings decreases of about 12% in prime and on households. However, we're seeing that ratings decreased in the midst of a strong market. And we don't we have a lot of big heavy acquisition amortization, so we really have the ability to control and manage our expenses.

And with that said, we will see significant EBITDA growth in TV One in 2016. So we're going to give you guys a guidance number of EBITDA for TV One of mid-70%s, up from 67% last year, so about 10% EBITDA growth for 2016.

And again, we have the ability to manage the ratings softness that we expected, because of the loss of Martin with our expenses in marketing and programming and employees, et cetera. We also have the ability across the radio platform to continue to optimize our expense base. We've taken out a fair amount of expense in 2015.

We've got more productivity initiatives in place that we think will allow us to continue to bring down the overall expenses of the business in 2016. We're constantly focused on that. I'm optimistic that the radio business is not a falling knife.

While I hate seeing us underperform, I love seeing other companies like Entercom and iHeart posting good numbers, because that gives me faith and comfort in the long-term health and viability of the radio industry. So net-net I think that we continue to be well-positioned. We're building cash.

Right now, a lot of people have asked us about bond buybacks, given where the trading levels are. We think there is going to be significant opportunities to be aggressive in some form of fashion. We think that will allow us to reduce our leverage. And we think the key to take an advantage of those opportunities is having cash on hand.

So we don't know, which direction we're going to go in yet, but we're analyzing it. And we're building a war chest for any opportunities that could create deleveraging for the company. So with that, operator, I'd like to go to the question-and-answer segment of the call..

[Operator Instructions] And our first question is from Timothy Stabosz, Private Investor..

Well, first of all, congratulations on the refinance last year. I'm sure you feel pretty good about being in that position, and then that's going to feel good..

Yes. Now, look, we had some tough breaks in terms of over the last four years when we hit the market, and usually some natural disaster happens. The first time -- this wasn't a natural disaster, but the first time we went out for refinancing, the first Greek crisis happened, and we had a busted deal.

And then the next time we went out Fukushima, the nuclear meltdown at Fukushima happened. So, yes, we caught a break this year. We're really happy with our capital structure, the length of it. And with our debt service levels, it's going to allow us to build cash and put us in a position to delever it..

I'd liked your use of the term, war chest, by the way.

And what is the cash on hand by the way?.

At the quarter end it was $67 million. Today it's a little over $62 million. We had a debt service between then and now, Tim..

Does the imperatives and attractiveness in the debt market mean that equity buybacks are the less attractive? There is a buyback outstanding, of course, correct?.

Yes. That buyback was put in place specifically. And by the way, there has been very, very, very little executed on that buyback, probably 50,000 shares. And the reason we put that buyback in place is, because we thought Third Avenue, the fund -- they're a big shareholder. They own over 2 million shares of stock.

And we thought that they might have to have an emergency liquidation. So we wanted to be in a position to support the stock, because we got 2 million shares on our flow hitting the market. That could be really, really problematic. It turns out that they are not going to have to buy or sell immediately and can do an orderly disposition.

So, yes, I would say that we're not focused on buybacks now, that was specific for that particular potential event, and we are focused on building cash and building the war chest and looking for opportunities that could create deleveraging..

Just a couple of other, then I'll get back in queue.

How comfortable are you with covenant compliance this calendar year?.

I think we still got plenty of headroom. The covenant was set pretty loose. We got guaranteed growth in affiliate revenue at TV One. So we know within reasonable tolerance, where we're headed on that business. So I think we see radio stabilizing.

And therefore, as we look ahead the next 12 months, I don't assume we have to convince you when it is the best which we've done. We feel fine with where we're at in terms of headroom and covenants..

And then one other, why the delay in the return on audience, getting better ad rates or whatever you get from a stronger audiences? And is this unusual? And does it normally come quicker? And do you attribute it to the instability in the financial markets?.

I don't attribute it to the instability in the financial markets. Why, is the $64,000 question that me and David Kantor, who runs our Radio Group in particular, are asking our managers. There is always a lag. But the question is, is it three month lag, a six month lag, a nine month lag.

And we're down a number of account executives in across the company right now and we're replacing them with sales people. As the radio industry has matured, it's become more difficult to recruit folks into the business. At one point in time, this was the go-to-business, a lot of people, everybody want to be in it.

Now, with a lot of the digital companies in place, younger people got more options. It's still absolutely possible to recruit good talent. It's just not as free flowing. So I think we've got caught flat-footed in the number of account managers that we have on hand, and we haven't been able to monetize these ratings as fast as I would like.

I'm highly disappointed in that. And everyday this is my focus, because look we stabilize the radio business and just stop it from going down, right. Then this story works, right. And so we're continuing to pull expense levers, but what I need to stop from going down is the topline. So I don't think its financial market related.

Look, the markets from an economy standpoint aren't great, but they're not freefalling right. And I've always been of the mindset that radio was a flat industry. And so I think we got a good shot of that coming through this year. So as I said earlier, I feel better about the radio business today in terms of its long-term health.

So it's a issue specific to us. We're not doing a good job right now. And David Kantor and I talk about it on a daily basis, and he talks about it with our managers and we're going to fix it. We fixed it many, many, many times before in a long period of time that I've been running this company and it will happen again..

Our next question is from [indiscernible]..

So could you just explain and flush out a little bit what happened in the fourth quarter on TV One in terms of the under-delivery versus the rate card for the network and if you expect anything like that to impact 2016? The other question, I'll give them all, so you could just check them off.

The other one I was curious on is can you talk a little bit about the upfronts on the cable side? And then also I know political could be interesting for you guys this year, so I'm curious what you're seeing there?.

So TV One under-delivery, we knew we were losing Martin and we planned for that. But I just think the under-delivery, the fall-off from Martin was more than we thought and it wasn't made up by enough from our originals in Q4.

We're continuing to see audience erosion in Q1 from not having Martin, where we were plus-15% for total year last year in terms of ratings and so far Q1 probably about minus-12%. We're continuing to look for things to make that up. So it's too early to tell, whether the ratings trajectory is going to stay at minus-12%, improve or decline further.

I would say that the management team at TV One and the CFO have me given the kind of a range of shortfall that we could have and I took that into account, when I gave you the guide of mid-70s. There is a lot of levers in that business to getting you home from an EBITDA standpoint. Martin was a seismic event, if you will.

So I don't expect further dramatic drop off of the ratings. We know why this is occurring now? And we didn't actually acquire anything to replace it. We looked at a number of things, but got outbid on them.

Our decision was to stay, instead of biting off a big number on an acquisition that we hope would replace Martin and take the gamble that it would produced the same kind of ratings. We decided to take the ratings hit and leave ourselves flexibility to control our programming budget, in order to meet our EBITDA growth targets..

And on political Matt, I think we've said before, we are budgeting about $7.5 million of political dollars for this year. And through today we've booked a little over $700,000 in Q1. So there is a ton more political still to come. So we think that gives us some tailwind, Q2, Q3 and through that cycle..

We're loving the tight Bernie Sanders and Hillary match up. And actually if Donald Trump ends up being the nominee, I think that bodes well for us too, because Donald's out saying that African-Americans love me, Hispanics love me, and I think love is a very strong word from him.

But I can tell you that Trump probably resonates more with a black audience than Mitt Romney does, right. So I think that there is going to be a fight for our audience all the way into November and we're hoping we benefit from that..

And on the upfronts on the cable side?.

Upfronts were plus-10%. We finished plus-10% and CPMs were kind of plus 3% or 4%, very happy with our upfront performance. That was the first positive year-over-year upfront that we've had in probably four years or so. So we were very happy with it. I think the same thing that happened in network broadcast TV over the years is happening in cable.

Even though cable ratings are going down for whatever reason, whether it's Nielsen not being able to capture, tablet viewership or a viewership that's going to other services like Netflix. As these audience as these ratings shrink, advertisers still primarily love television. And so they need to place this money.

And so right now you're seeing a strong ad environment, strong scatter environment and rates are going up. That happened in broadcast television as well as cable proliferated and CBS, and ABC and NBC, and Fox's audience has got smaller. The CPMs went up on the advertising that was run. And I feel that's what's happening in cable right now..

So if we have that kind of upfront backdrop, how do we think about the impact of the ratings being down? Is it not so much --.

We're just having to reserve more liability for ADU and the team's managing it. We're taking more direct response revenue now than we have in the past, because it doesn't come with any audience guarantees. And we're taking more direct response to minimize the amount of ADU that we'll have, and that's how we're managing through it..

And then the last question on sort of a move to delever or use your cash to capture some of the discount, picking on your sub bonds.

Are there any limitations on your ability to do that in your credit agreement or in your [ph] dentures?.

The 9.25 are permitted investments. So we don't have a restriction on repurchasing those..

We do have one from [ph] Andrew Finkelstein from CQS..

I think I was looking at the corporate line. If I was looking at that right, did that go up year-over-year and causing -- there is a difference between the change in station operating income and the EBITDA line. I was just wondering if you could talk more about that..

I called that out in my comments earlier Andrew. The real difference there in the fourth quarter was we didn't pay any bonuses to the corporate staff in 2014 and we did in 2015, and we include all of that in the fourth quarter. So there was about a $2.5 million swing in fourth quarter corporate expense, and that's what it's related to.

Is that what you were looking for the explanation on in terms of the numbers?.

Yes. Apologies, sorry I missed that..

No, not at all. No. I just wanted to make sure you got it, because it does stand now..

And should we assume you guys accrue, I guess, bonuses through '16 [multiple speakers]?.

I mean, generally, if we're on or close to our numbers, we'll accrue them quarterly. So, yes..

So 2015 is probably closer on a full year basis to the right corporate run rate?.

Yes. I have to say it, because one of the things, and I was going to get in the Q1 call, we have a management charge between corporate and TV One of $1.7 million annually. And we always have that as a negotiation with Comcast. Now, they're no longer in the picture. We'll just take that out.

So there will be a couple of puts and takes in that line, which is why you heard the hesitation in my voice. But, yes, the run rate at the end of '15 is not that run rate for '16 and is subject to some changes we may make on allocations, which I'd expect to spell out for you in the Q1 call..

And then, I guess, one more, if I could just jump back to, I think Alfred what you were discussing, looking at some bigger opportunities and building a war chest of cash for bigger deleveraging of that. I don't if there is any other color.

I was just wondering, I mean, generally what you're just thinking there?.

We get all these inbound calls about bonds, right, that's one. I think we're still not at the ownership caps in the radio business. In a shrinking or flat industry, you can delever through consolidation.

So there could be opportunities for us to buy end-market competitors that would allow us to take out significant expense and have a deleveraging event. There is lots of things circling around like that. Nothing is imminent. We haven't made a decision to buy bonds.

And when they're trading at 75, the question is -- and they're not really trading that much, right; is the world going to get worse and do people panic and there is a better opportunity for the company. We've had some conversation to with people about potential end-market acquisitions that would allow us to delever, but also nothing imminent.

But I believe something is going to happen. Yes, there just too much chatter right now, and I also at a minimum think the country is going into a rest break on the economy. I don't know if I would call it a recession or even if it is a recession, hopefully it's a two quarter recession like we used to have.

And when that kind of stuff happens, prices get cheaper and opportunities arise. And so it would be great if we could do something, have an event of some type that would allow us to delever, so we're preparing for that..

So either or maybe even both deleveraging M&A deals or if the bonds go down further on weak markets looking at that opportunity to be [multiple speakers]..

Correct. And we still have our MGM casino investment that we will make this year. Right now, we're supposed to make it in July. The casino is up, it's not -- it probably will open later in the year, probably in Q4. That investment will end up going in closer to when it's going to open.

The good thing about that investment is the closer we put it into opening; once it opens, we're going to get a revenue stream from that the following quarter that we can book. We won't actually get the cash till yearend, but at least we'll be at a book revenue on it after it's been open a quarter. We continue to think that's going to be a good deal.

We've got to make sure that we've got our $35 million laid aside to do that. We still have a tower portfolio. You've seen people sell towers. We're looking at potentially monetizing that to add to our cash trove.

And one of our investors said to me, not that long ago at an investment bank outing, sitting on a lot of cash would be a very good thing in this kind of environment. And plus the good thing for us is cash nets down our debt under our covenants, so it's a win-win, right..

And then just not replacing the Martin, it's such a big part, I mean you're not strategically sort of retrenching on the network side. Is it just that the right program opportunity didn't show up, because it seemed like a pretty important --.

There's not a lot to buy. A couple of things that were there to buy, there is a Tyler Perry's sitcom called House of Payne that we were focused on buying, but we got outbid by BET. And it was a big number from the standpoint that it's a lot of episode, there's 250 episodes. So it ultimately went for like a $100,000 an episode.

But that's like $25 million over a four-year license period. So we just weren't prepared to commit $6 million a year of programming expense to something like that, because if it underperformed in the ratings for us, it didn't do as well as Martin, we were going to be locked in, in terms of our ability to manage our EBITDA growth.

And there was one other Tyler Perry acquisition that we got outbid for too, but that's really kind of -- those are the only two things that have been in the market. There's not a lot on-the-shelf [ph] black syndication that we can buy to plug the whole. So we're not retrenching, we're continuing to try to look for stuff and uncover stuff.

But there's just not a lot of product out there, so we got to come up with alternative strategies..

And we do have a follow-up question from Timothy Stabosz..

You guys thought you're going to be out of here, right?.

No, we're good..

Most of my questions were answered by the last questioner.

But if I understand you correctly on the debt, in a way you're looking to leverage the deleveraging, because it's a great opportunity?.

I don't understand what leverage [multiple speakers]?.

What I mean by that is we're not merely looking at using the cash in our balance sheet to deleverage, we're looking at all the ways to manage..

Look, we strongly considered buying bonds at 75. But at the time that this was happening, it was like one crappy day after another in the market.

And a lot of the folks that we sought council for, who were stakeholders in the company, said, well, maybe the bids is 65, right, so it was kind of like, let's wait -- I mean, we don't know, right, let's wait and see where it's going. And it was market dependant, right. This was just a crappy market altogether.

So it, for whatever reason, it disconnected to the point where there was screaming buying opportunity, we wanted to be able to take advantage of it. But all of that said, we knew the number one thing that we should do is have cash on hand and available to do, what's motivated me to ask Peter to start pursuing the tower sale..

Do you potentially have stakeholders' support in delevering?.

What do you mean?.

Financing?.

No. We haven't had any of those conversations. I think the stakeholder conversations we've had was, hey, use your free -- should you be using your free cash to take advantage of discounts in your debt to delever. We haven't had any conversation about people coming to us and investing additional money to do it..

Tim, more of an organic conversation. And also, we like our bonds to be trading better, right. So once we stabilize radio and grow our cash flow, we would expect the bonds ultimately to trade up. We're not in a habit of talking down our own bonds, it's quiet the opposite.

We think as cash flows grow, hopefully that firms up, which will help us when we come time to refi it. But as Alfred said that there's a dislocation in the market and we can take advantage of it. For a period of time we would have to consider that..

Yes, our understanding is every company that's got bonds rated where we're at, this category of rated bond is just getting crushed, right. And to the extent, there is a market factor that's causing abnormal price depression, should we take advantage of that..

And just want to clear on this, it could just as well be acquisition, as well as divestitures and assets that fund a potential de-levering transaction..

Yes, delevering M&A, I mean, can we buy end market assets that allow us to create more EBITDA with bigger revenue base on a lower expense base, I mean that was radio consolidation during the 90s and the 2000s, and pretty much all the big guys are full. They are on the full compliment of stations and we don't in most of our markets.

But look, again, I would be very careful on how we did that. So we got a little bigger in Columbus Ohio, we've bought two radio stations for $2 million there to bolster our position. We just closed on them in January, so we haven't started to see the revenues turn around in that market yet, but we like that price entry point.

So we've been very, very cautious from an acquisition standpoint over a long number of years. What do we buy before, we bought Columbus, and then last thing we bought was Charlotte. And our acquisition in Charlotte actually tipped to help turn that market around from negative EBITDA to positive and it's actually performing well for us in Q1.

So we're mindful that there could be other things like that..

My final question, and maybe I want to have this type of conversation offline, I'm starting to think so. But in terms of new business initiatives, I know you've got the casino, and radio is not loved, it seems like on the street, of course.

So I'm wondering if you want to talk about at all, are you doing anything with just going on [indiscernible] on this Next Radio, which is the FM chip being turned on in the cell phone?.

Yes, we're participating. We are part of the Next Radio consortium. We help market Next Radio by running the ads. We're having [multiple speakers]..

My question specifically about that is, is there something that you believe about the nature of your audiences and markets that would make that more potentially successful or useful for Radio One?.

Our audience is the most mobily connected audience in America, the African-American audience, so I think having our radio stations accessible on the cell phone is tremendous, and just making a lot of good progress with the carriers in making that happen. He's showing great leadership and I think it's a strong positive for us..

Is there an aspect of disposable income, and the fact that bandwidth cost money and the use of FM does not, that is particularly attractive to your audience or?.

That's the theory, period, right. I mean, why pay to listen to music, particularly since Pandora runs ads now too, right. Why pay in that account against your data caps when you can get it for free on FM. But the other thing is that what we program on our stations is different.

We have local brands that have local contents, that talk about things that happen in a local market and a lot of people like that. I just saw something, an announcement from Neilson talking about increasing audience shares for terrestrial radio amongst millennials.

People were listening to radio and it's not true that millennials don't listen to radio. There's a just a lot more of audio competition out there, but I think this thing shakes out. I mean, Pandora is now trying to self itself, I guess. I just read something that they're looking at strategic alternatives. Their business model doesn't work.

The royalty rates don't work. They're having to just like we sell ads. They're building local sales forces. And yes, they are competitor, and they heard our business, but in the end if they can never really make any money, at some point in time that competition is going to subside and our boats going to level out and rise again..

And we do have another question from [indiscernible]..

Guys, just a quick one. Could you give us some more color on how you expect kind of advertising versus affiliate revenue to grow in 2016. I know you gave us the $75 million EBITDA number, but --.

It's about $50 million -- it's a bit changing..

Well, no. You're going to see ad revenues grow mid-single digits and affiliate a little higher than that..

How is kind of the loss of Martin affecting those numbers? So if you're having a loss, then I'm assuming there is kind of three quarters of that next year, right.

So that means that kind of high performance should be like organic, if I were to strip out Martin last year would have been much or it would be double-digit growth in advertising this year? Did you guys get what I'm asking?.

No, need to repeat that. I just pulled out my TV One forecast, while you were speaking. So affiliate sales kind of mid-singles, and ad sales both mid-singles. Ad sales actually growth projected to be slightly stronger than affiliate. So it's the other way around, net into just above a mid-single kind of topline growth is what we're anticipating.

But do you need to repeat your question?.

No, I can follow-up offline..

So we do have a follow-up from [indiscernible]..

Just a couple of quick ones.

The bank leverage ratio, can you guys disclose where you stand currently versus the test?.

Yes..

And then on the tower sale, are there any limitations on use of proceeds from that sale? And could you comment on the potential size, is that a $10 million, $20 million type, what kind of monetization in the tower portfolio you're thinking about?.

Yes, Matt, we have a $25 million carve out for that in our credit agreements. So that's probably the size of the cash infusion that we will be looking for. So we back into that number and then we would have to figure out the rents that we got to pay to achieve that number. So if we did $25 million, then we will have no limit on the proceeds.

It's kind of carved out as to -- we don't have repay debt with it, for example. And then on the covenants, we have two tests. We have a limit on net senior leverage of 5.85x, and we're at 4.99x. And then we have a interest coverage, we have to have at least a 1.25x interest coverage test and we're about 1.7x, 1.69x..

And there are no further questions in queue. End of Q&A.

Thank you everybody. And as usual, we are available offline for any additional questions. Thank you and talk to you next quarter..

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