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Operator: Ladies and gentlemen, thank you for standing by and welcome to the Urban One 2024 Fourth Quarter Earnings Call. As a reminder, this conference is being recorded. We will begin this call with the following Safe Harbor statement. During this conference call, Urban One will be sharing with you certain projections or other forward-looking statements regarding future events or its future performance. Urban One cautions you that certain factors, including risks and uncertainties referred to in the 10-Ks, 10-Qs and other reports it periodically files with the Securities and Exchange Commission, could cause the company’s actual results to differ materially from those indicated by its projections or forward-looking statements.

This call will present information as of March 27, 2025. Please note that Urban One disclaims any duty to update any forward-looking statements made in the presentation. In this call, Urban One may also discuss some non-GAAP financial measures in talking about its performance. These measures will be reconciled to GAAP either during the course of this call or in the company’s press release which can be found on its website at www.urban1.com. A replay of the conference call will be available from 2:00 p.m. Eastern Daylight Time, March 27, 2025, until 11:59 p.m. Eastern Daylight Time, April 3, 2025. Callers may access the replay by calling (800) 770-2030. International callers may dial direct (609) 800-9909. The replay access code is 3407726. Access to live audio and the replay of the conference will also be available on Urban One’s corporate website at www.urban1.com.

The replay will be made available on the website for 7 days after the call. No other recordings or copies of this call are authorized or may be relied upon. I will now turn the call over to Alfred C. Liggins, Chief Executive Officer of Urban One; who is joined by Peter Thompson, Chief Financial Officer. Mr. Liggins, please go ahead.

Alfred Liggins: Thank you very much, operator and welcome to our fourth quarter conference call. Also joining us, as usual, is Jody Drewer, who’s the Chief Financial Officer at TV One; and also Karen Wishart, who’s our Chief Administrative Officer. As the press release stated, we ended up coming in, in the middle of our guidance for adjusted EBITDA at $103.5 million. That number in Q4 was boosted by a pretty strong performance with our political advertising efforts. However, we did see continued headwinds in our Cable TV business due to churn and under-delivery. That actually has started to stabilize in Q1. So that’s good news. Unfortunately, the radio business continues to see downdrafts in Q1 with pacings currently minus 13.6%.

However, they are improving going into Q2 with pacings down just 1.7%. We’re optimistic that things will continue to improve in our radio business. But with the downdraft, we’ve been taking precautions with our cost containment and further debt reduction. We had a staff reduction in Q4 of about 5% which is about 64 people of our workforce which will save us about $5 million a year. Going into 2025, it’s going to be all about cost containment and also a continued debt reduction. We’re standing in a pretty strong liquidity position as of the end of the year with about $137 million of cash on hand. We are prepared to offer a 2025 guide even though it’s early in the year. But we are going to guide to $75 million of adjusted EBITDA from — down from the $103.5 million in 2024.

It’s going to be a combination of the weaker radio, primarily driven by lack of recurring political advertising. We’re going to be down a bit in TV but again, we feel like that, that is stabilizing as well. So a $75 million guide for 2025, down from the $103.5 million in 2024, continued cost containment and debt reduction. We’re going to be able to talk about more when we get to the Q&A section if anybody has questions. Right now, I’m going to let Peter go through the numbers from 2024 and the quarter. So Peter?

Peter Thompson: Thank you, Alfred. So consolidated net revenues were down 2.7% year-over-year for the 3 months ended December 31, ’24, approximately $117.1 million. Net revenue for the Radio Broadcast segment was $47.7 million, an increase of 14.5% year-over-year. Excluding political, net revenue was down 5.1% year-over-year. According to Miller Kaplan, our local ad sales were up 0.1% against our markets that were down 5.2% and national ad sales were up 35.4% against the market that was up 28.4%. Political advertising drove the growth in the national marketplace and for our stations and was our largest advertising category for the quarter. Second largest category for us was services which was up 12%, driven predominantly by legal services.

Health care, retail, auto, financial, food and bev were all down year-over-year. Telecom, travel and transportation categories were up. Net revenue for the Reach Media segment was $9.6 million for the fourth quarter, down 10.7% from prior year. Adjusted EBITDA was $2.9 million for the quarter, a decrease of 15.4%. While Reach benefited from $1 million in political advertising, client attrition and lower average unit rates offset those dollars. Net revenues for the Digital segment were down 3.1% in Q4 of $20.5 million. Direct national sales were down, driven by decreased advertiser demand. However, political advertising was $2.4 million and both connected TV and podcast revenue were up from prior year. Adjusted EBITDA was $5.3 million which was an increase of 50.7%.

We recognized approximately $39.8 million of revenue from our Cable Television segment during the quarter which was a decrease of 15.9%. Cable TV advertising revenue was down 21.4%. Delivery declined 36% in total day persons 25-54. We had approximately 6% fewer units converted to ad inventory, about 4,000 more units allocated to ADU to help mitigate the delivery impact and that was partially offset by favorable AVOD and FAST revenue of $1.3 million. Overall, that resulted in an ad revenue decline of $5.8 million. Cable TV affiliate revenue was down by 9.9%, driven by the increased subscriber churn which was a $3.3 million loss, partially offset by $1.3 million in subscriber rate increases and the launch of NOW TV. Full year subscriber churn was minus 9.5%.

Cable subscribers for TV One, as measured by Nielsen, finished Q4 at 37.2 million compared to 39.1 million at the end of Q3. And CLEO TV had 36.4 million Nielsen subs. Operating expenses, excluding depreciation and amortization and stock-based compensation and impairments of goodwill, intangible assets and long-lived assets, decreased to approximately $91.1 million for the quarter ended December 31, 2024 which is a decrease of 13.8% from prior year. The overall decrease in operating expenses was primarily due to lower corporate SG&A expenses, driven by a reduction in the CEO’s TV One award and lower overall expenses in the digital segment due to lower sales and marketing-related costs. Radio operating expenses were down 5.4% or $1.9 million, driven by a favorable adjustment to the bad debt reserve.

Reach operating expenses were down by 7.8%, driven by lower talent and staff incentive-based compensation. Operating expenses in the Digital segment were down 16.1%, driven by lower sales and marketing costs and lower performance-based compensation. Operating expenses in the Cable TV segment were up 4.1% year-over-year, driven by increased rating service costs and connected TV support costs. Operating expenses in the Corporate and Eliminations segment were down by approximately $10.2 million, primarily as a result of the reduction to the CEO’s TV One award. Consolidated adjusted EBITDA was $26.9 million for the fourth quarter, down 0.9%. Consolidated broadcast digital operating income was approximately $38.6 million, an increase of 1.7%. Interest income was approximately $1.1 million in the fourth quarter compared to $2.5 million last year.

The decrease was due to lower cash balances in interest-bearing investment accounts. Interest expense decreased to approximately $11.5 million for the fourth quarter, down from $14.2 million last year due to the lower overall debt balances as a result of the company’s debt reduction strategy. The company made cash interest payments of approximately $347,000 in the quarter. And during the quarter, the company repurchased $15.4 million of its 2028 notes at an average price of 69.8% at par, bringing the balance down to $584,575,000 at year-end. In January 2025, the company repurchased an additional $17 million in notes at a price of 62.5%, bringing the current balance on the debt to $567,575,000. $24.2 million in noncash impairment charges were recorded in the fourth quarter.

$4 million of that was associated with the TV One brand name and $20.2 million was for goodwill associated with the TV One reporting unit. The primary factors leading to the impairments were a decline in projected gross market revenue and operating profit margin for TV One. Provision for income taxes was approximately $27.6 million for the fourth quarter and the company paid cash income taxes in the amount of $130,000. Capital expenditures for the quarter were approximately $1.3 million. Net loss was approximately $35.7 million or $0.78 per share compared to a net loss of $11 million or $0.23 per share for the fourth quarter of 2023. During the 3 months ended December 31, 2024, the company repurchased 1,386,544 shares of Class A common stock in the amount of approximately $2.1 million at an average price of $1.50 per share, of which 908,894 shares of Class A stock were held in treasury stock as of December 31, 2024.

During the 3 months ended December 31, 2024, the company repurchased 703,292 shares of Class D common stock in the amount of approximately $700,000 at an average price of $1.02 per share. During the 3 months ended December 31, 2023, the company did not repurchase any shares of Class A or Class D common stock. As of December 31, total gross debt was approximately $584.6 million. And ending unrestricted cash balance was $137.1 million, resulting in net debt of approximately $447.5 million compared to $103.5 million of LTM reported adjusted EBITDA for a total net leverage ratio of 4.33x. On March 16, 2025, the company began investigating an incident involving an unauthorized third party who gained access to and infiltrated certain information from our information technology systems.

Upon discovery, we activated our incident response team which is comprised of internal personnel and external cybersecurity experts. As of today, the incident has not impacted the company’s operations or ability to conduct business in the ordinary course. This time, the incident has not had a material impact on the company’s financial condition and the results of operations, although our investigation is ongoing.

Alfred Liggins: Thank you, Peter. Operator, could you ask the audience if any questions are coming forward?

Operator: [Operator Instructions] Our first question will come from the line of Aaron Watts with Deutsche Bank.

Aaron Watts: A few questions, if I may. I guess, first, just to clarify, your 1Q radio pacing down 13.6%. What was the equivalent performance that lines up with that for the fourth quarter? Was it the radio advertising down 8%? Is that the right way to think about it?

Peter Thompson: Yes. So I gave core ex political. And so you need to strip out the political from Q4. I’m just looking back through my notes.

Aaron Watts: Yes. Sorry, I missed that. And then maybe while you’re looking at it, I’ll…

Peter Thompson: 5.1% — so excluding — yes, excluding political, net revenue was down 5.1%.

Aaron Watts: Okay. All right. And then could you give us a little more insight into what drove the weakness from that down 5% in 4Q into the first quarter? Was it broad softness, particular categories? And then a similar question on where you’re seeing the improvement as you look ahead to 2Q and what’s pushing that theme?

Alfred Liggins: Yes. So look, it’s absolutely broad softness. I’ve spent a significant amount of time with our national rep and our teams. And in Q1, you’re basically seeing negative double-digit pacing across local, national and network radio. And there was political in Q1 but not a ton of it. And so I think that you’re absolutely seeing advertisers probably reacting to an uncertain economy. I think I just read something from the CEO of Walmart talking about consumer behavior being choppy and skittish. The improvement for us is coming. And when I say improvement, it’s still negative, right but it’s negative 1.7% and we’re seeing a bounce back in improvement in our Ohio markets which are starting to lap a significant comps as it related to sports betting revenue. And Peter, you were going to add local?

Peter Thompson: Yes, local has bounced back more strongly in Q2, right? So national is a little better in Q2 than it was in Q2 [ph] but local is strongly better in Q2 than it was in Q1. So it’s part — local at the moment is pacing up in Q2, whereas it was down 10%, call it, in Q1.

Alfred Liggins: And we’re also — and we’re seeing improvements in national as well, albeit again still negative.

Aaron Watts: Okay, that’s encouraging. And carrying that out a little further within your ’25 guide, what are you assuming for the core Radio Broadcast segment from a top line perspective? Do you think it can trend back towards neutral, Alfred? Or are you still assuming it’s going to be down a little bit for the year?

Alfred Liggins: Yes, I mean we’re — that guide is also right on top of our internal budget. And I think Peter got the…

Peter Thompson: Yes, I mean it’s — if you strip out the political, Aaron, then we’ve assumed that the core grows a little bit in that number. So if you took out every dollar of political and didn’t replace it with something else, it would look worse than what we’ve got. So we’ve assumed some growth in local and national ex political and, obviously, digital.

Aaron Watts: Right. Right, okay. Let me squeeze one more in and I appreciate the time. There’s been a lot of talk around deregulation across the broadcasting space. I’m curious what opportunities you see that potentially opening up for you on the radio side, whether that’s as a seller or a buyer? Do you think we could see some material consolidation in the space on the heels of kind of this new positioning from the FCC?

Alfred Liggins: Yes. Look, I’ve been pretty vocal about my belief that you’re going to see further consolidation in the radio sector. You need to see it. And we have, over the years, been both buyers and sellers. Recently, we’ve been more of a buyer consolidating in Indianapolis and Houston. But we have gotten — we’ve trimmed our portfolio a number of times and gotten out of places that — where we weren’t successful and weren’t working for us and put that capital to work in either debt reduction or more accretive acquisitions. And so I think you’ll see us continue with that. I think that we’re probably in better shape than a number of other folks in the sector in terms of our leverage profile which I think gives us an advantage to be proactive in terms of opportunity.

So — but you still have to be careful, right? Even with consolidation, you’re still dealing with a negative trend line on the top line revenue number. So it’s very tricky. And because of that factor, even if you get dereg, having new capital come into the industry will probably be a challenge, right? And so I think that people will look to see if there’s swap opportunities that can be executed in order to put people in better positions in various different markets. I’ve always seen that as challenging for people to align on what’s a good swap. You just don’t see a lot of it but the state of the industry might and the dereg might make people more motivated to do that. So I would say that it is absolutely a net positive because in declining industries, you need to create economies of scale.

And so — and I also think being bigger in these local markets makes you more of a digital force for local advertisers because you’re covering off more formats. You’ve got more audiences that you’re touching. And we’re seeing significant amounts of digital revenue come into the Miller Kaplan in the local markets. In fact, in about half of our markets, we’re seeing more digital revenue than national spot revenue which really came to light during our fourth quarter budget process for the first time. So having more girth in the local market is going to allow us to compete better digitally, I believe, as well. So a net positive but still challenged because you’re not — I don’t think you’re going to see a flood of capital come in to execute this consolidation.

So people are going to have to figure out how to work it between themselves. But I also think that the current debt holders in the industry are eager for some sort of solution for folks’ balance sheets and will be constructive in trying to see consolidations happen. So it helps the industry and helps the players in it.

Operator: Our next question comes from the line of Ben Briggs with StoneX Financial Inc.

Ben Briggs: So I’ve got a couple here. Most of them was just around kind of what capital allocation plans are for fiscal ’25. So thank you for the guidance. You’ve mentioned that cost reductions and debt buybacks are going to be a focus for 2025 and I think the market will definitely be glad to hear that. Curious if there’s any plans for stock repurchases? Or is most of it going to be debt?

Alfred Liggins: We have been repurchasing stock. We’ve got a plan in place. It’s a small plan that basically just buys kind of like the daily limits. I think we’ve probably repurchased in the last year $5 million, $6 million of stock in comparison to $150 million. What’s our total debt repurchases?

Peter Thompson: We did $140 million last year and then another $17 million this year, right?

Alfred Liggins: Yes. So almost $160 million of debt repurchase. Yes, I think you’ll continue to see that kind of outsized ratio of how we deploy that capital. So 95% of our money will go to continued debt reduction. And so that’s — I think we’re also looking at M&A opportunities, as the previous person was questioning about dereg and having cash available to us if we can find acquisitions that accomplish the same thing that are deleveraging which is our goal. So we keep that in mind but we’re not going to just have it sitting around in hopes that an acquisition comes along. With that said, we’ve always been mindful and thoughtful about how we repurchase debt, right? So we’ll looking — we’ll buy it in $10 million or $15 million or $20 million chunks.

We’re not a repurchaser at any cost either, right? Like we’ve definitely tried to be opportunistic on the pricing of it because that benefits the company long term. And so if we just go into the market and indiscriminately buy debt, then it runs away from us. And so you never know exactly when we’re going to be a buyer and when we’re not going to be a buyer because we definitely set out for periods even when we had open windows because we didn’t like the price.

Ben Briggs: Okay. Got it. That’s very helpful. Have there been any — I know you disclosed the buybacks through January. Has there been any debt buybacks since then? There were a few good-sized trades that went through yesterday…

Alfred Liggins: No, that — we intentionally set out while the window was closed. We didn’t put a plan in place and we were out of the market for the last — we’ve been out of the market since that January repurchase.

Ben Briggs: Okay. Okay, good to know. And then second thing is kind of more operational with the business. And I know previous calls, you guys have discussed this but can you give a little clarity or can you just kind of reexplain to me, I guess, what exactly — as far as revenue is concerned, what goes into your Digital segment? I know there’s kind of a little bit of a few different things that go in there. And I’ve gotten a couple of questions from investors this quarter on what exactly goes in there. So if you could just remind me, I’d appreciate it.

Peter Thompson: Yes. And look, it’s a timely question because one of the things that has been going in there is the connected TV revenue. Yes. And look, that’s a growth area. And we decided going forward from January 1 that we’re going to report that through the TV segment. So that would be a change. And part of the thinking there is as linear TV is more challenged — see, to strip out that growth area and report it as digital is going to give a falsely negative position of the TV business. So we’re going to kind of repatriate that revenue and those impressions back to TV One. And we think that’s right because they really are attached to the TV business rather than digital content verticals. So up until now, we report CTV through digital.

Now we’re going to report it through TV. And then all other digital impressions go through digital. So it can be adverts on content verticals, can be pre-roll, can be banner, podcast revenue, streaming is the other big one. And that’s worth talking about. We had a really good deal through Katz and that got renegotiated down. So call it $7.5 million of revenue that we were getting from Katz on the podcasting side was reported as digital is going to be a significantly less — significantly lower, probably $4 million lower…

Alfred Liggins: It was podcasting and streaming.

Peter Thompson: Sorry, yes, streaming and podcasting. Sorry and the main part of that is streaming. If I said podcasting, I’d flip them in my head. It’s both to get — stream is the bigger part.

Alfred Liggins: So essentially, we had an output deal where they basically bought all of our available inventory that we had and that got renegotiated. Everybody has got cost reductions and so did they and that affects us in a big way. So we’re out now rebuilding our streaming partners. So instead of just giving all of our impressions to one entity, we’re actually plugging into multiple entities and it’s going to take us a while to build that back up. But the net is we’re going to see that revenue probably reduce by half of what it was. And that’s going to affect the digital revenue number.

Peter Thompson: Yes. And on our CTV plus that, so you’re going to see our Digital segment look weaker as a result of those 2 things.

Alfred Liggins: So in the most recent Miller Kaplan, we’re getting annihilated in digital and a big part of that is in our streaming number.

Ben Briggs: Okay. That’s all very helpful. As you report going forward, since you’re re-categorizing some of that revenue, are you going to report — are you going to adjust prior period numbers as you report them? So do you think that…

Peter Thompson: I don’t think we’re planning to adjust prior periods. But we — I can give — look, if it’s materially different, I can probably give color on the earnings call, so people can understand the differences.

Ben Briggs: Okay. That is very helpful color.

Operator: Our next question comes from the line of Marlane Pereiro with Bank of America Securities.

Marlane Pereiro: Based on your full year EBITDA guide of $75 million, how should we think about free cash flow for the year? If you can provide any context on some of the puts and takes that would affect that, that would be great.

Peter Thompson: Yes. So obviously, the good — bad news is EBITDA is going down. Good news is we’ve got less debt interest payments. So that’s about $41 million. CapEx, we’re penciling out at $10 million. There’s a big project going on to consolidate the Indianapolis office post acquisition, that’s kind of $5 million of the $10 million. So that’s a little higher — $10 million is a little higher than we would normally do but it’s probably a solid number. TV One programming, not a huge difference there. And so long story short, at the moment, we’re looking at around $25 million of free cash flow generation off of the $75 million.

Marlane Pereiro: Great. And then coming back to the cost save containment, you mentioned about $5 million that you’d be saving from staff reductions. So how should we think about cost savings for ’25 that will hit the numbers as well as the cost to achieve…

Alfred Liggins: Yes. We are actually in the — we wanted to get through getting our accounts filed year-end, etcetera and we’re back focused on what other cost save opportunities that we have. We don’t have a number yet. We do feel like we have more opportunity to reduce costs. We did our first round in Q4 and made it effective by the end of January but we haven’t gotten there yet but you can expect more. I don’t know how much more yet but we’re looking at every available opportunity.

Marlane Pereiro: Got it. And so just to confirm then, for the $75 million of EBITDA for the year, there’s…

Alfred Liggins: It does not — that number does not — the $75 million does not include any new or projected cost saves that might come. We made it simple this year. That numbers are — that’s our actual budget where we think we’re going to be at and it doesn’t take into account any further cost reductions in it. And I mean I know that I think iHeart had given a guide for 2025 which included their expected cost save. We had already taken out our cost save and we went through the budget process. And so anything new would actually help that number going forward.

Marlane Pereiro: Great. And then last one for me. Is there any — are there any like assets or parts of the business that might be considered noncore and potentially could be — would result in like an asset sale?

Alfred Liggins: Yes. I mean the answer is maybe we have some small things, you know what I mean? But you need buyers and those don’t exist right now. And so, yes, in the media M&A landscape in both television, cable networks, you haven’t seen much activity. You’ve seen a number of failed processes on the cable television network front. And so again, we’ve always been economic animals, meaning that if somebody were to make us an offer on pieces of our business that would ultimately be accretive to us from a deleveraging standpoint and would help us significantly move the needle, we would absolutely consider it. And on the other side, on the acquisition side, we’re not really considering anything that also doesn’t delever us, right?

Because we’ve got enough scale to be relevant now. Now it’s really about getting the balance sheet to what I call a safe position. And I think that, that safe position has got to be leverage that’s in the mid-3s, low 3s maybe even. But yes, you need buyers, so — which is what I said earlier when we talked about dereg and new capital coming into the business.

Operator: Our next question comes from the line of Hal Steiner with BNP Paribas.

Hal Steiner: A lot of my questions were already asked but I just have a few quick things. I guess, do you want to hold at least like $100 million of cash? Or is there sort of like a minimum cash balance you want to kind of keep on the balance sheet? Or would you sort of be likely to drop below that as you kind of continue to focus on gross debt reduction?

Alfred Liggins: Yes. No, we don’t have a minimum amount of cash that we are targeting to keep on the balance sheet. We’ve got an undrawn $50 million revolver. So we could definitely see our cash balances be able to drop and still be fine from an operating standpoint. Again, our cash deployment has been opportunistic, right? Like meaning if we can buy our debt at an attractive price, then we’ll do it. If the price is not attractive, then we sit out. And so those — that strategy has led us to have more cash on average than probably people might otherwise think that we should. But it’s not because we’re hoarding the cash. It’s because we just don’t want to go out and bid up things just because we’ve got cash, right? And so — because every time we have bought debt, it’s — when we’re in the market, it goes up; when we’re not in the market, it goes down.

And again, the best thing for the company is to try to manage that in the most efficient way possible to continue — to get the most deleveraging possible. It’s not a cash-hoarding strategy.

Hal Steiner: Yes, understood. Understood. And then I know you’ve talked a lot about sort of the deregulation environment. But I guess one angle or something that I’ve been looking at and I’m curious your thoughts, is I think like WBD and Comcast have both been kind of working on maybe cable network companies or cable network spinco sort of coming to market. I guess I’m just curious how you think about that, those entities coming into market and maybe providing some valuation read-through. And I’m just curious how you think about like any combination or partnership angles there with your TV business efforts.

Alfred Liggins: I mean everybody got all excited when Comcast announced they were doing SpinCo because they think that that’s going to — they’re going to be the end buyer of all of the stranded cable assets. I don’t know that to be true, right? And I think the biggest problem that you’re going to have with cable assets is if AMC is trading at — last I looked, it was trading at 4.5 or it was trading at like 5x cash flow. Nobody wants to sell cable cash flow at 5x. They’d rather keep it, right? And nobody really wants to buy it at 7 or 8x. So I don’t necessarily believe that those entities are going to be the end buyers for people’s assets. I do think, Jody, you tell me, we’ve seen churn moderate, right?

Jody Drewer: Yes.

Alfred Liggins: I think we’re forecasting, what, mid-single-digit churn, down from like 11% last year. So I had a conversation in New York with a broadcaster, I had lunch with him…

Jody Drewer: And net-net, growth in the virtual [indiscernible] helping to offset…

Alfred Liggins: Yes. I had a conversation with a broadcaster and he said that, hey, I’ve been talking to people, a lot of people think that sort of churn or cable penetration is going to net out, bottom out at like 40%. I guess that would be like 40 million households. That was his view. And I guess the point I’m trying to make is churn has started to ease up. There are some people believe that it is going to bottom out at some point in time. And if that happens, that will — that, I think, will create more opportunity for people wanting to acquire these assets because you know what — you know the knife has fallen, right? Like you know what you’re going to own and can try to — and can better project what the earnings from that are going to be.

But I don’t think just because you’ve got these spincos out here that all of a sudden, you’re going to see a bunch of consolidation. I could be wrong. I haven’t talked to anybody at Comcast about it. I haven’t asked them. I just don’t think people can make that assumption.

Operator: Our next question comes from the line of Matt Swope with Baird.

Matt Swope: Peter, could you give us an update on where your cash balance stands at this point?

Peter Thompson: Yes. As of this morning, it was $117 million.

Matt Swope: So Alfred, just sort of listening to you talk about possible capital allocation and things, I guess to be a little bit blunt, I mean your bonds are all the way down to 50 now which doesn’t make a lot of sense to me, honestly. Why not — I guess, one, could you find any M&A that gave you a better return than buying your bonds back here? And two, why not do something bigger? And you guys have run with a very, very low cash balance in the past. Why not take almost all of that cash, maybe do a broad tender or something and buy back as many bonds as you possibly could, maybe at a slight premium to where the market has been today?

Alfred Liggins: Versus taking that cash and buying it at where the market is at like over time? Like I mean, I think the problem with that is you go out and you offer a tender, it’s rarely a slight premium, right? Just to negotiate — just doing the bond buybacks, our experience is there’s a significant bid-ask when we’re an active buyer between where people want to sell and between where the market is marking it, right? And so we’ve done better when we’ve selectively bought, right, as opposed to just going out, taking all our cash and paying some big premium for the bonds. So we’ve considered the tender. We’re also going to run out of buyers — excuse me, sellers at some point because our bonds are very concentrated into 2 big hands that probably own over 50% of the issue. So there’s going to be a point where you’re not going to see sellers at these levels. So…

Matt Swope: Given that dynamic, is there any thought to doing some kind of liability management exercise or working with your big holders to capture some of this discount, maybe do some equitization. You talk about wanting leverage to be down in the low 3s. You’ve given an EBITDA guide that’s down over 25% year-over-year. So obviously, that pushes your leverage a lot higher. Is there any way to do some kind of broader, I’ll use the word restructuring which I know is a dirty word but to maybe provide some equity to some of those holders just to reduce that debt balance a little bit proactively?

Alfred Liggins: We have no liability management exercise in process. We haven’t engaged anybody. People have pitched us on it. We think it’s early for us, our maturity isn’t until February ’28. So we think it’s early to begin discussions on some sort of rollover amend to extend like iHeart has done, like Beasley has done, etcetera. But the answer to the question is, as we get closer to that maturity, maybe in another year, having those discussions with our holders are absolutely prudent and we would consider all options to accomplish a better leverage profile. But as I said before, there’s 2 players that you got to — we only have 2 people that we need to talk to and figure out what’s the best route for the company because they have over 50% of the issue.

Matt Swope: Got it. I appreciate that commentary. And…

Alfred Liggins: And we have consistent dialogue with those players. We’re not operating in sort of a vacuum of information flow between us and our debt holders.

Matt Swope: I got it. And on the $75 million EBITDA guide, Peter, that’s a little bit lower than I was modeling. Would you call that a more conservative estimate? Or how would you characterize that?

Peter Thompson: Yes. Look, one thing you got to think about is the valuation on TV One went down significantly year-over-year. And as a result of that, the liability on the CEO’s award went down by $10.5 million. And that’s in — we got a pickup in the adjusted EBITDA as a result of the valuation of TV One going down. So on a cash basis, you would adjust the $103.5 million, you’d take that $10.5 million off. So really, your baseline is kind of $93 million, not $103.5 because of that noncash pickup that’s not expected to recur this year.

Matt Swope: I see. Can you maybe mention that — yes, no, that does make sense. Can you just walk us through how that CEO award works?

Peter Thompson: Yes, it’s — I mean I’ll oversimplify it but it’s roughly 4% of any cash proceeds, dividends, sale proceeds from the value of TV One. And I think the valuation of TV One at the moment is $285 million. And then there’s some balance sheet adjustments. But the liability currently stands around $10 million on the balance sheet and it has been as high as $25 million in the past. So that’s just a reflection on the reduction in the carrying — in the fair value and the carrying value of the TV One asset as the projections have decreased.

Matt Swope: I see. And has cash been paid out on that at all? Or that’s just the liability that moves up and down?

Peter Thompson: It has on an annual basis, TV One declares dividends and the CEO gets his 4% share of those dividends. And that’s ranged. I think it’s around $2.5-ish million a year at the moment. It’s been as high as just north of $4 million. But as the cash flow from that business has reduced, so is the cash payout on the annual dividends flowing from TV One.

Matt Swope: I see. And maybe just one last one for me, probably for Alfred. Alfred, is it safe to say that the casino process is off the table for now?

Alfred Liggins: In Richmond, yes, that’s — it’s safe to say given that they’ve actually broken ground on the casino in Petersburg. So yes, that’s…

Matt Swope: I guess I’m asking even — yes, at one point, you may be mentioned thinking about it in Maryland as well. Is it — but just given the state of the balance sheet and things, is it over?

Alfred Liggins: Yes. No — well, we like that business. We are looking for opportunities to invest in it again. Our Maryland effort was not around a bricks-and-mortar casino. It was around their iGaming legislation. For the last 2 sessions, they’ve been contemplating trying to introduce iGaming. And we’d like to position ourselves to be in that business and get a license. And so we’ve been lobbying to be part of the legislation. It died again this year. But iGaming is a great business as well and it’s only in 6 states versus 37 or 38 states that actually have bricks-and-mortar casinos operating. So that’s been our most recent gaming effort. We are currently not participating in any sort of RFPs for any land-based casino developments at all.

Matt Swope: Got it. Well, I’ll just — I’ll reiterate my unsolicited advice that I just — I can’t imagine you can get a better return on anything than buying your bonds back in the open market right now.

Alfred Liggins: Yes. I mean like we’ve been taking that advice. I mean we spent $150 million in the last year. And I appreciate that advice. But again, like I said, we want to make sure that we’re prudent about how we buy it and that’s the reason we do it selectively.

Operator: Our next question comes from the line of Ken Silver [ph] with Stifel.

Unidentified Analyst: It’s Ken Silver from Stifel. Ann is my sister.

Alfred Liggins: Are you using her phone, Ken?

Unidentified Analyst: Yes, exactly. Nice to talk to you again. Most of my questions were answered. I guess let me just ask you, you gave the EBITDA guide which was definitely helpful. Would you be — can you give us a revenue guidance for the year also? You sort of did sort of talking about radio and TV a little bit but…

Peter Thompson: We haven’t talked about giving that, Ken. I need to — Alfred and I haven’t discussed it. I mean, obviously, I can see what we think it’s going to be. I don’t think…

Unidentified Analyst: That’s fine. So let me just ask you on how should we think about Reach Media for the year? I mean it was down, I think, like high single digits in 2024. Is that sort of a trend that’s going to continue? Or might it stabilize more?

Peter Thompson: Yes. We have it as stabilizing and actually growing a little bit on the bottom line. So top line, down a bit; bottom line, up a little bit. So we don’t see that as being the problem child this year.

Unidentified Analyst: Okay. And then now on digital…

Peter Thompson: Stable to down a bit but up on the bottom line.

Unidentified Analyst: Okay. And then on digital, you called out the sort of the headwind with Katz. Are there any other — obviously, you’re going to move some revenues to the TV segment. But besides those 2 things, is anything else significantly up or down in digital?

Peter Thompson: Yes. So it’s — I think there’s a couple of other macro things. Our traffic is down significantly over historic levels and that’s a function of partly AI, partly the new landscape out there. So we’re not getting traffic driven to us in the same way as we have before from Google and Facebook. So you’ve got some headwinds in traffic which in turn means we have to go out and buy traffic which reduces the margins, right? You’ve got higher TAC. And then demand in general, we’ve ridden the DEI wave and that’s receded. So I think there’s a softening in demand there in the digital business as well. So digital definitely got some headwinds for us.

Alfred Liggins: Operator, it’s 10:58. We got time for one more question, if there is one.

Operator: We have no further questions at this time.

Alfred Liggins: Okay. Great. Thank you, everybody. As usual, we are available offline if anybody forgets anything or would like to have a deeper conversation about the business. Thank you very much and we’ll see you next quarter.

Operator: This will conclude today’s meeting. Thank you all for joining. You may now disconnect.