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Gray Television, Inc. (NYSE:GTN)
Q3 2018 Earnings Conference Call
November 6, 2018, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning. My name is Kelly, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Gray Television Third Quarter 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. After the prepared remarks, there will be a question-and-answer session. [Operator Instructions].

I would like to turn the call over to Hilton Howell, Chairman and CEO. Please go ahead.

Hilton H. Howell, Jr. -- Chairman, President, and Chief Executive Officer

Thank you, operator. Good morning, everyone. I am Hilton Howell, the Chairman and CEO of Gray Television. Thank you all for joining for our Third Quarter 2018 Earnings Call, and happy Election Day to everyone. I am joined today by our Chief Legal and Development Officer, Kevin Latek; and our Chief Financial Officer, Jim Ryan. We will begin this morning with a disclaimer that Kevin will provide.

Kevin P. Latek -- Executive Vice President, Chief Legal and Development Officer

Thank you, Hilton, and good morning, everyone. 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 described in the forward-looking statements, as a result of various important factors. Such factors have been set forth in the Company's most recent reports filed with the SEC and included in today's earnings release. The Company undertakes no obligation to update these forward-looking statements.

Gray uses its website as a key source of company information. The website address is www.gray.tv. We will also post an updated investor deck to the website within the next two weeks. Included on the call will be a discussion of non-GAAP financial measures, and in particular, broadcast cash flow, broadcast cash flow less cash corporate expenses, 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 valuation of our Company. We included reconciliations of the non-GAAP financial measures to the GAAP measures in our financial statements that are made available on our website.

I now return the call to Hilton.

Hilton H. Howell, Jr. -- Chairman, President, and Chief Executive Officer

Thank you, Kevin. Gray Television has just completed another record setting quarter by almost any measure. Our financial results exceeded our expectations, especially with regard to the outstanding political and retransmission revenue we posted this morning. And of course, our team has been exceptionally busy working with the outstanding individuals at Raycom Media to ensure a smooth transaction closing and integration of our companies later this quarter. We very much look forward to adding to our growing corporate family the best assets of Raycom Media, which are, of course, the roughly 4,000 employees at the television stations and the production companies in Raycom Media.

Turning to our Gray heritage results, you saw in our earnings release this morning that Gray Television continues to deliver exceptional results. Our third quarter 2018 revenue, net income, and broadcast cash flow all set new all-time records. Our third quarter record revenue set a new record of $279.3 million. This figure represents a $60 million, and very significant 28%, increase from the third quarter of 2017. Our third quarter net income was our all-time best ever, coming in at $61.9 million. This figure represents a $46.6 million, or 304% increase, from the net income posted in the third quarter of 2017.

Similarly, our third quarter broadcast cash flow was our all-time best quarterly result in the company's history. We posted $134.6 million in broadcast cash flow, which was an increase of $54.7 million, or 69%, from the third quarter of 2017. These results were driven by stronger core business relative to the first half of this year, stronger retransmission revenue than any prior period, and exceptionally impressive political revenue. We posted $91.6 million in gross retransmission revenue for the third quarter of 2018, along with retransmission expense of $41.4 million. Therefore, our retransmission revenue net of retransmission expense was $50.2 million for the third quarter of 2018.

As you saw today, we now expect full-year gross retransmission revenue in a range of approximately $354-356 million in retransmission revenue net of retransmission expense in the range of approximately $188-190 million. In short, our gross and net retransmission revenue has again increased by double-digit percentages over the year earlier period. Our political advertising revenue in the third quarter was $48 million, which topped our high-end guidance range of $45 million. This figure was 17% higher than the third quarter of 2014 after giving effect to stations acquired and divested since January 1, 2014.

Please recall that we earned approximately $25 million in calendar year 2014 from the exceptionally hot race for the senate in Alaska that were not present this year. It is truly remarkable that we exceeded our high-water mark from the third quarter of the 2014 midterm cycle, even including the very tough comps from that cycle. You also saw in our release this morning that we project our full-year 2018 political revenue will be approximately $154 million. This figure represents a percent higher than 2014 after giving effect to stations acquired and divested since January 1, 2014.

For the past few years, and even most of this year, we cautioned against expecting a strong enough political season to surpass our 2014 proforma political revenue, given the absence of the super competitive Alaska races this year. Clearly, our conservatism was not warranted, as political advertising remains quite alive and exceptionally healthy.

I also would like to remind everyone that in 2014, we relied on a national sales representative firm to handle all of our political sales, and we paid them healthy commissions for that work. In contrast, Gray secured 2018's record setting midterm political revenue without any sales rep firms. Instead, 100% of our political ad sales were made through our National Political Sales Director Mike Jones in Washington D.C., coordinating with the general mangers and the general sales managers in each of our local television stations. In short, we could not be more pleased with our likely 2018 political revenue results, and I'd like to publicly commend Mike Jones and everyone involved in this effort. It's truly remarkable.

We ended the third quarter with a total leverage ratio as defined in our senior credit facility of 3.51 times on a trailing eight-quarter basis after netting our total cash balance of $551 million. For those of you with us just a few years ago, I'm sure you share my profound gratitude to all of our stakeholders for their patience and support through our efforts to grow our company while making our operations evermore efficient. And, along the way, I'm very pleased to remind you that Gray Television has reduced our net leverage ratio dramatically in recent years from 8.5 times in 2010, and 7.5 times in 2011, to 3.51 times at the end of this third quarter.

In other good news, we're very pleased with the steps we have taken to line up the financing for the Raycom acquisition. On Thursday, we announced the successful pricing of a private offering of $750 million aggregate principle amount of 7% senior notes due in 2027. Given the very strong demand, we upsized the note's offering by 50% and priced the notes at 100% of par. At the time we closed the merger, we are poised to borrow an additional $1.4 billion of term loans with a seven-year maturity under our senior credit facility, and replace our existing revolving credit facility with a new five-year $200 million revolver.

The new term loan and notes will help us finance the acquisition of Raycom Media. We're very pleased with the results of these financing arrangements because, when completed, they should provide solid, long-term financing for our growing company on favorable terms. Moreover, this structure gives a very favorable mix of fixed floating rate debt going into the new year. We view these very successful financing steps during the midst of some very choppy financial market conditions as a gratifying endorsement of our business model of investing in the highest quality people and the highest quality television stations that we can prudently afford.

We also wish to thank the team of professionals within Gray and Raycom, and most particularly those at Wells Fargo, and the many other banks, law firms, and accounting firms who sacrificed countless hours over the past few weeks to position Gray so strongly for completion of this merger and for the future of the combined company.

At this point, I will turn the call over to Keven Latek, and then to Jim Ryan, and their remarks. After that, we will open up the line for questions.

Kevin P. Latek -- Executive Vice President, Chief Legal and Development Officer

Great. Thank you, Hilton. In terms of the Raycom transaction, we remain on track to receive the regulatory approvals and close the transaction and the announced divestitures this quarter. Against the backdrop o fall this good news, we also experienced some very difficult days in September and October that remind all of us why we are so passionate about the local broadcast business.

In September, Hurricane Florence came ashore with tremendous force in our market in Greenville-New Bern, North Carolina, and Raycom's market of Wilmington, North Carolina, before spreading its wrath across a larger area through the Carolinas and the Mid-Atlantic. Shortly thereafter, Hurricane Michael arrived in Panama City where both Gray and Raycom owned television stations. Michael's destruction was acute in parts of that market, and our company's adjacent markets in Tallahassee, Dothan, and Albany all experienced Michael's force.

Broadcasters are journalists first, and we demonstrated that again this fall. No less than one dozen news directors, plus additional engineers from other great markets, feverishly worked to get WITN in Greenville the resources and crews that our station needed to cover Hurricane Florence. In all, we had 17 Gray employees from markets as distant as Colorado Springs and South Bend travel to Greenville-New Bern to augment our local station team. Together, they ensured that WITN provided the necessary coverage before, during, and after Hurricane Florence tore through town, despite the personal toll that many of the local station employees had endured.

Hurricane Michael arrived with less warning, grew more quickly, and created havoc in the Gulf. And again, the great corporate family rallied to help. Over 20 Gray employees from throughout the country, including as far away as Fargo, traveled to Panama City before, during, and after that hurricane. These additional news directors, anchors, reporters, meteorologists, and engineers provided critical talent and resources that allowed WJHG to serve as one of the very few sources of lifesaving information during this difficult time. In addition, the news directors, meteorologists, reporters, photogs, and others who physically came to Panama City, many others from our stations in Tallahassee and Dothan and elsewhere, worked from afar to provide support for the station, and support for the employees, in coordinating these massive efforts over a very short period of time. In addition, Raycom sent people and resources to our impacted stations. And we, in turn, shared people and resources with the Raycom stations in all of these markets.

Two weeks ago, I had the distinct honor to visit these markets with our COO Bob Smith, and our VP for this region Chris Mossman. We were all struck by the sacrifices quietly made by WJHG's employees -- from the seasoned pros who have experienced big storms before to those fresh on the job and those from other parts of the country who had never seen a hurricane previously. Many employees stayed at the station throughout the very worst of the storm so they could continue to serve the local community with the latest on-the-ground news and information. In fact, our General Manager Uly Carlini, News Director Donna Bell, and Operations Manager Jon McKee spent five days and nights around the clock at the station, sleeping only a few hours at a time on sleeping bags and air mattresses when possible. In this way, they were able to work constantly to ensure that the assemble team in and around the market, as well as those outside the market, were able to get out the news that local residents needed.

Let's remember that each of these individuals, as well as most of the rest of our WJHG team, had families too. And those families evacuated Michael while our pros stayed behind. We are humbled. Their selfless devotion of local service in all of these markets, Gray and Raycom, to inspiration, as well as a powerful reminder of why all of us are in the local broadcast business in the first place. We're exceptionally thrilled that all of our employees, and all of Raycom's employees, survived both of these horrible storms without any personal or family tragedies. Our board has asked that we publicly extend on this call our sincere appreciation to all of our colleagues in Greenville-New Bern, Panama City, Tallahassee, Albany, and Dothan, as well as nearly four dozen employees in distant markets who aided our stations in these difficult times. Likewise, we salute the similar devotion and efforts of all of our future colleagues at Raycom Media.

Thank you for your time. I now turn the call to Jim Ryan.

James C. Ryan -- Executive Vice President, Chief Financial Officer

Thank you, Kevin. Good morning, everyone. Our earnings release and the 10-Q that was filed a little earlier this morning provide a great deal of information, and Hilton and Kevin have addressed all the bigger developments that have occurred this quarter. So, just to sum up, we are extremely pleased that full-year political will approximate $153-154 million. We even had a few orders coming in as late as yesterday. So, it's been a phenomenal political season for us.

We're also pleased that we've moved our retransmission guide up again this year to a range of $354-356 million. And our core revenue in Q3 did appear to improve on a relative basis to the first half of the year, and we were pleased to see that. And again, our leverage net of all cash on a LAQA basis is 3.51, and it's the lowest that I can recall in the 20 years that I've been with Gray.

And finally, just reiterate what Hilton said, we're very pleased with the financing arrangements related to the $715 million in notes and the $1.4 billion incremental term loan that we will be using the proceeds of to finance, in part, the Raycom merger and the related fees and expenses..

I'll turn the call back to Hilton.

Hilton H. Howell, Jr. -- Chairman, President, and Chief Executive Officer

Thank you, Jim. And now, operator, we will open up the call for any questions anyone may have.

Questions and Answers:

Operator

Certainly. [Operator Instructions] Your first question comes from the line of Marci Ryvicker with Wolfe Research. Please go ahead. Your line is open.

Marci Ryvicker -- Wolfe Research, LLC -- Analyst

Thank you. Kevin and Hilton, you mentioned the Raycom deal and you have a lot of confidence that regulatory approval will be received. Are you having conversations with the FCC and the DOJ? Because we've been surprised before. So, I just want to get more color on that.

Kevin P. Latek -- Executive Vice President, Chief Legal and Development Officer

We are very confident we will receive the approvals in the next couple of weeks and close the transaction. And that is based on direct conversations with the decisionmakers at those agencies.

Marci Ryvicker -- Wolfe Research, LLC -- Analyst

Wonderful. Thank you. And then, I know auto had been -- and this is more for Jim. I know auto had been a category that was pretty choppy for you throughout '18. How are you piecing -- now, I know there is so much noise because of political. We have heard that auto's actually doing better than people had expected. Just curious if you're seeing that as well. And do you have any idea how auto might trend going into 2019?

James C. Ryan -- Executive Vice President, Chief Financial Officer

First, in Q3, auto did improve a little bit on a relative scale. It was only down about 8%, where the first part of the year it was down in double-digit territory on a percentage basis. And you have to keep in mind that September is the political start of the ramp-up. And obviously, our political was over the high side of guidance. Would've caused some additional displacement because auto and political advertisers love the news and they both can't be in there at the same time.

You're right about Q4 auto. October and early November are heavily distorted, which is the fantastic political season we've had. So, it's a little hard to read. I think it is still maybe -- again, on a relative scale -- a little bit better, as you would expect. October is down significantly because of the displacement from political. And pacing, as I'll remind you and everyone else, that it's obviously just one day, one point in time. So, at this stage of a quarter, and also with all of the political, they are kind of volatile. But, I would say November is looking a little bit better and December is, again, maybe looking a little bit better as well.

Marci Ryvicker -- Wolfe Research, LLC -- Analyst

Great. And then, I know that you are --

James C. Ryan -- Executive Vice President, Chief Financial Officer

But I would expect auto to be down in the quarter because of the political displacement.

Marci Ryvicker -- Wolfe Research, LLC -- Analyst

Right. Which we would expect as well. And I know you are at your lowest leverage that I can remember, which is going to change post Raycom. Can you just talk about once you've integrated those stations, how -- your path to deleveraging?

James C. Ryan -- Executive Vice President, Chief Financial Officer

We intend to use the free cash flow, and obviously continuing growth in our operating cash flow, to delever.

Marci Ryvicker -- Wolfe Research, LLC -- Analyst

Great. Thank you.

Hilton H. Howell, Jr. -- Chairman, President, and Chief Executive Officer

Thank you, Marci. It's great to hear from you.

Operator

Your next question comes from the line of Kyle Evans from Stephens. Please go ahead. Your line is open.

Kyle Evans -- Stephens Inc. -- Analyst

Okay. Thanks. Jim, I hate to nitpick, but you said November and December look better. Is that relative to first half and 3Q? Is that a year-over-year --

James C. Ryan -- Executive Vice President, Chief Financial Officer

Yeah. Yeah. It's still early and a little bit's going to depend on -- with a heavy political season, the auto guys will deliberately go to the sidelines, so it's a little bit of how hard they're going to come back in now it's post-election season. And we'll get a better feel for that over the next couple of weeks, after we get past today. But, if I look at the pace right now, as of today -- and again, it's volatile and there's a lot of money that would normally come in after a political season -- November is looking, on a pace, flattish and December is flattish, which I take at least some degree of encouragement from. And October is, obviously, down significantly because of all the political that dropped in.

Kyle Evans -- Stephens Inc. -- Analyst

Gotcha. The 8-K that you put out recently gives us a lot to chew on for the Raycom deal. Can you help us think a little bit about taxes post integration? Or is it too early for that?

James C. Ryan -- Executive Vice President, Chief Financial Officer

Yeah. First of all, keep in mind we are acquiring a fairly substantial NOL with the Raycom deal that will be usable over the next two to three years for us before we probably exhaust it. And so, our cash taxes -- obviously, it'll vary on even/odd with the political cycle. But it isn't going to be a full federal rate for the first two or three years. It's more muted. I believe when we announced the deal back in June, we said that our average cash taxes on a two-year blended basis is around the mid tens of millions -- call it $50-ish million or so.

Kyle Evans -- Stephens Inc. -- Analyst

Okay. And you guys rolled, like most of your peers, digital into core sometime ago. And the logic for that is sound, in my mind. Can you talk about what you're seeing at the tv.com level of the business? How has that grown since that disappeared as a line item in the income statement?

James C. Ryan -- Executive Vice President, Chief Financial Officer

It's growing at a faster rate than the main core business. It's still a very small component of the total core numbers, especially the total local number. It is -- but keep in mind all of that digital revenues is organic digital advertising within our local markets. And so, the digital advertising space in a mid to smaller market is only going to be growing so fast as well. But it is at a higher growth rate than the main core.

Kyle Evans -- Stephens Inc. -- Analyst

Could you update us on sub count for retrans?

Kevin P. Latek -- Executive Vice President, Chief Legal and Development Officer

Our sub counts have seemed to have become more stable this year than we were seeing last year.

Kyle Evans -- Stephens Inc. -- Analyst

Down low singles? Down one? Down --

Kevin P. Latek -- Executive Vice President, Chief Legal and Development Officer

We're just saying they've become -- we've seen the sub erosion slow in the last couple of quarters, especially most of the bigger operators.

Kyle Evans -- Stephens Inc. -- Analyst

Gotcha. And then, lastly, anything notable in the political rev? Are we going to have another Alaska type adjustment four years from now for some other bang-up market?

Kevin P. Latek -- Executive Vice President, Chief Legal and Development Officer

We saw widespread hot races. I mean, when we're asked what's a hot race, it's -- how long do you have. We saw spending in Tennessee that we never expected. We saw spending in Kansas we didn't expect. Florida has always been hot. It was even better this year than we expected. Ohio was the disappointment. We thought that would be more of a hot race that was for senate. That was not. The governor's race was not as lucrative as we wanted. But those are about the only surprises. Reno has been our top performing station election after election. They just keep setting new records. Wisconsin was strong, North Dakota -- it's been pretty widespread. So no, we didn't have an oh-my-god-Alaska experience, but we seem to have a whole bunch of just phenomenal races everywhere we looked.

Kyle Evans -- Stephens Inc. -- Analyst

That's great. Thanks, guys.

Kevin P. Latek -- Executive Vice President, Chief Legal and Development Officer

Pretty much everywhere we looked.

Operator

Your next question comes from the line of Davis Hebert from Wells Fargo Securities. Please go ahead. Your line is open.

James Davis Hebert -- Wells Fargo Securities, LLC -- Analyst

Hi, guys. Thanks for taking the questions. On the leverage point, you guys have talked about being at five times at closing of the deal. I'm not sure if you have any insight on Raycom's political numbers, but yours are obviously very solid. Any chance that leverage point could be below five times?

James C. Ryan -- Executive Vice President, Chief Financial Officer

Well, it starts getting into the law of large numbers a little bit. We're comfortable in saying five right now. Raycom's footprint is not immensely dissimilar to ours, and ours in some definite battleground states. So, I think in general, they have been having a good political year as well. Just like we were, I'm guessing they're probably disappointed in Ohio, but probably very pleased in Tucson and a couple of other places. So, I think, in the 8-K that we put out a couple of weeks ago that had 630 information on Raycom, there is some indication of what they were doing, at least the first half of the year. So, I think you can extrapolate from that, and I would expect that they're having a good political year as well.

James Davis Hebert -- Wells Fargo Securities, LLC -- Analyst

Okay. That's helpful. And I appreciate the comments on November and December looking better. If we look out to 2019, I understand visibility might be challenging. But is there any reason to think we shouldn't see a bit of a rebound, especially on the local side of things from a core perspective?

James C. Ryan -- Executive Vice President, Chief Financial Officer

That's certainly my current expectation. Admittedly, first half of this year was a tough year for everybody. So, I would think going into next year it's probably a little easier for us.

James Davis Hebert -- Wells Fargo Securities, LLC -- Analyst

Okay. Great. That's my questions. Thank you.

Hilton H. Howell, Jr. -- Chairman, President, and Chief Executive Officer

Thank you, David.

Operator

Your next question comes from the line of Daniel Kurnos from Benchmark Company. Please go ahead. Your line is open.

Daniel Kurnos -- The Benchmark Company, LLC -- Analyst

Great. Thanks. Good morning. Just a couple of quick housekeeping-ish questions. Just on KDLT, since it's still pending, I'm assuming that's not included in the forward guide at this point.

James C. Ryan -- Executive Vice President, Chief Financial Officer

That's correct.

Daniel Kurnos -- The Benchmark Company, LLC -- Analyst

Okay. And then, historically you guys have said on net retrans that next year, even with the NBC step-up, I think you have a tiny FOX and some -- half your CBS as well -- that you still expect net retrans growth. You guys continue to exceed upside on your retrans contracts, and NBC got done early -- which I don't want to read too much into that, but seems like that doesn't get done unless it's agreeable to both you and them and on somewhat favorable terms. So, maybe with the upside now, have your expectations for net retrans growth changed at all for '19?

James C. Ryan -- Executive Vice President, Chief Financial Officer

You're right in that we expect net retrans growth in '19. As we've said for quite awhile now, '19 is going to be the lowest net retrans growth year of us just because of the timing and the cycle of sub renewals. So, on a Gray legacy basis, we've only got a handful of subs up this year. And so, there's not real big uplift in the growth retrans number, except for the annual escalator that earn -- in all of our other contracts. And we'd characterize that annual escalator as a low double-digit percentage. So that helps the gross number next year. But, we've only got 3-4% of the sub base up for repricing. So, it'll still be a slower growth year in '19. But then, the sub base comes back around in 2021.

Daniel Kurnos -- The Benchmark Company, LLC -- Analyst

Got it. And then, I'm just going to apologize in advance for being that guy, but since you haven't even closed Raycom yet, is there any possible way, Jim, you could flex the balance sheet to absorb Cox with some creative financing if it became available?

Hilton H. Howell, Jr. -- Chairman, President, and Chief Executive Officer

Oh, I don't think we're going to comment on that one way or another.

Daniel Kurnos -- The Benchmark Company, LLC -- Analyst

All right. It was worth a shot, guys.

Hilton H. Howell, Jr. -- Chairman, President, and Chief Executive Officer

Again, and I appreciate it very much.

Daniel Kurnos -- The Benchmark Company, LLC -- Analyst

All right. Had to throw it out there. Thanks, guys.

Hilton H. Howell, Jr. -- Chairman, President, and Chief Executive Officer

I got it. I got it.

Operator

[Operator Instructions] Your next question comes from the line of Jim Goss from Barrington Research. Please go ahead.

James C. Goss -- Barrington Research Associates, Inc. -- Analyst

Thanks. Extending the retrans notions, how much more room to run is there? Is this a process that you think can at least grow at -- at least at some inflationary rate over time? Or do you think there is still more share that the networks and the network affiliates can get out of the MVPDs and other providers?

Kevin P. Latek -- Executive Vice President, Chief Legal and Development Officer

Jim, this is Kevin, and we think there's a long runway. All broadcasters together deliver more than 90 of the top 100 top shows on television, and yet we still get a small fraction of the overall programming pie. And that's got to change. Obviously, it's not changing overnight. And, while the broadcast retrans dollars are growing quickly, I'm going to point you to data from SNL that shows that the nonbroadcast channels -- all of the nonbroadcast channels -- are increasing their take of the programming pie faster than we are in absolute dollar. That just seems odd to us. We're the ones who have -- were not compensated for 20 years and have delivered all of this great value, and are still delivering 90-plus of the top 100 shows on television. I think real numbers run 94 or 95 of the top 100 shows on television. We should be seeing not just our percentage increase but our absolute dollar share of that programming pie increasing.

We think there's a long way to go. And as that continues to grow and we all get more revenue, that's good for the broadcast ecosystem because, of course, that allows us to invest in the local stations and the local news, as well as networks, to invest in better and better programming in a very competitive programming marketplace. So, we certainly don't think we -- there's a ceiling on retrans.

James C. Goss -- Barrington Research Associates, Inc. -- Analyst

Okay. And with retrans and political, relative to Raycom, is there a sense that you can provide us as to how they do relative to Gray in terms of maybe per viewer metrics? Should we expect that the combination would have that same sort of percentage impact when the businesses are put together?

Kevin P. Latek -- Executive Vice President, Chief Legal and Development Officer

Jim, when you put the number one and the number two together, you're naturally going to have an average that is not as strong as the number one station, but still better than everybody else -- or the number one or number two of any category. We have the highest quality portfolio. They have the second highest quality portfolio. Together, our average is still going to be better than everybody else's. And again, number one and number two TV stations -- but it's going to be less than we have today. They are in some bigger markets. They do have some stations that are not necessarily as strong as Gray. They cover about 14% of the U.S., so they're larger than.

We provided a significant amount of their data in an 8-K last week, and we are very constrained in what we can discuss because they're a private company. So, we can point you to the historical and you can look at the ratio of our metrics to theirs. I would just -- when you're thinking about political, just to highlight, the last couple of years we've put out a slide in our investor deck that shows our political revenue versus the industry, and it's more than just ours is high on a per household basis. In 2016, we had $9.63 of political revenue. And the closest competitor was in the $5.00 range. In 2018, if I do that same math, our political revenue divided by our TV households according to Nielson puts us around $13.50. I can't tell you Raycom's going to be that high, but no one's going to be anywhere near that number.

So, our metrics really do put us at the left side of most every table that compares the industry. Raycom's pretty close to us in a lot of ways, but there's no way that combining us together drives an average up, just by the law of putting a number one and number two together.

James C. Goss -- Barrington Research Associates, Inc. -- Analyst

Okay. The last thing that's --

Kevin P. Latek -- Executive Vice President, Chief Legal and Development Officer

Hope that helps.

James C. Goss -- Barrington Research Associates, Inc. -- Analyst

Yes, it does. Very much. And that slide you always put in your investor presentation, I think, does say that and speaks to that. The last thing, the OTT value to you -- it was pretty much zero a few years ago and then seemed to be at least showing up on some sort of chart a little later on. Is it getting to where it -- there may be some meaningful aspect delivered in your participation in CBS All Access or the other things you might have involvement with?

Kevin P. Latek -- Executive Vice President, Chief Legal and Development Officer

I mean, the short answer is it's still a small number. It's still a rounding error. And, frankly, as we keep lifting our retrans guidance for the year, even if OTT is growing nicely off of the small numbers, it's still a rounding error. And we're not sure that's going to change. Obviously, we could be wrong, but we're really focused on our MVPD relationships. Those are the strong relationships and those are definitely the most lucrative for us.

James C. Goss -- Barrington Research Associates, Inc. -- Analyst

All right. Thanks very much.

James C. Ryan -- Executive Vice President, Chief Financial Officer

Sure.

Hilton H. Howell, Jr. -- Chairman, President, and Chief Executive Officer

Thanks, Jim.

Operator

And there are no further questions at this time. I'll now turn the call back over to Hilton Howell for closing comments.

Hilton H. Howell, Jr. -- Chairman, President, and Chief Executive Officer

Thank you all very much for being on the call this morning. We're exceptionally pleased with our results this quarter. And we're really looking forward to having Raycom part of this company at our next call for the fourth quarter next year. Thank you very much, and have a great day.

...

Operator

This concludes today's conference call. You may now disconnect.

Duration: 39 minutes

Call participants:

Hilton H. Howell, Jr. -- Chairman, President, and Chief Executive Officer

Kevin P. Latek -- Executive Vice President, Chief Legal and Development Officer

James C. Ryan -- Executive Vice President, Chief Financial Officer

Marci Ryvicker -- Wolfe Research, LLC -- Analyst

Kyle Evans -- Stephens Inc. -- Analyst

James C. Goss -- Barrington Research Associates, Inc. -- Analyst

James Davis Hebert -- Wells Fargo Securities, LLC -- Analyst

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