Gray Television Q2 2009 Earnings Call Transcript

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 |  About: Gray Television, Inc. (GTN)
by: SA Transcripts

Operator

Good day, everyone and welcome to the Gray Television second quarter earnings release conference call. As a reminder, today's call is being recorded. For opening remarks and introductions, I would like to turn things over to Mr. Hilton Howell. Please go head.

Hilton H. Howell Jr.

Thank you, Operator. Good afternoon and welcome to the second quarter Gray Television earnings call. As the Operator mentioned, my name is Hilton Howell and I am Chief Executive Officer of Gray Television, and along with Bob Prather, our President and Chief Operating Officer, and Jim Ryan, our Chief Financial Officer, we are going to be providing a few brief comments before our Q&A session this afternoon.

As you saw from our release this morning, our total television revenue has dropped this quarter by about 17%. While we candidly aren't pleased with this, it compares favorably with both the television industry as a whole right now and with other broadcast companies in particular. And from everything we are seeing and hearing in this market, we feel like we are bumping up along the bottom of the advertising market. We have seen and heard a bunch of rumblings about improvement in the second half but right now there is nothing that we can call one way or another.

Obviously the most significant occurrence this quarter has been the award by the bank group of the Young Management contract. Now, in the broadcast industry, we are candidly distressed that it was necessary to award this contract all. But in the competitive situation, we are very pleased to have been chosen by the bank group as we feel that this validates our operational expertise, our lean cost structure, and especially the outstanding work of our regional television Vice Presidents and General Managers who, while running a tight ship, continued to keep an eye on the quality local coverage that our audiences expect and demand.

Looking forward to the implementation of this contract, I just wanted to say that we are truly looking forward to working with the professionals in Young Broadcasting throughout the course of this contract and that we are raring to go.

Bob, would you like to add some comments to mine at this point?

Robert S. Prather Jr.

Thanks, Hilton. Welcome, everybody. I guess I’ll start off with the bad news -- I don’t think nobody in our industry right now is having a good year. I think it’s tough for the broadcast industry in general, as the general economy. But I think television historically has always done better even in tough times and this has been a very difficult time for everybody in the TV industry. The good news is we are right at the top of our industry again this quarter and for this year and I am very proud of that and I think it’s a tribute to several things -- one, our management team, as Hilton mentioned. Second, I think it’s a tribute to the markets we are in. We’ve had a strategy from day one of two things -- one, trying to buy number one or strong number two stations and second, buy them in strong markets, specifically University towns and state capitals. And I think this has been validated by the fact that I think most of our markets are faring better than the general economy right now. So we are very pleased that we are right at the top of our industry again.

Hilton mentioned the Young deal -- we are very happy with that, a couple of reasons. I think as Hilton mentioned, it does validate the fact that people think we know how to manage stations, especially these are right in our sweet spot in mid-market sized stations. The only one that’s a little bigger than we’ve had in the past is Nashville, which is DMA29, but that market is a good market and we know the Tennessee market very well and we think we can do well there. But they’ve got mid-sized markets, they’ve got some very good positions. I like to say they are good stations, we hope we can make them better. That’s been our history in the past of trying to buy good stations and ideally manage them better and we hope -- we think we can continue that trend with the Young stations. We’re looking forward to it and we are working closely with the Young people right now and then once the FCC transfer is final, we’ll be dealing with the bank group more and with the consultants that are managing the property for the bank group. But we are very happy with the fact that we’d be able to manage these stations.

A couple of things going on that I think is good for the future -- we are testing live mobile TV right now in Omaha. I think everybody in the industry is excited about live mobile. We are a little behind in the world right now. I think a lot of you know Japan has got 20 million people watching live mobile TV as we speak and there’s no reason this can’t really be a great growth area for us in the TV business in the future here and I think it is something we want to test it in three or four of our markets. There’s about 30 different markets around the country being tested right now with various groups and I think everybody is very excited about the future of live mobile TV.

Second, we are happy to announce that we’ve gone local HD TV in our Tallahassee market as of August 2nd. Very few glitches and we are putting a great product out on the air and we’ve got a dominant station right in that market and we want to make sure we stay dominant. We really control the Tallahassee and South Georgia market with our new product there and we want to continue that tradition.

We plan to go local HD in our Lincoln, Nebraska station in early September and our Omaha station in early November. These are all things I think that are going to be important for us to maintain our competitive advantage, to maintain our number one position in these markets in the news ahead and we -- and we’ve been able to do it -- actually we are spending less than $1 million per market to go local HD, which we are very proud of. We really researched hard on how to do this right and do it very efficiently and very cost efficiently, so we won't continue in our key markets to add to this over the next year or so.

We are constantly monitoring expenses. We’ve been able to cut some expenses in some areas that nobody ever sees. Give you an example, our controller [came up with the way] we’re saving $300,000 a year by -- we did away with all our bank lot boxes and doing our own cash collection there. It was working great and these are the kinds of things we’re looking for in every nook and cranny of the company to make sure we are being as efficient as possible in this kind of economy and it will carry forward going forward.

As Hilton mentioned, we are bumping along the bottom. I think that’s the perfect description. I’ve talked to a lot of key car dealers over the last few months, particularly Charles [Olver] who is head of Asbury Group and Mike [Zack], the head of Auto Nation and some of the local dealers in similar markets. They are all saying the same thing -- there’s just no financing available. They are getting less than 50% of the people walk in the door to buy a car qualify to take a loan that they would be willing to accept. And I think until somehow this gets turned around, we are going to continue to see the auto industry very, very challenged to have any growth and I am not sure what is going to turn it around but I think it will and I think we will be poised to be ready for it. But I am very happy that we continue to be right at the top of our industry, even in this bad market.

At this point, I would like to turn it over to Jim Ryan, our Chief Financial Officer, and he can go through some specific numbers and then we will throw it open for questions. Jim.

James C. Ryan

Thank you, Bob. Good afternoon, everybody. I am going to keep my comments relatively brief. I think the things -- main points were laid out pretty well in the release itself.

Speaking to the second quarter, again our overall net revenue was down 17.4%. Our local was down 12.6%, which actually is a little bit of an improvement from first quarter results. The national was down 33%, now both of those are excluding political. TVB reported that for the industry in second quarter, local was down about 24% and national down about 26%, so we are very pleased on a relative basis with the performance of our local and during the quarter, as we did in first quarter as well and as we’ve been doing for well over the last couple of years, there’s been a strong emphasis on developing new local business and within second quarter, although it really doesn’t show up in the global numbers because of the depth of the recession, within second quarter we were able to generate about $5.8 million of new business in our stations and that new business involved over 1900 different accounts, so the local sales staffs are working very hard in the markets to go out and knock on a lot of doors and bring new business to our stations, both new business and also as you know, we’ve had an ongoing effort to switch business from newspapers, yellow pages, cable, and that has continued to be successful for us.

On the category front, the only category that was up for us during the quarter was legal -- all other categories were down. Auto was down 48% and that represents -- auto right now represents about 15% of our overall business a year ago that was representing somewhere in the low 20% of our business. We are pleased that the operating expenses came in on the low side of guidance, better than expected. As Bob mentioned, we’ve been continuing to work hard on the expense side all year long. Originally we thought our year-over-year expense reduction would be tracking to about $15 million based on first half results and where we think the second half is likely to come out, we think we’ll actually see year-over-year expense reduction of at least $16 million. So again, we are very pleased with the efforts that the stations have been making at the grass root level to control expenses as tightly as possible.

For the first six months, again local was down 13% which tracked very favorably to the TVB report of the industry average being down 24% and again we are pleased to be tracking significantly better than industry averages.

Turning quickly to the balance sheet, total debt at the end of the quarter was about $802 million. We had cash on hand of $9.8 million. Our trailing eight quarter cash flow ratio as defined in our credit agreement put us at 7.98 times leverage and that was against an 8.25 covenant.

Program payments in the quarter were $3.8 million. That was consistent with program amortization. CapEx for the quarter was about $4.8 million. Year-to-date so far CapEx is about 10.2, and we are still currently thinking that the total CapEx for the year will be approximately $15 million.

At this point, Bob, I will turn it back to you.

Robert S. Prather Jr.

Thanks, Jim. Operator, at this point, we’d like to open it up for questions.

Question-and-Answer Session

Operator

(Operator Instructions) We’ll go first to Larry [Havarty] with Gamco.

Larry Havarty - Gamco

Do you guys have any exposure in Texas?

Robert S. Prather Jr.

We’ve got three stations in Texas. We’re in Waco with a CBS, Bryan/College station with CBS, and Sherman, Texas, CBS.

Larry Havarty - Gamco

But nothing -- so this Texas Senatorial thing really isn’t that big a deal for you?

Robert S. Prather Jr.

Well, it could be, yeah. Oh yeah, no, I think it will be great. I think the Governor’s race could be really good with Terry and if [Kate Bailey Hudson] does run for sure, which it looks like she will, I think it will be a big political for us next season.

Larry Havarty - Gamco

Well as I understand it, the Texas Senatorial thing, they set up a special election, so would it be non-comparable, sort of like having an extra election?

James C. Ryan

Yes.

Robert S. Prather Jr.

Yeah, well, there will still be advertising, I guarantee you.

Larry Havarty - Gamco

No, but I mean it would be a political campaign against one -- against a time slot where you wouldn’t have any at any time.

Robert S. Prather Jr.

Well, I’m not familiar with that, so --

Hilton H. Howell Jr.

I think that’s correct. They will be scheduling a special election if everything goes through, as has been indicated in the press, and it would be at a different time than our typically expected political revenue.

Larry Havarty - Gamco

Okay. And the auto situation, while Mike Jackson has been lamenting to you, his stock has almost tripled, Bob, or maybe it has off the bottom. And I’m seeing a lot more auto advertising locally in Boston right now from the point of when the cash for clunkers was put in, which is only like 10 days ago. The 6 to 7 o’clock time block, I think last night there were four different guys advertising on the station I was looking at. Has your auto situation changed very dramatically in the last 10 days and now that the -- do you see any visibility there because it sure looks like at least in one market that behaviors are changing.

Robert S. Prather Jr.

Well, I’ll let Jim answer specifically but in general the good news for us is we didn’t lose near as much as some of the big markets like Boston. They are much more dependent on auto than we are, so I think they were a lot farther down.

As I mentioned, we haven’t seen any clear signs that it is coming back specifically in the last 10 days. Jim, do you have any further information on the last --

James C. Ryan

In talking to general managers in the last few days with respect to cash for clunkers, it varied a little bit by market. Some people thought it helped, picked up things a little bit and I would stress it was a little bit. Others felt that it was -- the spend was what the spend would have been anyway if they just rebranded the copy to point to the clunkers. There was a fair amount of consensus though that they thought that the overall program, and of course now that it’s been apparently renewed for another $2 billion, where obviously it’s going to run longer, we should be good for [all of this], that they thought that the dealers, by having the program the dealers were able to push some product, it would certainly strengthen them over the near-term and by them getting a little bit healthier in the local markets, we certainly would -- should hopefully speak to a little more confidence on their part to be placing -- start to place orders a little longer and a littler firmer. But of course that’s our hope. We’ll have to wait and see if that really transpires or not.

Larry Havarty - Gamco

And in the retail field, yesterday I think there were four or five big retailers that raised their guidance on the quarter, largely because of gross margin, so they’ve got their inventory in line and the stocks are acting well and normally what comes after that is that they decide they don’t have enough inventory and start to advertise after they’ve added more inventory. Do you see any signs of life in that vertical?

James C. Ryan

Not yet. The problem we are still having, and we had it the past several quarters now is that placement tends to be extremely short. We are only getting a good view of literally only a few weeks out at a time, so the visibility is as limited as it has been, you know, at least through the first half of the year so far.

Larry Havarty - Gamco

And then in your college towns, a lot of colleges were scared to death that folks wouldn’t show up for the fall because of the economy and from what I can gather, and it’s especially clear up here, that not only didn’t that happen but more are showing up because they regard education as the key to ticket in future economy and has that made things anymore buoyant in your educational communities where perhaps greed may be replacing fear?

Robert S. Prather Jr.

I think this continues to validate our university strategy. All the GMs I have talked to says that all the schools are busting at the seams and I think you are right -- I think people, even graduate students are booming right now because it’s why not go back to school if you can't find a job, so I think states will continue to realize that education is the key to success, especially in America and I think those kind of communities will continue to benefit from stronger-than-average economies, in good times and bad times.

Larry Havarty - Gamco

But none of the locals are signing up for more advertising when the --

Robert S. Prather Jr.

You know, here again, we just feel like we’ve been bumping along the bottom for the last two or three months. I think there’s -- what’s interesting to me is that I’ve talked to a GM and they will be all excited about a couple of new orders or new things coming in and a couple of days later, they would get a big cancellation from somebody else and it kind of even things back out. And that’s kind of more of what we’ve seen in the last 90 days, I think. Things hop up and then things back off, so -- and as Jim mentioned, the visibility is just virtually down to a week or two timeframe, that seems like.

Larry Havarty - Gamco

Okay, great. Thanks, Bob.

Operator

Our next question will come from Matt Slope with Broadpoint Capital.

Matt Slope - Broadpoint Capital

I know your affiliation agreements with CBS and NBC and all your primary stations don’t come up for a couple of years, but could you talk about what you think the dynamics are going to be like when it comes time to talk about how you might share in the retransmission consent revenues?

Robert S. Prather Jr.

We are going to just say no, as Nancy Reagan used to say. I mean, I think they are going to try and we are going to say no and I hope we can get our industry to really all realize that this retrans is hard fought money for us and we need to keep all of it. NBC tried to get some from us last year and we said no, no, no and they eventually agreed to basically renew the contract for three more years, just like it was. I think they are all cutting back, trying to do three and five year deals. Nobody is going to want to 10 year deals right now on either side, but you know, I think a lot [of it will depend] on how the economy is at that point, how the networks are feeling about the world. But I think for us on the local TV broadcasting side of the industry is something we’ve really got to fight and this retrans money is important to us and will continue to be and I just think it’s something we are going to have to really hold the line on.

Matt Slope - Broadpoint Capital

Do they try to make an argument about kind of the percentage of revenue you get from primetime or percentage of ratings that come from network programming and is there -- how does that discussion go?

Robert S. Prather Jr.

No, they have not mentioned that at all -- they just wanted a percentage of our overall retrans fees and [we’re the floor], so -- they backed down fairly quickly from that when us and several other stations pretty well -- there weren’t many NBC dealers up last year, honestly maybe seven or eight markets in the whole country. But I know eventually they backed off of that with everybody, as far as I know. I don’t know the details or anybody else’s negotiations but I didn’t hear of anybody giving any retrans money to them. I’ve heard that Fox is really going to go all out for retrans from their affiliates when they come up, so -- and they may be coming up sooner I think than some of the others, so -- I think it’s just a battle we’re going to have to fight and I think it’s something that our industry really needs, I think the NAB and all our affiliate groups and all that really need to be on the same page on this.

Matt Slope - Broadpoint Capital

That’s great. What about, just a separate point -- have you seen any signs for political advertising for the third and fourth quarters? We’ve heard from some of the other operators --

Robert S. Prather Jr.

-- advertising regarding the healthcare plan, things like that. There’s always seems like issues going on in states where both sides are putting up money, so we had earlier in the year, for example, the Seminole Indians were lobbying real hard for some legislation down in the State of Florida and we got some real good political in the first quarter down there. The issues continue to -- the issue advertising continues to grow and it is not necessarily at the same time as the other advertising, so it’s nice to be getting it these off years but we are seeing a fair amount of healthcare both side, the Democratic side and the Republican side in the healthcare and I think that will continue over the next month or so [inaudible]. And I think there’s a lot of town halls going on right now, a lot of congressman testing the water to see what the temperature is and so I think these groups that have money are going to be spending it to get their message out.

Matt Slope - Broadpoint Capital

And just one on the cost side -- you mentioned in the press release some professional services type of legal expenses and then some kind of consulting arrangement with the former chairman -- can you just give us a little more detail on those two things?

Robert S. Prather Jr.

We just -- what we are doing on legal expenses, are you talking about -- we’re asking --

James C. Ryan

Matt, specifically the up-tick in legal is primarily related to the costs we incurred in negotiating the retransmission consent agreements. We had most of the economic terms nailed down by December 31 and then moved to negotiating a long form agreements during most of the first quarter and some of that actually dribbled into April as well, so that’s really what drove the legal costs first part of this year. But when you put it in the context of $12 million of incremental revenue from it this year and that $12 million grows a little over the next couple of years as well, it gives us some of the up-ticks in the agreements we struck. It’s money well spent to secure that revenue stream [for us].

Matt Slope - Broadpoint Capital

That’s fair. And --

Robert S. Prather Jr.

And regarding the consulting agreement, we do have one with our former Chairman, Matt Robinson, and our board voted that his advice and counsel was obviously very valuable to me and all our management and we wanted to continue that. Matt is one of the most successful businessmen in America and knows our business and been actively involved and was basically my partner for 16 years and we just felt we needed to make sure we had his advice and counsel going forward.

Matt Slope - Broadpoint Capital

Okay, that’s great. Thanks, Bob. Thanks, Jim.

Operator

(Operator Instructions) Our next question will come from Aaron Watts with Deutsche Bank.

Aaron Watts - Deutsche Bank

So a few questions from me, to start off just to continue on the cost side -- you’ve obviously had to make some drastic and I know difficult decisions this year in light of the environment but once things do get a little better and advertising comes back, how sticky are these costs? Because obviously I guess especially with the debt load that you are carrying now, every cent dropping to the bottom line matters and do you think with the exception of maybe commissions that most of these costs, it’s sort of a new reality for the cost structure of the company?

Robert S. Prather Jr.

Aaron, I don’t think there’s any doubt of that. As a matter of fact, I think that’s -- everybody in the TV industry better realize that because I think we all need to figure out a way to operate more efficiently and I think even going forward, we’ve got to look for more ways. I think you are going to see in our business a lot more automation, a lot more video journalists, a lot more use of user generated video -- all these things that will help us lower our overall costs.

You know, our news product is the most important thing we have and we don’t want to do anything to cheapen it but I will tell you this -- people like the immediacy of user generated video on news stories, even if the quality is not broadcast quality.

I’ll give you an example -- I was out in California a year ago and they had a bunch of tornadoes hitting Los Angeles, which are unusual. All four major stations news at night had nothing but user generated film of the tornadoes and it was people out with iPhones, cell phones or whatever, or cameras and they were shooting the tornado, they were coming right at them and what’s the chances of having a news crew out at that same moment. It’s going to do a story for us so I think we’ve got to adapt and be very flexible and be very willing to make sure that we take advantage of the Internet and all the good things about it that it can do to make sure that we get the -- that we are recognized as the news leader in all these markets.

Aaron Watts - Deutsche Bank

Okay. And actually, I wanted to follow on with a news question -- obviously it’s a center piece for what you do. How is viewership, or do you have a sense for how viewership has held up through this downturn, you know, separate from advertising? Are the eyeballs still there?

Robert S. Prather Jr.

Based on our ratings, I’ll tell you what you see more than anything, Aaron, is if you see a drop in eyeballs usually in a market from one rating period to the next, nine times out of 10 we usually dig into immediately with Nielsen and it usually just is where the books fell that particular timeframe. You know, sometimes they get -- they wind up with diaries. We are all diaries except one market in Knoxville and sometimes the diaries just get in an area that for whatever reason there’s not much viewership or lower viewership than normal. And you know, usually if you go back, and we are very particular, all our managers are watching very closely with Nielsen and the consulting firm we used for news. They are very, very Nielsen oriented as far as keeping an eye on usually those kinds of things that revolve around your diary and where they failed that particular rating period.

Aaron Watts - Deutsche Bank

Okay, and the newspapers have been pretty pummeled by the online availability of news and how big of a threat do you view being able to access local news online to your platform? I know YouTube, kind of some early talks of them putting local news, streaming local news on their site -- how much of a threat are these things to your broadcast?

Robert S. Prather Jr.

I think it’s an opportunity, honestly. I think we are in a three screen world now where you’ve got a TV screen, a computer screen, and a mobile screen and I think it’s important for us to be top of mind in the local news in all three of those screens and that’s one of the things that we are working hard every day in our news product and in all our local stations to make sure that we deliver the news any way people want it. I mean, I think you see a lot of young people walking around with an iPhone in their hand all the time and we want to make sure those people are -- if they want to know something that’s going on in our local market, whether it be news, weather, sports, or community activity, they know they can go right on their mobile device and go right to our website and see, and I think live mobile is going to be even more important going forward as you can literally access the programming we’ve got on the TV at home.

So I look at it as an opportunity and not a threat for us. I think we are the best out there in the video business and I think that’s our real advantage over any other sources that are providing news. And as I mentioned to you, I think we have to be flexible about having plenty of user-generated stories and I think we’ve got to be aware, of which we are, of Twitter and Facebook and all these kinds of things and their involvement in the news business these days.

Aaron Watts - Deutsche Bank

Okay. Thanks for the color, guys.

Operator

Our next question will come from Marci Ryvicker with Wells Fargo.

Marci Ryvicker - Wells Fargo

Thanks. Good afternoon. I have a couple of questions. Yesterday, CBS had their conference call and Les Moonves was pretty bullish about the CBS network and the stations, so I’m just curious as to how your CBS stations are trending versus your other affiliate stations.

And then secondly, can you just give us more color on the Young relationship and how this may or may not impact you financially?

Robert S. Prather Jr.

I’ll start out with Young first, Marci. You know, we are signing an agreement with the creditors group that is taking over Young where we are going to be paid a base management fee plus we get reimbursement of our reasonable travel expenses, things like that. And then we will have an opportunity to earn an incentive based on increasing the cash flow over a base amount starting with next year’s cash flow. So it could be a real home run for us, frankly.

We think Young has got a good group of stations but we think we can improve their operating next year and we think this is just a great opportunity for us that’s -- I call it a lot of upside and virtually no downside, so we are looking very forward to getting involved full steam ahead on that.

Regarding CBS, we go more by market I think than by network. We have traditionally got most of our number one stations year-in, year-out. The strength of the market economically is more important than the strength of the network and I’ll give you a good example. I mean, Dothan, Alabama is a market that’s a strong dominant CBS but Dothan is having a rough year. Their economy is down probably more than other places and so even though we’ve got a strong CBS air, it’s lagging behind some other stations. But here again, some of our university markets are doing much better than the economy in general.

So I think we go more by market than we did by network but I am glad Les is bullish. He’s usually always bullish but he’s clearly more bullish than normal and what’s good for CBS is good for us, I promise you.

Marci Ryvicker - Wells Fargo

And I just have one follow-up -- you mentioned live mobile video, and when do you think this will be a material revenue stream for the TV industry?

Robert S. Prather Jr.

I still think it’s probably a year to 18 months away. The testing is going on the balance of this year. I think there’s still a lot of questions about exactly how the economic model is going to work, whether it’s going to be a subscription base or an advertising base. You know, the big issue if it’s subscription base is at that point, if you are getting paid by the phone companies or whoever is delivering to the consumer, the networks want a piece of it, the syndicated want a piece, AP and CNN want a piece. So it would require some pretty heavy duty negotiating with all the stakeholders I guess you’d say at that point.

I personally think it’s going to be an advertising support medium, which is what we’re the best at. That’s what we know how to do. But I -- and I think the key there is how do you measure it, make sure we can measure it because I think it will bring added viewers to the TV that we can monetize.

Marci Ryvicker - Wells Fargo

Thank you.

Operator

(Operator Instructions) We’ll hear next from David [Tyger] with Low’s.

David Tyger - Low’s

Just one question I have is can you please talk about what the advertising rate market is? For example, are there spots where you have to decrease the rates where you may be able to attract advertisers because of either the newspapers in the area or radio stations and how are you able to attack that, just to get a sense on whether or not that appears to be firming up in certain markets or I guess just a general discussion on what you are sitting at competitively versus those other mediums. Thanks.

Robert S. Prather Jr.

You know, David, that’s a good question. I guess one thing I’m a big believe in is most of our number one stations is rate integrity and trying to be the -- making sure when we are number one in the market that we are also the price leader in the market and we have held our prices better than most people, I think. Where we’ve got real tight competitive situations with our other TV stations, we’ve probably had to lower prices more than we wanted to in some cases but overall, I think we’ve done a good job of keeping price integrity.

As far as newspapers and radio and things like that, we tried to -- one of our selling points is that, especially regarding newspapers is that we are just -- newspapers are extremely expensive buy on a cost per thousand if you really dig down and really see what the newspapers readership actually is. And we have got a real plan that we use against newspapers showing people that we think TV is a much better buy. Same way with the local cable -- local cable has done a terrific job, frankly, of stealing a lot of advertising [from us] by selling cheap spots but if you really look at their cost per thousand, they are outrageous in a lot of cases. And here again, we’ve got a selling campaign we can use against local cable that we really work hard on trying to show people that a TV broadcast buy, especially in some of our markets where we’ve got really dominant positions, you are just getting so many more eyeballs for your money than you do in any of those other type of mediums.

I mean, we try to sell on strength, is what we try to do. We try to show people that television is still without a doubt the best value for getting the most views with the least amount of dollars.

David Tyger - Low’s

Bob, do you think that at this point, that the rates -- you mentioned several markets where you thought you had to lower pricing to be competitive -- is your sense by and large in those markets that rates have firmed and you won't have to do that in the future, and perhaps have even a little pricing power or we’re not there yet?

Robert S. Prather Jr.

I think so. As Hilton mentioned, and I followed up, I think I would use the term we are bumping along the bottom. We really haven’t see the pressure like we were seeing -- really if you go back, David, to after the elections last year from that November until about the end of March, early April, it was pretty -- our forecasts were down virtually every week and then we started firming up and we -- we actually went up about 10 weeks in a row, not great but a little bit every week and then we kind of bumped along where we had a little -- up one week, down the next. And I’m not talking about big swings but -- so I think that it seems to us that rates have firmed up. As Jim mentioned in his initial thing, we’ve really gone after a lot of new business. I mean, we do have car dealers basically car advertising dropped from 25% of our revenues a couple of years ago to 15%. That’s a lot to replace and I think we’ve done a good job replacing it. And I said, I think when the car advertising really comes back, it will come back strong and we’ll be a big beneficiary of it. It will be a good problem to have at that point.

Hello?

Operator

And we have no further questions from the phone audience at this time. I will turn the conference back over to our speakers.

Robert S. Prather Jr.

Okay. Thank you very much, Operator. I want to thank everybody for being here today. We appreciate your support. As we always tell you, we are easy to find. You can call us anytime here if you have further questions and we’ll look forward to talking to you again on our third quarter call. Thank you, everybody.

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