Welcome to the Gray Television Q4 2023 earnings call. I will now turn the call over to Hilton Howell, Chairman and CEO of Gray Television. You may begin. Thank you, Operator. Good morning, everyone, and thank you for joining us. As the Operator mentioned, I'm Hilton Howell, the Chairman and CEO of Gray Television. Thank you for joining our fourth quarter 2023 earnings call. With me here in Atlanta are all of our executive officers, Pat LaPlatney, our President and Co-CEO, Sandy Breland, Operating Officer, Kevin Latek, our Chief Legal and Development Officer, and Jim Ryan, our Chief Financial Officer. As usual, we will begin with a disclaimer that Kevin will provide. Thereafter, I will discuss the company's results and expectations, followed by brief remarks from Jim Ryan regarding our financial posture. Then after those remarks, we will have a few questions for all of our officers here with me today. Kevin? Great. Thank you, Hilton, and good morning, everyone. Gray uses its website as a key source of company information. The website address is www.gray.tv. We filed our annual report on Form 10-K with the SEC a few minutes ago. 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. These metrics are not meant to replace GAAP measurements but are provided as supplements to assist the public in their analysis and evaluation of our company. Included in our earnings release, as well as our website, are reconciliations of the 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 on Form 10-K and our most recent earnings release. The company undertakes no obligation to update these forward-looking statements. I now return the call to Hilton. Thank you, Kevin. Before turning to today's earnings release, I want to address Gray's upcoming transition to a new Chief Financial Officer for the first time in 25 years. A few days ago, after the successful completion of the refinancing and the upsizing of our revolver, Jim Ryan notified me that he would like to transition into retirement after 2025 and, as part of that plan, to step down from his CFO position later this summer. As many of you know, Jim joined Gray as its CFO in 1998 upon our acquisition of Busse Broadcasting, where Jim had also served as CFO. And during that process, we were so impressed that he negotiated to the very end and really almost negotiated himself out of a job that we decided to offer him a job to take over and run the combined company. And happily, he agreed. He has provided steady leadership and management of the company as we have divested our previous publishing assets and embarked on two significant waves of acquisitions of the highest-quality television stations in the industry. Jim and his entire team have been instrumental in helping to build Gray into the leading multimedia company that it is today. While we will all miss Jim's day-to-day contributions, we are very fortunate to have succeeded in hiring his most logical successor, Jeff Gignac, a 20-year veteran of media and telecom banking at Wells Fargo Securities. Gray's leadership and finance teams have worked closely with Jeff over many transactions, and he knows our company as well as almost anyone who is not already working here. He is, therefore, the perfect candidate to become our next CFO. So I'd like to welcome Jeff to the Gray Television family. Turning now to our earnings release, it should be clear to all that Gray Television delivered in 2023 by nearly every measure. Our core advertising and retrans revenues increased over the prior year, and political advertising revenue increased over 2019, the last year before a presidential cycle. Meanwhile, our local television stations continued to score with our audiences and to bring new business to our airwaves and our digital platforms. Our stations also collected more awards and recognitions from outside organizations for their successful news, investigations, and community service. In the second half of the year, we reached substantial completion of our state-of-the-art Assembly Studios movie and television production facility here in Atlanta. In December, NBCUniversal commenced its long-term lease for 2/3 of our sound stages at Assembly Atlanta. With these achievements in 2023, we have laid a strong foundation for 2024, which we believe will be further powered by another significant presidential election cycle. In the fourth quarter of 2023, Gray had total revenue of $864 million, which was at the high end of our revenue guidance. The company had total operating expenses of $664 million, which was below the low end of our expense guidance for the quarter. Fourth quarter revenue was $143 million, or 20% ahead of 2021, our most recent non-political year. Our fourth quarter 2023 core advertising revenue was $415 million, an increase of 2% from the fourth quarter of 2022. Retransmission consent revenue was $365 million, an increase of 3% from the fourth quarter of 2022. Unfortunately, investments to grow and diversify our company do not always pan out, but in the fourth quarter 2023, due in part to non-cash write-downs of certain investments, Gray posted a net loss attributable to common shareholders of $22 million. On the other hand, when investments do pay off, the rewards can be tremendous. And indeed, we saw such a payoff about two weeks ago with the receipt of $110 million in pretax proceeds from the sale of BMI, in which we have long held a position. Operationally, we had a tremendous fourth quarter, not only in sales and content but also in multiple initiatives to leverage our unique assets for future growth. In fact, our significant focus on developing new local direct advertising business continues to be very strong. During the fourth quarter, we grew our new local direct ad revenue by 12%, and that momentum has continued into 2024. In addition, as the year drew to close, we extended our affiliation agreement with NBC for another two years. We are happy that this long-term relationship continues. The most exciting initiatives involve our aggressive efforts to bring professional sports teams in our markets back to free, over-the-air broadcast television. After extensive efforts over the summer and fall, we were able to announce two major deals on top of our previously announced long-term deal with the Phoenix Suns and Mercury, with storied professional sports franchises at the end of the year, literally New Year's Eve. First, the Atlanta Hawks returned to Peachtree TV in Atlanta after almost 30 years away for nearly every Friday night game remaining in the 2023-2024 NBA season. Thereafter, we followed up with the announcement that the New Orleans Pelicans would have 10 of their games this NBA season broadcast to fans on Gray's WVUE and our Bounce channel in New Orleans. But significantly, in both cases, we have supported the teams by carrying these games in all of our stations where all of their true fans are. T he Hawks are broadcast throughout the state of Georgia and a good half of Alabama, and the Pelicans are broadcast across the entire great state of Louisiana and most of Mississippi and even part of Alabama. Gray has begun 2024 with great momentum. In January, we hosted our station general managers for our annual meeting, and they are universally excited about the year ahead. We have continued to sign up professional sports contracts with new deals announced in the last few weeks to bring Gray stations' games featuring the Cleveland Cavaliers, the Oklahoma City Thunder, and the Milwaukee Bucks. Over the past several weeks, Gray has also renewed all of its retransmission consent agreements with MVPDs that expired in the fourth quarter of January 2024. These renewals cover a sizable portion of our subscriber base at higher rates and improved terms that recognize the enduring value of our truly unique local stations and what they continue to provide. Earlier this month, our CBS portfolio capitalized on the Super Bowl with $18 million in local ad sales. That was a 200% increase over our Super Bowl net revenue last year across our Fox station portfolio. But significantly, it also represents a 39% increase over the last Super Bowl broadcast on our CBS stations. Most recently, we took advantage of a good opportunity to launch a process to refinance certain of our senior credit facilities. Unfortunately, an unexpected turmoil in capital markets led us to postpone that effort with regard to our term loan expiring in 2026. We did, however, successfully refinance our revolving credit facility as our bank stood strongly with us and provided us with a new and larger revolver totaling $625 million. Although we do not have any amounts currently drawn on our revolving credit facility, it will provide us with additional flexibility in the future when and if needed. We very much appreciate the bank's continuing and deep understanding of our company and our business and their unwavering support of our efforts to grow the company and reduce its debt load. As we now look ahead to 2024, I remain very bullish about our prospects and our future. Our television stations continue to perform at the absolute top of their game. Sports teams are rediscovering what our local advertisers and viewers already know, which is that our local stations offer unparalleled reach and promotional opportunities for free to 100% of the viewing audience. 2024 will see us continue to build on these foundations for continued success. Finally, I'm very proud that we have created the nation's finest television and movie production facilities at our Assembly Atlanta complex here in Atlanta. By relying on local contractors, tradesmen, and materials, we were able to deliver the facilities to NBCU in just 19 months from the date of announcement. In 2024, we will be putting the finishing touches on the studio complex and certain infrastructure projects. These additional projects will require about $52 million in capital expenditures, but they will be netted against about $31 million in reimbursements for the public nature of these infrastructure projects, or a net of about $21 million. It is extremely gratifying to us to now see the major content creator, NBCUniversal, leverage the sound stages and support buildings into a new major center for its world-class productions. On the Gray side, we are actively marketing the sound stages that we have retained at Assembly as well as our pre-existing sound stages at our adjacent Third Rail Studios to bring additional production work here to Atlanta. This now concludes my remarks, and I will turn the call over to Jim Ryan. Thank you, Hilton. Good morning, everybody. Hilton covered the key highlights of the quarter and of the full year, so my remarks will be very short today. Again, we're very pleased with our Q4 and year-to-date results, especially the growth in core revenue. On a debt-net-of-cash basis and on terms consistent with our senior credit facility, total leverage ratio at the end of the year was 5.60 x, and our first-lien leverage ratio at the end of the year was 2.38x. Turning to our Q1 2024 guidance, we look forward to a successful full year 2024 and we're off to a good start in Q1. We're very pleased with core revenue and Q1's growth guiding. To mid-single-digit% increases. Core revenue got off to a great start, helped by the $18 million of Super Bowl advertising revenue in February, providing for a strong year-over-year increase in core revenue in February. But more importantly, we see both in January and March, core revenue is expected to be increasing in both months year-over-year. I'll turn now to some comments on the full year 2024. As we've said consistently for some time publicly, we are not providing a guide on political revenue for the full year of 2024. We will point to 2020 and say that after deducting the $50 million that was associated with the double Senate runoff election in Georgia that year, we had approximately $600 million of political revenue. Of that $600 million, about 22% represented the presidential campaigns that year. We'll also point to 2022, where we had approximately $515 million of political revenue. All of you on the call are welcome to plug in whatever political revenue estimate you want for 2024, and after Election Day, we can compare notes to see who got closest. Turning to some other data points for the full year 2024, we expect core revenue of approximately $1.6 billion, retransmission revenue of approximately $1.5 billion, other TV revenue of approximately $70 million, production companies' revenues of approximately $110 million, our operating expenses before depreciation, amortization, impairment, gain and loss on disposal of assets, broadcasting of approximately $2.4 billion. That would include approximately $937 of network compensation, also known as retransmission expense. We expect approximately $85 million of expense at the production companies and our corporate expense of approximately $125 million. Significant cash uses in 2024 are as follows. We expect cash interest of approximately $430 million. Routine capital expenditures between $115 million-$120 million. As Hilton already mentioned, our net additional investment in Assembly Atlanta is expected to be $21 million. Our cash taxes are expected to be between $190 million-$210 million. That obviously reflects political in 2024. It also reflects the taxes we will be paying on the $110 million of the BMI sales proceeds. Our preferred dividends were approximately $52 million, and our common dividends will be approximately $30 million. Turning again to the BMI proceeds of $110 million, that translated into approximately $81 million after-tax cash proceeds. We use $50 million of that $81 million to repay in full all outstanding amounts under our Revolving Credit Facility. As Hilton said earlier, we have nothing drawn on the Revolving Credit Facility as of today. Finally, as Hilton mentioned, we're very pleased to upsize our revolver to $625 million, and we appreciate our bank syndicate's understanding of the fundamentals of our business and partnering with us into the future. I'll now turn the call back to Hilton. Thank you. Thank you, Jim. Before we open up the floor to take questions, I would like to conclude our remarks on what I view as an exceptionally positive note about the momentum that we are building with professional sports, particularly with the NBA. We have been able to use our unmatched regional presence to distribute these games on our stations across the entirety of the states of Arizona, Georgia, Ohio, Louisiana, Mississippi, and Alabama. At the same time, we have worked with other broadcasters to fill in a few holes in our distribution map as we have done with Allen Media, and soon will announce similar deals with other groups. We have also worked with other broadcasters to enable our stations to provide outer-market distribution for NBA teams in cities where we do not have the major market television station, as we have done with Griffin Media in Oklahoma City and Tulsa, and with Weigel Broadcasting, and soon with more companies. I'm happy to see the industry working together to provide the power of broadcasting to local professional sports teams and their amazing fans. Last but certainly not least, it is worth highlighting the massive increase in viewership that these teams are receiving when their games appear on free local broadcast stations instead of their traditional regional sports networks. In market after market, these NBA teams are enjoying ratings that are two and often 3x higher than what they had been receiving previously. Even more importantly, they're reaching 100% of their fans. We are racking up impressive ratings for NBA games, not just and this is important to me, in their home market, but throughout the regions where we are distributing the games. Through local broadcast on Gray Television, they are getting to 100% of their fans. B roadcast stations and professional sports teams are among the strongest local institutions that help to bind our communities together. When we struck our deal with the Phoenix Suns and Mercury, something occurred that I'm extremely proud of, but I am a little embarrassed that I didn't think of beforehand. Once we launched and it went out on broadcast television, our local general managers received many letters from local individual American Indian viewers who had never been able to watch their basketball teams before. We are immensely proud that we have spread these sports teams to truly 100% of their fans. We are at an important time in history when these two powerful forces are proving that coming together can provide unparalleled reach and experience that benefits everyone. So, operator, at this time, we ask that you open the line for questions of anyone here on the leadership team. 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 the telephone keypad. And I'll just give it a few moments for the queue to build. It looks like our first question is going to come from Aaron Watts with Deutsche Bank. Your line is open. Hi, everyone. Thanks for having me on. Let me start by saying to Jim, congrats on the announcement. Well-deserved. But happy we still have some time left to work together, and I'll save my laudatory remarks for a later date. Maybe I can start with a question around retrans. Your retrans revenue growth implied in your first quarter guidance seems to be a bit of a slowdown from what we've seen in recent quarters. Can you unpack that a little more for us? Is that just timing of renewals? Is there an acceleration in the decline in the underlying sub base? And maybe the same question, thinking about the components for the full year. Hi, Aaron. This is Kevin. Aaron, this is Kevin Latek. We renewed a number of our contracts that were expiring at the end of the year, as Hilton mentioned on the call, and we're happy with where those renewed at. As the numbers are getting bigger, the percentage increases can't be as big, but we're very happy with the rates that we got and the terms that we received. So the first quarter was about 38% of our total MVPD sub base. The virtuals, of course, are becoming a more sizable portion of that, so when we talk about the percentage, we're talking about the traditional MVPDs. The increase in our growth was not as significant as we had hoped, and we attribute that not to the rate increases but to the sub declines. The traditional MVPDs, and this is publicly reported by the companies you all follow, continued to see losses last year, and unfortunately, it seems like the losses actually accelerated last year. That may be due to the strikes leading to not as much new programming or interesting programming on big broadcast networks. W e're hopeful with the strike behind us and new premieres coming back out that we'll see the sub-losses stabilize. But we did see a continued decline in the traditional MVPD subs through last year, including through the end of last year when we were expecting to see that slowdown. So the net result of that was that our gross retrans was not powered as much just because we had a smaller sub base to multiply it on. On the reverse side, we've been saying for some time we expect the network comp is going to stabilize, and I think that's pretty clear in the guide today, that network comp is stable. But the system where we're paying a fixed fee to the networks and receiving variable income is one that has to change. And I expect all the broadcasters see that, and we will continue to push for a realignment of that formula because that's absolutely not working for local broadcasters any longer. Okay. Thanks. That's helpful. And then, Jim, I appreciate your comment on political, but with the way the Republican primary has played out, have your expectations for political for the year changed? And given the races you see in play, I don't know if I could ask you if you think you can grow off that $600 million result from 2020, I think you mentioned. We are not going to comment on any growth rates or specific numbers. We will tell you we are confident that 2024 will be a strong political year given how this year's primaries have shaped up versus 2020, which is just stating the obvious, right? I mean, it's two different cycles. We think the political will be naturally more backweighted to the second half of the year and especially the traditional general election campaign season of September through Election Day. So. Okay. Understood. Other than saying, I don't know how many hundreds of millions of dollars we're going to get, but we're going to get a lot of it. W e have always historically done better per capita than anybody in the peer space by a long shot. We don't see that being any different this year, and we got a lot of Senate and House races as well. So we think it will be a good year, but we're not going to put a number on it this early. It's way too early to even try to put a number on it. Aaron, let me just add a little bit to that. I mean, this is an unusual time period in the sense that you have a number of third-party candidates. We've had them in the past that may be out there. Robert Kennedy, obviously, comes to mind. He had a $7 million ad that a PAC of his put on the Super Bowl that I'm sure all of you saw. We have had a rapidly moving Republican primary season. South Carolina is Saturday, but Governor Haley, Secretary Haley, Ambassador Haley, I should say, has significant funds, and she intends to continue with the primary process. Donald Trump's able to generate an awful lot of free media by his rallies, and that covers it, but he's not going to get what he's had in the past. And so I think he's going to be advertising. Now, a lot of you may be thinking that a lot of his money is going to legal fees. We'll see. But one number that I'm actually certain of is that the Biden-Harris team announced a quarter ago that they had raised a hundred and I think it was $114 million, which was the largest sum ever accumulated by any Democratic candidate in any previous election cycle. T hat was a long time in advance. And so I think the real determinants are going to be what the respective parties and their respective candidates raise. And from everything I'm saying, those numbers are historic numbers, and hopefully, that goes through and matriculates through in an ad business because they're not going to sit on that money. They're not going to pay their debt off with it, right? They're going to spend that money. Gray Television stations, because of their news dominance and their huge viewership in their local markets, always outperform. The only thing we see is not repeating outside of strong, strong political revenue is we don't expect a double Senate runoff for four months in Georgia this time around. We've taken that out, and that was in Jim's comments. We think it's going to be a great season. Okay. Thanks for that, Hilton. If I could flip one more in, and I appreciate the time. You ended 2023 at 5.6x leverage. As we're starting a new year, Jim, any fresh thoughts on where you see that leverage trending 12 months, perhaps 24 months out? Relatedly, does debt paid out remain a top capital allocation priority? Are there any other levers beyond organic free cash flow we should be thinking about to help accelerate the deleveraging process? That's it from me. Thank you again. O ur number one priority with our free cash is to use to delever as rapidly as possible. We've been saying that consistently for some time, and that has not changed. Over the next year or so, I see us getting, without being too specific because if I get too specific, then people will start triangulating on political, and I'm not going to go step on that landmine after just saying we're not guiding for political. I see us getting into the lower fives, and then as you go out a little farther, you're definitely in the fours. And we will continue to push it downward over the next several years as rapidly as possible. Our next question is going to come from Dan Kurnos with Benchmark. Your line is open. Great. Thanks. Good morning. Kevin, can we just go back to retrans for a second? First, housekeeping because I think Hilton said this. Are all of the deals that came up at the end of the year, that 38%, are they all done? Hilton said all of the deals that expired in the fourth quarter and in January of 2024 have been renewed. We have not finished the first quarter, and therefore, we have not finished renewing the contracts that expired after January 2024. We're still in discussions. The figure of 38% of our subs is the entire quarter. So we have renewed almost all contracts, but we're still in discussions with another large party. It's going fine. As it has in all prior cases, we will get it wrapped up in the ordinary course, and it'll be retroactive to the expiration date. So again, we had 38% expiring in Q1, which takes us to basically January 1st. And we have done all those that expired at the end of the year in the month of January, and we have a continuing conversation with another party that's on track that is in Q1. In the second quarter, we have more renewals that are up. Those renewals represent about 23% of our traditional MVPD sub base. Okay. So the Q1 guide assumes that retroactively, you will complete the large-party negotiation. That's what you're telling us? Our guide represents our current estimate at this time of the deals that will be in place and our good faith estimate of what the rates will be for the first quarter. Okay. Look, you made some fairly strong commentary about the ecosystem and the fact of the fixed fee and the impact, obviously, on reverse. Based on your guide, how do we think about kind of net retrans from here? Obviously, $1.5 could mean a couple of different things, but just we have the reverse piece of this. I'm just trying to get a sense, especially since your biggest renewal year, how we should be thinking about net growth from here. Jim provided a full-year guide of approximately $1.5 billion for gross and $937 million, I believe, for network comp. We're not, at this point, smart enough to know tens of millions of dollars which way that $1.5 million's going to be. Again, we don't have a crystal ball on the sub numbers, and as you know well, we don't even get the numbers until three to six months after the quarter's over. So doing all the modeling, we can make assumptions. We have believed for a while that the sub-losses would be it kind of mostly moved through the folks who were planning to drop traditionals and either go forward with virtuals or back to antennas. This past fall, the programming was not particularly strong, and the sub-losses continued when we expected them to slow. We can only make guesses at this point as to what the future holds, and so we'll just simply say we continue to think that the sub-losses should be slowing, but we don't have the visibility into what's going to happen in the future. So I don't know how we can give a and we are not going to give a more specific guide on gross because we don't have enough intelligence on what the future's actually going to do with the MVPD traditional MVPD subs. Okay. And just one on the production studios, on Assembly. I guess for Jim or for Hilton, where is that going to hit the P&L, and what do you guys have assumed, I guess, or directionally assumed for 2024? I think Hilton said you're Hilton, I think you said you're marketing the other sound stages. So just how do we think about your ability to grow? Yeah, go ahead. Let me just kind of touch base on that. I mean, we're in a very unusual. Hollywood, however you define that term, is not greenlighting a great number of productions right now. In fact, we have had three that were coming to our studios initially that ended up getting canceled by their respective production houses. I think there are a number of issues that are holding that back. Obviously, there is a potential strike, and hopefully, it is just a potential, and it will dissipate with IATSE that I think comes up in May, and I think that leads to some reticence. I will say I think there was a lot of expectation that when the studios and the guild and SAG-AFTRA came to conclusion that it would be a rush back, the truth is I think people actually really stopped. I think a lot of productions are out there writing the scripts, and so we expect a pretty healthy resumption of production capacity. But exactly when that begins will depend, I think, largely on the IATSE strike or lack thereof. Where does all that stuff fall in the P&L, just to be clear? It's in the production lines as it has been. Got it. All right. Thanks, guys. Appreciate the color. Our next question is going to come from Jim Goss with Barrington Research. Your line is open. All right. Thanks. A couple about your sports comments. One, I'm curious if adding some of the sports at the CW, including LIV Golf, has impacted your affiliated properties to any significant extent. And also, when you noted sort of regional broadcasts of some of the local sports teams to maybe the rest of the state or neighboring states to your Gray stations, I assume that's envisioned in the contract terms when you do those negotiations. I wonder if you might talk about that a little bit. Sure. Let me start with your second question, Jim. It's Pat. So yeah, we are I think Hilton's point in pointing out the fact that we're not just in Atlanta, but we're in the whole state of Georgia and some other markets in neighboring states with over-the-air television is just an indicator of how and the audiences that we're seeing is an indicator of what a great move this is for professional sports to go to local television stations. Hilton referenced a couple of a little bit about ratings performance, and I'll give you a couple of examples. So in New Orleans, Louisiana, we've run four or five NBA Pelicans games on our FOX affiliate there. And Sandy, correct me if I'm wrong here, but the ratings on those games are essentially double what the normal prime-time average is in that market. That's correct. These games are bringing new viewers. Many of those viewers are younger. They're bringing very large audiences, and they're bringing new advertisers to our stations. And again, the key point in your question revolved around, "Well, it's not just New Orleans. It's also Shreveport, and it's Biloxi, Mississippi, and it's Baton Rouge." And same thing with Augusta and Albany and Columbus and Macon in Georgia. A ll of those markets are seeing a lift there, not only in ad revenue but also in new folks coming to traditional television stations along with new advertisers. So your other question was around LIV Golf in CW? Right. I think they've been looking at sports as a complement in areas where you really didn't have any programming from that network. Yeah. So I think the first thing I'd point out is that the ACC football and basketball packages that the CW is airing actually comes from Raycom Sports, which is a Gray company, and we're very excited about that. Look, we're happy to see the network go acquire sports. We think it's good. We think it's good to grow the viewership base on that network and good for retention. We are happy to have some CW affiliates and to be partnered with Nexstar on that. I hope that answers your question. Well, I was just wondering if it's made much of a difference. Is it significant or just a minor thing? We're seeing some increases, but I can't say it's. I will just tell you as a viewer, Jim, just to have Georgia Tech football here in the Atlanta market, that's a really big deal. I mean, I'm not a Georgia Tech alum, but I love watching those games on the CW. And so I think we're probably the second-largest CW affiliate, and we're thrilled that Raycom Sports could help move the ACC to the CW. W e're actually also thrilled that LIV G olf is out there. At its Super Bowl, the LIV G olf was out there at the same time. They had huge audiences. We don't have any numbers for that here. That may be a question you need to ask the folks at Nexstar. But from our side, we're very happy with what they're doing, and we're very happy to be affiliated with the CW Network. Okay. Thanks. And one other, and maybe this is for you, Hilton, primarily. You've had quite a period of time over the past several years with the significant acquisitions, which you mentioned in talking about Jim, and the retrans growth and Assembly Studios now ramping up. I'm wondering, as you look forward the next year or two, what do you think would be the principal growth levers you think we should be calling attention to? Well, we haven't spoken about this, but we have a presentation coming up for our board from Rob Folliard. We think ATSC 3.0 is going to be a huge growth for the future. We think there's going to be changes with regard to the retrans that exist with traditional MVPDs in terms of how that's taken. I think Kevin sort of addressed that. One of the things that I'm actually really thrilled about is that throughout 2023, Gray was the only TV company out there that consistently grew its core revenue. And so quarter- after- quarter, our core revenue was up, and in the first two months of this year, it's accelerating. Now, that may be because Sandy Breland's now in charge of it all. I don't know, but she's doing a great job out there. And so we think there are all kinds of avenues for growth. Some of them may not be quite as fast as the retrans from 2009 to today in terms of its growth, but we think broadcast television is as healthy now, if not healthier, than it's been in decades. We actually did a video for our general managers. It's Back to the Future. Because what we're seeing is a return to broadcast television. Now, I know that doesn't fit the narrative out in New York, but too many people confuse the term linear television. A lot of people, what they mean by that is cable-distributed. Cable networks. Back in the day when Ted Turner was in the cable business and he was telling everybody he was cable for cable was cool, all right, well, they started all those different businesses. Way back in the day, and some of us around this table were here, all we had was advertising to grow the company. Now, we have so many other different areas. One of the things that we have been so successful is growing our digital revenue. That's 100% ours, and it gets bigger and bigger and bigger every year. So I think there's just a tremendous amount of opportunities for growth, and I think you're going to see us have an extraordinary 2024. All right. Well, thanks for your comments. Appreciate it. Our next question is going to come from John Kornreich with JK Media. Your line is open. Hi, Jim. I got a question for you. Right now, you have subordinated debt of $1.45 billion coming up in 2026 and mid-2027. The market is expressing skepticism as to whether you're going to be able to refinance that. The yield on that debt is about as of today, is about 13%. What is the plan to reliably, predictably refinance the 2026-2027 subordinated debt? Talking about the senior notes, John, and not the term loan? Right. The bonds. I have every confidence that they'll be refinanced in due course. The company throws off tremendous amounts of free cash on a two-year blended cycle, as you well know, and as we've consistently demonstrated for years. I think a lot of the pricing in the bonds is reflective of the interest rates on those bonds and where the current interest rate environment is. They're yielding 12%-13% yield to maturity, not current yield. I mean, that, to me, expresses some skepticism of your ability to refinance the bonds. Otherwise, they'd be yielding more like Nexstar or Tegna bonds, which they're not. Well, all I can tell you is I have absolute confidence that we will be in due course. We will be refinancing them. Okay. Thank you. As a reminder, if you would like to ask a question, press star one on your telephone keypad. Our next question is going to come from Craig Huber with Huber Research. Your line is open. Great. Thank you. My first question, your retrans subs in the fourth quarter, how much were they down year- over- year? I think you said three months ago for the third quarter, they were down mid-single digits. What was the trend the latest quarter? Yeah. We have not been providing our sub counts. Our sub counts are running sort of consistent with what you're reading in the press on what the public companies are reporting. So the traditionals have been declining. The virtuals have been growing. The net effect of that is that our total sub count is down a little bit. But the traditionals is where, obviously, our rates are higher because we negotiate those on our own, and those are declining much faster. The public PTV companies are reporting their numbers, and we're seeing, our numbers are fairly reflective of theirs. Our company used to be primarily concentrated in small, midsize markets, so our sub trends seem to be different than what was being publicly reported since we closed the Meredith deal. We're now more evenly distributed among large markets through small markets. As a result, we've been saying for the last year or so that what we see in our own internal sub count sub report are numbers that are largely reflective of what's being reported publicly, so we don't feel the need to start throwing out minor differences between what's being publicly reported. What you see publicly is reflective of our own experience. Okay. And then, Jim, a housekeeping question. Below the line, you have a miscellaneous income number of about $12 million in the quarter. It's a lot larger than it normally is. Just what is it, to be clear? Hang on. I'm trying to grab my key and help this. A gain or something in there? Oh, yeah. It's probably have some of the—no, that'd be further down. Interested in a colleague today. Yeah. Let me just catch up. I'll catch up to you later on that. I need to go down another level of detail, which I don't have right in front of me. Okay. Appreciate that. So on the total cost, total net cost for Assembly Atlanta, including the $21 million net you're expecting to have to pay this year, what's the total net cost for that going to come out to, you think? It's in the 10-K. Yeah. We put it in the 10-K in liquidity. 570, It's $570 million. Okay. Including what you're going to pay this year. Okay. Appreciate it. Okay. Good. So just giving your guidance for this year, so I want to get down to here. You talked about production revenue of $110 million, $85 million in production costs, obviously, back into $25 million or so of EBITDA for the whole production company line. Obviously, that line, the EBITDA last year, I guess, was about $6 million. The year before, it was $10 million. So it infers maybe round up, it's called $20 million or so of EBITDA this year. You're inferring that over time, that's going to grow significantly from that number, or what's going on there? I mean, $20 million of EBITDA versus $570 million total cost is not exactly an ROI, I'm sure, you originally were expecting. T here's some puts and takes in the production line. As Hilton already mentioned, for this year, our studios that we own, we expect they will be leased a little later in the year, which is muting that production revenue number for the full year. But as Hilton said, we fully expect, as the year goes on, that those studios will be leased out as we had originally intended. Also, if you recall, and we commented about this in the Q1 call last year, when Diamond had its bankruptcy, we had to completely redo our ACC agreement, and that's how we got it over to the CW. But we also said at the time that that redone agreement was not as lucrative to us as the previous agreement we had with Diamond. So there is some noise in that production line for this year. Thinking to the larger Assembly project overall, remember, the studio complex represents only about 43 acres of the total acreage. We have somebody can correct me if I'm wrong, but I think we have about 80 acres left that is undeveloped presently. We have said that over the next three, five, seven years, we would be looking to develop that. I think that future development certainly will bring with it additional revenues to justify the total investment. Okay. Appreciate that. But you're just saying it's going to take some time here to build to a proper ROI in your mind, I guess you're saying. Yeah. Yeah. Phase one was the studios, and as we've talked about a couple of times on our calls last year, we "rushed" that because we had a tight delivery line under our NBCU lease agreement. And so we ran full speed ahead to get that done. Delivered to NBCU on time. T hen we had been clear on multiple calls last year that aside from the $21 million of modest cleanup investment this year, which is largely public infrastructure, that we would be taking a pause in the very near term to start thinking long and hard about how to unlock the rest of the value in the undeveloped acreage. So the short answer is yes. It's going to take a little more time. Okay. My last question, if I could, guys. Your retrans costs for the year, your guidance is obviously flat year-over-year and stuff. I believe you had an NBC contract renewal at the end of last year. Correct me if I'm wrong there, in a handful of CBS stations for renewal. I mean, that's pretty good or darn good on your part that you're able to hold that line flat this year despite those contracts up for renewal at the end of last year, if I have that right. Maybe just talk a little bit deeper about that. I mean, what's going on there? Because that's not like what's happened in the past, obviously. You're obviously having your way here on the contract side of things with these renewals, it infers to me, right? Without, obviously, commenting any specific contract, we renewed CBS last summer for the Meredith Group and then the Legacy Group, which were on slightly different dates. And then, yes, all our NBCs were up at the end of the year. We have been predicting for, I think, two years now that the network comp rate of increase would be slowing, if not stabilizing. And I think we've seen that in the numbers that we posted today in our full-year guide. Comp being flat with last year. What I said at the beginning of the call is we would anticipate broadcasters being more vocal about changing that regime so that the network comp begins to decline along with the sub numbers. But that will take some time to work out, and that's, obviously, something that's not on our near-term decks since we have no near-term renewals. Okay. Great. Thank you, guys. Circling back to the question on the $12 million miscellaneous, the vast majority of that was actually some proceeds on a spectrum auction that we actually were pleasantly surprised at. Our next question is going to come from Hal Steiner with BNP. Your line is open. Hi, guys. Thank you so much for taking the question. I think I just wanted to clarify, for one, I think your 2026 and 2027 are trading at yields actually below 10%, nowhere near 12%. So I just want to maybe straighten that out because I thought that was a lot. But anyway, I think notwithstanding maybe a little bit of a softer guide for 1Q, you guys are still going to generate a substantial amount of free cash flow this year. And in light of the equity coming off a little bit, that your dated bonds coming off a little bit, is it still right to think that the main priority for free cash flow should be addressing the front end, 2026, 2027, and not pursuing any discounted debt buybacks or anything like that? I think that is more likely than not, yes. You always got to say, I can't never say never. But I think and as clearly as we did start a refinancing of the 2026 term loan a couple of weeks ago, and then because of a market dislocation that had absolutely nothing to do with us, we postponed that just to wait for a little bit better time in the market. So I think we've clearly signaled that it's more likely than not that we'd be focusing on the 2026s and 2027s first and then thinking about the longer-dated stuff later. Got it. That's super helpful. Thank you so much. That's all my questions. Thank you. Our next question is going to come from Alan Gould with Loop Capital. Your line is open. Thanks for taking the question. First, Jim, congratulations on your retirement. I have two questions left. One is the reimbursements on the Assembly plant appear to be a little bit less than I was expecting. I was wondering if that might be in some other line item. Secondly, if Hilton or someone could comment if the Georgia production tax credit bill has any significant impact on what you see coming to Georgia. I 'll take the first question. Yeah, there's a little bit of a timing difference in 2023. Some of that we had expected to get in 2023, and it's actually showing up now in what we're about the roughly $31 million we're expecting in 2024. Part of it was just a shift in the timeline of some of those projects. So as I've commented before, the public side has to be done, completed, inspected, valued. And I think there's several other steps involved. So one, some of the public stuff, it wasn't critical to get it. To activate the NBCU lease, so we let it slide a little bit. So the public funds are following it as well in the construction schedule. And I'll remind everybody that those public funds, which we refer to as the CID, all of that money has been in a trust account. It is dollar good. It's just the related public infrastructure has to be completed in order for us to go through the process of getting the funds out of the trust account and into our bank account. With regards to any questions about the Georgia tax film credit, we've obviously been deeply involved. I have personally been deeply involved in all of the negotiations. During the summer, the state of Georgia launched a review of all tax credits in an effort to begin a process of reducing the overall tax burden on the Georgia citizens here. We don't see any effort on the part of anyone in the Assembly to get the tax credits, we don't think that's an issue at all. In fact, everyone wants to make sure that Georgia remains a competitive player in the film industry because it is now a permanent part of our economy and generates, say, huge amounts of revenue for the state. There's all kinds of discussions about how much that revenue really is. T here's room for people of good faith to differ with what that is. But I'll tell you one thing. It's the film business that has a big chunk of the reason that the state of Georgia is sitting on close to an $18 billion surplus this year. I think everybody at the General Assembly understands that because it creates revenues from everything from restaurants to lumber mills to carpet mills to every industry in this state. And so plus all the creatives that we have. And Georgia has spent two decades, two generations, really, through the Georgia Film Academy of building up a huge reservoir of local talent that can operate in the production space. And that employment base is in the hundreds of thousands. And so there's a huge constituency here for that in this business. And so I expect it to continue. The slowdown that we have in terms of leasing, I think you'll probably hear about it in a lot of places. People are reassessing a number of things. Hollywood's just not greenlighting enough. I think that will change dramatically when this potential strike is settled and when some scripts get written. Okay. Thank you, Hilton. Thank you. We have enough time for one more question, and that's going to be from Steven Cahall with Wells Fargo. Your line is open. Thank you. Thanks for squeezing me in. Maybe first, Kevin, just as it relates to reverse, the slowing rate, and you said the comment about how reverse isn't working for broadcasters any longer. I think you've maybe been leading the charge here to try to change the norms, whether it's negotiating directly with the MVPDs or changing the structure of reverse. Can you give any more clarity on how you think this can work for affiliates over the next couple of years to start to realign expectations in reverse? Your outlook for growth. And then maybe Hilton or Pat, how do we think about margins on sports rights? So it certainly seems like the viewership is strong, the advertising, and the revenue generation is strong. I think one of your peers has said they expect to be essentially cash accretive on sports in year one. Wondering if you could confirm that with your sports rights as well. And then lastly, Jim, how do you just think about when you want to restart the refinancing process? I know there was a lot of volatility in the stock that caused you to delay that, though, with the completion of the upsize revolver. But what do you need to see to kind of get back on that track? Thank you. We're going to do these really, really fast because we have the post-calls actually starting a minute ago. And I think we've got your team coming up in a bit this afternoon. So super fast. All the affiliates of the content companies, cable, satellite, virtuals, pay for all channels on a per sub basis. Broadcasters are the only people who are paying the conglomerates on a fixed fee basis. And so I think the simple answer there is we should be paying a per sub basis as well. So quick answer on sports? Yeah. Sure. So these deals will be accretive. Jim? Sorry, Steve. What was the third leg of the question for me? T to restart the refinancing process. We will, more likely than not, be coming sooner than later. That's not necessarily Monday, but we certainly would like to get back to the market and get that done in the reasonably near future. Obviously, that was an opportunistic refi, and we want to hit a good market window where we can conclude that opportunistic refi. Got it. Got it. Thank you. Great. That was efficient, Steven. Thank you. Talk to you soon. Listen and thank all of you for being here this morning. We really do appreciate it. We can't wait to talk to you about our first quarter of 2024. It's wonderful to bring 2023 to an end. As you all recall, we began; everybody was nervous. We were going to have a recession, going to be a bad year. Turned out to be a fabulous year. I expect the same thing to happen in 2024. So talk to you next quarter. Bye. Okay. This concludes your call. You may now disconnect.