Good morning, ladies and gentlemen and welcome to the Media General Inc. Earnings Call for the Fourth Quarter and Full Year ended December 31, 2014. Today's call is being recorded. Now the company will read a brief legal statement..

This morning, the company announced its fourth quarter and full year 2014 results. The press release along with the supplemental data can be found on the company's website at www.mediageneral.com. When available a full transcript along with the replay of today's call will also be posted on the company's website.

Today's presentation contains forward-looking statements, which are subject to various risks and uncertainties. It should be understood in the context of the company's publicly available reports filed with the SEC, including sections in those reports concerning risk factors.

Media General's future performance could differ materially from its current expectations. The company undertakes no obligation to update these forward-looking statements.

Today's speakers will be the company's President and CEO; Vince Sadusky, who will provide a high level overview of our results and achievements and Jim Woodward, the company's Chief Financial Officer, who will discuss our financial results and guidance. They will take your questions after their prepared remarks. And now I'll hand it over to Vince..

Thank you, Andy. Good morning everyone, and welcome to our earnings call. 2014 was truly a game changing year for Media General. Fresh off its merger with Young Broadcasting in November of 2013, the closed on $2.6 billion merger with LIN Media in December.

In a little over a year, Media General has grown from 18 television stations in 17 markets to 71 television stations in 48 markets and now it's one of the largest and most diversified digital business in the industry. Our strong local brand reach 23% of U.S. Television household and over 50% of the U.S. internet audience.

We believe that our significant group of content and distribution assets provide a scale and expertise to effectively compete, innovate and grow in today’s ever changing dynamic video landscape. We careful evaluate the people and processes from our predecessor companies and selected the best to drive our success forward.

2015 marks historic of a new chapter for Media General and I am honored and excited to lead our accomplished team. The strength of our combined businesses was evidenced by our 2014 results. On a comparable basis, net revenues increased 17% year-over-year.

Key drivers were political advertizing revenue, higher pay TV subscriber fees and growth in our digital business. Political candidates favored strong local news station to reach voters and our station did a terrific job capturing additional political demand in 2014.

On a comparable basis, the company -- on a combined basis earned $160 million in political revenue in 2014 versus $109 million in 2010. We are really looking forward to the 2016 elections with spending on the Presidential race alone and estimated to surpass $5 billion, which is more than double the presidential campaign spending in 2012.

Subscriber fees have added another important revenue stream and we believe there is a lot more room for growth net our programming payments to the networks. In 2014, we negotiated 236 contracts that represented approximately 11% of subscribers in our markets.

The next two years provide a great opportunity for Media General in its new scale of nearly 30% of subs were up for renewal in 2015 and over 60% in 2016. We will continue to focus on obtaining fair market value for our highly rated contact. Our additional strategy differentiates us from the competition and adds meaningful revenues to our mix.

Digital revenues increased 65% to $125 million in 2014 versus the prior year. Bringing our national advertising solutions to local advertisers has been very successful and this merger provides a great opportunity to expand multi-screen marking capabilities to our new footprint.

Expanding contact beyond traditional TV is a significant initiative for our company. In 2014, we acquired Federated Media an industry-leading digital content and conversational market organization and BiteSizeTV an original entertainer programming and digital production video in Hollywood.

Federated Media and BiteSizeTV further fuel our content and distribution initiatives and syndicated partnership opportunities. This year we will launch a new lifestyle show that will include BiteSizeTV annual program Hollywood Today as well as content from Federated Media's unparallel network of prominent publishers.

During the year, we launched our 13th local lifestyle show in Austin, Texas as well as a new reality show in Dayton, Ohio produced by our local team The Valley was a great success.

Despite going head to head with Sunday Night Football we earned 2.3 rating with the adults 25 to 54, the CW Dayton highest rating in that time period since 2006 and then also outperformed the network. We're identifying unique programming opportunities like this in our other market and implementing best practices across our large footprint.

Since our merger closed integration teams have been focused on capturing target synergies and we're on track to achieve our $70 million target on a three-year run rate. The company has a proven track record and did an excellent job successful integration the young station in 2014 and over delivering on its initial synergy goals.

As a result of the hardware that went into merger integration plans before we closed, we were able to hit the ground running in December. We held our first General Managers Conference for the combined company in January and in two weeks will host our annual sales conference.

Integration plans focused on training on all local sales teams on best practices for selling multiplatform through our custom accelerated program and specifically the seller digital medium product and services. It's great to see how excited our sales teams are to have access to our best in class digital marketing solutions.

To better managing our performance, we’re implementing across all the stations of our CRM program and traffic and business analytics system. With our major strategic operating opportunities is to capitalize on the significant opportunities for outside of the new company, particularly and move the needle markets like San Francisco, Tampa and Portland.

We brought a new leadership, re-launched our brands and implemented our next Gen news room and investigated new strategies. We're pleased with our results so far, for example in San Francisco, we grew Morning news share 31% year-over-year leading both NBC and CBS's network morning show.

We are implementing best practices and we are focused on operational excellence as in these larger market one point share increase generates substantial incremental ad revenue.

Looking ahead to the first quarter of 2015, first quarter core advertising revenues are facing up about 2% running through the political and incremental Olympic revenue and that is despite significant bad weather in many of our markets.

Given our improving operating strategy, fully integrated digital marketing services business, premium news and entertainment content and potential spectrum value, I believe Media General is one of the best positioned companies for growth and success. And now I'll turn it over to Jim, who will discuss our financial results and guidance..

Thank you, Vince and good morning everyone. Before I begin, I would like to draw your attention to the explanation of GAAP results in our press release.

To summarize, our 2014 GAAP results include Media General’s operating results for the full year as well as the television station's earned and operated, LIN Media and its digital operations for 13 days. They also include 13 days of operating results for the acquired television stations WTTA in Tampa, KXRM and KXTU in Colorado Springs.

The 2014 GAAP results exclude 13 days of operating results for the stations that we divested as part of the merger transaction. In order to help you make more meaningful comparisons, we've included supplemental combined company financial information on our website for both the fourth quarter and the full year 2014.

These adjusted results are the summation of Media General and LIN Media’s standalone operating results. No adjustments were made to the information. The combined figures do not include any other synergies anticipated from the merger of Media General and LIN Media.

The supplemental combined information does not afford to be inductive of what would have happen had the merger occurred at the beginning of 2014 nor has been inductive of the results that may occur in future.

My comments have been a focus on the combined company, using the information provided in the supplemental combined company financial information. So let me begin. During the fourth quarter, net revenues were $412 million up 22% from $337 million in the prior year.

As Vince mentioned this is largely due to political revenues and growth in Pay TV subscriber fees. For the full year, net revenues were $1.4 billion up 17% from $1.2 billion in 2013.

Down deeper into revenues, local revenues, which include net local advertising revenues, retransmission consent fees and television station website revenues increased 5% during the fourth quarter to $237 million compared to $226 million in the prior year. And for the full year, local revenues increased 9% to $899 million, compared to 2013.

Net national revenues decreased 6% to $64 million compared to $68 million in the fourth quarter of 2013 and for the full year net national revenues decreased 8% to $233 million. Combined political revenues was $65 million during the fourth quarter and $116 million for the full year.

Digital revenues in the fourth quarter increased 34% to $35 million compared to the prior year. For the full year versus 2013, digital revenues increased 65% to $125 million. Automotive advertising our largest category, decreased 3% in the fourth quarter compared to the prior year and represented 26% of core advertising sales.

The decline was primarily as a result of lower domestic factory advertising. Local dealer advertising was up 5% compared to the fourth quarter of the prior year. Category, which showed improvements during the fourth quarter, compared to prior year include media, services and home improvement.

As adjusted total operating expenses for the quarter, which exclude corporate expenses, stock-based compensation D&A increased 7% year-over-year or about $15 million to $232 million. The growth in operating incentives was driven larger by increases in programming fees paid to the network and cost of sales tied to our digital revenue growth.

For the year, our adjusted operating expenses increased 10% or by $82 million to $900 million. The growth relates primary to the operating expenses from digital acquisitions and increases in programming fees paid to the network. BCF for the quarter increased 51% to a $180 million, compared to $120 million in the prior year.

For the year BCF increased 31% to $513 million, compared to $392 million in 2013. Corporate expenses for the quarter excluding stock-based compensation and non-recurring items were $16 million, compared to $19 million in the prior year. And for the year, corporate expenses were $54 million, compared to $51 million in 2013.

Adjusted EBITDA increased by $64 million or 64% year-over-year to $165 million during the fourth quarter. For the full year adjusted EBITDA increased by $120 million or 35% to $459 million.

Before I turn to our debt and guidance and to follow-up on Vince's comments regarding synergies, as the integration progresses along, we remain comfortable that on a run rate basis we'll realize about half of the $70 million of synergies by the end of the year. Now turning to Media General's debt and key credit metrics.

At December 31, 2014, we had unrestricted cash on hand of $44 million and no borrowings under our $150 million revolving credit facility. Our net debt was $2.37 billion reflecting the additional borrowings for the Media General and LIN Media merger and the assumption of $290 million of LIN senior notes.

Our consolidated leverage at year end as defined in our senior credit facility with 5.46 times. Our credit agreements do not contain maintenance covenants. Our revolver does contain a maintenance covenant if the revolver borrowings exceed $45 million.

Focusing on the outlook for the first quarter, we expect net revenues on a same station basis will be up 1% to 3%, compared to net revenues of $292 million in the first quarter of 2014.

For expenses, we expect that direct operating and SG&A will increase in the range of 9% to 10% for the first quarter, compared to expenses of $197 million for Q1 of '14.

Driven largely by growth in programming fees paid to networks, excluding the program fees paid to networks, direct operating and SG&A expenses were increased in the range of 1% to 3%, compared to the prior year. In Q1 of 2015, we expect to pay approximately $7.5 million in state taxes related to the sale of our stations.

However given our NOL balance, we continue to expect not to pay any meaningful or significant cash taxes. And now I’ll turn it back to the operator..

Thank you. [Operator Instructions] And we’ll go to our first question from Marci Ryvicker of Wells Fargo..

Thanks I want to talk a little bit about Q1. When I look line by line, I know the reporting format is very different than what we're used to. But when I look just big picture, expenses are coming in line, revenue is extremely light versus us and the other two publishing analysts.

So I’m trying to understand if there’s an issue in retransmission consent, if there’s an issue in advertising or if we just still don’t have the right historical pro forma numbers.

And I know that you gave us supplemental for the fourth quarter and the full year, but we’re probably going to need the other three quarters of the year to finally get our models right.

So any color you can give on Q1 would be helpful?.

Yeah, so I’m not sure Marci in terms of the reference point. All I can take out is from a modeling perspective there were obviously significant challenges for all of you associated with trying to put together kind of glue together the historical -- given the stations ins and outs of sales, the purchases, Young, Media General, LIN historical etcetera.

I feel like if you go through the various categories and the guidance that Jim gave, just talking about the first quarter we feel pretty good given again you kind of pull out the maximum amounts of Olympic revenue we had in our MVC stations as well as a fair amount of political in the first quarter and receive a poor actually pacing up for the first quarter.

On the retransmission consent side, we don’t have as many deals coming up in the first quarter as we've had in the past, but we feel very good about our ability to achieve our goals and when we kind of look at retransmission fees, we mentioned we feel really confident about our ability to continue to increment up the net.

So those are really the two significant drivers as well as the continued very significant growth that we've had in digital. So I think it really must be a matter of kind of taking a look at the right kind of ground at reference point for 2014..

Now when you talk about incremental Olympic revenue what is your definition of incremental? For political we've always used 50/50, but what about for Olympics?.

When we look at incremental revenue for Olympics we will look at what was the additional revenue we received from Olympics over and above what we would have received had the Olympics not been there..

Is there a percentage that you gauge that..

No..

Percent of Olympic, no..

The 50% of Olympic revenue no. I think we look at it as a dollar amount Marci and because we can try to bear it down and do a little more analysis on that to come up with a number..

All right and then one last question, do you have Q1 '14 pro forma revenue to compare to what you are guiding for Q1 '15?.

Do we have Q1 pro forma revenue for '15, '14, hold on let me come back to the numbers..

All right. That’s it from me. Thank you..

We will take our next question from James Dix of Wedbush Securities..

Hey good morning guys. I guess first just in terms of the ad market how did the fourth quarter come in terms of course? I am just trying to get a sense for whether you're seeing a change of pace in terms of you move forward to that first quarter number where you're pacing up 2%.

And then I guess I am curious on the net re-trans side, I know you're pulling two companies together and there may be some issues of whose agreement to takeover on certain re-trans deals and perhaps you're going to be pulling forward some deals when you renegotiate.

So I am just trying to see whether you can give us a little color as to whether there is going to be any lumpiness in terms of that incremental growth in the net re-trans number given all the moving parts? I think you've talked about a longer term growth rate of the net re-trans, but any color you could give on kind of the near term bridging to that long term and then I had just one other follow-up on Spectrum..

I’ll take the re-trans. The re-trans will not be the great -- it will be lumpy, a little lumpy. We do expect that number to continue to -- the net re-trans number to continue to grow, but remember this is first year we're going to be paying reversed all of our NBC, I mean CBS stations.

And as we get another bite at the apple on the MPVD then that will continue to grow. So yes, it will be lumpy. As I said that the net growth may not be as great this year as it is next year and then it will come back and forth but if you look at it over time it shows a strong growth lying for us..

Yes, let me jump in and then I'll move on to the -- I think you had asked about fourth quarter result pacing.

So with regard to re-trans in the first quarter we believe that our net re-trans will indeed increase in the first quarter and that's even with coming online at market rates for all of our CBS television station that previously were well below market as they were paying very little or nothing.

With regard to how does the plus 2 pace fell relative to the fourth quarter, clearly there was a ton of political displacement in October. So the first month in the fourth quarter is pretty noisy.

So I pointed to November and December and November and December finished up relative to the prior year on a comparable basis, some had averaged up a couple of points as well. So it feels like what we saw existing the political season and existing 2014 is continuing through for the first quarter..

Great.

And just so I understand on net re-trans over the longer term is there an outlook that you have for how much that should be growing over the next few years on a net basis kind of with the caveat for 2015 might be a little below that just depending on how things shake out, but just over the longer term, is there kind of an annual CAGR that you have in mind..

Yes I know it's good for you all to get your arms around as these deals are confidential and our peers that kind of struggled to give you answers as we'll. I think for modeling purposes, the best thing is just to recognize that. For us, we get into our long term affiliation partnership with CBS. So we know in absolute terms what those fees are.

We have long term agreements with many other networks as well and we talked about the significant regardless of kind of a shorter term alignment of the surveying contracts with MSOs being either Media General or LIN.

The important thing is to stay focused on is the significant amount of MSO agreements that we have coming due in 2015 -- remainder of 2015 and 2016 and so when we make the statement, we believe the net re-trans continues to grow, it's based on our understanding of what market is today, what we think market ought to be tomorrow for both our subscriber fees we received from MSOs as well as our programming payments back to the networks..

Great. And then just on the Spectrum.

I am just wondering how much Senior Management time do you expect to devote to monetizing your spectrum kind of outside of your core TV broadcast business, whether that’s through the auction or otherwise over the next year? I know certainly regarding some LIN legacy markets you've made some public comments in the past about some market, which look like potentially descent candidates or some participation in the auction, I don’t know whether you have any update on markets, which are looking more or less interesting for participation, but if so, that would be interesting to hear about.

Thanks..

Yes sure. So I don’t know if we really have anything due to report versus what we've said in the past. We have internal group that's worked plenty of folks on the outside as well to constantly update the value of our bids and look at places where we have potential opportunities for monetization.

And we run a separate model, which is difficulty model today, but we certainly believe in the future of a new broadcast standard, which includes a data and video transmission capabilities.

It’s a pretty hard to get your arms around what that business looks like as well and what we've said in the past and what we continue to believe is in our markets where we have multiple channels, multiple full power channels, and LP channels, which is quite a few, that’s really interesting potential opportunity to perhaps have a participation of them as well as continue to help the industry drive and lead towards a new standard that is both more efficient and I think more effective in the ability to be able to deliver high quality mobile digital services.

So we've got some time yet to make those decisions. We think the reverse option is a good vehicle and provides the opportunity to participate or not participate based upon each company’s assessment of value and so we have those assessment and we're continuing to focus on that internally and review with the group we have we here..

Great thanks very much..

Sure thing..

Our next question comes from Tracy Young of Evercore ISI.

Hi, I have two questions. I am sure you'll go through this on you Investor Day, what is actually running through our digital line rate now is? Is that website or is that your actual businesses.

Can you talk a little about auto-pace using Q1? You mentioned that it was down in Q4 and also should we expect the synergies in the back half of the year, thank you..

So what's running through the digital business, the digital line is the LIN digital companies, LIN mobile, height and dedicated federated right size that’s what's running through their currently..

Yes and with regard to auto, Jim had mentioned that auto was down in the fourth quarter. Again I think through some insight into that, you had quite a bit of political displacement in October. So I think the auto trends can follow all the other categories and looked better in November and December.

I think for the full year even with the displacement from political, which was significant, autos were about flat for us as a company.

And if you take a look at what the numbers are now yet for the full year for the auto industry, but based upon where the industry was pacing as a whole there has been really didn’t appear to be up in 2014 over 2015 or total as spent as an industry beyond television.

So that question about potential share shifts from TV, it seems to be satisfying in that it does not appear there is share shift.

So even though they had a terrific year in terms of selling cars, there are a lot of cars moving as a result of kind of pent up demand and manufacturing is kind of working to keep up with that demand, so not a ton of a inventory on car lots and certainly not a lot of used cars available as well.

So that's kind of where auto is for the first quarter we're seeing similar results from auto..

Okay. Thank you and then in terms of synergies, we should expect to start filtering in the second quarter or the second half of the year, thanks..

On the synergy side we you should expect them definitely by the second quarter and will be at that run rate by the end of the year and start to see filter in..

Our next question comes from [Leah Colt] [ph] of RBC Capital Markets..

Good morning. Thanks for taking the questions. I have two quick one.

First it likes your expense guidance for 1Q implies about a $12 million to $18 million step up from your affiliate -- increases in your affiliate agreement, is that a good run rate for the year?.

On the affiliate expenses, yes..

Okay, perfect thank you. And then I am sure you'll talk more about this at the Analyst Day, but any updated thoughts on our capital -- returns of capital policy, what you're going to do with your -- with all the free cash flow you're generating.

It sounds like may be the TV deal market has slowed down a little bit ahead of the spectrum auction and just want to get some thoughts on how you're thinking about capital allocation..

Yes, you're exactly right. That would be a topic for that day and we're still working together with the Board to formulize that. So I don’t really want to get too far ahead of that, but I agree with you that the TV market is slowing down.

I still think they have a deal that there to be done, but we're going to generate significant free cash flow and be able to deploy that in the most effective way unfold..

Yes I’ll just augment that, our goal coming at the gate is to utilize all this terrific free cash flow generation to pay down debt and get us to the target leverage level and we will discuss that further pretty soon.

And then given the cash flow that we see coming from the business especially as you look ahead into 2016, we think about other usage for that capital the same as I think any company would have had at this type of cash flow profile and we will talk about that -- we will talk about that as well.

But I think with regard to M&A environment clearly you had kind of big wave consolidation or folks to decide as well deep in size portfolio have decided to either exit the business or grow.

We are firm believers in the opportunity going ahead for the core business as well as adjacent business that we're currently in and we think about kind of the excitement of Spectrum moving forward as part of that as well. As 23% of the country and coverage with the statutory limit of 40 we feel like we're in very, very good shape.

And in terms of putting the infrastructure, the operating procedure, the technology, the systems in place to have a superior platform and there certainly are fewer parties that eventually transact with now that were few years ago, but I do feel that as the time marches on, even though there will be fewer, I think there will be potentially less competition as others are at or around the Cap.

And so I do think that that's pretty exciting and I do think if you're sub scale you really have to consider whether or not that creates the most competitive opportunity for your broadcast and digital assets going forward. So we're excited.

We think we're in a really good place for less than 90 days in our merger and of course we're completely focused on operations getting it right and maximizing our opportunities and best practices, but clearly going forward we are very bullish of the space and excited about it and we think opportunities will come about to grow the platform..

Got it, thank you, Vince and if I just throw in one more question. Vince I think you've said earlier on that you expected political potentially double versus 2012 and 2016 on the presidential election.

Could you put on little more color on that kind of given political scene that is coming a little bit weak in '14 versus initial expectations?.

Yes, the Presidential raise in '16 that year along with the conventional ratio is completely different profile from the nonpresidential years. So the nonpresidential years are big kind of races, gubernatorial races, even local races and its very steep, and municipality specific.

So we've got a very good political profile in terms of money being spent in competitive states like Ohio, like Michigan. The challenge is it's very hard to kind of predict exactly how, when you kind of add up all those individual races, how robust they will be.

So when you take a look at places like Florida that really outperformed for us in 2014, the gubernatorial race was very, very active as well as several other seats that were open and available and even some of the ships and sheriff offices advertize for those elective position.

So I think those are pretty exciting, but then we had other markets like Alabama for example, where the races really never -- did not become competitive for one reason or another.

Starting was a really good result considering all that for 2014, but then you look ahead in 2016 and you see kind of very, very early, but kind of the political prognostic year.

Looking at what the potential money rates could be and how much has that stayed from kind of the divided political viewpoints that we got strongly political viewpoints we have in the country right now.

And it gets pretty exciting from the perspective of wanting and needing to get your message out to get elected, and the fact that we have such strong local news stations and kind of topic again that proven superior outlet to get your message across and be effective in order to be elected.

So those numbers that we kind of tease with its early, but it’s in trend and it just feels as if 2016 is going to be very, very robust and we’re also further and further removed from the Supreme Court case, which kind of allows get each year better and smarter organization of funds to be raised on a randomized basis to support various issues..

Great, thank you for the color..

Sure..

Sure before we move to next call, I just want to come back to Marci’s comment that the revenues for Q1 2014 and for the -- to guide against $292 million..

And our next question comes from Aaron Watts of Deutsche Bank..

Hey guys covered a lot of ground, so I just have a quick one.

Vince I think you touched on this briefly, but the end of the year at 5.5 times leverage how are you thinking about, now that you’ve got kind of the companies combined and you’re looking ahead, how do you think about that leverage a year out, two years out where would you like to see it, what’s the right level?.

Well I would say a year out we would like our year to at four times is a nice ring to it, but like I said we haven’t formalized our capital return policies. But we need to see we need to continue that process, which is quite as today definitely lower. And 4 has a nice ring to it could then set up 4.5 is the right uses of the capital present there so….

Okay, and then secondly kind of big picture question, have been asking with some of your peers as two of it, as you hear a lot about pure fragment going on at the network level and maybe more so at the cable network level what’s your expectation on the impact that could have at the local broadcast level for your viewership and your advertising?.

So when you take a look at the rating over the past season and the start of the of the channel TV and the start of 2014, 2015 season you had further declines in viewership and as primarily in prime time viewership.

Having said that, everything from the NFL to the live events, entertainment events to, The Blacklist, to Empire, the networks have the greatest ability to continue to produce hits and I think that is a result of they've got a view to being competitive for three hours and it takes about two hours every night of the week and that’s a completely different view from cable that looking for a 10-fold show right.

So they kind of go all in behind a show or two with their budgets and its more of a hit for this game and I would say the likelihood of success is lower and that’s proved out in the ratings, coupled with the superior distribution system that, that broadcast provides.

So although you have the declines, the declines from what we’ve been able to measure are merely a result of how should be the viewing and that's primarily on 10 ‘o clock. So that place have amazing numbers and people are watching previous season shows, horror movies, on a time shifted basis.

So when we think about the rest of the day for us it's exciting, because we don’t control A, the length of the time periods like some of the cable channels do, those are just filler time periods. We're busy 24 hours a day with local news, with top show syndicated programming.

And with our original content that we may be getting into beyond local news and those ratings are very good. In fact for the year, if you kind of, it's very hard to do but you kind of aggregate kind of on a same-store basis all of our local news. We do not see declines as we have seen in prime time.

So that’s native of the increase in kind of OTT viewing.

I don't know that anyone still does exactly where it goes, but I feel very confident in the capability of the networks to continue to have these developing budgets and continue to produce identify best public method given kind of the changing viewer habits where some part of that weekday evening where you’re sitting on a couch you got the ability to watch those stuff on a time shifted basis.

But I think the industry has been effectively absorb that type of consumption and still be very, very effective in terms of drawing a lot of eyeballs especially with kind of the complement of local incentive and the early life what it was and daily life syndicated programming that's unique to our local broadcast offering..

Okay, thanks for the time guys..

And we’ll take our next question from Barry Lucas of Gabelli & Company..

Thanks and good morning. Two kind of nuts and bolts questions and then questions and then maybe a bigger picture. Just look at the press release and the comments you had made on 1Q outlook being sort of plus two.

I just want to make sure with re-trans now in your local revenue line are we talking core advertising up low single-digits or you’re including re-trans revenue in that number as well?.

Re-trans revenue is included in that total net revenues line..

So, how would you view core advertising Jim/.

So the core advertising is although..,.

We had said that -- hey Barry, we had said its core, it’s actually pacing a 2%, if you pull out the incremental outside we got from Olympics in the first quarter last year and political..

Okay, all right just want to make sure we got there right and speaking of re-trans again, not to beat the dead horse too much but on a net basis for '15 in spite of the fairly sizable step up to CBS you think that net re-trans will be up for the year?.

Yes..

Okay, thank you and bigger picture Vince, you spent a little bit of time talking about content and local shows and things like that.

How much of an opportunity might there be to spread that around, sell that content to other broadcasters that you’re not competing with in the same market?.

Yes, it's a great question and it's clearly part of our strategic initiatives going forward. Now covering almost one in four homes, we have a real opportunity to be able to drive some, I think the right content. Everybody wants to be in the content and incentives very sexy, but it's also very hard and could be very expensive.

So the key I think is that when both companies have learned is we got the capability to be able to produce programming that’s very good and very highly watched as evidenced by our experiment indeed with the valley and can be produced very, very efficiently. And you’ve heard from other broadcasters that they have been engaged in these efforts as well.

And so I do think that there’s clearly a very important role for syndicated programming coming down from the studios as well as certainly local news and to try to formula into this stage drive the highest level of viewership.

But I do think there is clearly an opportunity for scale of local broadcasters to be engaged in some of this program and content production on an efficient basis and as far work with each other to be able to distribute these programs and I think get very good coverage..

So if we think of it more as what initially as an offset to syndicated programming cost with some option value to distributed to others is that a fair way to look at it?.

I do think that is the right way to describe it. I think again in certain time slot and certain instances we have a lot of television stations. We have many duopoly stations as well that have a need for the high quality programming that don’t necessarily access to the highest rated semi-theater programming out there.

In those places there is a real need to satisfy for Media General first and that evolves into programming that does well that's attractive for someone else. I think that's a real opportunity. I think others are thinking about original content in a similar way..

Great thanks very much Vince..

And we’ll take our next question from [John Kornreich of JDS] [ph]..

Yeah, I have two or three questions.

First Vince you in the press release have said that video programming distributors represented 28% of company subscribers up for renewal and then you said 60% in '16, did you mean 60% cum versus '15 and '16 or are you talking about 28 and the new 60 for a total of 88 in the two years?.

So I believe over the next few years we have almost all of our subscribers up for renewal..

Okay so that would indicate that '15 would be a modest growth, because only 11% were up last year and had a good jump in '15 I mean '16 and enormous jump in '17?.

Yeah we’ll be talking -- and that's right, almost a third of our subscribers are up for renewal this year in '15 right. So you wouldn’t get the full year impact from all of the competitors that are up.

So I think you’re thinking about the right way and that’s why I think we talked about expenses and revenue synergies at that $70 million run rate we talk about those over a three year period to fully realize that $70 million..

Okay also and next point on corporate overhead the difference between BCF and OCF in the fourth quarter was $15 million. And I assume that’s the corporate overhead I don’t know if it’s overwriting in there.

But if you multiply that by four, that’s a $60 million corporate overhead, which would be well over 4% of revenue, which is a lot comment please?.

That is not a run rate..

What is the corporate run rate as you’re looking at it out of few quarters?.

By few quarters it’s probably 40..

Okay.

Last question, when did you last sign the NBC Affiliation Agreement and when is it up again?.

So NBC we have a mix of affiliation renewals, if you look at last year to Ks and that will get updated in a few days this year's K. On the former LIN NBC stations those were renewed probably year and half ago or so. So they have several years left to go from what I recall.

The Media General stations have barriers for renewals, but quite a few of those renewed or term out at the end of this year 2015..

Okay, when you have -- I won’t beat the dead horse either on re-trans at all, you’re going to need to do some detailing in your Investor Day, because I don’t see how net re-trans can up this year.

If the CBS alone is going to jump $50 million and this is kind of an off year for your revenue side, I don’t see how it can be up, but really I don’t want to press it, it will come I’m sure in the Investor Day, which is a great idea by the way to get people on Board what the company looks like early on. Thanks that’s it..

Right with regard re-trans again, I think when we think about the opportunity going forward, the fact that we made that statement with CBS coming online and the renewals that we have in 2015 as laid out at about a third or less than a third, I think that indicates that we feel very good about to continue that growth.

So we will -- it’s noted and as we get our Investor Day we’re thinking about what we can disclose as far as re-trans projections..

Thanks a lot..

Thank you..

And we’ll take our next question from John Yoo of Wells Fargo..

Hey guys I just have few follow-ups.

Can you guys maybe talk directionally as to what’s the margin for your digital business is currently and that’s including federative?.

So we've said in the past on our digital businesses is this is a high growth area and it has a significant amount relative to the business and has a significant amount of investment for us.

So the margins as we talked about have been in the low single-digits starting off with a very high growth profile going forward as we’re investing and we feel as if at this juncture we've a fair amount of investment and we can continue to provide terrific solutions to advertisers with the group of assets and products that we currently have.

So we think other than that we talked about that business being in the kind of low 20s range, because on these ad wise good deal of our solutions involve our proprietary content, but in order to create I think an effective tag line we also go outside as well to augment that.

So you have a cost of publishing to other issues that are not proprietary to us..

Okay, thanks for the color.

And then Jim, can you give us a pro forma Olympic revenue number for 2014?.

Pro forma Olympic revenue for 2014 I don’t think hold on..

The number is just $11 million, it was incremental..

That was incremental yes..

Okay that’s it from me. Thank you..

Sure..

And our next question comes from Dave Cohen of Midwood Capital..

Hi, this is more of a suggestion than a question, which is given the lack of the ambiguity around sort of what this company looks like the inability from very, very experienced and knowledgeable analyst that actually hone in on the financial profile of the company near-term, I think management needs to take a very hard look at how it communicates what’s the profile of this company is.

I think there is some potential for very, very compelling free cash flow here.

But it is really lost certainly in the first quarter as expected results and in the messiness that was just exhibited and it can’t be business as usual you really need to set some guiding post for investors to really understand the cash flow generating power of this company.

And obviously without pinning yourselves down since you're early in this merger, but I think you just need to take a really different perspective on communicating with the financial profile of the company is. So that's my two stance. Thanks for taking my call..

No, thank you..

And our next question comes from Tracy Young of Evercore ISI..

If you could, can you provide us free cash flow per share on a combined basis for the year ago period from March of 2014 and then also can you provide us some guidance for free cash taxes for 2015 and also CapEx just as an update. Thank you..

The -- you said the free cash flow from March of 2014..

Yes, you have that on a combined basis, just as we're modeling out I am thinking about 2015..

I'll have to get back to you on that Tracy. Let's see you want CapEx..

Cash taxes for 2015 guidance..

Okay. The cash taxes for 2015 guidance I think in the guidance stood at $7.5 million and that's really, there will be some other cash taxes, I think of it in $8.5 million to $9 million, but the bulk of that is related to a $7.5 million is related to a gain on the sale of some of our TV stations, which could not be sheltered by our NOLs.

It related to the State tax piece. And CapEx I think you would -- if you think about a $45 million to $50 million run rate and that maybe a little higher this year as we work through some of the integration, and shared some projects from last year, but on a run rate basis, I would say $45 million to $50 million..

Thank you..

We'll take our next question from Dennis Leibowitz of Act II Partners..

Thanks, you reiterated the synergies and net retransmission gains, going back to the projections that were made in the proxies, is there any reason to change your assumptions as to what went into those?.

Those were the merger performers and they were built midyear or late summer. The assumptions that went into those were market based assumptions. I think we have better intelligence on what the market actually did and what we believe it will do.

So I guess the answer to your answer is, if I was to rebuild them today, whether it would look different, probably so but the core assumptions for the synergies no. I don't have any reason to change it..

It would look different in the fact that they would look lower because of core?.

Yes, I think that they would look lower, especially if you think about what happened international last year..

With no other questions in the queue, I would like to hand it back over to the President of the company for closing remarks..

Thank you, all for attending our conference call. We're excited going forward and we look forward to keeping you updated throughout the year. Thank you..

And that does conclude today's conference. Thank you for joining us..