Good morning. My name is Kelly, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Gray Television Fourth Quarter 2018 Earnings Conference Call. [Operator Instructions].

I would now like to turn the call over to Hilton Howell, Chairman and CEO of Gray Television. Please go ahead, sir. .

Thank you so much, operator. Good morning, everybody. I'm Hilton Howell, the Chairman and CEO of Gray Television. Thank you so much for your time this morning and for joining our fourth quarter 2018 earnings call.

I'm delighted to announce that we are joined for the first time by our President and co-CEO, Pat LaPlatney, who has joined us effective January 2, and who will be with us going forward. As usual, we have our Chief Legal and Development Officer, Kevin Latek; and our Chief Financial Officer, Jim Ryan, both with us this morning. .

And I'll ask Kevin to provide a quick disclaimer before we begin. .

Thank you, Hilton. Good morning, everyone. Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results. Those 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 filed with the SEC and included in today's earnings release. The company undertakes no obligation to update these forward-looking statements..

Gray uses its website as a key source of company information. The website address is www.gray.tv. We also will post an updated investor deck to the website within the next 2 weeks..

Included on the call will be a discussion of non-GAAP financial measures and, in particular, broadcast cash flow -- broadcast cash flow less corporate expenses, operating cash flow, free cash flow and certain leverage ratios.

These metrics are not meant to replace GAAP measurements, but are provided as supplements to assist the public in their analysis and valuation of our company. We include reconciliations of the non-GAAP financial measures to the GAAP measures in our financial statements that are available on our website. .

I now return the call to Hilton. .

Thank you, Kevin. The big news, of course, is that Gray closed its acquisition of Raycom Media at the beginning of the year. The bad news is that we're just going to be talking about Gray heritage at this point. But the even better news is, before we discuss our transaction, the milestones that we hit in the fourth quarter were outstanding.

Our revenue for the fourth quarter of 2018 was $328.2 million or plus 40% from the fourth quarter of 2017..

Importantly, this was our all-time best quarterly revenue hit ever. Our net income for the quarter was $88.3 million and was our second best fourth quarter net income. Our broadcast cash flow was $172.8 million, which was double that in the fourth quarter of 2017. This was our all-time best quarterly broadcast cash flow results.

Our political advertising revenue was $83.2 million, which was about 5% higher than our political revenue in the fourth quarter of 2014, which was the most recent non-presidential election year after giving effect to stations acquired and divested between 2014 and 2018..

This was our highest fourth quarter political revenue in a non-presidential year ever. Our growth retransmission revenue for the fourth quarter was $93 million, and our net retrans revenue was $50.3 million. Both of these figures also saw -- set new quarterly records for us.

For calendar year 2018, gross retransmission revenue was $355.4 million, and net retrans revenue was $190.4 million..

Finally, as of December 31, 2018, our total leverage as defined in our senior credit facility was 3.01x on a trailing 8-quarter basis after netting out our total nonrestricted cash balance of $667 million. In short, the fourth quarter of 2018 was an excellent quarter once again across the board.

Given that performance and even before considering that we had nearly doubled our size with the Raycom acquisition, I believe that our stock remained deeply undervalued..

On the heels of the fourth quarter momentum, we completed our acquisition of Raycom Media on January 2, and made it effective as of January 1, so that we could begin this year with a clean break from legacy Gray.

As you know, upon closing, we own and operated television stations and leading digital properties in 91 television markets from Alaska and Hawaii to Maine and Florida..

This portfolio includes the first or second highest rated television stations in 85 markets. Collectively, our television station portfolio broadcast roughly 400 separate program streams. Closing the Raycom deal was no easy feat. And I want to take a moment to acknowledge the literally heroic efforts that I witnessed in the fourth quarter of 2018..

Remember, we set the ambitious goal of completing multiple complex closings simultaneously in addition to the actual acquisition of Raycom.

Those included financing transactions, the spinoff of Raycom's newspaper and ad tech businesses, several television stations to 4 different broadcasters and internal reorganization of both personnel and corporate subsidiaries. And we made all that happen over the holidays..

Gray's shareholders were clearly well served by the extreme dedication, sacrifices and professionalism of all the countless people who made this all look easy.

I want to publicly thank my colleagues at legacy Gray and legacy Raycom as well as the many others that the divestiture buyers and the professionals assisting all these companies at the banks, law firms and accounting firms that have been involved in these transactions. They were truly heroic.

Our new scale will give Gray the opportunity to face the dynamic changes in our industry and local communities, with new bigger and added resources. A great example of the new opportunity before us is this morning's exciting announcement that Greta Van Susteren has joined Gray as our Chief National political Analyst.

On a personal and professional basis, I'm thrilled with this..

In this new role, she will provide our local newsrooms and [ nightly ] markets coast-to-coast with the expert, unbiased, professional coverage of national and international development that has been the hallmark of Greta Van Susteren's distinguished journalism career.

While I cannot provide details today, we can confirm that Greta also has 2 nationally syndicated shows in development with Gray..

Over her long career on cable news channels, Greta has distinguished herself as a journalist first. She is known for her knowledge, experience and unbiased approach to the controversial issues of today.

As such, we have found a trusted, respected expert on national and international affairs to complement the trusted, respected professionals in our local newsroom and cities and towns across this country..

Her decision to join Gray from among all the many other quality news operations out there, we affirm that our investments in quality, local journalism and service to local community does in fact pay off. At this point, I am very happy to introduce Gray's shareholders to our new President and co-CEO, Pat LaPlatney. .

Thank you, Hilton, and good morning, everyone. I'd like to echo Hilton's comments regarding the extraordinary effort on the part of all Gray employees and our professional partners to close the agreements. Tremendous amount of work has been accomplished in a remarkably short amount of time..

We commended our agreements with both Nielsen and Comscore, resulting in significant cost savings for the company. And as of today, we are now handling all national business in-house, which will provide our stations with revenue upside to put a huge dent in our cost of sales.

Jim will talk in greater detail about the synergy effort, but I can tell you that we're well on our way towards the stated goals. We're also moving forward on revenue development efforts in a number of areas and we expect to see progress throughout 2019. Again, Jim will cover the numbers in detail, but Q1 has been okay, with March showing an uptick.

We have a sizable [ Olympic ] revenue number from February 2018 because of our large NBC footprint, and that has impacted our comps in first quarter..

It's early, but we're hoping that the momentum from March swings into second quarter. .

With that, I'll turn it over to Kevin for his update. .

Good morning, again. We all certainly kept pretty busy in the fourth quarter, not just with the Raycom and related transactions, but also our 4 business, political coverage and political sale. As luck would have it, Gray had very few retransmission consent agreements expiring at the end of 2018, accounting for roughly 1% of our total stock. .

Still as usual, we concluded those renewals on very satisfactory terms without any disruption. Going forward, we anticipate having about 22% of our MVPD subs under contract expiring around the end of 2019, with 56% of sub under contract expiring around the end of 2020, and the balance expiring again at the end of 2021..

You saw in our release today that we're also guiding to a 22% increase in those retransmission consent for this quarter and 20% for the year. I'll also note that, while we had some delay in reports on OTT sub, it appears we have crossed 1.25 million OTT subs around the first of this year..

Those following Gray for the past few years know that most of our network affiliation agreements have been scheduled to expire at some point in 2019. In the fall of 2017, we announced that we had extended the terms of all of our affiliation agreements with CBS, regardless of expiration date.

Similarly, we announced in the fall of 2018 that we had extended the terms of all of our affiliation agreements with NBC, which had been expired -- scheduled to expire at year-end 2018. .

Shortly after closing the Raycom transaction, we announced that we had extended the terms of all of our affiliation agreements with ABC for all of our legacy -- Gray and all of our legacy Raycom stations. Most of those contracts have been scheduled to expire at year-end 2018.

This morning's release announces that we also recently extended the terms of all legacy Raycom affiliation agreements with CBS..

So we're off to a very good start. We have one major network of expiring affiliation agreement this year. That negotiation, of course, is already underway. Turning to M&A, we have said consistently for many years that we look at all #1 and strong #2 ranked television stations offered for sale regardless of market size.

The Raycom transaction has not sent us [indiscernible]. Indeed, we recently entered into an agreement to acquire United Communications television stations in Watertown, New York and Mankato, Minnesota for $45 million.

These are terrific stations that will fit very well into our portfolio of similar stations, which many [indiscernible] service to the local community..

Moreover, we anticipate that the transaction will be at least leverage neutral and the certain opportunities can be executed as we hope and expect the United acquisition can be a deleveraging transaction for us.

We are continuing to look at opportunities to grow the company through more small tuck-in transactions like United, potentially larger acquisitions of high-quality stations and some nonbroadcast yet complementary ventures.

In all cases, we will continue to be guided by our public commitment to grow the company prudently within the limits of our balance sheet..

Thank you for your time. And I'll now turn the call over to Jim Ryan. .

Thank you, Kevin, and good morning, everyone. As Hilton already said, fourth quarter and full year '18, we're very pleased with. Obviously, '18 was a record-setting political year for us and we think that bodes very well for 2020..

Turning to our first quarter guidance. I'm going to focus my comments on a combined historical information that we put out for Q1.

I'll also point out that in the 8-K that was filed a little earlier this morning, there was an exhibit where certain select combined historical revenues in certain select operating expenses for 2018, '17 and '16 have been published by quarter, so that should help everybody with their modeling..

And I'll remind everybody that combined historical does not include expected synergies of any transaction. It is merely the combination of historical record, adding in acquisition and contracting out divestitures..

Also, our guidance for Q1 does not include the 2 United stations that we will begin operating tomorrow under a pre-closing LMA, so stations, while they're great stations, very powerful in their local markets, we're delighted to be acquiring them, are not material to the quarter or to any of Gray's full year operations..

Our core level with national is expected to be down in the mid-single digit range, but as Pat mentioned a moment ago, we had $12.7 million of total local and national revenue in the Winter Olympics last year, which we're going again. And in that $12.7 million, we had $3.6 million of auto-related advertising.

So it clearly is a significant event for us in '18, which does affect our ability a little bit for our '19 Q1. However, if you exclude the Olympics, we would expect our core local and national to be approximately flat in Q1 '18..

We are very pleased with the anticipated growth in retrans revenue of a low 20% range. Remember that legacy Gray and legacy Raycom, as Kevin just said, has very few MVPD subs to renegotiate. And we commented before that Gray's NBC contract at the annual escalator is generally a low double-digit percentage.

So we are very pleased that our overall retransmission growth in Q1 will be up 22% to 23% growth revenue -- retrans revenue. And that obviously is reflecting the synergies of Gray's effort, [ acquired quads and has been ] a legacy Raycom station.

We are reaffirming our previously announced net retrans synergy of at least $15 million for the entire year. Our broadcast expenses in Q1 have 2 significant components.

First, there is $33 million to $34 million in nonrecurring expenses associated with the Raycom transaction, including $27.6 million of expense to terminate the national [indiscernible] and about $5.3 million of severance or other compensation-related expense in the broadcast expense line..

Second, as Kevin mentioned, our NBC agreements repriced under the new agreement effective January 1. Retrans is expected to grow quarter-over-quarter $19 million to $20 million. If you exclude both of those items, then our broadcast operating expense in Q1, it would be essentially flat to Q1 '18 on a combined historical basis..

Similarly, our corporate expenses in '19 are impacted by transaction-related expenses of $29 million to $30 million. Again, that is M&A advisory fees, legal and accounting fees, severance and other transaction-related compensation, which is -- would be nonrecurring.

If you exclude those nonrecurring charges, again, our corporate expense would be approximately flat to '18 on a combined historical basis..

I'd like to give some updates on pro forma leverage for '18. We have not yet completed the preparation and audit of the carve-out statements for Raycom for the year ended 12/31/18. Therefore, my following comments are on a preliminary basis based on internal forecast and do not reflect the audited statements.

That being said, outstanding debt post closing was $3.97 billion as of 12/31/18 or would have been. We estimate our cash on hand as of closing would have been about $200 million.

On a trailing 8-quarter basis as of 12/31/18, our operating cash flow is defined in our senior credit facility, we estimate would have been in a range of $780 million to $795 million..

That's higher than when we announced the deal last June. And obviously, that has in part reflect some very, very strong political we saw in the second of the year of '18. On a trailing 12-month basis, the operating cash flow would be in a range of approximately $880 million to $900 million.

Those cash flow estimates do include the impact of the $80 million of synergies we announced at -- when we announced the deal. And I'll update you on synergies in a moment..

With these results in perspective, if you look to our November investor presentation that is on our website, our operating cash flow combined historical with synergies for '15 was approximately $803 million, in '17 it was about $686 million. Our leverage ratio at 12/31, we're currently estimating would have been somewhere between 4.85x and 4.75x.

If you recall, when we announced the deal, we said we would be approximately 5x, and that announcement was last June. When we closed the deal in January, we said we would be between 5 and 4.75. And clearly, our expectation would be towards the lower end of the range, closer to 4.75. And again, that leverage ratio would reflect the synergy number..

We currently estimate free cash at December 31 would have been a range of $500 million to $525 million. Again, if you go back to our investor deck for November that's on our website, 2016 free cash was estimated at about $401 million and 2017 free cash was about $300 million. So we're very, very pleased at where we are at the outset of 2019..

Our common stock post-closing is approximately 100 million shares outstanding for both the GTN and the GTNa on a combined basis. Now let me update you on our synergies..

We had said at the outset that we expected $80 million of synergies. To date, 8 weeks in post closing, we're at $61 million that's been essentially locked-in. That $61 million represents $22 million of payroll and benefits. We've already either eliminated or have scheduled to eliminate 135 positions across the entire combined company.

Also, given changes to our benefit plan, we will have an additional approximately $4 million of savings -- $4 million of cash savings from benefit plan changes..

For contractual arrangements, we have savings of $18 million to $20 million, that would reflect the annual run rate of the former national rep commission and it would reflect the savings and renegotiating the Nielsen and Comscore agreement at very favorable pricing terms to Gray..

Our net retrans, we're very comfortable that we'll have a net retrans uplift of at least $15 million. In addition, the legacy Raycom aircraft unit has been closed down, saving approximately $2 million a year. And the planes [ have been filled ] with net proceeds of approximately $2.7 million.

So I would say that, first of all, those expenses, those savings, those synergies will all be realized ratably as we go through the year. We, I think, are off to a very good start at $61 million, about 75% of our goal. There will be other opportunities for us as we progress through the year.

And you know, we will not be bashful about taking advantage -- taking every opportunity that we can uncover..

So at this point, I'll turn the call back to Hilton. .

Thank you, Jim. At this time, operator, we'd like to open up the lines for any questions anyone may have. .

[Operator Instructions] Your first question comes from Marci Ryvicker from Wolfe Research. .

You've spent a lot of time on the gross retrans number and the synergies, can you remind us what the net retrans guide is for -- is it the low-single-digit year-over-year growth?.

Marci, it's Kevin. I can remind you, we've not said anything yet on net retrans for the year. We still have 1 network that we have to negotiate our terms that the current -- all those current agreements expired in the middle of the year.

We don't know where they're going to land on that renewable, so therefore, we don't know what the reverse is going to be this year.

As we've been telegraphing with all of the contracts, all the other big 3 contracts mostly expiring in 2019 and being replaced in '19, so there will be a -- there is a larger-than-normal step-up in reverse comp this year just because of the timing of all those network contracts. So last year was a, I would say, a good year.

This year's margins can be a bit compressed, but our growth is probably higher than a lot of people expected this year, right? And we're just -- we're not ready to give that guide for this year just yet. .

Okay.

And then the free cash flow, the $500 million to $525 million that you would estimate for 2018, is there anything onetime in that, that would not recur in 2019 or 2020, like taxes?.

Just to be clear on that, I'm not counting any onetime cash payments, for instance the $27-plus million of national rep termination fee in that number, because it is nonrecurring. But it would include an estimate for taxes for 2018 that would be -- what would -- we would appear -- what appears to us to be a normal run rate in taxes.

There were no taxes directly linked to the transaction itself. .

Okay.

So then would it be safe to think that 2020 would grow above that?.

I -- yes. Now obviously, that's going to depend on where political lands in 2020. But I would expect our growth through retransmission will obviously grow, especially the way we price 20%-plus of our subbase at the end of this year. So I would think 2020 is going to be a very strong free cash flow year for us. .

Your next question comes from Aaron Watts from Deutsche Bank. .

A couple of questions for me.

I guess, first, on the core advertising environment, can you maybe talk a little bit more about the cadence you saw post-election November, December, into the first quarter? And maybe just broadly some goal posts around what you see core doing in 2019?.

I'm going to look up. I can give you a number for December. Just give me a second to pull it out of my stack of cheat sheets and I -- maybe I'll let Pat start with... .

Sure. I mean, look, I can speak for legacy Raycom. In general, we did see some momentum in fourth quarter. We were pleasantly surprised by that. And again, our first quarter is okay. When adjusted for Olympics, it's better than okay.

And we are seeing some momentum in March, probably a function of early second quarter starts, which will happen this time of the year. But candidly, it's really too early to give any further guidance for Q2 or remainder of the year, in my opinion. .

Just given that it's such a big piece of the pie, any insights you can give on what you're seeing in the auto category?.

Yes. I can speak to that a little bit. Now again, we had about $3.6 million of auto advertising in the Olympic broadcast last year. So that obviously creates quite a -- it skews comparability a little bit.

But when we take that out, I would say our auto is right now in Q1, looking like it would be down kind of mid-single digit range, say 4-ish percent, 5-ish percent, someplace in there looks like is where it's going to land.

But that again is excluding the $3.6 million of political that -- I mean, not political, but auto from the Olympic that was really kind of incremental last year. The other comment I would make in general for auto is we are seeing board corporate cutback and we'll be keeping our eye on that just like Dodge Chrysler Jeep did last year.

It looks like it's Ford's turn this year, but -- and that's probably worth $1 million hit to us in Q1. .

Okay. That's helpful. Jim, maybe since -- I'll throw 1 more your way here. You talked about being give or take around 4.8x leverage pro forma for the transaction.

As you ended '18, can you refresh us on where your head's at? Where you see that leverage going over maybe the next year or 2 years?.

I think it's -- absent any large transaction, I think leverage at the end of '19 is somewhere in the lower 4s. And then we're somewhere at the end of '20, comfortably in the 3s. .

Okay, perfect. And last one for me. Appreciate the time. A little bigger picture, we saw private equity step into the space in terms of making an acquisition recently.

Curious what your view is of that? If it's a one-off situation or you think we'll see more of that? And how does that impact a kind of bidding environment from a competitive standpoint as you look at assets going forward?.

Well, the price of poker may have gone up a little bit. We're happy to have Apollo and guys -- we know those guys and they're smart as whips. And we're delighted that they see the value that we see in local broadcast. And so we are -- we heartily welcome them to the space and wish them the best with the new acquisition. .

Yes. And just a quick follow-up. Your December question, as far as what core did post-election day. December was up a nice, solid 4%, which was very encouraging for us. .

Your next question comes from the line of Dan Kurnos from Benchmark Company. .

Nice to see some recognition of the actual Raycom just getting factored in here. Just looking it kind of your subtrans maybe, Kevin, I think that's the other piece of the equation, obviously, you gave really healthy guidance, but we've heard that there was some noise at the end of the year.

Just what are you seeing from linear and OTT? And how that's kind of playing out for you over the balance of the year?.

I think we just -- more of the same. MVPD [ stubs ] are dropping for everybody. One operator is seeing bigger drops, which are probably not much of a surprise given they're not carrying some marquee programming and are dropping seemingly every broadcaster who they have a negotiation with.

So we're seeing -- we're probably seeing some bigger fluctuations. Some of those subs seem to be moving to other operators. And I don't think that trend has changed much recently or will change going forward. At the same time, OTT subs are growing frankly faster than we expected.

It's 1.25 million OTT subs around the beginning of the year for the whole company. That's a lot more than we expected at this point in time. Even like -- we feel like Raycom is still growing faster than we thought.

It's unclear how many of those folks are going to sort of stay where they are or move around to different OTT providers, but it doesn't really matter. The economics are decent. And I think we -- they were pleasantly surprised at how retrans is doing so far this year. .

Got it. That's helpful. And then, Jim, I know you never like to go out on a limb on political, but maybe just at least for the off year, I think from looking through the K, you did $31 million or so on a CHP 17.

So just -- obviously, you're starting a little lower or it will probably be back-end weighted, just any thoughts on how political could pace this year?.

I think it somewhat looks like '17, although I'm trying to recall, I think we had -- well, I think, we had in the '17 cycle maybe a little bit more off your governors races than we do in the '19 cycle. So that might mute it a little bit. But you're right, it will be very, very heavily back weighted.

And it's not -- no matter what, it's just not going to be a big number this year because it's an off year for us as there is no -- at least right now, there is no huge catalyst. But having said that, while the dollars are still pretty small, we've actually gotten two 2020 presidential orders in Iowa already this year. .

I was about to say, when Jim was talking about that, our company, to my memory, and I've been around almost 30 years now, we've never gotten presidential ad money this early in the cycle. And for us to have presidential ad money at this point, I think it's going to be literally just raining money in 2020.

In all of our states, and we, Gray, happily is in essentially every battle zone state that is defined by 538 in the country. And -- literally everyone. And I don't think the Democrats are going to make 1 mistake in terms of ignoring Wisconsin, Michigan, any of the rest of those areas that are so important in 2020.

And I think the Republicans -- you're not going to have, like we had the last presidential election here, the President sitting back, thinking his celebrity can win him the election. He is sitting on a huge war chest right now. And I think 2020 is going to be gargantuan, in my opinion. .

Your next question comes from the line of Michael Kupinski from NOBLE Capital Markets. .

This is Tarun Aswani for Michael Kupinski. Raycom had a fairly developed program arm with a decent amount of original programming outside of news content.

Can you give us some color on your plans for those operations? And given the much larger platform that you will have with Raycom, does the company plan to move to a more fully developed original programming moving forward?.

Yes, we just made a big announcement yesterday with Greta. So that's one project. Candidly, I don't see a bigger move into originals, although, as you know, we do have production companies in our portfolio, which gives us capabilities.

But in terms of growing originals for syndication, there will probably would be some of that, but not a huge focal point right now. .

But I will say we're very proud of the production companies that Raycom brought to our portfolio. While in comparison to the size and the cash flow and the revenue that's generated from our television station portfolio, it's relatively small, each and every one of them is substantially profitable. And they turn out outstanding products.

Just really across the board, from Raycom Sports to Tupelo Raycom to RTM Studios to Swirl Films here in Atlanta, they are assets that Gray is proud to own. And we look forward to explaining their unique niches to you in the future, because it is an added area for growth. At some point, all the TV stations in the world are going to be bought out.

And we'll have to look for other areas to grow our business. And that's given us a great foothold in that regard. .

Your next question comes from the line of Steven Cahall from Royal Bank of Canada. .

I was maybe wondering if you could talk a little bit more about the one big 4 renewal you haven't done yet. That company is also going through some transformative M&A.

And I wondered if that at all impacted the way they are coming to the negotiating table? And then also on the pro forma free cash flow numbers that you gave, does that give your future cash interest expense? Or as we think about trying to forecast 2019, do we need to build in a little bigger cash interest expense given the debt you've just raised?.

I'll take the first question. On the other renewal, I'm not seeing anything particularly different than what we've talked to them about in years past. So that conversation started a little slower than others, which is not a surprise and there is a lot of important markets there and we'll get through it.

But there's nothing that we've seen that is really all that different than what we've seen in the past renewals.

Jim, do you want to...?.

Yes, if you take our current capital structure now and go through the different tranches, you make some assumptions on LIBOR. But at current LIBOR rate, it's about $220 million, $225 million per year. And then, obviously, there is the preferred dividend now too of $52 million a year.

And both of those are taken into account in the free cash that I was talking about. .

[Operator Instructions] Your next question comes from the line of Jim Goss from Barrington Research. .

I was wondering with the Greta Van Susteren programming, are you planning on making that a Gray exclusive? Or will that be syndicated to others? And will that tie into your efforts to sell political ads in the coming years?.

We will make an effort to syndicate it and sell it to others. We will obviously and we've already identified clearances within all really 93 of our markets for space on Sunday, but we will be looking for syndication. .

Okay.

And will there be a political ad placement on that as well, so that's one of the benefits of having this sort of a person?.

Yes, Jim. Greta is joining our news operation right now and we're talking about some shows that we would plan to nationally syndicate, but we don't have details on what those shows may be or what would be in them. But right now, she's joined us as an analyst and she will be appearing on our local newscast as soon as this afternoon. .

Okay. And the switch to Comscore from Nielsen, I wonder if you could talk a little bit more of the value you expect to bring from that, and maybe the rationale behind it? I think you're not the only one to have done that. .

I'll let Pat talk about it from an operation standpoint. I will say that we have had a lot of frustration with our other service, particularly in the [ diary market ]. And a lot of markets -- many markets we had both Nielsen and Comscore. And we were able to see -- in which we compare the 2 for a significant period of time.

And Comscore data, which, as you know, comes from many more data sources, data points and diaries, were much more stable, much more responsive to what we were seeing in the news -- I mean in the market and what was on television [ they went with ] showing up in the diaries.

And despite all the conventional wisdom, I think, I can tell you all of our stations do better in Comscore than do Nielsen anyway. So from that perspective, Comscore's stability was very important to us. But I'll let -- also Pat add to that. .

Yes, sure. So legacy Raycom effectively had -- we had moved to Comscore in the [ diary markets ], I think 3 years ago. So this really is a big change. We still work with Nielsen in the larger markets and we've consolidated with Comscore in the [ diary markets ]. .

Will it also give you better information to justify any improvement in pricing power in those markets? Is that part of the rationale?.

No, it's not, given that... .

It's not part of the rationale. .

Okay. And lastly, capital allocation priorities.

What is the rank order of your desires and plans?.

We had talked -- when we announced Raycom, we said our #1 priority was to close Raycom. And after that, we would put a focus on bringing our debt down, but still keep an eye open for smart acquisitions that made sense for us and nothing has changed in that regard. So right now, we are focused on paying debt down as we get to a different level.

And not to get ahead of the board, but we anticipate they'll be looking again in capital allocation returns to shareholders. But I don't have any -- I have nothing to report to you at this time. And again, that would be the board's decision.

But we have said since Raycom closing that our focus will be paying debt down once the deal closes, which is now our focus. .

And there are no further questions at this time. I'll now turn the call back to the presenters for closing comments. .

Well, I just want to take a moment to thank everyone of you for joining us this morning. We have a lot of exciting things ahead. We're thrilled to be bringing all of the professionals, Raycom and all of their operating units within the new Gray umbrella. And I think it's going to lead to remarkable results in our future quarters and for the year.

And we look forward to sharing with you in the next quarter. .

Thank you very much for being here this morning. .

This concludes today's conference call. .

You may now disconnect..