TEGNA Inc. (NYSE: TGNA) reported a significant rise in revenue during its Third Quarter 2024 Earnings Conference Call, with political advertising being a key driver.
The company's CEO Mike Steib and CFO Julie Heskett outlined a future strategy that includes leveraging competitive advantages and exploring synergies, amid an evolving media landscape. TEGNA also highlighted the potential impact of FCC (BME:FCC) regulatory changes on acquisition opportunities and expressed caution regarding sports rights deals and digital acquisitions.
Key Takeaways
- TEGNA's revenue increased by 13% year-over-year to $807 million, largely due to political advertising.
- Subscription revenue dropped by 6%, while political advertising revenue was close to 2020 levels.
- The company reduced expenses by 2% in Q3 and returned $91 million to shareholders.
- Q4 revenue is expected to grow by 19% to 21%, with a slight increase in operating expenses.
- TEGNA is focused on digital growth, operational efficiency, and effective capital allocation.
- Management is cautious about the 2025 outlook due to the absence of political advertising revenue.
- Premion faced challenges in Q3 but is expected to grow in Q4, especially in local markets.
- The company is considering FCC regulatory changes and their impact on acquisitions and duopoly rules.
Company Outlook
- Q4 revenue projected to rise by 19% to 21% year-over-year.
- Expenses to increase marginally by 1% to 3% in Q4.
- Effective tax rate for 2024 adjusted to 22%-23%.
- Digital presence and operational efficiency remain focal points for future growth.
- Premion expected to return to growth in Q4, driven by local advertising.
- The company is actively exploring synergies and potential acquisitions with a focus on cost savings.
Bearish Highlights
- Subscription revenue has declined by 6%.
- Anticipation of lower expenses in 2025 due to the absence of political advertising revenue.
Bullish Highlights
- Year-over-year revenue increase of 13% in Q3.
- Political advertising revenue nearing 2020 levels.
- Cost reduction initiatives on track to achieve $90 million to $100 million in annualized savings by end of 2025.
- Return of $91 million to shareholders in Q3, including dividends and share repurchases.
Misses
- Premion faced challenges in Q3, impacting performance.
Q&A Highlights
- CEO Mike Steib believes the FCC has the capacity to adjust duopoly rules and the national ownership cap.
- Steib reiterated the importance of profitable sports rights deals that align with the company's investment strategy.
- CFO Julie Heskett refrained from providing specific 2025 guidance due to ongoing uncertainties.
TEGNA's management remains cautious yet optimistic about the company's strategic direction. With a focus on enhancing its digital presence and maintaining operational efficiency, TEGNA is navigating the competitive pressures of the media industry. The potential for regulatory changes at the FCC could open new doors for acquisitions, which TEGNA is prepared to explore, ensuring that any new ventures are profitable and beneficial to shareholders.
InvestingPro Insights
TEGNA Inc.'s strong performance in Q3 2024 is reflected in its recent market performance. According to InvestingPro data, TEGNA has shown impressive returns, with a 26.63% price total return over the last three months and a 20.29% return year-to-date. This aligns with the company's reported 13% year-over-year revenue increase and the positive outlook for Q4.
The company's focus on shareholder returns, as mentioned in the earnings call, is supported by InvestingPro Tips. TEGNA has maintained dividend payments for 54 consecutive years and has raised its dividend for 3 consecutive years. The current dividend yield stands at 2.79%, which may be attractive to income-focused investors.
TEGNA's P/E ratio of 8.02 suggests that the stock may be undervalued compared to its peers, potentially offering an opportunity for value investors. This is particularly interesting given the company's strong revenue growth and positive outlook for Q4.
InvestingPro Tips also indicate that TEGNA's management has been aggressively buying back shares, which aligns with the company's report of returning $91 million to shareholders in Q3. This demonstrates management's confidence in the company's future prospects and commitment to enhancing shareholder value.
It's worth noting that TEGNA is trading near its 52-week high, with the current price at 97.91% of its 52-week high. This could be seen as a reflection of investor confidence in the company's recent performance and future outlook.
For investors interested in a deeper analysis, InvestingPro offers 8 additional tips for TEGNA, providing a more comprehensive view of the company's financial health and market position.
Full transcript - Tegna Inc (NYSE:TGNA) Q3 2024:
Operator: Good day and thank you for standing by. Welcome to the TEGNA Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to turn the conference over to your speaker for today, Kirk von Seelen. Please go ahead.
Kirk von Seelen: Thank you. Good morning, and welcome to our third quarter 2024 conference call and webcast. My name is Kirk von Seelen, and I am TEGNA’s Treasurer. Today, our CEO, Mike Steib; and our CFO, Julie Heskett, will review TEGNA’s third quarter performance and results and provide TEGNA’s full year and fourth quarter outlook. After that, we’ll open the call for questions. Hopefully, you’ve had the opportunity to review this morning’s press release. If you have not yet seen a copy of the release, it’s available at tegna.com. Before we get started, I’d like to remind you that this conference call and webcast includes forward-looking statements, and our actual results may differ. Factors that may cause them to differ are outlined in our SEC filings. This presentation also includes certain non-GAAP financial measures. We have provided reconciliations of those measures to the most directly comparable GAAP measures in the press release. With that, let me turn the call over to Mike.
Mike Steib: Thanks, Kirk, and good morning, everybody. I’m excited to be here working hard for our shareholders and the communities we serve. On the heels of this week’s election, I want to commend our team for helping to keep our communities informed and engaged in our democracy, local journalism has never been more important in America. And as the folks on this call know, it’s also never been more challenged as the world has undergone a digital transformation, viewers and advertisers have shifted online. Since 2021, pay TV homes have been declining 5% to 7% per year with traditional cable and satellite homes declining in the teens, while TV advertising has declined 3% to 5% per year. Traditional media and broadcast in particular, has fallen behind, missing opportunities to evolve the business and take advantage of the digital moment. But history is not destiny here. Local communities continue to strongly value local news, 85% telling people that local news is important and the vast majority reporting that their local media team is doing a good job. TEGNA’s brands, in particular, have strong leadership positions in attractive markets across the U.S. In this hypercompetitive environment, where it is extremely difficult to establish an audience and build trusted brands, TEGNA has both. We reach approximately 100 million people every month across the web, mobile apps, streaming and linear television. Our brands and our products continue to mean a lot to the people in our local communities. Some of the wins Julie will share with you around political advertising and new sports rights really underlying the resilient value of our TV stations. At a moment of technological shift where audiences continue to show a boundless appetite for great content on all devices and where AI is offering massive opportunities to improve products and productivity. Now is the moment for a company like TEGNA to build a more profitable future on our strong foundation. Over the last few years, TEGNA has been through a lot with the merger process behind us and our leadership transition complete, we’re taking a fresh look at how to best leverage our competitive advantages. In my first few weeks here, I’ve been spending time at our stations and with key business leaders across the company that I’ve come away with an initial set of five potential opportunities that are going to have our focus. Number one, we’re ensuring that we have the team, the culture, the accountability and the leadership operating system to move with the urgency and the excellence at this moment into us. The no huddle offense is on the field at TEGNA from now on. Number two, we’re reviewing org structures and processes across the enterprise to ensure we’re doing our jobs as effectively and efficiently as possible. I hypothesize that there are synergies across stations that we have not fully exploited. Number three, we’re doing a nose-to-tail review of every process from content creation to sales and marketing to ensure we are leveraging the power of technology. I believe we are underutilizing automation, and AI to drive efficiency and create a better product. Number four, we’re examining a myriad of opportunities to expand our reach and better serve our users through digital channels. Today, we generate a sizable online audience, but the amount of engagement per user is well below our potential and we see a path to deepening user engagement and ultimately revenue for our company. And number five, we are scrutinizing every expense in the company to ensure each dollar is a smart investment, driving audience and driving revenue. This is still my first quarter here, and I can’t tell you exactly what the work is going to yield. But what I’ve seen so far makes me optimistic. There’s a sense of urgency and energy in the company that is exactly what we need to ensure a bright future for TEGNA. Now before I turn it over, I want to welcome our new Chief Legal Officer, Alex Tolston. Alex is an experienced public company CLO with a deep understanding of our space. He’s a trusted business partner that is comfortable and fast-paced dynamic environments, he’s a tough on the nails negotiator and a proven winner. He’s going to be a high-impact addition to team TEGNA. I’ll now hand it over to Julie to provide a more detailed look at our financial results.
Julie Heskett: Thank you, Mike. Good morning, everyone. We are thrilled to have Mike leading our team, bringing a fresh perspective and a sense of urgency to drive our execution forward. In just a short time, he has already made an immediate impact energizing our team with a clear focus on accelerating our performance. I’ll begin today by covering TEGNA’s financial results and capital allocation execution for the third quarter, then provide an update on our cost control initiatives before closing with a review of our guidance. My comments today will primarily focus on TEGNA’s performance on a consolidated non-GAAP basis to provide you with visibility into the financial drivers of our business trends and operational results. You can find all our reported data and prior period comparatives in our press release. Here are some headlines. Total (EPA:TTEF) company revenue for third quarter increased 13% year-over-year to $807 million, exceeding our guidance of 9% to 12% growth. This performance was primarily driven by political advertising and an uptick in advertising and marketing services revenue referred to as AMS (VIE:AMS2). AMS revenue was up slightly year-over-year as strength in the Summer Olympic Games was offset by continued softness from national customers as well as political displacement. An important note to emphasize our core linear advertising was up in third quarter, driven by Olympic sales across our NBC station. TEGNA is the largest NBC affiliate group, and our portfolio experienced a 35% growth in total hours watched for the Paris games versus the last summer games in Tokyo. We are encouraged by our local advertising performance across several categories, including services, banking, finance, health care, entertainment, education and travel and tourism. However, automotive, retail and home improvement categories continue to be soft. Now let’s look at our subscription revenue. For the third quarter, our subscription revenue decreased 6% year-over-year to $356 million. We will renew approximately 20% of our traditional MVPD subscribers at the end of this year and approximately 45% of traditional subscribers in 2025. Turning to political advertising. We delivered record political revenue in the third quarter. Our political advertising year-to-date through election day is approximately $375 million despite having fewer competitive Senate and House races, 2024 political advertising to date nearly matched 2020, excluding the two Georgia Senate runoff. While not all political cycles are created equal, results further emphasize the importance of our strategic footprint in key battleground states and the durability of political advertising across broadcast. Now let me turn to expenses for the third quarter. We continue to make structural cost reductions across our legacy operations. Our expense management trend has been improving throughout the year. In first quarter, expenses were up 1% year-over-year. In the second quarter, we improved to flat as we started to benefit from our initial cost reductions. Now in third quarter, we achieved a 2% reduction year-over-year. It’s important to note that when we discuss our core cost initiatives, we are focusing on legacy operations, excluding growth areas such as programming, which includes sports rights and Premion. We believe this provides a clearer picture of our cost reduction efforts in the traditional areas of our business. Looking ahead, we remain on track to generate $90 million to $100 million in core annualized savings when we exit 2025. We expect to achieve approximately $50 million or 50% of these annualized core business savings as we end 2024. This puts us in a strong position to meet our overall goal. To balance this discussion, I want to emphasize that while we are focused on cost management in our core operations, we continue to invest organically in other areas of the business. Specifically, our recent sports rights agreements while impacting our programming expenses are important to grow strong local audience engagement. Additionally, Premion has experienced momentum is heading into the fourth quarter. Turning to capital allocation. We continue to make progress on our commitment to return between 40% and 60% of adjusted free cash flow to shareholders over the 2024 and 2025 period. In the third quarter, we returned approximately $91 million of capital to shareholders comprised of $21 million in dividends and $70 million in share repurchases, representing 4.9 million shares at an average price of $14.48. Year-to-date, we have returned $286 million to shareholders, keeping us on track to meet our commitment of returning approximately $350 million in 2024. Cash and cash equivalents totaled $536 million at the end of the third quarter. Net leverage finished the quarter at 2.8x, below our 3x annual guidance. Now turning to our outlook. We are reaffirming all our full year 2024 key guidance metrics as well as our combined 2024, 2025 adjusted free cash flow guidance of $900 million to $1.1 billion. There is one improvement to call out regarding tax rate guidance. We are lowering our full year 2024 effective tax rate guidance to 22% to 23%, reflecting a purchase of tax credits at a discount made available through the inflation Reduction Act of 2022. For the fourth quarter, we expect total company GAAP revenue to be up 19% to 21% year-over-year, driven by strength in political advertising. We expect total non-GAAP operating expenses to be up 1% to 3% compared to fourth quarter of 2023, driven by growth in programming and Premion cost but also offset in part by savings realized from our core cost reduction initiatives. In closing, we are pleased with our third quarter performance. With that, operator, let’s open the call for questions.
Operator: Thank you. [Operator Instructions] And our first question for today will be coming from Steven Cahall of Wells Fargo (NYSE:WFC). Your line is open.
Steven Cahall: Thank you. So Mike, thanks for your comments this morning. It wasn’t so long ago that TEGNA was under an agreement to be acquired, and then that deal fell apart due to the actions really of the FCC. It sure looks like we’re going to get a much more favorable FCC possibly starting early next year. So how do you think about the opportunities here for TEGNA within that? And how does that affect how you kind of think about allocation of free cash flow between reducing leverage or just building cash on the balance sheet or stock repurchases, maybe knowing that there could be some more opportunities ahead. And then duly the cost reduction really showed through in Q3? It seems like that going ahead, you’ll probably have lower costs in ‘25 just due to not having the political revenue in there. So as we think about maybe expense growth in the next year, is it logical to think about it being down year-on-year, but you also talked about some organic investments. So just trying to think about how we put that all together. Thank you.
Mike Steib: Thank you, Steve. I’m excited to be here and looking forward to working with you. I am certainly – the personal opinion that the regulatory regime needs to be reevaluated. If you look at any of our markets, Google (NASDAQ:GOOGL) makes 50x the advertising revenue that any broadcaster does in our markets. And TikTok has greater share of news viewing by young audiences than any single broadcaster and is owned by a foreign adversary. And yet today, we’re not allowed to buy a Fox station in Waco, Texas. So I’m certainly hopeful that the regulators will be looking at what the right regulatory regime is to ensure a long and prosperous future for local broadcast and local news. With that in mind, we are – we certainly are big believers here from the board to the leadership team and down that there are opportunities to unlock synergies and value for shareholders through combinations. In particular, in the markets where we operate. Whether what unlocks the most value for our shareholders is for us to be an acquirer or a seller either on a market-by-market basis or across the board. You don’t know until you know prices. Our job is to be good capital allocators and we’re going to be really focused on and we’re going to be really focused on making the right capital allocation decisions now and forever. So it’s – forgive me, it’s a little bit of a non-answer. I think you’re instinct that we’re going to be having a lot of these conversations is right. And you should know that we’re going to want to be in a position to unlock value for shareholders and whatever weigh in with whatever opportunities present themselves.
Steven Cahall: And Julie, on expenses?
Julie Heskett: Yes. So on expenses, Steven, you’re exactly right. We’re really focusing on the cost takeout of our legacy businesses, the underlying trends, which you have seen successfully in the first three quarters here of 2024. What is happening is we are preparing and working hard with the integration of Octillion and returning Premion to growth, which you’ll see here in fourth quarter as well as we’ve invested in programming with sports rights, which comes with that both top line and expense. So the growth rate that you’re going to see in fourth quarter is probably something that will be more realistic going into 2025. But as of right now, we are not coming forward with any specific details on 2025 guidance.
Steven Cahall: Thanks.
Operator: Thank you. [Operator Instructions] And our next question will be coming from the line of Dan Kurnos of The Benchmark Company. Your line is open.
Dan Kurnos: Yes. Great. Thanks. Good morning. Mike, appreciate your initial vision here. Glad to have you talking to all of us. Maybe just high level, any philosophical differences? I’m guessing no between sort of you and the way things were or in your outlook and the way things were before, number one. Number two, you gave us a few pieces of things that you’re looking at. I mean a lot of it sounds expense oriented. Is there any way to get more at least directional thoughts on breadth, like how aggressive or sizing of any of these things of these opportunities. Just – you don’t need to quantify specifically but any kind of directional help there would be great. And then, Julie, you said Premion returning to growth in Q4. I assume that means it wasn’t growing in Q3? How should we kind of view the acceleration trajectory there? Thanks.
Mike Steib: On the first one, Dan, thank you for the question. I’m not sure I can give you a useful sort of philosophical comparison. But what I can tell you is, the company has been through a lot over the last few years with a busted merger and a CEO transition. And so what I – I think what is different and important is that there is a there was a re-energization here and a real focus on execution. And what you heard in my rundown was certainly in one part, we’re talking about cost, but we’re talking about, just as importantly, how do we put the absolute best product in front of our audience across platforms. And the – looking at talent, looking at our operating system, but also the nose-to-tail review of all of our processes and where we’re leveraging software automation and AI is going to help us to create more and better content that better serves in our markets, helps us to win on the revenue side, helps us to win market share but also ensures that we’re not investing in a dollar that we don’t have to invest to put out the best product and to monetize it.
Julie Heskett: And on the Premion question, Dan, I’ll take that one. So Premion did have another tough quarter comp here in Q3. It continues to be the national trends of that business. In Q3, our overall advertising and marketing services, which you saw in the release, were up slightly. Core linear was actually positive, up low single digits. Premion is the area that brought that down. But we do foresee Premion of returning to growth in Q4. And I want to remind you, Premion local has performed well continuously throughout the year. And third quarter local Premion was up double digits. We continue to see that accelerate as we go into Q4.
Dan Kurnos: Great. Thanks so much. Appreciate it.
Operator: Thank you. [Operator Instructions] And our next question will be coming from Craig Huber of Huber Research. Your line is open.
Craig Huber: Great. Thank you. Julie, just a follow-up there on the Premion. Can you give us a sense of what you’re looking for, for Premion in terms of growth in the fourth quarter year-over-year? Are you thinking like up mid-single digits at this time or wise?
Julie Heskett: Yes. So we’re not going to guide to specific line items, Craig, of our revenue. You saw total revenue plus 19% to 21% in Q4, driven mostly by political AMS specifically is going to be challenged in fourth quarter because of the heavy political displacement. But Premion, as I just said, I’ll just rearticulate we do project that to return to growth in Q4, driven by local, which continues to grow double digits.
Craig Huber: And as you think out for next year on Premion, is there any changes you’re sensing out there where you could end up having a better year next year, at least the first 6 months?
Julie Heskett: We’re not providing any guidance for 2025 at this time. We continue local Premion to have growth opportunities and national continues to be challenged.
Craig Huber: Okay. Can you help me understand if you...
Mike Steib: A quick – let me just add a quick strategic note on that one because I’m sure you guys are also wondering how we think about Premion generally. Over the last decade, a lot of the television audience has moved to connected TV. And the advertisers that we serve in our markets have not had the same ability to reach that audience as they did in television. The local sales teams and the relationships and the brands that we have in those markets sets us up really nicely to expand that business, especially with local advertisers and better serve them by helping them to run their ads across linear and digital. So it is – we think it’s a real opportunity. It is, in part, an execution story. We have to, in our markets, be exceptional at connecting our advertisers to audiences across platforms, even though historically, we have been a company that sells those advertisers’ television. So, it’s going to have a – it was the sort of a component of the fourth point I touched on earlier, thinking about the opportunity for growth in these digital channels through better execution is something that we have got a lot of excitement about.
Craig Huber: And then, Mike, just a little separate note here, as you think about the company and what you have seen so far and the strategies that you are contemplating here and so forth. I mean in terms of potentially doing digital acquisitions going forward here. I mean the media landscape, as you know, is littered with underperforming digital acquisitions have done over the last 20 years and stuff. And I think there can be very, very risky and stuff. And some CEOs will come in and do one or two and make a mess of the company and stuff like occasional work and stuff. And just what is your appetite for digital acquisitions at TEGNA? Do you feel like you need to really totally try to revamp this company to some degree in different direction, or are you pretty contented status quo for a while?
Mike Steib: I will answer vaguely and then try to answer specifically. So, vaguely, if you – when I started in media a bunch of years ago in corporate development at NBC, which then became NBC Universal, and I saw through my time there, two different kinds of acquisitions. One kind of acquisition brought cost savings and revenue synergies and unlocked real value. And the other always inevitably was referred to as a strategic acquisition and it didn’t unlock revenue or costs, but it made the acquirer feel like they had gotten some kind of a capability or opportunity in a space that they didn’t fully understand. A lot of media companies did those acquisitions at that time. We can harken back to my village and my space and some others, and everyone lost their shirts. I have seen real success through my career with acquisitions in the First Camp, where when you put two assets together, it unlocks cost savings or it brings revenue synergy. If we were to see acquisitions that we get excited about, it would be for that reason. There are probably not in your mind, a lot of digital acquisitions that meet that description. So, I can’t get all the way to an answer for you. I am only in my first quarter here and we will be getting a better sense over the coming months as to the opportunities on this landscape. But we are old fashioned in the way that we think about M&A. You are supposed to put two assets together, and as a result, more cash flow comes out and well, well pays for both the acquisition takeover Premion that you have to pay as well as the execution risk.
Craig Huber: Okay. Final question, if I could ask Julie or Mike, your TV advertising pacings post the election, how are they looking on a year-over-year basis? And is the trend any better here on a year-over-year basis post the election for the best you can tell the bookings you have so far?
Julie Heskett: Yes, Craig, I will take that one. So, what we have seen, as you know, throughout 2024 is mixed economic signals. There are signs of resiliencies and there is also signs of challenge where advertisers and consumers seem to have been very cautious with their spending what you saw in Q2. Obviously, Q3, that continued, but also had political displacement and then Q4, we see that same pattern. So, fourth quarter will be hindered with the political displacement, specifically in October, November. To your point, December looks better. It is sequentially better than both October and November. But it’s still sluggish and challenged, and I would say, similar to what you have seen in Q2, Q3 is really dirty because of Olympics and political displacement. But if you go back and kind of look at what we saw April, May, June, kind of Q2, it’s in that same similar range.
Craig Huber: Great. Thank you both.
Julie Heskett: You’re welcome.
Operator: [Operator Instructions] Our next question is coming from Patrick Sholl of Barrington Research. Your line is open.
Patrick Sholl: Hi. Thank you. I was wondering if you could talk a little bit on political and how maybe the share has shifted between broadcast and Premion? And if any of that political and Premion is kind of contributing to the rebound in growth in Q4, or if it is all just – if it’s non-political that you are talking about?
Julie Heskett: I will take that, Patrick. Hi. So, from political advertising, I think it is still clear that broadcast wins the day and takes the majority share of overall political spending nationwide. Yes, there is a shift to digital in political. And yes, CTV is a benefactor of that shift of U.S. political spending. From a Premion perspective, Premion is able to take some of those national political dollars. But most of those are spent on a programmatic side of the equation, which is not the product that Premion is focused on. So, yes, Premion got some political. I would not call it a material number. Our political is very heavy on the TV linear side. With that said, I can say that Q4 Premion’s growth is not isolated just to a political, but we do see non-political Premion returning to growth in Q4 driven again by local.
Patrick Sholl: Okay. Thank you.
Operator: Thank you. One moment for the next question. And our next question will be coming from David Karnovsky of JPMorgan (NYSE:JPM). Your line is open.
David Karnovsky: Hi. Thank you. Maybe to press on the regulatory piece, I just wanted to see if you could expand on what you think is possible in terms of easing rules for either in market or the ownership cap? Do you think the FCC has room to maneuver independently, or will kind of substantial changes require congressional action? And then as a second question, Mike, I want to see if you could expand on local sports, especially if more team deals might come available. Can you say anything about how the deals are kind of structured at a high level? Are you aiming to be profitable on ads alone or should we look at the games kind of more broadly in terms of their benefit to adjacencies or even re-trans? Thank you.
Mike Steib: Hi David. Our view is that the FCC has the opportunity to drive change here in the duopoly rules, and the national cap and the UHF discount. But in fairness, I wasn’t hired because I am the world’s leading expert on this. I think among the folks on this call, you all inform, sort of more informed opinions on that. Secondly, on the question of sports, we love that these sports rights have become available to us. I mean as you all know, the RSNs have not been able to deliver the economics and increasingly the reach. And with these teams, there are two things that really matter to them. One, they want the right dollars coming in the door. But secondly, they need to reach as large an audience as possible to also drive ticket sales and Jersey sales for many years to come. And so broadcast seems to be emerging and reemerging if you would, as an important component of these local sports rights. We like these opportunities because keeping your engagement with the audience live content is perfectly suited for linear television. It also will open the doors to a lot more advertiser accounts. All that said, I think embedded in your question is, do you run out and do a bunch of rights deals that lose money, hoping you will make it up in some other way, I would sort of refer back to the framework I gave on M&A. Anything we do in the company is an investment whose job is to deliver cash flow returns and cash flow returns at clear our shareholders and our company’s cost of capital. So, when we look at these rights, we are looking at ways to get these sports rights to make money.
David Karnovsky: Thank you.
Operator: Thank you. And this does conclude today’s Q&A session. I would like to now turn the call back to Mike for closing remarks. Please go ahead.
Mike Steib: Well, thanks everyone for the questions, for your support of the company. And I can’t tell you how excited I am to be here working with this fantastic team, its important mission and with this very special collection of assets. So, I will talk to you all and if folks have questions, we will talk to you today, and we will be back here at next quarter and look forward to working together. Thanks everybody.
Operator: Thank you for participating in today’s conference call. You may now disconnect.
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