Ladies and gentlemen, thank you for joining the 2022 Q4 earnings call. I will now turn the call over to President and CEO, Mr. Hilton Howell. You may begin. Thank you, Misty. Good morning, everyone. As the operator mentioned, I am Hilton Howell, the Chairman and CEO of Gray Television. I want to thank all of you for joining our fourth quarter 2022 earnings call. With me today, as usual, are our executive officers: our President and Co-CEO, Pat LaPlatney, our Chief Legal and Development Officer, Kevin Latek, our Chief Financial Officer, Jim Ryan, and our Chief Operating Officer, Bob Smith. We're going to shorten and streamline our call today. We will begin, as usual, with a disclaimer that Kevin will provide. After that, you will hear abbreviated comments from myself, then Kevin, and then Jim, and all five of us will then be available to take any of your questions. Kevin? Yeah. Thank you, Hilton. Good morning, everyone. Gray uses its website as a key source of company information. The website address is www.gray.tv. We will file our annual report on Form 10-K with the SEC later today. Included on the call may be a discussion of non-GAAP financial measures, and in particular, broadcast cash flow, operating cash flow, free cash flow, and certain leverage ratios. Metrics are not meant to replace GAAP measurements, but are provided as supplements to assist the public in their analysis and valuation of our company. Included in our earnings release, as well as on our website, are reconciliations of non-GAAP financial measures to the GAAP measures reported in our financial statements. Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results. Those statements are subject to a number of risks and uncertainties. Actual results in the future could differ from those expressed or implied in any forward-looking statements as a result of various important factors that have been set forth in the company's most recent reports filed with the SEC, including our most recent annual report and the one we'll file today on Form 10-K and our most recent earnings release. The company undertakes no obligation to update these forward-looking statements. I turn the call to Hilton. Thank you, Kevin. Today, once again, we reported a strong finish to 2022. On an as-reported basis in the fourth quarter of 2022 compared to the fourth quarter of 2021, our total revenue increased 49% to a record $1.1 billion. Core advertising revenue increased by 13%. Broadcast cash flow increased by 88%. The fourth quarter capped an exceptionally good year for Gray. For the full year of 2022, total revenue was a record $3.7 billion, an increase of 52% from 2021, marking our highest ever annual revenue. Core advertising revenue was $1.5 billion, an increase of 26% from 2021, and broadcast cash flow was $1.4 billion, an increase of 77% from 2021. These record results flowed from a number of factors, the most significant of which was another record year for political advertising revenue in a midterm cycle. In particular, for the full year 2022, our political advertising revenue was $515 million, which exceeded 2018's political advertising revenue by 232% on an as-reported basis, and by 38% on a combined historical basis. We attribute these stellar political advertising revenue results to Gray's unique combination of our market-leading news stations in competitive battleground states, our news professionals' unbiased coverage of divisive political issues and campaigns, and our excellent and direct relationship with the political advertising agencies. Our board and our senior leadership continued to focus on our balance sheet. Since we announced our acquisition of Meredith Corporation's local television stations two years ago, we have consistently emphasized that Gray, its board, and its leadership team are committed to reducing our leverage. Our actions demonstrate this commitment. During 2022, we paid down $315 million of principal under our outstanding term loans. Yesterday, we received $300 million under a three-year accounts receivable securitization facility. On March 1st, we intend to use those proceeds to pay off entirely the remaining principal balance of $295 million under our Term Loan B. At that point, Gray will have reduced approximately $610 million in debt over the course of less than 12 months. To further strengthen our balance sheet, yesterday, we also entered into an interest rate cap agreement. The rate caps will effectively limit the annual interest charged on all of our variable rate debt to a one-month LIBOR maximum of 5%, plus an applicable margin through December 31st, 2025. These arrangements will limit our exposure to approximately an additional 40 basis points of annual interest expense over current market rates, which will reduce our risk to unforeseen events that could increase market rates above our current expectations. Looking ahead, as we continue to produce significant free cash in 2023, and especially in the presidential election year of 2024, we fully intend to allocate a significant portion of free cash to additional debt reduction. We will also use a portion of our strong cash flow to complete the first phase of our Assembly Atlanta project, which will put us in position to begin earning revenue from the project later this year. As you know, Assembly Atlanta and Assembly Studios will provide diversification from our broadcasting segment by participating in fast-growing film and television production industry headquartered in our home state of Georgia. Construction on Assembly Studios and the infrastructure for the remaining area within Assembly Atlanta continues to run ahead of any of our schedules. This was only possible due to our decision in 2021 to pre-order steel and to produce concrete on-site and certain other key materials before the supply chain issues created delays, inflation, cost overruns for so many other projects in 2022. We currently anticipate that construction on the Assembly Studios portion of the development and much of the infrastructure for the entire project will be completed as soon as this June. At that time, both NBCUniversal and Gray Television will begin producing television shows and movies at Assembly Studios on land that less than two years ago was an empty industrial site. Once this phase of construction is complete, Gray intends to pause its funding of construction projects across the remaining roughly 80 acres that will comprise Assembly Atlanta. We are now and will continue over the next several months to actively evaluate opportunities to maximize the long-term value of this quite unique investment to the benefit of all of Gray's shareholders. 2023 will be marked by some macro challenges, Gray will continue producing locally focused news and other content that our audiences want and delivering the value that drives solid advertising and retransmission revenues. I will now turn the call back over to Kevin Latek. Kevin? Hi. Thanks again. Gray Television's stations and production companies continued to perform well in the fourth quarter. They're beginning 2023 in a better position than you might presume based on headlines about certain sectors of the economy. For the full year 2022, our television stations' core advertising revenues were $1.5 billion. This is an impressive outcome because core in 2022, as compared to 2021, declined by a mere 1% on a combined historical basis. That's despite our inventory being displaced by $455 million of additional political revenue in 2022. Since we cannot manufacture additional inventory, this very minor 1% dip in core revenue with all that extra political confirms the strong underlying demand from traditional advertisers that Gray successfully converted into sales throughout the year. As noted in this morning's release, we attribute our solid advertising results to real-world confidence among advertisers and businesses in local markets, combined with a portfolio of high-quality local stations, investments in recently acquired television stations, and efficient sales and news operations. Turning to retransmission revenues, Gray posted 5% growth in full year 2022 over the prior year. Recall that Gray did not renew any retransmission agreements in 2022. Consequently, our gross retrans revenue increase of 5% is a result of our annual rate increases outpacing subscriber declines and outpacing the impact of subscribers rotating into OTT platforms. In the first quarter of 2023, we will renew and reprice traditional MVPD retrans contracts covering approximately 22% of our AD subscribers. Virtually all other retrans contracts experience annual rate step-ups in January. For the first quarter of 2023, we anticipate that our gross retransmission revenue will increase by approximately 10%-11% over the fourth quarter of 2022. Retrans price increases at both this annual escalator level and a contract renewal remain in the same neighborhood as we have seen previously. Sub declines not impacting our ability to keep reaching to be paid fair value for our content. Reverse comp payments to the networks did step up on January 1st under the contracts that were negotiated a few years ago. We have discussed now many times, we expect reverse comp rates will decline starting in 2024 as more recently negotiated network affiliation agreements kick in. We will renew retrans contracts for approximately 18% of MVPD subs in the second quarter of 2023, 38% of MVPD subs in the first quarter of 2024, about 23% of MVPD subs in the second half of 2024. In terms of subscriber counts, subscriber reports that we received for the third quarter of 2022 provided a more positive picture than what we received for the second quarter of 2022. Specifically, in the third quarter of 2022, our pay TV subscriber total declined by roughly 1.5% from the third quarter of 2021. We are gratified that our subscriber base remains fairly stable. We continue to be impacted by the rotation of households from traditional MVPDs to virtual MVPDs and the direct platforms where the networks dictate both the terms of our distribution and our revenues. Gray, like virtually all affiliate groups, will continue to push for control of our own signals on all platforms. Putting this all together, we anticipate that gross retrans will continue to grow annually. Net retrans will continue to grow over a multi-year period, especially true in 2024 and 2025, even with conservative assumptions for continued sub-losses. These projections are based on our demonstrated ability to continue to command strong retrans rates from traditional MVPD platforms for our portfolio of top-rated local news stations, coupled with some relief in reverse comp payments starting next year. We anticipate that macroeconomic conditions will continue to be more challenging in 2023 than we experienced in recent years. Still, based on our vantage point today and our strong performance in 2022, we expect that our core revenue, production revenue, and retransmission revenue in 2023 will be generally flat compared to 2022. This concludes my remarks, and I now turn the call to Jim Ryan. Thank you, Kevin. Good morning, everyone. Hilton and Kevin have covered the key highlights for the quarter and the full year of 2022, so I'll make my remarks very short today. First of all, very pleased with our Q4 and full year 2022 results. Turning to Q1 2023 guidance, we believe our revenue guidance demonstrates the company is off to a good start in 2023, especially when you consider that it's an off year of the political cycle. We anticipate about $6 million of net revenue from the broadcast of the Super Bowl on our 27 Fox channels. That's compared to an aggregate of $13 million of net revenue relating to the broadcast of the Winter Olympics and the Super Bowl on our 56 NBC channels during Q1 2022. That's a $7 million non-recurring event for core revenue. When you look at our guidance for Q1 and consider that $7 million headwind, we think we're off to actually a very good start in Q1. I'll make a few comments on our current expectations for the full year of 2023, and I'll preface these comments by saying that given the size and scale of the company, these data points are our current expectations as of today and will undoubtedly change up or down as the year progresses. When I'm talking about amounts in billions of dollars, I will fully admit that I'm not the last $10 millions or more millions of dollars smart. Again, this is directionally what we see today. For total revenue in 2023, we're expecting currently about $3.3 billion. Core revenue of approximately $1.55 billion, which would be up low single digits over 2022. Retransmission revenue of approximately $1.55 billion as well. Our core and our retrans, just like it was in 2022, are pretty well matched set. Political revenue of approximately $40 million-$50 million, given 2023 is the off year. Importantly, that range does not consider any potential early political advertising revenue for the 2024 cycle that we could possibly see later this year. The guide on political is conservative and not counting in any 2024 presidential. Total broadcast revenue would be approximately $3.2 billion. Our operating expenses, before depreciation, amortization, and gain and loss on disposal of assets is currently anticipated to be approximately $2.5 billion. Of that, broadcast expenses will be approximately $2.3 billion. Network reverse comp is going up to $945 million approximately. On the broadcast $2.3 billion, we have non-cash stock comp of $5 million and non-cash 401(k) expense of $10 million. Production expenses of approximately $80 million and corporate expenses of approximately $120 million. That $120 million includes $17 million of non-cash stock comp. Our operating cash flow, as defined in our Senior Credit Agreement, will be approximately $850 million-$875 million. Turning to major cash uses in 2023. As Hilton mentioned, we have put in place interest rate caps, which insulate us from significant increase in market rates for the next several years. We expect cash interest of $420 million-$430 million. Our 5% LIBOR interest rate caps around $2.6 billion of our floating rate debt. We cash taxes of $100 million-$105 million. Routine capital expenditures of $105 million-$115 million. Preferred dividends are $52 million, and our required Term Loan D amortization is $15 million. That would place our estimated free cash between $150 million and $160 million. We are very well-positioned starting 2023, and we look forward to a successful year and continuing into a strong 2024 with the return of another presidential cycle. Return the call back to Hilton. Thank you very much. Operator at this time would like to open up the line for any questions for Pat, Jim, Kevin, Bob, and Me. Okay. If you would like to ask a question, please press star one on your telephone keypad. Again, to ask a question, press star one on your telephone keypad. It looks like our first question is going to come from Dan Kurnos with The Benchmark Company. Dan, your line is open. Hello, Dan. Hey, sorry. Can you guys hear me? We can. All right. Sorry about that. Don't know what happened there. Good morning, and thank you for all the super helpful color. Really appreciate it. The one thing I did miss, Kevin, could you just go back over the sub cadence again for me? Hi, Dan. In the first quarter of 2023, we will renew and reprice traditional MVPD retrans contracts covering 22% of our MVPD subs. We will renew approximately 18% of MVPD subs in the second quarter of 2023, 38% of MVPD subs in the first quarter of 2024, about 23% of MVPD subs in the second half of 2024. All right. Perfect. Jim kinda gave us the net retrans answer, so we can kinda do the math, but I think it's probably a little bit better than people were expecting. For what it's worth, you know, your net guide is or your reverse guide is probably a little on the, on the lower side, a little bit upside on retrans. You know, Kevin, you know, and I'm sure you get plenty of questions on this. As we kinda look at the marketplace today, even under sort of conservative sub assumptions, you've obviously got the legacy Meredith stations coming up for renewal. It seems like your ABC was relatively benign, and I'm guessing that, Meredith- Dan, we lost you at Meredith. Hello? Operator, are we still online? Yes. Dan, your line is open. I'm not sure what happened there. All right. Well, let's go on to the next question, and when Dan is able to get back on, we will put him back in the queue. Okay, no problem. Our next question is going to come from James Goss. James, your line is open. All right. Thank you. I have a couple of things. One, I was curious, maybe this is a Kevin question, about the streamer usage of the national network channels rather than some of the local affiliate feeds. I think you were talking a little about it, but I'm a little unclear about how the contracts address those issues because, you know, traditionally you owned the market and the ad sales in those markets, but this is changing that dynamic a little bit. Could you talk about that? I think, Jim, what you're referring to is the CBS affiliates largely do not opt into the FuboTV CBS contract. That's the one that the example. Maybe that's a unique situation. We've said now, I think all the broadcast groups for many years that we let the networks do the first round of virtual negotiations with Hulu, YouTube, then Sony PlayStation to get them off the ground. At the time, they were negotiating deals for their owned and operated stations, and those deals were largely offered to the affiliates to opt-in. Fast-forward now several years, the virtuals have gotten much larger. Sony PlayStation Vue has obviously gone away. Fubo's come on the market, and the affiliates have all the affiliate boards, and I think all the affiliate groups have been pretty loudly saying the last several months or longer that we should be controlling our destiny. These are now established providers. Just as we negotiate a great hundred different MVPDs, we can surely handle negotiations with three virtual MVPDs. The CBS Fubo situation was that CBS presented a contract to the affiliate board and to the CBS affiliates, in which the CBS affiliates were offered an opportunity to sign a contract with CBS, in which CBS would then take our local signals and our local content and provide it to Fubo. The CBS Affiliates board did not endorse that deal. Gray did not opt into that deal. As a result, FuboTV did not have the access to CBS affiliate signals. CBS network created some alternative feed or feeds to provide national CBS content to FuboTV customers rather than the local CBS signals. I'm not sure when you're talking about other streamers carrying national feeds. To our knowledge, the first time affiliates have said no to an opt-in agreement in the virtual context was late last month with CBS FuboTV. I don't think it changes the overall picture. This is something again that we've been discussing for a couple years. In the last several earnings calls that the affiliate groups feel pretty strongly that we should control our own destiny, and that's what's happening in this case. We are continuing to talk to CBS to anticipate your next question. The affiliate board and other groups are optimistic and hopeful that we'll be able to reach new long-term agreements with this network and other networks that make sense for the affiliates. That's all we're gonna say in that negotiation and all those networks. All right. No, I appreciate that color, and maybe it brought the issue to light a little bit. The one other thing I was going to ask, was the Atlanta Assembly Studios. Sure. you're getting close to, you know, coming, or opening them to usage of you and NBCUniversal initially. Is there any framing of the financials you might provide in terms of the overall investment, the revenue expectations, cost estimates or anything else that we might be able to think about in terms of how it impacts your statements? James, for just, for a number of reasons, we're unable to provide great details on that right now, particularly on the revenue side. Suffice it to say that we're very happy with what it's going to be producing, not just in terms of rental revenue, but production revenue, beginning this summer. While we won't have those numbers to talk about, probably at our next call, it'll be very near to beginning it because we'll be turning it over to our partner, NBCUniversal, the first of June. Okay. It will be on them rather than on you, and or will there be some intracompany participations in that you'll be using it as well? Well, I mean, they will be using it and making movies and TV shows there on the properties that they are leasing from us. We will be doing the same on the properties and the studios and stages that we have retained. There is some production through our subsidiary Swirl Films that will be happening on our stages in addition to their stages in Paulding County. Gray will be separately leasing out to other film producers the stages that we have retained. All right. Thanks very much. Thank you. As a reminder, if you would like to ask a question, please press star one to join the queue. Again, to ask a question, press star one to join the queue. Our next question is to come from Dan Kurnos from Benchmark. Dan, your line is open. Welcome back, Dan. Sorry about that, you know. I'm gonna try this again, Hilton, and I'm gonna be really quick before I get the hook again, I guess. We didn't give you a hook. I'm sorry. You know, technology always kind of messes up from time to time, it seems like. It definitely wasn't you guys. It was definitely me. On the Atlanta, just to be clear, is any revenue or any benefit from that included in the guide that you guys gave? Hilton, if you could expound a little bit upon your thoughts on, you know, monetization opportunities as you laid out in the press release, I'd love to hear it. Thanks. Sure. There would be a little bit in the guide, but remember, that NBCU is actually by the time we turn it over, the lease actually commenced payments to us under its terms. There's not many months in this year, so it's, you know, pretty small number for 2023 just by timing. The Assembly upon maturity is going to be a quite significant contributor to the free cash flow of this on an individual asset basis. I'm really quite excited about it because, you know, one of the things that we have to continue to maintain a focus on is how we continue to grow the company. While we are currently, in terms of distribution with our TV stations, slightly maybe 2.5%-3% below the currently articulated cap, since the FCC doesn't seem to be recognizing at the moment, the UHF Discount as they did with both Scripps and Nexstar in the past, Gray seems to be capped at the 39% number. Our management team is charged with continuing to grow our company. While those of you who may not follow this business or may not live in the state of Georgia, so you may not understand fully the stunning amount of production that has come to this state, and that's for a number of reasons, Dan. It obviously began 20 years ago with the creation of the Georgia Film Tax Credits. What Georgia has done that I think is really quite unique, and it's a great testament to, I think wise legislators 20+ years ago, they created the Georgia Film Academy, if I'm calling this correctly. We now have at least two generations of young Georgians who have learned the craft of making film and television in this state. The crews, the talent, everything is here. There is a huge amount of production that's coming to this state. Last year, the only public numbers that we have, for the amount of production in Georgia, and this was probably from the 2021 year, so I know it's old, but it's all we got right now. The total productions were $4.4 billion, which is a huge generator of revenue here. The Assembly Studios, I have been told is one of the finest studios built anywhere in the world. We have immense demand that we have coming in for use of all of the studios. Obviously, we have a long-term financial agreement with NBCUniversal. I'm happy to say that they are looking forward to being here in Atlanta and in Georgia. I would actually say that we have had direct contact from or direct contact with the full gamut of content creators, whether independent or other individuals, to bring feature films and television and candidly, post-production to the Assembly and to Georgia. We're very excited about that. It's gonna be a profitable endeavor from day one, and it's going to be a huge asset for our company, our shareholders, and for the city of Atlanta and the state of Georgia. Got it. That's super helpful. I'll try this real quick, Kevin. I mean, we got the numbers from Jim on the reverse now, so we're, you know, we can kind of do the math on your thoughts here. Legacy Meredith obviously comes up in the back half, I think, of this year and, you know, doesn't seem too onerous, and obviously, your ABC seems relatively benign based on the guide you've given. Just trying to get a sense, you know, you commented that net obviously should be up pretty substantially next year, and because you also get some relief on that reverse trend. Just maybe over like a three-year time horizon, I mean, do you expect to outperform? You know, what's kind of your view? What are your sort of underlying sub assumptions in the model right now? Yeah. Dan, we've never commented on what we use in our model. We've said we've been conservatively projecting sub losses, and we will continue to do that. We, again, we had a bit of a shock in the second quarter that we revealed on the last phone call. As I said, our sub numbers improved relatively in the third quarter. We do not have all the fourth quarter sub counts at this point, but they frankly look better than what the third quarter was. Things seem to be sort of trending, at least right now, in a good, definitely a better direction than what we have modeled. We'll continue to model conservatively on sub losses and the sub rotations to the virtual and direct-to-consumer. We've not modeled out and given guidance over a two or three-year period. You can appreciate this is probably the most guidance we've ever given on a February phone call for the full year. We're gonna kind of stick with the current guidance we have now, which is a little specific for this year and a little more general. I'm not really prepared to be more specific after than what we gave on the earnings script today. We do think that net will be improved next year over this year for the reasons mentioned in the script, and again, 2025 again, for the same reasons. I'm not prepared to put percentages on that right now. Okay. Fair enough. Thanks, guys, for letting me back on. All right. Thank you, Dan. Yep. Anytime. Our next question is going to come from Alan Gould with Gray TV. Alan, your line is open. Thank you, c ouple of questions. Hilton first, on the Atlanta Assembly plant. one easy one, how many sound stages are there? Two, it looks like the CapEx for it was a bit higher than expected this year. Was that a pull forward, or is the inflation causing costs to be a little higher than expected? Inflation's always there, but let me answer your first question. The total stages are 19. The total square footage is about 1,250,000 sq ft in terms of production mill and office space total. It's 19 sound stages under construction right now. In fact, last Thursday, we had our topping out ceremony, so we're almost done. Plus Third Rail. Third Rail. Oh, plus you ask about Assembly, but I'll add in, there's an additional three stages that are currently operational and whose numbers are incorporated with Third Rail Studios. We also have a further two studios that are currently named, ATL Film Studios that are part of the Swirl Films group that is a 51% owned subsidiary of Gray Television. Okay. The costs? Alan, the CapEx number, the regular CapEx number was higher than we had guided. It's a multi-phase. The answer one is inflation. Two is of some pull forward and supply chain issues earlier in the year. We thought some of what actually got delivered in Q4 would have actually shown up in 2024. That was a pleasant surprise on the one hand, but also not something we had expected. I'll take responsibility that internally, you know, we should have guided better. I will assure you that we're watching CapEx, regular CapEx, like a hawk in 2023 and going into 2024. The last piece of the equation on the regular CapEx was, we thought we could push some studio renovation projects farther into 2024, but our current landlords were not open to extending leases, so we had to move a little faster than we had originally thought because our leases will be expiring next year, and we've got to move out and move in. As I said, a combination of several factors, but obviously in the guide this year, regular CapEx is $105 million- $115 million. Again, we're gonna watch that very carefully and to the extent possible, put as much into 2024 as we can. Jim, how much more do you expect to spend on the Atlanta Assembly Plant, until June or until it's completed? In 2023, on a net basis, we're currently estimating that to be about $72 million to finish the studio project. Okay. One quick question for Kevin. Your rotation to the MVPD, should we just assume you're matching pretty close to what the industry trend is there? In terms of what with the MVPDs? I'm sorry, Alan. Your, your rotation from traditional MVPD to virtual MVPDs, is your share similar to the industry for Gray Television? To be honest, I don't know what we would say was the industry rotation. I'd say we're seeing a lot of it. I mean, we have a pretty significant decline in the MVPDs, and we have a pretty significant growth of the virtuals and the direct-to-consumer. Again, our total sub count on a year-over-year basis was - 1.5%. We're converting, you know, essentially everybody, almost everybody who's leaving the traditionals into a new subscriber on the digital side. I don't quite know how that tracks with everybody else, but our number is - 1.5% on a year-over-year basis. Okay. Total subscribers. Let me just... Maybe I can ask you differently. Can you tell us what percentage of your subs are now coming through vMVPDs or digital? No, we've not disclosed that. Okay, thank you. Sure. Our next question is going to come from Craig Huber with Huber Research Partners. Craig, your line is open. Great. Thank you. My first question is this interest rate cap. I'm glad to see you guys are putting this into place. You mentioned your press release of $32 million that's payable on it says on December 31st, 2025. Is that gonna be amortized in there? What's the impact on your P&L in terms of the cost to put this in place? Is it gonna hit in the quarter? From a GAAP accounting perspective, that will be amortized in more or less ratably over between now and December 31, 2025. Again, I think the important part is, you know, the cash settlement is at December 31st, 2025. We've put that way down the road and, you know, we're very pleased to have gotten in place, and we're fully insulated now on, you know, continuing rate hikes. You know, I say this somewhat jokingly, but actually in absolute sincerity, I'm glad we got the rate caps in earlier this week. I would not have been pleased with trying to price one today given the inflation headlines this morning. We, you know, we're very pleased with where we came out. Very good on that. Second question, if I could. You're down 1.5%, retrans sub count declines year-over-year are quite good. Certainly a lot better than you've heard all talking publicly about down mid-single digits. That trend for them has been very similar, down mid-single digits. What is it about your company, your markets that you're only down 1.5%? I just wanna hear your thoughts there, please. You know, we have been trailing the industry really forever. When each announced sub declines in August of 2015, we were still seeing sub gains. A couple of years later, our broadcast peer groups said that they were sort of seeing sub stabilization. We were still seeing growing. They announced they were seeing little declines, and we saw stabilization. Now they're seeing some greater sub declines than we are. We've definitely been trailing behind. The best guess we have is we have more rural exposure than other folks. We are certainly in some large markets, but we're in a whole bunch of smaller markets and some that are geographically very large. Those folks have been a little later to the virtual MVPD because their broadband access is not as great as it is in Philadelphia and San Francisco and other large markets. The YouTube, Hulu, Sony, FuboTV, et cetera, they're sort of launching local signals in our markets later than others. They were not full substitutes until more recently than they were in large markets because broadband was not as was not deployed as much. We're seeing broadband rolling out, you know, more aggressively now in the last couple of years. We're probably seeing more people pick those subscriptions up, and that's covering the loss in MVPDs. That's our best guess is the type of footprint we have is a bit different than others. Okay, great for that. Thank you. My next question, sorry, is, alternative uses of your broadcast spectrum. Can you maybe just update us on your thoughts on that, how aggressive you might be to put in place here in the coming years? Yeah. That, it's Pat LaPlatney. I would tell you that, like the rest of the industry, we are rolling out ATSC 3.0. We've rolled out, I guess, three markets in 2022. We have the majority of our larger markets rolled out at this point. You know, there's been quite a bit of talk about the possibility of using that spectrum for data into automobiles and a number of other uses. I think we're a few years away from that still. The reality is that the rollout is moving along at a pretty good clip. We'd expect to be north of 70% by the end of 2023. It's a matter really of, in terms of the television side of 3.0 getting the chips into TV sets. The vast majority of manufacturers are selling chips or selling sets today with the chips in them. So that's on the TV side. On the alternative uses, you know, it's a matter of getting the footprint filled out, and that's happening pretty quickly. Okay. My last question, guys. Just curious, what's your thoughts on the broad economic environment right now, given, you know, the, all the markets you guys are in around the U.S.? I mean, how are you guys? This is Bob Smith. We're actually pretty optimistic, as Jim mentioned a little bit about the numbers and our projections. We're seeing a lot of good things in our local markets, a lot of actually a ton of new business development. Those are local direct accounts that are coming onto TV, and we're having a lot of success with that. We're also seeing automotive coming back in a lot of markets. General Motors is pretty strong. Nissan is strong. You know, and legal continues to do well. We recently saw sports gambling, you know, get approved in Ohio. Our Ohio markets are seeing a lot of pretty big buys here in first quarter and it'll continue in the second quarter. We're optimistic that North Carolina will pass gambling here in time for the football season. All in all, you know, despite the headwinds, despite, you know, all the chatter, if you will, there's a lot of good things happening in our, in our local markets right now. Okay. That's it. Thank you very much. Thank you. Our next question is going to come from Nick Zangler with Stephens. Nick, your line is open. Yeah. Hey, guys. On some of the direct-to-consumer stuff. The access of your local broadcast feed through direct-to-consumer apps, I think it's pretty new. I'm curious how the economics work between Gray and the networks when your local feed is made available through an app like Paramount+ or Peacock. Are you basically just recognizing maybe a net retrans figure on the top line here? Is this a material piece of revenue contribution at the moment? Hi, it's Kevin. On the first point, CBS or CBS signals were available on the CBS All Access app from day one. We actually beta tested CBS All Access with the O&Os as a company, we launched CBS All Access out of the gate. Every station we acquired that was not on even in little tiny markets, we put on CBS All Access. Just to be clear, the direct-to-consumer piece is not really new for us. CBS All Access has been a part of our distribution for some time. Obviously, that was rebranded as Paramount+. Peacock started adding local affiliates late last year. The revenue on both affiliate boards negotiates a price per sub per month, that is a fee paid by CBS or NBC respectively, based on the number of subs in the respective markets for each station. That revenue comes to us as retransmission revenue. There is no offset additional expense against it, so those dollars drop to the net income line. And they're not, the peak happened again, it just added signals to late December, so I couldn't even tell you what the subs are as we sit here, just later. Got it. Okay. No, that's fair. On, you know, I did wanna ask about the total guidance for the year. Obviously, I hear you guys $3.3 billion in total for total revenues. Political upside would occur if the presidential election campaigns start to roll in early, so we could potentially see upside in that segment later on in the year. When we talk about the core assumption for the year, if you exclude the political displacement that you saw in 2022, does that guide assume basically year-over-year growth in advertising in the core into 2023? Also it sounds like even in the press release, you refer to maybe like a recessionary environment in 2023. Is that your underlying assumption when you make that guide? Obviously if things, you know, continue to show improvement, naturally you'd get upside to the core revenue piece for 2023 relative to your expectations currently. First, you are correct. There is potential upside in the political number from early primary money later this year. We saw that in the 2020 cycle. We saw that in the Well, basically every cycle for the last several years, several cycles, we've seen early primary money. We have not baked that into the guide. Hopefully that's good news and upside we can talk about a couple of phone calls from now. In the core, yeah, we would expect some growth over and above the political displacement from last year. I'd say we are pleased with where we're seeing core go in 2023. No, we are not planning as a company for a recession. Mm-hmm. A lot of headlines like everybody else does. As Bob commented a few minutes ago, when we dig down to our local business in our 113 local markets, we see good news at the start of the year. You know, we have no reason to think it won't continue. Now, if the macro changes, the macro changes. I, you know, we can't control that. As Bob said earlier, too, the focus has been creating new local direct business, and it was very successful last year, and the budgets for new local direct are even higher this year. You know, local is our bread and butter on core, and we're focused on it and working hard to bring in every dollar we can. Got it. Did core... Just 'cause I keep hearing this everywhere else, that December was very weak in the ad market, soft start to January and then improvement from there on out. Did local advertising experience like a similar cadence, or was it just stronger altogether? you know, all in all, this is Bob Smith again, you know, it's been pretty decent in December and carried over into the first of the year. you know, as Jim mentioned, there's some, you know, political and Olympic dollars that not returning in February. Other than that, again, we feel pretty good about the quarter, and moving forward after that. Great. Much appreciated. Thanks, guys. Good luck. Thank you. Our next question is going to come from Michael Kupinski with Noble Capital Markets. Your line is open. Thank you. Most of the questions on core have been. I have another question here. You indicated that you plan to pause funding for the Atlanta Assembly project to evaluate opportunities. Sure. I'm wondering if you could just talk a little bit about what options you might be considering there. I mean, I kinda hate to put on a public record what options we're considering. We've got. We have 80 acres over there, and you know, we're pausing. There's some, you know, macroeconomic concern about, you know, real estate and what's going on out there. We're just taking a break. Our focus is on building the studios. We just about have all those built. Gotcha. Gotcha. Okay. That's all I have. Thank you. Thank you, Michael. Our next question is going to come from Steven Cahall with Wells Fargo. Steven, your line is open. Thanks. Maybe Kevin, a couple for you. You talked about the trailing industry sub-trends that you've seen. You know, kind of on our numbers, looks like the industry subs are down about 6% for 22. Do you think that you'll catch up to that over time? Do you plan the business around something like that? Do you think that there is something a bit more structural about your rural exposure that means that you're not gonna revert to that trend and you'll continue to perform better over the next year or so? I would say it's kinda right down the middle, Steven. At some point, we will likely revert to the mean, but it's not gonna be over the next year. We have been trailing for at least seven years now, eight years. I don't see why that would suddenly reverse in one year, and we'd revert to the mean. You know, Yeah. I don't have any insight beyond kinda what we've seen. As I said, you know, third quarter was actually better than the second quarter shock, and the fourth quarter is so far coming in even better. I'm feeling good about retrans, I'm feeling subs, and certainly as we're going through these repricings, feeling really good about the environment for Gray's the value of Gray signals. Great. Another one, Kevin, just on the vMVPD issues and the FuboTV deal. You know, we've heard you and a few of your peers kinda talk about the unfairness of the industry and the ability to negotiate directly with vMVPDs. You know, what is the mechanism that moves that into place? It doesn't sound like this is really an FCC issue. It sounds like it's an affiliate to national network issue. When you think about your relationships with the national networks, what kinda is the function by which you think they might change the nature of those arrangements so that you can negotiate directly? I guess I would answer by saying all four of the network affiliate boards have been having active discussions with the networks about the picture of them negotiating with the virtual providers instead of the affiliates. We are attempting to work out a, you know, privately negotiated improvements or resolution of this issue. It's an issue that animates all 4 affiliate boards and all the affiliate groups. You know, we are actively working, all of us, for quite some time now. Mm-hmm ... to reach a more equitable arrangement with the network. Yep. Jim, thanks for the free cash flow number. Should we just think about cash available for debt paydown? Is the free cash less what you talked to as Assembly CapEx, less the dividends that you'll have for the year? Yeah. The way we define free cash flow wouldn't include the dividend or the A ssembly Investment. As Hilton mentioned at the beginning of the call, I mean, what free cash flow we have this year, the remaining part of the year, most of that will go towards debt reduction. Debt reduction could be a little higher depending on what especially fourth quarter political does, which is, you know, to be determined, right? Obviously, we've got a strong year in 2024 for further debt reduction. I'll remind everybody that, you know, on next Wednesday, we're paying off $295 million of debt. In less than the last 12 months, we have paid down $610 million of debt. I would say that $610 million within the last 12 months is a darn good start to what we promised everybody when we closed Meredith, that we were gonna be focused on bringing down our debt as fast as we could. If I could just- Yeah Steven, just add, you know, we're only a little more than 100 days past the election, we're all maybe enjoying this break from political ads on TV. You may have seen the first presidential primary debate has already been scheduled. It's gonna be this August in Milwaukee. Mm-hmm. Again, we're not making projections on presidential primary money, but the Republican primaries will still be held in Iowa, where we have a huge presence, New Hampshire, where we have a very strong station, Nevada, where we own stations in both markets. In South Carolina, we have a very strong presence. That campaign begins, really officially with the first debate this August. I mean, what, six months from now. Yep Enjoy the quiet now, but the political season's gonna be upon us before you know it. Absolutely. Steven, let me add, you know, one other thing to your initial question. just please understand that as a matter of just basic, law and common sense, no other company has a right to negotiate on behalf of my company without our consent. That's just common. I have no intention of negotiating in public, or criticizing anyone anywhere. The negotiations in the past, everyone agreed to, so they were handled that way. The affiliate groups feel that times change. I will refer you- Yeah ...to our friend, Chris Ripley, who in his earnings call, I think set out brilliantly, Sinclair's position, and I personally endorse his comments, and where he articulated it. I picked it up through a Broadcasting & Cable article that covered some of those issues, and that's where Gray stands as well. I'm very hopeful that we can work out something with all of the networks, but we consented to where it has been. We will not be consenting going forward. Yeah. That's very clear. Thanks, everybody. Thank you. There are no more people in queue. All right. Well, everyone, thank you very, very much for joining us today. We're very excited about what we did in 2022, we really are actually quite excited about 2023. We are not seeing signs of the much-heralded recession. We're actually seeing a lot of robustness in Main Street throughout our 113 markets, and we see no regional dips. It seems to be across the board. We enter 2023 with a great deal of optimism and look forward to talking to you with regard to our first quarter of this year. Thank you. Thank you for participating. You may now disconnect.