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E.W. Scripps Company (New)(OLD) (NASDAQ:SSP)
Q1 2020 Earnings Call
May 9, 2020, 8:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and Gentlemen, thank you for standing by, and welcome to the Scripps First Quarter 2020 Earnings Call. [Operator Instructions] I would now like to turn the conference over to our host, Carolyn Micheli, Head of Investor Relations. Please go ahead.

Carolyn Pione Micheli -- Senior Vice President, Corporate Communications and Investor Relations

Thank you, Grace. Good morning, everyone, and thank you for joining us for a discussion of The E.W. Scripps Company's financial results.

You can visit scripps.com for more information and a link to the replay of this call. A reminder that our conference call and webcast include forward-looking statements, and actual results may differ. Factors that may cause them to differ are outlined in our SEC filings. The COVID-19 pandemic enhances the uncertainty of forward-looking statements we make about our operations and financial condition. Because of this rapidly changing economic climate, we are not issuing second quarter 2020 guidance, and we also are rescinding most of our previously issued guidance, with a few exceptions we'll discuss today. We do not intend to update any forward-looking statements we make today.

We'll hear first this morning from Scripps' President and CEO, Adam Symson; and then CFO, Lisa Knutson. Also on the call are Local Media President, Brian Lawlor; National Media Executive Vice President, Laura Tomlin; and Controller and Treasurer, Doug Lyons. Now here's Adam.

Adam Symson -- President and Chief Executive Officer

Thanks, Carolyn. Good morning, everybody, and thanks for joining us. Well, those of you who have been with us for some time know that 2020 was supposed to be a watershed for our company financially. And the year certainly started out that way. Despite the impact of the coronavirus outbreak on advertising for the last two weeks of March, we are reporting a tenth straight quarter in which Scripps had delivered better-than-expected results on nearly every measure. While our full-year results will be unlikely to meet the high expectations I had coming into the year, I'm heartened to tell you that the plan we have been working over the last 2-plus years has made us stronger and better performing.

For the first quarter, the Local Media margin is up over Q1 2019 on both the adjusted combined and as-reported basis. National Media segment profit was double last year's Q1, and the $49 million in total company segment profit for Q1 is the highest profit number for the first quarter that we have seen since we spun-off Scripps Networks Interactive in 2008.

The bigger and better performing portfolio we have will pay off during the upcoming political advertising cycle in this presidential year and through the upside we are capturing in retransmission revenue. Even before the impact of the outbreak on advertising, those two revenue lines, political and retrans, were projected to account for more than half of our local media revenue in 2020, and we expect them to hold up well during the crisis. The changes we've made to the company to make it leaner and more efficient and the significant M&A we did that doubled the scale of our Local Media portfolio has also made us more durable and better able to withstand the crisis, like the one we're all living through now.

Today, we're in the midst of a business disruption due to stay-at-home orders, shuttered businesses and a soft advertising market. But the fundamentals of the broadcast industry generally and Scripps' local and national businesses specifically remain sound.

On behalf of the Scripps' Management and Board, I'd like to thank our shareholders who have been supported us during this challenging time. Many of you have been with us for years and some since before the last financial crisis. Today, as always, we appreciate your understanding of Scripps' near- and long-term growth strategies and the value this company has created over the decades and will continue to create in the years to come. Here is Lisa to discuss our financial picture, and then I'll be back to cover a few more topics in detail. Lisa?

Lisa Ann Knutson -- Vice President, HR-Operations and Corporate Secretary

Good morning, everyone. The first quarter got off to a strong start across the company. In Local Media, we were on track to significantly exceed first quarter budget until mid-March when the COVID-19 outbreak began to impact the economy. We reaped the benefits of our acquisitions of 27 television stations last year. And although core advertising ended the quarter down on a same-station basis, it had started the year with the same momentum we saw in Q4. We received significant early political advertising spending finishing the quarter at $19 million, and we captured retransmission revenue upside as we completed negotiations for about 20% of our subscriber households, with another 20% left to negotiate this year.

Retrans revenue was up 21% in Q1 on an adjusted combined basis. The National Media division saw even more positive Q1 dynamics. By far, our largest national business is the Katz Networks, which managed to deliver its best revenue growth since we acquired it, 31%. Newsy also finished up around 30%, a testament to its ongoing appeal with young audiences and driven by programmatic ad growth on its over-the-top platform.

Overall, the National division met and beat our first quarter guidance with $108 million in revenue and more than double its Q1 2019 segment profit at nearly $12 million.

Turning to expenses. Local Media's Q1 expenses came in well below our guidance of up low-teens at up 8% on an adjusted combined basis. National Media's expenses came in at $96 million versus guidance of about $100 million. Shared services and corporate expenses were nearly $19 million in the first quarter that is consistent with what we guided and much higher than what we'll see the rest of the year because it included annual compensation and benefit payments. I'll talk more about our ongoing expense control in a moment.

The company's Q1 net loss was $0.15 per share, but that loss is only $0.10 per share if you factor out the first quarter acquisition and integration costs of $3.7 million net of taxes. So again, a very solid first quarter.

Now I'd like to spend a few minutes on our current financial picture. Although we are temporarily suspending guidance, we do feel obligated to our shareholders to make a good faith attempts to provide insights that reflect the current state of affairs and our outlook. Those issues include where we stand today operationally and financially, how we're responding to the COVID-19 by protecting the well-being of our workforce and how our operations and financial condition may change as global efforts to fight COVID-19 progress.

In addition to our comments today, you will find disclosures and risk factors related to the outbreak in our 10-Q. Of course, we can't know the full impact of the COVID-19 crisis at this time.

Turning to the Local Media division. Let's start by discussing the progression of core advertising revenue over the last two months. So speaking sequentially, from March to April of this year, we saw a 40% decline in core as our markets felt the impact of state governments' stay-at-home and business shutdown orders. Right now, our ad pacings indicate core advertising improving from April to May and from May to June. Let me be clear, we are discussing month-to-month performance in 2020, not our year-over-year performance. Many factors will come into play into our final Q2 results, including the pace of businesses reopening and consumer spending rebounding across our markets. In comparison to core advertising, political ad spending remains healthy. Michael Bloomberg's presidential run provided helpful dollars at levels we don't normally receive so early in the presidential campaign.

And now that Joe Biden is the presumptive Democratic nominee, we expect the full force of the democratic fundraising effort to fall behind him, setting up for robust political spending. Key Senate and Governor's races are also falling in line for us. All in all, we expect a strong political spending year and our outlook for political advertising in 2020 has not changed.

Our retransmission revenue outlook has actually improved from the start of the year. In January, we began our new Comcast contract, and in March, we completed negotiations for about half of the 42% of subscriber households that are up for renewal this year. We are pleased with the outcome of those negotiations and believe our expanded station footprint helped us to realize greater value. We have now begun negotiations on the rest of those households, another 20%. Regarding subscriber counts, we saw no substantial change from the third quarter to the fourth quarter of 2019, the most recent data available. Our National Media businesses also felt the effects of the soft advertising environment in April.

The month of April was down 19% from the previous month March. And March was the best month of the first quarter. However, we now see stabilization in the national businesses for the remainder of the quarter. Like Local Media, these businesses are managing the ad market challenges by employing stringent expense controls. In addition, we believe the national businesses are well equipped to withstand these challenging times.

At Katz, the pillars of the network's businesses are very durable. They bank on growth in over-the-air TV viewing. They benefit from stronger national advertising, and they each reach nearly all U.S. households. These fundamentals will help Katz rebound as the economy improves.

At Newsy, the stability of programmatic ad revenue on its over-the-top platforms has allowed it to manage through this unusual time. While Newsy has seen cancellations and softness in the second quarter, its ad rates are holding steady along with viewership gains. Stitcher's business also faced challenges from the unfolding economic crisis and advertiser uncertainty about usage as stay-at-home orders reduced commute times. But listening has bounced back in recent weeks to near-normal levels with a new spike midday. And the Stitcher team has been actively managing its P&L with two goals in mind; to preserve and strengthen the long-term value of the business and to mitigate risk through prudent expense management. Stitcher continues to receive pitches from big celebrities and maintains key partnerships with others and is well-positioned to emerge as an even stronger brand.

Now I'd like to discuss the proactive expense control measures we've executed across the company since mid-March to help us manage the ad revenue declines. Our initiatives have included a reduction in capital expenditures, a hiring freeze, a freeze on the merit pay raises we were scheduled to implement on April 1, the rolling back of executive pay increases that were made earlier in the year. Then later, pay cuts for executives and reductions in our Board of Directors' fees and general expense reductions in items like travel, entertainment and marketing.

We expect these initiatives to provide cash savings of more than $85 million for the year. And now a few key liquidity items to update you on. Our current forecast for full-year cash interest is $90 million versus our previous forecast of $100 million. The savings reflects the significant decline in LIBOR over the last few months. Our capital expenditures currently are estimated to come in between $25 million and $30 million versus our previous estimate of $50 million. And our cash taxes are currently estimated to be 0 for the year. In fact, rather than paying taxes, we're receiving a $14 million tax refund as a part of the CARES Act.

I'll talk more about CARES in a moment. Many of you were with us as we weathered the Great Recession of 2009. That was a difficult time for this company, and we were forced to impose furloughs, pay cuts and suspension of many employee benefits. We hope those measures won't be necessary in this case. Our expense reductions are certainly helping. Another significant difference from that period comes from the benefits of the federal stimulus package to our company's liquidity.

The stimulus provisions that benefit Scripps include the deferral of social security taxes and pension contributions, the tax relief on the use of net operating losses and interest expense limitations. These measures either bring in cash this year or help us to push out cash payments to 2021 and beyond. The total impact to Scripps is about $60 million. We appreciate the federal efforts to help businesses maintain continuity during this difficult period. We expect to be cash flow positive for the year, and based on our current outlook, we expect our cash flow from operations to be efficient to meet our operating needs over the next 12 months.

We have, of course, stress tested our forecast with a number of downside scenarios. And even in our most severe downside models, our 2020 cash flow significantly exceeds 2019 cash flow. And while we do not anticipate liquidity constraints, we do have other potential cost control levers as well as the ability to slow our working capital spend and generate cash in the event of a prolonged economic weakness.

Right now, we do not need to take these steps. I'd like to conclude with the cash with cash and capital allocation.

Our cash balance at March 31 was $180 million, and net debt was $1.94 billion.

Our net leverage at the end of first quarter was 5.4 times. Just a reminder that our term loans and unsecured notes have no maintenance covenants. We have no maturities until Q4 of 2024. Our revolving credit agreement has a maintenance covenant only withdrawn. Its maximum leverage is 4.5 times on first lien debt on an adjusted pro forma 2-year blended EBITDA as defined by our current credit agreement.

At March 31, we were at 2.9 times on this threshold. Finally, our team has been focused on navigating the economic fallout from the pandemic with a sense of urgency. Our number one priority right now is managing our cash and liquidity through the duration of the downturn. However, we haven't lost sight of the fact that outside of this crisis, our overarching priority is to pay down debt. This is why we've temporarily suspended share buybacks last quarter. Nevertheless, we thought it was important to maintain our $4 million of quarter dividend. And now, here's Adam.

Adam Symson -- President and Chief Executive Officer

Thank you, Lisa. I shared with you at the outset of the call, how the plan we have been working over the last two years at Scripps was designed to make us a stronger and more durable company and why that work has better positioned us to navigate this moment. Then after sharing the results of our strong start to the year, Lisa detailed our plan to weather the current storm. Now I'd like to discuss how we believe the work we are doing today will better position our company for the dawn ahead when we know the sun will inevitably rise again on commerces.

As the coronavirus crisis came upon us this spring, we identified three key priorities to guide our actions. Number one, to protect the health and well-being of our 6,000 employees. Number two, to energetically serve our audiences and communities with the objective news and information they need to stay safe and the entertainment they seek to lift their spirits. And number three, to maintain business continuity and strong financial stewardship of the company. These three priorities have guided our decisions thus far, and they are the reason we believe we will be better positioned after the crisis. It all started with planning because several weeks ahead of the pandemic's rise to the top of the American consciousness, we were already putting the pieces in place to safeguard our employees, execute the mission and maintain business continuity.

We led our industry in transitioning many of our employees to working from home across both our television station footprint and our national businesses. I'm proud of the creativity and ingenuity demonstrated across our teams to overcome any challenge, and I want to thank our employees for their dedication to their audiences, their true commitment to our mission and their loyalty to Scripps. Without missing a beat, anchors, meteorologists and our field reporters transitioned to covering our communities with minimal risk and exposure, many live from sets in their homes.

Podcasts are being produced, recorded and edited remotely. Software engineering and development continues without interruption. And video conferencing has helped shore up our sales efforts across the company. At Katz, for instance, the upfront season has already started with about 100 pitches being made over video calls with the same polish as an in-person pitch.

Across our company, our sales teams are staying in close contacts with clients, agencies and brands as we navigate this together. While COVID-19 is a global pandemic, it is inherently a local experience. And therefore, a local new story. We believe we have moved into a new era for the journalism industry, one in which news, especially local news, is again a must-have for most Americans. This era begins at a time when local broadcast newsrooms are uniquely positioned to cover our communities and meet audience demand. Ratings and audience impressions at our local stations have been up on average between 10% and 50%, and that same data shows that Scripps' brands are taking a greater share of the increased attention.

Our coverage focuses on the facts. We are delivering information with authenticity with humility over authority and with a willingness to recognize that we don't always have the answers. This is because of our newsrooms' dedication to a differentiated content strategy that calls on us to deliver the stories and information our audiences need with context and objectivity.

At Newsy, the spike in demand from our audience has been just as profound. Spread out across the nation, Newsy's journalists continue to report about the pandemic, along with all of the other news that keeps the world spinning. Newsy's audience has been up 40% on cable and more than 65% on OTT, record-setting viewing numbers and a significant opportunity that has introduced Newsy to a bigger and broader audience seeking out our commitment to nonpartisan objective journalism.

The five Katz networks are seeing boosts in viewership from the increase in people watching television. This is especially true for Mystery, Laff and Grit. The three networks that specialize in escapism. And not surprisingly, daytime is the new prime time as people turn on their TVs while spending more time at home. Total viewership on these networks during the day is up between 20% and 40% over the same period last year.

At Stitcher, more than 300 agency and brand professionals joined our Power of Podcast webinar in early April to learn how even in this environment podcasts will connect their messages with their target consumers. Some advertisers have increased spending with us. And new advertisers continue to enter the podcast marketplace. The resonance of podcasting during this chaotic time illustrates how deeply ingrained it is in our lives today. All of this elevated consumer demand for our news and entertainment makes me optimistic about what lies ahead.

Branding and marketing experts know that consumers' habits shift after life-changing events. I believe we are collectively all experiencing a moment like this now. People are recognizing that social media posts and Internet influencers may not be reliable sources of legit information to keep them safe. Our trustworthy and enduring brands will be here for them during and well beyond this crisis.

I believe all of this outstanding audience growth will financially benefit our company, even in the near-term as we head toward what we expect to be a very robust political revenue cycle. At moments like this, the Scripps' commitment to mission and service extend beyond how we inform our audiences. It reaches to the role we play within our local communities for good and how we support the economy with the power of our media. Our efforts on this front include launching three news and advertising campaigns to support citizens and businesses across our footprint: We Are Open, Take Out Tuesday and The Rebound. These initiatives and campaigns connect us closely to our audiences and advertisers and reinforce the central role our media brands play in our communities, and they are integral to our mission.

As the fourth largest independent television broadcaster, one of the largest podcasting companies and the largest and most powerful portfolio of over-the-air multicast networks, Scripps is contributing to moving America forward. This is what we do because it's what's right, but we also believe doing this work gives us an advantage that will pay off for our business and for our shareholders down the road. As our company mission states, we do well by doing good.

Today, advertising may be down, but audiences are way up. I'm confident that as stay-at-home orders are lifted, we'll see the start of a recovery. Auto dealers will need to sell their cars. Air conditioning systems will once again need to be replaced. And eventually, travel and leisure spending will resume. As businesses return, we will be there to help them reach their customers, and I expect our actions today will benefit us tomorrow.

Ahead of this pandemic, Scripps had repositioned itself to thrive by prudently deploying capital to grow our scale and the economic opportunity with a commitment to delivering strong financial results. Along with the rest of the global economy, we are certainly being significantly impacted by the disruption to business, but we are also using this time to become a stronger and more powerful company. Scripps in its 142-year history has survived wars, depressions and even other pandemics. Our company is strong, our media is enduring and our people are resilient.

While it's inevitable that some companies have to hunker down and play defense through this period, we will be on offense because we know that how we act now during this crisis will have everything to do with how we succeed as we emerge from it.

And now, operator, we're ready for questions.

Questions and Answers:

Operator

[Operator Instructions] And we'll go to the line of John Janedis with Wolfe Research. Please go ahead.

John Janedis -- Wolfe Research -- Analyst

Hi, good morning, thanks for the color and happy all safe. Adam, a couple of questions. First, as markets reopen, what are you hearing from your sales team? How quickly are advertisers prepare to move given stress on local businesses? And when you look at your top categories like services and auto, do you think they lead or lag coming out? And then just on Katz, you talked to it a bit, but is the advertising mix there with more DR, just making it so much more resilient? And I'm just curious in terms of what the mix is there and if that's what's helping?

Adam Symson -- President and Chief Executive Officer

And it's great to hear you on these calls again. I'm going to ask Brian to cover those 2.

Brian Lawlor -- President of Local Media

John, it's Brian. How fast they're opening? Honestly, it's just early. I mean we're just in the last week, Kentucky, Texas started opening up. Montana, which had very few cases has started opening up a bit. And now we're beginning to see some of the other states starting to take incremental steps.

I think we'll know better in the next couple of weeks. I mean this past week was very reassuring. We saw quite a bit of business that had been canceled four or five weeks ago reinstate their buys. But I think it's really going to be on a market-by-market basis. And there are some categories. The medical category is one of the first to start to bring money back into the ecosystem as nonelective surgeries and so forth are one of the first things that are opening back up. So I think that's a category that we're starting to see. Services actually has held up OK. I mean, everything is down, but has held up OK during this. I think, with a lot of people home, it was a good time to start to get some self-fix. So I think in the next couple of weeks, we'll know more, but I expect it to be a kind of a market-by-market situation. Relative to Katz, was your question, John, about the first quarter performance or just how they're holding up now?

John Janedis -- Wolfe Research -- Analyst

I think now there's been talk in the market around direct response being just a much better category broadly. And I'm curious if that's going to benefit Katz going forward as opposed to looking backwards?

Brian Lawlor -- President of Local Media

Yes. I think so. I mean, DR was not immune to the challenges that general market had. There was some DR that pulled back, but there is enough in that ecosystem to backfill. The CPMs are down a little bit. And so we do have a switch of advertisers. But even in the last two weeks and talking to the folks at Katz, they've actually raised their estimates of their early thinking of where Q2 would be because the CPMs were actually starting to grow off of where they had set in at the end of March. So I do think Q2 DR will fare OK. Probably not back to Q1 levels, but we are seeing momentum and growth in the CPMs. Thanks, John.

John Janedis -- Wolfe Research -- Analyst

Thank you.

Operator

And next, we'll go to the line of Kyle Evans with Stephens. Please go ahead.

Kyle William Evans -- Stephens Inc. -- Analyst

Lisa or Brian, I know you have 20% of retrans subs renewing in the balance of the year. Can you talk about how those phase across the quarters? And then I've got some follow-ups as well.

Brian Lawlor -- President of Local Media

Kyle, we're in the middle of negotiating those now. I think that money will phase in over Q2, Q3 and Q4 fairly evenly. A little bit heavier for the back half, but some of that money will come up into Q2. Those negotiations are complex, but they're going well.

Even in this period, we've continued to have ongoing conversations with them week-to-week in advancing the negotiations. So I would expect sooner than later, we'll be in a position to announce successful completion of those deals

Kyle William Evans -- Stephens Inc. -- Analyst

Great. On the 1Q 2020 political ads, any sense or help that you give on how those comp on a same-store basis to the 2016 and 2018 cycles?

Brian Lawlor -- President of Local Media

Kyle, it's Brian again. We did $18.7 million in Q1 of 2020. We did $3.4 million of political in Q1 of 2018. And I don't have the number for 2016 in front of me, but we can work on getting that for you. But obviously, it was good. Bloomberg was about a little over 40% of our spending. But beyond that, we had, I don't know, 15 states that had primaries. We definitely saw a crowd out effect that affected our core. The back half of March, Michigan, Missouri, Arizona, Florida, Ohio, all had primaries where we have multiple stations. And so we definitely saw an impact on our core there. But it was a good first quarter and beyond just Bloomberg. Sanders, Biden, Warren, Buttigieg, Klobuchar, everyone was active in those primaries that moved us through the quarter.

Kyle William Evans -- Stephens Inc. -- Analyst

I'm staring at a very expensive Bloomberg terminal, so you're welcome for the for that political revenue.

Brian Lawlor -- President of Local Media

We are appreciative.

Kyle William Evans -- Stephens Inc. -- Analyst

The sub counts 3Q to 4Q not been moving materially is encouraging. What, if anything, could you give us on your view for 2020 given the $30 million of unemployed and the lack of alternatives for people when they're locked in their houses?

Brian Lawlor -- President of Local Media

Yes. Look, I think you're asking a good question. We get our quarterly numbers in arrears and down less than 1% down to less than 0.5% over the last three months of what we have reported. So that was, quite frankly, one of the best results we've had in several quarters. It will be a while before we know the impact of this period. I've certainly heard both arguments that people need local TV and they need TV more than ever. And so those subscriptions are really valuable. I also understand the pressure of people who are having a hard time paying their bills and is that a dispensable expense. So I don't really know how that's going to play out. I think we'll be watching just like you'll be watching to see. But as we look at the momentum we had coming into this quarter, it was actually very positive.

Kyle William Evans -- Stephens Inc. -- Analyst

Great. One last one. Could you please tick down kind of what the pacings are for the national business segments?

Laura Tomlin -- Executive Vice President, National Media

Kyle, it's Laura. We've come off of an excellent quarter. We delivered our highest profit, as those guys mentioned earlier for the division yet, and a real healthy growth rate of 23%, even with the impact of COVID-19 hitting us at the end of March. We do see stabilization as the quarter is progressing, and we continue to believe in the underlying growth rates. It's too early to tell sort of how the growth rates will shake out for the remainder of the year.

Kyle William Evans -- Stephens Inc. -- Analyst

Okay, thank you.

Operator

Thank you. And next we'll go to the line of Dan Kurnos with The Benchmark Company. Please go ahead.

Daniel Louis Kurnos -- The Benchmark Company -- Analyst

Just first on retrans, you actually came in a little bit higher in Q1. So, it just I know Adam or Brian, you've been pretty proud of the ability with the scale you've gotten to get rate, and we've seen some pretty good numbers. I just want to make sure there's not any true-ups in there that we're missing. And then, Brian, just sort of on core, in general, you guys obviously have a pretty good footprint relative to less restricted shelter-in-place type markets as well as pretty good ABC exposure. So do you think that's giving you an advantage? Do you think you're pacing ahead of kind of where the broader industry is pacing from a core perspective?

Adam Symson -- President and Chief Executive Officer

I'll take the first question. No unusual true-ups in those numbers. I think it's what you're seeing is an affirmation of the strategy we've been working adding through M&A to our portfolio last year, and those positioned us best for this year. We've been for a long time talking about how important 2020 was because of the Comcast step-ups and also because of the opportunity to renegotiate 40% of our subs, that is under way, and we're very pleased with the results. Brian?

Brian Lawlor -- President of Local Media

Yes, Dan, I'm not sure that as we look across, we feel like we had less markets affected by the shelter-at-home. Every one of our markets had a shelter-at-home order to some degree. As a result of that, every one of our markets had some business cancellations as a result of the environment. I don't think there was any state that just was open for business exclusively. So I can't speak to the other groups, but we definitely felt like we were impacted across our entire portfolio. As it relates to ABC, we've been really pleased with the health of the ABC brand, Good Morning America and world news, has seen significant growth over the last couple of years. And I think in this time, has done a nice job and been a very credible brand. And so I think our association with that has been good. They do have a couple of prime time shows like American Idol that they've been able to continue to stay on with live performances. I think that's helped us. But I think time will tell whether the heavy ABC will be an advantage over the others through this.

Daniel Louis Kurnos -- The Benchmark Company -- Analyst

And maybe just one more, either for, I guess, Adam or Laura, just on maybe high-level thoughts around kind of the mix shift toward streaming and out-of-home as it relates to Newsy and Stitcher. And just is there any way that you guys can sort of try to handicap what you think the stickiness is in terms of the uplift in usage and active accounts and relative to kind of what you think that how that impacts sort of the way you either view, let's say, Stitcher valuation, Adam, since that's been a conversation piece or Newsy's kind of growth trajectory over the next, call it, 12, 24 months?

Adam Symson -- President and Chief Executive Officer

Yes. I mean, look, I think we're experiencing certainly increased attention at Newsy as a result of two things. First, more people are spending more time looking for the brand of news and information that we provide right now, and they're doing it on new platforms like OTT. We've also seen audience growth on the cable side with Newsy. And I think that will definitely benefit us over the long-term. It's been good to see that programmatic ad rates have hung in there through this, and that's benefited Newsy, for sure. Obviously, there's still, at this moment more supply than there is demand, but the rates are hanging in there on the programmatic side. And so I expect that the work we're doing through this period at Newsy as we continue to maintain our commitment to the kind of reporting we do through this crisis will inure to this company's benefit, to Newsy's benefit over the long-haul as people's preferences are set. On the podcasting side, I think, as Laura mentioned in the prepared remarks, there was a little hit to podcast listening overall as an ecosystem as the morning commute disappeared. It certainly wasn't as profound as I think what you're seeing from radio groups with respect to terrestrial radio. That's bounced back to basically normal levels as people have begun listening to podcasting now on their daily walks, as they're walking around the neighborhood. And I expect as people return to commuting, I expect those people who have, for the first time, been introduced to all of the different opportunities that podcast provides from a programming perspective, will continue to help them. So when we look at what this crisis has done, look, I'm let me be clear, there are no silver linings with respect to the crisis that this world is going through right now. But I do think when I look at our company relative to other industries, we are serving an audience that is hungry for the product we produce. Yes, we are temporarily being negatively impacted by business disruption, but I expect once business gets back to normal we will be in a better position to capitalize on the strengths of this company than we might have even been before. And I'm absolutely looking forward to that moment.

Operator

And next, we'll go to the line of Davis Hebert with Wells Fargo. Please go ahead.

James Davis Hebert -- Wells Fargo Securities -- Analyst

I just had one question, if you could, Lisa, give us the last eight quarters EBITDA on a pro forma basis and how that translates to leverage?

Lisa Ann Knutson -- Vice President, HR-Operations and Corporate Secretary

Yes. Davis, our current leverage as of March 31 was 5.4 times at the end of the the last 12 quarters, when we look back on an EBITDA basis, it was $363 million on the lagging eight quarters. Yes.

James Davis Hebert -- Wells Fargo Securities -- Analyst

And actually, if I could ask one follow-up. You gave some color on April, May and June being sequential. Any color on year-over-year trends, how that would look? I know it's a bit difficult with the M&A, but maybe on a pro forma basis?

Brian Lawlor -- President of Local Media

Davis, it's Brian. I think the key thing, Lisa mentioned in her prepared remarks, was that we are seeing sequential growth. She talked about the fact that March, which was our strongest month of first quarter, we saw a decline of about 40% into April. But from that, May's bookings are better than April, June's bookings are better than May. But compared to last year, each month is going to be down. Each category is going to be down. There's still a lot of moving parts, and the states are changing their rules every day. So it's very difficult at this point to give you any sort of solid Q2 guidance, and that's why we focus more on sequential growth.

James Davis Hebert -- Wells Fargo Securities -- Analyst

Thank you.

Operator

Thank you. And next, we'll go to the line of Michael Kupinski with NOBLE Capital Markets. Please go ahead.

Michael A. Kupinski -- NOBLE Capital Markets -- Analyst

Brian, just to follow up on that. What is the normal sequential month-to-month performance for the let's say, the broadcast group from March to April? I mean there's some seasonality, right?

Brian Lawlor -- President of Local Media

Yes, there is. Typically, April would be flat or even down a little bit from March. May bounces up to be one of our best months of the year, one of our top two strongest months of the year. And then June would typically drop back from that. So the fact that it's not unusual to see May grow over April, but it would be unusual, and we do expect June now to grow over May.

Michael A. Kupinski -- NOBLE Capital Markets -- Analyst

Got you. And then in terms of just looking at the retrans, just going back to that for a second, I'm just trying to get a sense because I understand that you had some new renegotiations that kind of kicked in, in March. You already had a step-up beginning January one from the Comcast subs. Can you just kind of give us a sense of the progression and retrans month-to-month?

Brian Lawlor -- President of Local Media

Mike, it's Brian. We're all looking in here at each other saying, who's going to take this. Relative to month-to-month, you saw a step-up in Q2 as a result of the deal that we got done that we've now announced was done early in the quarter. You'll see another big step-up as we complete Q2, and that will carry through Q3 and Q4. And then we have another deal up at the end of the first half of the year that will benefit third and fourth quarter.

Michael A. Kupinski -- NOBLE Capital Markets -- Analyst

I understand, and I'm referring to the first quarter in terms of the retrans came in a little bit better than what many of us were looking for. And I was just wondering that I know that you had a renegotiation that kind of kicked in, in March, I believe. And I was just wondering if you kind of give us just some thoughts in terms of the trend line for retrans in that quarter.

Adam Symson -- President and Chief Executive Officer

Mike, it's Adam. I would say we did benefit in March from the completion of a retrans agreement.

Michael A. Kupinski -- NOBLE Capital Markets -- Analyst

Okay. And then...

Adam Symson -- President and Chief Executive Officer

And just going back to my comments before, I guess I would say, again, it's an affirmation of the plan we've been working to negotiate those agreements with a larger portfolio.

Michael A. Kupinski -- NOBLE Capital Markets -- Analyst

And in terms of that agreement, is there any additional color that you could say in terms of the variance that would have accounted for that agreement in the quarter? I mean, kind of give us a sense of the trend.

Adam Symson -- President and Chief Executive Officer

I mean, not really. I mean the reason we have been reticent to guide to retrans is because we're in the midst of these negotiations, and we expect that it's our responsibility on behalf of the company and our shareholders in order to monetize the distribution of our signal to the best of our ability. So when we outperform your expectations, I guess I'd say that's an affirmation of the job we're doing.

Michael A. Kupinski -- NOBLE Capital Markets -- Analyst

Fair enough. Fair enough. I was wondering if going back OK, thank you. I was wondering, Brian, if you could go back to your comments about the how the performance were among disparities about TV stations. But I was wondering if there were regional disparities in terms of performance in your television segment, small markets versus larger markets? Are they pretty much down to similar across the board?

Brian Lawlor -- President of Local Media

Yes. There was some regionality to it, Mike, really depending on what was happening in the state. I mean obviously, you think of markets like New York, where in New York City and Buffalo, where they were especially hard hit. The Midwest, Michigan, Ohio, Wisconsin, they're very aggressive in many of their stay-at-home orders too. And so those have been restrictive. There were other states, Texas fared a little better. We're in Corpus in Waco Montana fared a little better. Also, as you get to smaller market, you have a little less national advertising. And so in markets like those where there were less stay-at-home, and local is what drives the station, we were able to hang on to more of the business. So it really depends on sort of market size and state to state versus just a general regional comment.

Michael A. Kupinski -- NOBLE Capital Markets -- Analyst

So it's nice to have a diverse portfolio, right. Last question, the company historically it's managed with much more modest debt levels. And the initial thought was that the company would increase leverage with a very visible way to lower it. And certainly, you're going to get that cash influx from Comcast and the political to pare down debt. And now that prospect doesn't look as promising given at least you're going to get that, but given the other portions of the business. With that prospect in doubt in terms of the debt leverage pare down, can you talk about the prospect of more aggressively lowering debt? Would you consider monetizing assets? Are there nonstrategic assets, markets that could help reinforce your balance sheet? Any thoughts on that?

Adam Symson -- President and Chief Executive Officer

Mike, it's Adam. I mean right now, obviously, we're very focused on navigating through the crisis. Looking at the cash that we're generating and using that, obviously, for the long-haul, as we've said for now the last several quarters, our focus will be paying down debt, reducing our company's leverage. I think we've got to sort of take it a quarter at a time. I'm gratified actually to see that we were able to flex our balance sheet last year in order to double the scale of our Local Media portfolio because I actually think that it's really helped us to be better positioned to withstand a crisis like this. The cash flow generation of the company is significantly enhanced now as a result and that helps us looking at our fixed costs. I would say, moving through the crisis, we will continue to execute with the strategy in order to make sure that we maintain a healthy balance sheet and continue to pay down debt.

Michael A. Kupinski -- NOBLE Capital Markets -- Analyst

Do you have any thoughts in terms of where the debt leverage might be by the year-end?

Lisa Ann Knutson -- Vice President, HR-Operations and Corporate Secretary

Mike, it's Lisa. Given the uncertainty of the impact of COVID, we're not guiding or forecasting to year-end leverage at this time.

Operator

Next we'll go to the line of Craig Huber with Huber Research Partners. Please go ahead.

Craig Anthony Huber -- Huber Research Partners -- Analyst

I hope you're all safe. Just a few questions. I'll just maybe just go one by one, if I could. Brian, on the retrans subs, what was the year-over-year percent change? Was it down like, say, about 4%, your latest quarter there?

Brian Lawlor -- President of Local Media

Over the last year, our subs have declined about 5%.

Craig Anthony Huber -- Huber Research Partners -- Analyst

Okay. That does include the OTT, right?

Brian Lawlor -- President of Local Media

Correct.

Lisa Ann Knutson -- Vice President, HR-Operations and Corporate Secretary

And that's a 2019, just clarifying through the end of 2019. Yes.

Craig Anthony Huber -- Huber Research Partners -- Analyst

Lisa, I like your latest quarter, I guess, it's in a really in the fourth quarter, down roughly 5% year-over-year?

Brian Lawlor -- President of Local Media

No. I'm saying for the full year, over a 12-month period, we declined about 5% total subs.

Craig Anthony Huber -- Huber Research Partners -- Analyst

Okay. Brian, while I have you here. What's your thoughts here on the NFL contract renewals out there and just broadly that you can speak to here? I mean do you think things are getting pushed out in terms of any aggressiveness here to get the contracts signed here in the coming quarters given this virus situation going on here. I'd also be curious to hear what your thought is. How you think the contract may get broken up in terms of the Sunday afternoon games? Do you think you'll say status quo or the other or all four players participate? What's your latest thoughts on the contract?

Brian Lawlor -- President of Local Media

Yes. I don't have any insight as to where those negotiations are at other than I know they're going on. And so I don't have any visibility as to if this current environment has slowed those. I'm guessing it didn't. But I'm not actively involved in those. As I've said in the past, I'm not sure that this next deal has to look like the last deals. I think that there could be an opportunity for everybody to have a piece of the action. I could see and again, I don't have visibility into how these negotiations are going. So this is not just my own personal opinion, but I can see an environment where every all four of the major networks have a piece of the NFL package. I'm not sure the NFL package has to be as cleanly cut as the prior ones with one company getting the AFC, the another one getting NFC, somebody getting Sundays. I think that I think there's a lot of regional games that are of high interest, and it would be great if markets could have the opportunity to see those. So I think of a market like Cincinnati where I'm sitting in. Oftentimes, we'll get the Bengals game, which is great. But then we are within 100 miles of here, you got the Colts, a little over that you got the Browns. The Steelers have a big interest here. And so the idea of somebody being able to have Bengals, but also another station or two also at the same time being able to broadcast some other games of regional interest, I think, would be of high appeal. And so I think there's an opportunity for everyone to play. Smarter people than me will figure out how that could all work. But the fact that we have a big footprint with all four networks, I would be hopeful that everybody has a piece of the action.

Craig Anthony Huber -- Huber Research Partners -- Analyst

And then back on the core advertising front on television, your comment about down 40%. I think I guess my main question here is, was that a comment, I guess, sequentially So it also assume basing first down 40% year-over-year for the month of April for core TV advertising. Is that a fair statement? But the rate of decline is getting better in May and June, is that what you're trying to say?

Brian Lawlor -- President of Local Media

So yes. So what I'm saying is that April revenue was down core revenue was down 40% from March. So we're looking at March was kind of our high-water mark in first quarter, April dropped, obviously. Come the third week of March, we took millions of dollars in cancellations. But now we see May we have more money booked and a better percentage year-to-year in May than we had in April, and we have more money booked in June than we had in May and an improved percentage there as well.

Craig Anthony Huber -- Huber Research Partners -- Analyst

But then just to be clear, on a year-over-year basis, you're inferring...

Brian Lawlor -- President of Local Media

Not year-over-year. Let me just clear. Not more money booked year-over-year, more money booked and a greater percentage month-over-month.

Craig Anthony Huber -- Huber Research Partners -- Analyst

Okay. That's over 40, but how about this April year-over-year pro forma? Is that down roughly 40%?

Brian Lawlor -- President of Local Media

Yes. We're not sharing that, Craig. Go ahead, Adam.

Adam Symson -- President and Chief Executive Officer

Yes. No, I mean, Craig, I really appreciate what you're trying to get at. It is just so many moving parts right now, we're just not issuing any guidance right now.

Craig Anthony Huber -- Huber Research Partners -- Analyst

I mean last OK, I appreciate that. And then my last question, I guess, Brian, on the cost side within television. Can you give us any sense of the nonprogramming costs? How much you think that might be down sequentially, like with the compensation costs, etc? Just so we have something that go off of here to think about for our models?

Brian Lawlor -- President of Local Media

Yes. I think when you take out all of our programming costs, which would be all of our network fees paid to the networks, our syndication to all of that programming stuff, everything else is running flat-to-up, low-single digits. So all of our employee costs, our legal fees, our repairs, towers, music license, travel and entertainment, for and I'm speaking to Q1, not Q2. I think Q2 will look totally different, as we've frozen so many expenses. There's obviously no travel, we've cut back on capital, things like that. But in Q1, all of those other categories, nothing was up more than 2%. And so everything was in that kind of flat to just maybe up a little bit range. So most of our costs our expense increases came in the programming line.

Craig Anthony Huber -- Huber Research Partners -- Analyst

Can you help us quantify what you think the second quarter will do versus that up 1% to 3% number? How much materially better you think you could get it to?

Brian Lawlor -- President of Local Media

Yes.

Adam Symson -- President and Chief Executive Officer

But we may...

Brian Lawlor -- President of Local Media

I think...go ahead, Adam.

Adam Symson -- President and Chief Executive Officer

Craig, it's Adam. I mean we've obviously tightened the belt very, very significantly. I think very consistent with Lisa's comments, and we can't give you much more beyond that.

Operator

And next we'll go to the line of John Kornreich with JK Media. Please go ahead.

John Kornreich -- JK Media -- Analyst

I may have missed this, what's the size of your revolver? And the maximum pressure is the second quarter because the political won't be all that great. And then in the third quarter, it picks up. In the fourth quarter, it explodes. So are you comfortable in your best case modeling that you won't have to tap the revolver in the next 2, 3, four months?

Lisa Ann Knutson -- Vice President, HR-Operations and Corporate Secretary

John, based on our current forecast, I had indicated, we our cash from operations provides sufficient liquidity to sustain operations for the next 12 months, and we would not expect to exceed our first lien secured leverage covenant over the next 12 months. So and that revolver size is $210 million.

John Kornreich -- JK Media -- Analyst

And none of it's drawn?

Lisa Ann Knutson -- Vice President, HR-Operations and Corporate Secretary

No. We did draw the revolver really out of an abundance of caution.

John Kornreich -- JK Media -- Analyst

Okay. That's right, I remember.

Lisa Ann Knutson -- Vice President, HR-Operations and Corporate Secretary

Yes. Absolutely, yes.

John Kornreich -- JK Media -- Analyst

You drew it all?

Lisa Ann Knutson -- Vice President, HR-Operations and Corporate Secretary

No, we did not draw it all.

John Kornreich -- JK Media -- Analyst

Can you give me an idea what you drew?

Lisa Ann Knutson -- Vice President, HR-Operations and Corporate Secretary

$175 million.

John Kornreich -- JK Media -- Analyst

Okay. Okay. I want to Brian, I want to throw a concept out at you and get your reaction. Every call with every broadcaster, political estimate unchanged after all, more people are home and will remain home and there won't be any it won't be much in the way of campaign rallies and so on, makes sense. The campaigns will want to spend more. What I'm concerned about is the raising the money side. Our wealthy donors in such a great mood this year that they were willing to give huge amounts of money to the candidates. I mean I can speak for myself. I went into this year ready to donate x to a candidate. I'm still going to donate half x. I'm more nervous just like everybody else. So I'm more worried about the raising the money side than the wanting to spend side. What do you think of that?

Brian Lawlor -- President of Local Media

Well, look, John, I think it's a legitimate question. It's probably a legitimate concern. So to this point, the fundraising levels have been significant and significantly higher than what we've seen in the past. And so the campaigns at this point are well-funded. I expect they will continue to be well-funded. I think your comment about maybe people will not give the same amount that they're going to, may be valid. Time will tell on that. But I do think that there will be enough money in the ecosystem that TV comes first. And as a result of that, I think that if there's less money, it could impact maybe some other mediums, but I think local TV is typically where they go first for spending. And look we look at our footprint, very strong in the presidential states; our senate, we're in six of the top 10 considered competitive races. The house is going to be very competitive, 53 races considered toss-ups or lean, and we're in almost half of them. We think we're really well-situated that even if there's a little less money in the ecosystem, we believe local television is going to come first, and we'll be fine.

John Kornreich -- JK Media -- Analyst

Okay. Finally, I heard a rumor that Brian Lawlor is privately working out with Joe Borrow, is that right?

Brian Lawlor -- President of Local Media

I can't comment on that. You'll have to ask my agent.

Operator

And next, we'll go to the line of Jamie Zimmerman with Litespeed Partners. Please go ahead.

Jamie Zimmerman -- Litespeed Partners -- Analyst

You guys have like in terms of employees per station, you have always had like a number that way exceeds everybody else's. I just thought that this opportunity would allow you to sort of to get to take that number down and actually let go a bunch of employees who perhaps were redundant and not necessary. And I'm curious why staffing levels haven't come down during this crisis?

Adam Symson -- President and Chief Executive Officer

Jamie, it's Adam. Wow, I guess, I would tell you, I don't see this in any way as an opportunity. And right now, we're very focused on the health and welfare of our employees. I don't necessarily think it's also an accurate statement that we have more employees across our stations than other groups. So at this moment, we don't feel the need to execute furloughs, pay cuts and layoffs. Thanks for the question, though.

Carolyn Pione Micheli -- Senior Vice President, Corporate Communications and Investor Relations

Grace, are there any other questions in the queue?

Operator

We do have John Kornreich back in the queue from JK Media. Please go ahead.

John Kornreich -- JK Media -- Analyst

Retrans growth pro forma turns out to be this year, and I'm not asking what it will be. Is it safe to say the net retrans growth will be less?

Carolyn Pione Micheli -- Senior Vice President, Corporate Communications and Investor Relations

Less than...

John Kornreich -- JK Media -- Analyst

Less than the gross retrans growth, whatever that turns out to be. In other words, margin will be down a little bit.

Lisa Ann Knutson -- Vice President, HR-Operations and Corporate Secretary

We really haven't discussed any guidance on retrans for the year.

Laura Tomlin -- Executive Vice President, National Media

Yes. John, we haven't disclosed our net retrans profit, and based on, obviously, the large amount of subs that are resetting in 2020 we do expect nice growth this year, but we haven't said really because of those negotiations.

Operator

And I have no further questions in queue at this time.

Carolyn Pione Micheli -- Senior Vice President, Corporate Communications and Investor Relations

Great. Thank you very much, everyone, for joining us today.

Operator

[Operator Closing Remarks]

Duration: 62 minutes

Call participants:

Carolyn Pione Micheli -- Senior Vice President, Corporate Communications and Investor Relations

Adam Symson -- President and Chief Executive Officer

Lisa Ann Knutson -- Vice President, HR-Operations and Corporate Secretary

Brian Lawlor -- President of Local Media

Laura Tomlin -- Executive Vice President, National Media

John Janedis -- Wolfe Research -- Analyst

Kyle William Evans -- Stephens Inc. -- Analyst

Daniel Louis Kurnos -- The Benchmark Company -- Analyst

James Davis Hebert -- Wells Fargo Securities -- Analyst

Michael A. Kupinski -- NOBLE Capital Markets -- Analyst

Craig Anthony Huber -- Huber Research Partners -- Analyst

John Kornreich -- JK Media -- Analyst

Jamie Zimmerman -- Litespeed Partners -- Analyst

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