Entercom Communications' (ETM) CEO David Field on Q3 2017 Results - Earnings Call Transcript

Entercom Communications Corp (ETM) Q3 2017 Results Conference Call November 2, 2017 10:00 AM ET

Executives

Rich Schmaeling - CFO and EVP

David Field - CEO, President & Director

Analysts

Marci Ryvicker - Wells Fargo

Kyle Evans - Stephens

Aaron Watts - Deutsche Bank

Lance Vitanze - Cowen

Brandon Osten - Venator

Operator

Good morning, and welcome to Entercom's Third Quarter 2017 Earnings Release Conference Call. [Operator Instructions] This conference is being recorded. I now would like to introduce your first speaker for today's call, Mr. Rich Schmaeling, CFO and Executive Vice President. Sir, you may begin.

Rich Schmaeling

Thank you, Anderson. I'd like to welcome you to Entercom's earnings conference call. This call is being recorded. A replay will be available on our company website shortly after the conclusion of today's call and available by telephone at the replay number noted in our release.

Should the company make any forward-looking statements, such statements are based upon current expectations and involve risks and uncertainties. The company's actual results could differ materially from those projected. Additional information concerning factors that could cause actual results to differ materially are described in the company's SEC filings on Form S-4, 10-Q, 10-K and 8-K. We assume no obligation to update any forward-looking statements.

During this call, we may make reference to certain non-GAAP financial measures. We refer you to our website at entercom.com for a reconciliation of such measures and other pro forma financial information.

And now I'll turn the call over to David Field.

David Field

Thanks, Rich. Good morning, everybody. Welcome to our third quarter earnings call. These are exciting times at Entercom as we countdown the days before closing our game-changing merger with CBS Radio. As you may have heard, we received DOJ clearance of our merger yesterday and with the CBS exchange offer well underway, we are now tracking towards a most likely merger closing date of November 17.

We have been hard at work preparing for the transition for several months and our plans are coming together beautifully. We've always expressed a great deal of enthusiasm for the opportunities created by this transformational merger and our enthusiasm has only grown as we have worked our way through this process. We'll have some major announcements to make later on this call, and of course, we'll cover our third quarter results and update you on fourth quarter business conditions. Rich will provide you with his thoughts and then we will revert to once again taking your questions live, a practice we will continue on future calls.

Let's start with third quarter results. Third quarter revenues were up 1% as reported. These results included the impact of our late 2016 acquisition of stations in Charlotte. On the same-station basis, ex political, revenues were down 1%. This is slightly better than what we had indicated on our second quarter earnings call. Third quarter cost ran higher than normal, largely due to substantial merger-related fees, plus the expansion of our corporate team as we ramp up the organization in anticipation of becoming a significantly larger company and the addition of Charlotte.

As you might expect, given the scope of this transaction, these deal-related expenses, which dramatically impacted our total cost and profitability this quarter don't mean very much without the complete picture of what the company's costs and margins will look like going forward. More meaningfully, excluding deal-related costs, our same-station expenses were up just 1%.

Later in this call, we will provide you with an important update on our planned synergies, which as you will see will provide dramatic margin and profit expansion across the new company. Here are the notes on second quarter. Local and national were both down roughly comparable. Events and digital were both up, including a strong performance from our SmartReach Digital products.

As you would expect political was down about $2 million in this nonelection year. The best-performing categories were drug stores, home furnishings and improvement and TV cable, and our best-performing markets were Atlanta, Boston and Charlotte. We were held back by a particularly weak performance in Denver as well as softness in three of our markets that are highly impacted by the uncertainty surrounding the significant deal related divestitures, namely Los Angeles, San Francisco and Sacramento. Absent these markets, same-station revenues were up 2% for the quarter.

Turning to the fourth quarter, pacings are currently up 2%, ex political on a same-station bases excluding the stations we are divesting. Once again, our pacings would be a bit better than that or it not for the materially weaker performance we were experiencing in the most significant overlap markets.

Let's turn to the important developments with the merger. As we approach the finish line, I've a number of updates as we continue our work across multiple fronts preparing for this transformational event. First, as I mentioned earlier, the DOJ announced yesterday that they have cleared our merger and approved our divestiture plans. We've entered into consent decrees in Boston, San Francisco and Sacramento. We expect to receive FCC approval on a timely basis.

As I'm sure you know, CBS is in the midst of their exchange offer, which unless is extended, is scheduled to expire on November 16, enabling us to close on November 17. That is now our working plan. As a result of the merger, the new Entercom will be the leading American media and entertainment company reaching and engaging over 100 million people each week to a premier collection of highly rated, award-winning radio stations, digital platforms and live events. As one of the country's two largest radio broadcasters, Entercom will offer integrated marketing solutions and deliver the power of local connection on a national scale with coverage of close to 90% of persons 12 plus in the top 50 markets. Entercom will be the number one creator of live, original local audio content as the nation's unrivaled leader in news and sports radio.

I'm very pleased to report that as a result of the exhaustive integration work, led by Rich and 24 separate internal joint Entercom CBS radio teams, working with our outside consultants, we have substantially increased our synergy estimate. We have previously indicated that the merger would generate $25 million in net cost synergies. We are now revising that figure to $100 million in net cost synergies. And again, these are net cost synergies. It will still allow for significant expansion in investment and various key growth drivers in the organization as we work to accelerate our revenue growth.

When we added Rich Schmaeling to our team as our new CFO back in March, we knew he would be a great addition on many levels, but one critical area in particular was his extensive experience leading integration efforts across multiple media mergers, including Dow Jones, News Corp and Media General LIN. Rich's done a terrific job leading this effort and he will provide more color during his remarks. On a separate front, yesterday, along with our DOJ announcement, we announced three new transactions to satisfy the government's divestiture requirements. As those transactions were just announced, I won't repeat the details, but I will summarize the headlines.

In total, we will be divesting 19 stations in seven markets in exchange for 11 stations in three markets and anticipated cash proceeds of $265 million. If all goes according to plan, we will achieve a net cash multiple of 9.8 times on the divestitures. We intend to use roughly $100 million of the proceeds to pay down debt, on an after-tax basis, with the remainder used to fund additional station exchanges on a near tax-free basis. As a result of the expanded synergies and the strong divestiture plan, our pro forma leverage of closing should be under 4 times.

I'm also very pleased to report that the Entercom Board has approved a 20% increase in our quarterly dividend from $0.30 per share to $0.36 per share on an annualized basis effective this quarter. The Board took this action mindful of the company's synergies and its massive free cash flow generation. The dividend will constitute less than 30% of the company's pro forma free cash flow and yet generate close to a 3.5% yield to shareholders based on the company's current share price. And in the future, we intend to continue to increase our dividend to return more capital to shareholders.

In addition the Board has authorized a $100 million stock repurchase program authorization under which we expect to repurchase roughly $30 million in stock in 2018, subject to market conditions. As this merger has always been principally about our conviction that the combined entity would have the scale, brands, the people and the capabilities to drive meaningful revenue acceleration and value creation going forward. We've been hard at work developing our extensive plans to drive growth of the business through a series of changes, enhancements and investments across the organization. In the days, weeks and months ahead, we will be rolling out our plans, aggressively capitalize on our significant opportunities across essentially eight separate [Indiscernible].

Number one, scale-driven national revenue opportunities. As a result of this transformational merger, Entercom will emerge as one of the industry's two largest players with the scale to compete effectively with other media for a larger share of ad dollars. We'll be building out robust national business development capabilities.

Number two, CBS Radio turnaround. CBS Radio has many of the country's best iconic radio brands and many terrific leaders, on-air personalities, sales executives and more in their markets all across the country, but its performance has suffered over the past couple of years and it will benefit from new energized focused leadership and expanded investment in its core business. We will deploy a comprehensive action plan to drive tangible enhancements and accelerate performance.

Together, post-merger, the company will benefit from being a focused, pure-play industry leader with scale, an outstanding set of combined assets and a best-in-class leadership team that will compete boldly and aggressively.

Number three, sports. The new company will be the nation's unrivaled leader in sports radio with over 40 pro teams and dozens of top colleges calling the new Entercom home. We will also have an outstanding line of nation's top local sport stations and personalities. The opportunities for expanded sales growth and strategic value creation is large as we believe there are many major national advertisers who are currently nonusers or light users of radio who will be interested in the marketing opportunities on this platform.

Number four, digital events and podcasting. We already have a significant presence in these fast-growing areas, the first two of which are $100-plus million product lines for the new company. We will capitalize on our scale to accelerate our efforts in both of these. We have also made a strong push into the podcasting space with our recent investment of a 45% position in Cadence13, an important player in the rapidly growing podcast space. We have the option to complete the purchase of Cadence13 in the future, and I'm pleased to share that the combined podcasting metrics of Entercom, CBS Radio and Cadence13 make us the number two player in that space in terms of downloads, trailing only MPR.

Number five synergies. As I mentioned a few minutes ago, we expect to deliver 4x the level of synergies we have previously indicated or $100 million in net cost synergies. And note that we are also going to deliver additional synergies to fund a meaningful improvement of our operating capabilities and our competitive position with investments in leadership talent, listener research and marketing, content, data and analytics, national business development and more.

Number six, data and analytics. We will be making a significant commitment to build our data and analytics capabilities to drive insights on our 100-plus million audience and enhance our product offerings for customers.

Number 7, elevating radio. Radio is America's most undervalued and misunderstood medium. It is ripe for rediscovery. Radio has emerged as America's number one reach medium with strong usage trends and ROI data as other media are increasingly disrupted and challenged. This deal is an important catalyst for industry growth, as it provides a second scale competitor to partner with large national advertisers and another major industry advocate. As advertisers become increasingly frustrated with their media options, advertisers are beginning to consider shifting more dollars into radio, led by Procter & Gamble, which is increasing its radio spending to capitalize on radio's massive ROI, massive reach at low cost.

Finally, number 8. Our balance sheet and enormous free cash flow generation. Even with a strong dividend, we'll still have ample free cash flow available to amortize debt, deal share buybacks and for potential value creating acquisitions. We are opening pro forma leverage as stated under [indiscernible] we are well positioned for the future. And all of our work will be led by a best-in-class leadership team that we have been assembling from top CBS Radio and Entercom leaders, plus a significant number of outstanding new leaders from both inside and outside the radio industry. Leadership and culture [indiscernible] and we are thrilled with the team we are putting together. So to summarize, we are close to the finish line and hoping to close this game-changing merger on November 17th. We have quadrupled cost synergies to a net $100 million. We'll be raising our dividend from $0.30 to $0.36 per share annually and instituting a meaningful share buyback and we have an extensive tangible set of action plans to capitalize on the meaningful drivers for significant revenue growth and value creation.

With that, I'll turn it over to Rich before we answer your questions.

Rich Schmaeling

Well, thank you, David, and good morning, everyone. For the third quarter, our net revenues came in at $122.3 million, up 1% versus $121.6 million in the prior year. On a same-station basis, our third quarter net revenues were down 1% ex political. Our station operating expenses for the quarter increased by $3.8 million, or 4%, to $87.9 million. After factoring in recent acquisitions, our same-station expenses increased less than 1% consistent with our guidance and most of this increase is attributable to the addition in one of our markets of the rights to broadcast MLB games.

Our corporate expenses for the quarters were up $0.6 million year-over-year to $8.1 million, largely due to a few new positions added in anticipation of the merger with CBS Radio. We expect that our corporate expenses will be in the same ballpark in 4Q and that they will be about $33 million for the full year or about $1 million higher than our prior guidance. $8.8 million of M&A cost in the third quarter related to the CBS radio transaction and expect to spend about $16 million in the fourth quarter, including $9 million in M&A advisory fees that are due upon completion of the merger.

On October 19, 2017, CBS Corporation commenced the CBS Radio exchange offer, which is scheduled to expire at 11:59 p.m. on November 16th, unless extended. Entercom will conduct its special shareholders meeting to confirm the merger on November 15th, and as David said, if things go as expected, we will close the merger on Friday, November 17.

Tomorrow, we plan to file our exchange offer roadshow presentation with the SEC and hit the road. We are excited to share this presentation with investors and to get through closing and on to executing our integration and growth plans.

Looking at our balance sheet, we ended the quarter with approximately $458 million outstanding on our term loan facility and $22.5 million on our revolver, up $13 million from where we were at the end of 2Q. This increase is attributable to our normal plus special 3Q common dividend of $10.7 million, our $9.7 million investment in the Cadence13, $8.8 million of M&A cost and capital expenditures of about $5.3 million. Our consolidated leverage at September 30, as defined under our credit agreement, was 4.9 times compared to our covenant of 5 times. Our reported leverage is being significantly impacted by the $25 million merger-related costs we've incurred year-to-date as about $10 million of those costs are not permitted to be added back under the credit agreement.

Our reported leverage would be about 4.4 times if all of the M&A costs were permitted to be added back. At the closing of the merger later this month, as discussed by David, we expect our pro forma combined total leverage to be inside 4 times. A 3Q capital expenditures of -- were $5.3 million. As previously discussed, we have several office and studio facility relocation projects underway this year that is causing our capital expenditures to higher than normal. For the full year, CapEx is still expected to be in the range between $15 million and $16 million.

Operator, with that we'll take -- we'll now take questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question is from Marci Ryvicker of Wells Fargo.

Marci Ryvicker

The cost synergy number of $100 million is surprising. First of all, is it just cost? And second of all, where is it coming from? And then what is the timing? When do you actually recognize all of these synergies? Is it year one , by year two, year three? And the second question, we've gotten a lot of questions from investors on the projections in the S-4. The 2% to 3% top line growth for 2017 through 2021 for the pro forma company, what is embedded in these projections? Is it better macro trends? Better radio industry trends? Or is it very specific Entercom execution?

Rich Schmaeling

So let me speak to the synergy question first, Marci. The total cost synergies, as David mentioned, will be quite a bit in excess of $100 million and we do intend to spend back a meaningful amount of our cost synergies to fuel growth delivering about $100 million net and we expect to realize that fully on a run-rate basis with an 18-month closing. When you look at it relative to the pro forma combined cost structure, it's about 11%. It benchmarks nicely to other mergers of similar scale so, from my perspective, it's really expected.

The synergies come from overlap in corporate. They come from eliminating a lot of CBS corporate allocations that we'll be able to replace those services with existing Entercom capabilities. They come from the eight overlap markets where we'll be able to eliminate redundancy. And then they come from a whole host of other areas where we see an opportunity to consolidate services to gain greater cost efficiencies and scale. So we'll detail that more in our roadshow deck.

You know as David mentioned, we spent about 4.5 months with 24 teams, combined teams Entercom and CBS Radio people, with the assistance of FTI consultants and drilled down in a lot of details and did the analysis to understand the as is environment in both companies. We developed new solutions. Completely developed the details of the synergies and clear implementation action plan. So we are quite confident in these synergies. Nothing here from our perspective arises to a high level of implementation risk. As I said, we expect to fully realize these synergies within 18 month post-closing and in our roadshow deck, that you'll see tomorrow, we detail how much we expect to realize by year. David, you'll take the projections?

David Field

Yes. So Marci, your part two question there on the S-4, so those who haven't taken a look at it, yes we've talked about 2% to 3% of organic revenue growth line over the next few years and I think first of all, let's put that in context. If you look at our revenue CAGR over the course of the last few years, we've been exactly in that zip code, right? From 2013 to 2016, we averaged about little over 2%, between 2% or 3% in terms of revenue growth. And I'll also tell you that internally, our aim, right, is to get to mid-single-digit organic top line growth. That's certainly what we're going to shoot for.

And if you think about the eight different buckets that we outlined on the call this morning, we do think that all of them are meaningful drivers, right? And so if you look at -- and I won't repeat the whole list again, but if you go through that list in terms of potential industry elevation, if you look at the CBS Radio situation and the opportunities to turn that around and accelerate. If you look at the fast-growing digital area, events area, podcasting, and you go through rest of that list, there are tremendous opportunities across all of those. We're excited about.

Rich Schmaeling

And Marci, tomorrow in our roadshow deck, we have included a projection scenario that kind of outlines what we think is a reasonably possible case. And that is updated from what was in the S-4.

Operator

Our next question here is from Mr. Kyle Evans with Stephens. Go ahead. Your line is now open.

Kyle Evans

Thanks for the eight bucket, David, super helpful. The big one I have questions about is the CBS Radio turnaround. Could you give us sub-bullets on that. It sounds easy but it's a lot of stations and I'm just curious about some of the kind of tactical highlights you hope to achieve there? And then I've got some follow-ups.

David Field

Absolutely. So I guess first of all I'd say that, we've taken advantage of the fact that we have been waiting over nine months to close this deal, to build that exclusive action plans. And as you all know, that we have done many acquisitions in the past and so most recently, in the Lincoln deal, this is exactly what we did, we went into an operation where we thought there was significant opportunity to accelerate performance and we made some immediate moves and we saw that those radio stations accelerate dramatically, both in terms of top line and bottom line.

This is obviously a bigger channel because it is a larger entity and more markets. But it does ultimately come down to a market-by-market set of specific tangible change. And one of the things that we've worked on over the past few months is to deepen and broaden our leadership team, so we have the resources to be able to move quickly across a wide set of market to look for improvement. And I want to tip my cap to the CBS Radio folks because there are tremendous number of outstanding people embedded in that organization. An outstanding brand. And outstanding capabilities. So there's -- this is a wonderful company that needs to benefit from new energized focused leadership and it's not -- we can't lose sight of the fact that for year -- couple of years these assets have been essentially on the shelf as the company looks for its strategic direction.

And these are also assets that will benefit greatly from investments. And so one of the things, and we're not going to an exclusive list here over, I should say an extensive list, but I will give you one example of a tangible change that you'll see and that is on the side of research. They, in our estimation did not do enough investment in listener research across their stations and so a number of their brands were running essentially blind.

We have gone out and done dozens of research studies in markets all across the country and have essentially a playbook now of what we can do to improve programming across a number of those stations and we believe lead to higher ratings and revenues. So you're going to see us sort of with cascading announcements or cascading improvements that will roll out here very quickly as we seek to look forward to gain in ratings, revenues and cash flow in the near future.

Kyle Evans

Great. Last quarter, you used the word tepid to describe the business condition, you reported businesses -- that the business was being paced later than prior year, could you kind of give us an update on -- give us another adjective to describe business conditions and talk about pace of bookings in the current environment?

David Field

I mean, look, I don't think the business climate is materially different. I think that we have a soft ad climate in this country right now. I'm not talking about radio, I'm talking just about the broad advertising [Indiscernible]. We've also been, I think, hurt a bit by the nine plus months disruption that we've undergone here in the overlap markets where clients don't know who they're going to be working with, employees don't know if they're going to have jobs and sales people don't know if they'll get paid commissions and so forth. And look, you do the best you can to lead through it but it has an impact on it. So we're just excited to get back behind this year and I think that if you talk to people within CBS Radio and Entercom, people are super fired up with the transformational nature of this merger and what that can do to our offerings as we hit the speed with, I think, some really exciting plans in the very near future.

Rich Schmaeling

It is not one word. It's a phrase. Excited for the future.

Kyle Evans

Got you. In the second quarter we've talked about Denver, could you talk maybe a little bit about the specific on that market and then on the overlap business, is that just mostly account executives?

David Field

Well, look, I don't want to go too much into the details in terms of Denver other than to say that our guys -- we just didn't perform particularly well over the past several months. We've made a change there in leadership and we're confident about the future because we've got a great situation. To the broader question, I'm sorry, your broader question was in terms of?

Kyle Evans

I'm sorry, the overlap markets, is that mainly an account executive problem?

David Field

I think it's broader than that. I think it's the karma of going to work every day not knowing -- knowing that there has to be significant changes, knowing that stations are going to be sold, not knowing to whom and then as from the standpoint of an account executive, selling time with the client, who is questioning whether that station is still going to be owned by that owner and wondering if they're going to be paid. So it's more -- it's broader than just the account executive.

Kyle Evans

Last one and then I'll go back in queue. Could you talk specifically to what you're seeing in automotive?

David Field

I don't think we see any -- I think just sort of normal trends in automotive. Really not much to add to that.

Operator

Thank you for the question Mr. Evans. Our next question is from Mr. Aaron Watts of Deutsche Bank. Sir, go ahead, your line is now open.

Aaron Watts

I guess, first one more, David, on the advertising environment, so I strip away political, encouraged to seek core advertising improvement from you sequentially and you spoke to your optimism going forward, is the growth you see for Entercom you taking share? Or do you believe the industry as a whole can grow in 2018, which obviously, would be a positive dynamic for Entercom longer term?

David Field

Yes, it's the latter, right? So for us, and again, I'd refer you back to those eight buckets. Our eyes are on the broader ecosystem of advertising and the fact that radio -- radio's relative value proposition has strengthened significantly in recent years as we see great disruption around us and the reach in the ROI offered in radio, versus what is happening in other media, we believe creates an opportunity for dollars to shift into radio. And we are going to be attacking that in a number of different ways using our scale. So a much more robust national business development effort. And if you look historically, we have not had the scale to be able to really compete effectively against other media. But now with our position across the top 50 markets in United States and our position as the number one creator of original local audio content and being number one in sports and news and really bringing, I think, a tremendous amount of value to the table, to our customers, integrated opportunities that we think we'll be able to compete far more effectively and look for growth sort of above and beyond this space. Rich, do you want to?

Aaron Watts

And then, Rich you spoke to leverage maybe just under four times at the close. Given some of the moving parts since the last update we heard from you, can you remind us where you see that leverage trending perhaps towards the -- by the end '18? And what your ultimate leverage target is for the business over the next couple of years?

Rich Schmaeling

Yes, so we're targeting to get to 3.5 times. Expect we'll be there within a year of closing. And I think that you'll see the company stay right in that zip code going forward.

Operator

Our next question is from Mr. Lance Vitanze of Cowen.

Lance Vitanza

Look I understand the merger hasn't even closed yet but do you have a plan to address the morning show at WFAN in New York in the wake of the unexpected disruption there?

David Field

So that's a programming decision, that is being handed by capable folks at CBS Radio and the folks at WFAN. The only thing I would add to that is to say that, that's a pretty good gig. And I think that there are a lot of people around the country who would love see a featured personality on WFAN. It's a fun job and I'm very confident that it will be filled with somebody great.

Operator

Our next question is from Mr. Brandon Osten of Venator.

Brandon Osten

Just that was being referenced, I just -- I was reading two of these a week, it's like 1,000 pages, so the most recent one, like the forward CBS Entercom projection that was in the last one, that was still prior to the divestitures, I am correct?

Rich Schmaeling

Yes, it's -- you'll see there's detail in the S4 that shows the impact of divestitures based on 2016 information. When we file our roadshow deck tomorrow, Brandon, it will be [QIA] you'll see kind of an updated view of the divestitures based on the 2017 data.

Brandon Osten

Okay. So -- but if I'm right, if I'm using the information that was in the S4 and the divestitures, you're going to come out of this -- you're going to come out of this with about $200 million, $250 million of cash on the balance sheet, is that right?

Rich Schmaeling

So there's, as David mentioned, about $100 million after tax that will be used to pay down debt at closing, or shortly after closing. And then there's a portion of those proceeds that will go into a QIA for 1031 exchanges and we'll give more specificity about that in our roadshow deck tomorrow.

Brandon Osten

Okay. So I'm looking forward to reading that. On the buyback, you guys have -- you guys put in $100 million authorization and you expect to use $30 million of it over the next, say, 13 months. Do you have the ability to accelerate that? Or I mean, I guess you have the ability to go all the way to $100 million and do you have any ability to buy back stock, this is tight, but before the deal closes? Because it just seems like the arbitrage situation -- I mean, you just said basically with $75 million in additional synergies that if we had earnings projections, we basically are taking them up over $0.30 after-tax and the arb situation has the stock stuck at outrageously cheap level. Do you have the ability to buy back stock over the next two weeks if you just -- let that thing loose or not?

Rich Schmaeling

Yes, Brandon, we'd love to but unfortunately one of terms of the merger agreement with CBS, we're precluded from.

Brandon Osten

Do you get to start the day after?

Rich Schmaeling

As soon as the gun goes off.

Brandon Osten

Okay. And do you the variability just say, wow, I can't believe the stock's is staying here, let's just take 50 million and do it by the end of the year? Or do you have sort of set schedule that doesn't allow that flexibility?

Rich Schmaeling

There's some governors on it but we have a lot of flexibility.

Brandon Osten

And just on the trades and the swaps, it looks like you guys had -- when you guys came out with the original schedule, there seems to be a pretty robust market for being able to make these trades and swaps in radio land, is that a fair assessment?

David Field

We had, let's say, meaningful conversations with about a dozen parties who are interested in -- that were serious contenders for different pieces of the divestitures.

Brandon Osten

Okay. And, I mean, I find it interesting that you guys are swapping, obviously, you have a history with -- and heard as CBS doing transactions with Beasley. I thought it was interesting to see iHeart involved in that process, so is this sort of a one-off? Or do you guys have a working relationship with iHeart in situations that would require moving around of stations?

David Field

We were in a unique situation, of course, due to the merger and we had certain required divestitures and we did what we had to do and, obviously, talked to a lot of parties and worked vigorously with the government and ended up, we think, in a good place. And all good-quality buyers on the other side, which I think is great for the people involved, and I think a good outcome for Entercom shareholders and again good outcomes for all the companies who participated in these transactions.

Brandon Osten

I guess my last question again more on the capital allocation front. I mean with this extra 70 million -- or I guess, second last question, but let me first ask about the synergies just to clarify. So you're saying there's north of 100 million in synergies but the amount if that is above that 100 million, you're going to reinvest in growth in the business, is that correct?

David Field

That's correct.

Brandon Osten

Okay. And again capital allocation side. So you're free cash flow, I mean, we'll see what the numbers are going to be like when you guys come out with your deck tomorrow but it's going to be quite substantial. How often are you going to reevaluate the dividend? Is that going to be a quarterly thing? Or is that going to be an annual thing?

David Field

I think our Board expects to have an ongoing conversation about that and we do meet quarterly.

Operator

Our next question is from Mr. [indiscernible] with [indiscernible]. Go ahead sir, your line is now open.

Unidentified Analyst

My question has actually just been asked. But I just wanted [indiscernible] notion about the buybacks being as aggressive as you guys can be and as soon as you can, I guess, right after the close?

David Field

Yes, we can.

Operator

We don't have any more questions from the speakers.

David Field

Well, thank you, Anderson. Thank you, everyone, for attending Entercom's third quarter earnings call today. We look forward to talking with you on the road and we look forward to bringing this merger to closure and getting on with our plans. Thank you so much.

Operator

Thank you very much, speakers. And that concludes today's conference, everyone. Thank you very much for participating. You may now disconnect the line.