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Meredith Corporation (NYSE:MDP)
Q3 2020 Earnings Call
May 14, 2020, 8:30 a.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 Meredith's fiscal 2020 third-quarter earnings call. [Operator instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your host, Mr. Mike Lovell.

Mike Lovell -- Investor Relations Contact Officer

Good morning, and thanks, everyone, for joining us. Our call will begin with comments from president and chief executive officer, Tom Harty. Followed by chief financial officer, Jason Frierott. Remarks this morning will include forward-looking statements, and actual results may differ from our forecasts.

Reasons for differences are described at the end of our news release that was issued earlier this morning and in our SEC filings. Certain financial measures that we're discussing on this call are expressed on a non-GAAP basis and have been adjusted to exclude the impact of special items. Reconciliations of these non-GAAP measures are included in our slide presentation, which is available in the investor relations section of meredith.com. Finally, an archive of the call will be available on our website later today.

Now, I'll turn the call over to Tom.

Tom Harty -- President and Chief Executive Officer

Thank you, Mike, and good morning, everyone. I hope you've had the opportunity to see our news release issued earlier this morning. I want to introduce Jason this morning, who joined us in March. He was most recently at Wabtec Corporation.

Jason is a 20-year-plus veteran of General Electric, where he held senior finance roles in its transportation, power and water and energy businesses. Jason brings with him strong financial analytic capabilities and attention to detail while still being able to see the big picture, experience focusing on cash flow and liquidity and most importantly, strong leadership skills. We are glad to have him lead our financial organization and be part of our senior leadership team. As we announced last year, Jason succeeds Joe Ceryanec, who retired during the quarter.

We're doing things a little differently today, which you've probably already noticed, starting with our press release. We've also posted a presentation that Mike referenced to our investor relations website to complement our fiscal third-quarter earnings release and our update this morning. They include additional disclosures, we think you'll find very useful. I'll start with Slide 3.

The outbreak of COVID-19 and efforts to slow it has created an environment unlike anything we've seen. Amid great uncertainty, we are adapting quickly and focusing on what we can control and our strengths. Our top priorities are: One, keeping our employees safe. Two, continue to deliver trusted news and inspiration to our audience of nearly 200 million Americans.

Three, supporting our advertising and marketing partners. And four, maximizing free cash flow. Our employees have risen to the challenge. We have transitioned seamlessly to the new rules that govern our daily lives with no production disruptions.

All national media group content is being produced remotely. We have a large asset library of evergreen content. At last count, it contains 6 million editorial images, illustrations and videos. All our television stations remain open to serve their communities.

Our stations have increased news hours to meet consumer demand and fill programming holes created by the absence of live events. Now, let me update you on our two primary revenue drivers, advertising and consumers. Our advertising and marketing partners are facing tremendous challenges, and that means challenges for us as advertising accounts for approximately half our revenues. We are responding across the Meredith organization with innovative and actionable consumer insights to support our partners.

For example, we announced last month an expansion of our Meredith sales guarantee program called the Meredith Audience Action Guarantee. The Meredith Audience Action Guarantee guarantees to advertisers who are investing in Meredith brands that a specific number of readers will take action as a result of seeing a brand campaign in Meredith magazines. As a reminder, the Meredith Sales Guarantee provides proof to advertisers across all platforms that their investment in Meredith brands increases product sales at retail. Our digital properties are seeing record traffic growth as they provide informative content across categories that are of key importance during this time from cooking to health, to parenting, to home projects and even recommendations on what to stream for entertainment.

We are collecting data and providing real-time insights to our advertising clients about changing consumer habits and trends, reworking their creative campaigns with messaging that is more appropriate to the current environment and driving sales and direct connections to retailers where consumers can buy these products for home delivery. Our local media group is creating new advertising sponsorship opportunities based on consumer trends that have emerged during the COVID-19 pandemic. For example, our Fox affiliate in Las Vegas is featuring local restaurants via a new feature called drive-through dining. At WALA in mobile, we are profiling graduating high school students with a feature called saluting our seniors.

There are a host of other innovative programs in place at our other stations. These programs and others have launched and are designed to support our advertising and marketing clients. While we do not know when advertising conditions will improve, our goal is to grow market share as we had in prior times of economic difficulty. For example, our share of U.S.

magazine advertising rose to 12.1% in calendar 2010 from 9.7% in calendar 2008. For perspective, our market share in calendar 2019 is at 31% according to MediaRadar. Since the COVID-19 outbreak, we are seeing stronger engagement across all of our media platforms. Americans have made adjustments to their lifestyles, and we believe our content and brands are more relevant than ever.

We'll go into more detail on the next slide. Turning to Slide 4. The consumer metrics we're seeing are doubtlessly driven in part by stay-at-home directives, but this stronger engagement is also driven by our brands and the content they provide. Americans have many choices for media, and they are turning to us for trusted news and information.

Let me provide more detail. We delivered mid-single-digit growth in visits across national media group digital properties in the third quarter compared to the prior year. In April, we saw visits grow by more than 30%, including strong digital performance in the Allrecipes, InStyle and Entertainment Weekly brands. Our licensing and digital consumer-driven activities grew more than 25% in the third quarter, due to royalties from Apple News+ and e-commerce revenues from direct product sales and lead generation referrals.

We're seeing the strongest rating gains in more than a decade across our television portfolio. March ratings for our morning and late news casts were up approximately 10% from a year ago and evening news casts were up approximately 35%. In April, we saw a growth of 45% from our evening news cast. We responded by adding more local news production.

Since late March, we are seeing growth ranging from 30% to more than 90% in various magazine subscription channels that drive high lifetime subscriber value. These include our owned and operated digital properties, paid search and direct mail campaigns. We are adding investment dollars to the most promising of these channels, capitalizing on demand and advancing two long-standing goals. First, to move to a greater percentage of our subscriber mix to credit card auto renewal; and second, to transition more subscriber acquisition activity to our own direct to publisher model and away from less profitable agent sources.

Finally, and perhaps more importantly, we are reaching more Americans than ever before, and our reach to women continues to grow. Today, our reach includes 120 million American women and 90% of all millennial women. There are three reasons consumer metrics matter. First, consumers are our second largest source of revenue.

Since the last recession over a decade ago, we have grown consumer-related revenues. 10 years ago, a little more than 25% of our revenues came from consumers. Today, retransmission, brand licensing and digital sources, along with stable subscription results have grown consumer-related revenues to approximately 50% of total revenues. Importantly, most of these revenues are contractual, ranging from one to five years.

Second, these difficult times are driving us -- or giving us the opportunity to grow our audience organically by strengthening our relationship with our long-standing consumers and introducing our brands to new consumers. Finally, these consumer metrics form the basis of our value proposition to advertisers. While the advertising marketplace is challenging now, our consumer engagement positions us well when the economy recovers. With that introduction, I'll turn it over to Jason, and I'll come back with some closing comments, and then we'll invite your questions.

Jason Frierott -- Chief Financial Officer

Thanks, Tom. Good morning, everyone. I'm really excited to join a company with such a proud history and demonstrated success at growing the portfolio of so many well-known and relevant brands. It's clear Meredith's brands matter more to consumers now more than ever.

I'm looking forward to partnering with Tom and the leadership team and our board of directors to successfully navigate Meredith through this challenging environment. Echoing Tom's comments, we're introducing some changes to our earnings presentation with a goal being of being greater clarity, transparency with our stakeholders. Let me begin on Slide 5. Given the current environment, we announced on April 20, a series of targeted measures to conserve cash and provide as much financial flexibility as possible as we evaluated areas of opportunity to conserve cash, our actions impacted a variety of stakeholders, including our shareholders, employees, suppliers and partners.

We also initially focused on actions that can be executed quickly with immediate impact. The first item was our board's unanimous decision to pause our dividend, giving us maximum financial flexibility during the downturn. In this economic environment, financial prudence and flexibility are critical. The board remains committed to resume the dividend in the future when circumstances permit.

And we will -- and we see three factors when considering our dividend policy going forward. Seeing a path to economic recovery and in particular, the advertising market recovery, our cash flow needs, including investment to support future growth and ensuring compliance with terms in our debt and preferred stock agreements. Second, we implemented a series of compensation and salary reductions, including reductions in board of director fees and officer, executive and other employee salaries. These reductions affected 60% of employees and increased an impact for higher-earning employees.

The third area is eliminating capital expenditures. We will continue to prioritize business-critical investments above discretionary items. But for the short and medium term, we, like many others, are managing with reduced investment. The fourth focus area is working capital.

We're closely monitoring accounts receivable and accounts payable. On the AP front, we're optimizing scheduling with our suppliers and vendors to be consistent with market norms. For the month of April, AR and AP combined, we are seeing net cash activity consistent with recent history. Finally, we continue to evaluate other costs across the company as we seek to optimize capital allocation and align the organization to be as efficient as possible.

In terms of impact, while we don't know the duration of all these measures and much can change over time, on an annualized basis, the buckets break down as follows: Pausing our dividend saves approximately $115 million annualized. Salary actions temporarily lowers compensation expense by approximately 60 to 65 million. In the past, we've stated we budget between 60 and $70 million for capital expenditures. Going forward in this environment, I expect we will invest roughly half that amount plus or minus a few million dollars annually.

We expect to improve working capital, generating cash of approximately $25 million. And the last bucket includes taking a hard look at the organization at how capital is allocated and its effect on costs and cash. Turning to Slide 6. Looking at 3Q 2020 consolidated performance.

Our revenue and EBITDA was largely in line with our stated expectations until mid-March. Then COVID-19 hit. For the quarter, revenues were down 6.5% from the prior-year period or $48 million. Advertising-related was down $36 million.

Of that, national media group portfolio changes were $19 million. As a reminder, these portfolio changes include transitioning Rachael Ray Every Day and Traditional Home to premium news stand titles, while adjusting the frequency of Entertainment Weekly to a monthly publication and closing Family Circle and Money magazines. We also experienced COVID-related cancellations and delays in advertising totaling $17 million across both the National and local media groups. These declines were partially offset by political advertising revenues, which were up $10 million.

Consumer-related revenues were down by $19 million. National media group portfolio changes accounted for a $21 million decline. Other items that netted to zero or a net negligible variance include lower volume attributable primarily to our subscription and affinity marketing businesses that accounted for another $16 million decline. These declines were partially offset by 9 million of growth in licensing and digital and other consumer-driven and $8 million of growth in retransmission consent fees.

Other revenues were up $7 million, primarily related to custom print work. Adjusting for portfolio changes announced over the last year, total revenues have been down -- would have been down at 1.2% on a comparable basis. Adjusting for portfolio changes and COVID, revenue would have been up slightly. Bringing the COIVD impact together at the top and bottom line, revenues were down $17 million, with some of that decline offset by reduced expenses, including compensation-related items resulting in a $6 million decline in EBITDA.

We recorded a $395 million charge related to special items. There are two areas to highlight, both of which are non-cash. Our goodwill, trademarks and FCC licenses balance as of December 31 was $3.4 billion. Given declines in advertising revenues and our lower market valuation, we tested the valuation of these balances as of March 31, which resulted in a $296 million impairment.

The majority of this impairment is in our national media group and related to Time Inc. assets acquired in 2018. With respect to lease-related assets, we had an $88 million impairment as a result of our ongoing synergy work also related to Time Inc. Our work to rightsize the organization and sell non-core brand allowed us to exit two floors in New York.

There are two components to this impairment. The majority relates to right-of-use assets tied to the floors being exited, and these assets were established on our balance sheet on July 1, 2019, due to our adoption of the new ASC 842. The second relates to capitalized leasehold improvements associated with those same two floors. On a consolidated basis, adjusted EBITDA was down 5.5%.

As disclosed in our 10-Q filing in the third quarter of fiscal 2019 and referenced in last quarter's investor update, we recorded a $10 million reduction in SG&A last year in the third quarter that did not repeat. That said, fiscal 2020 third-quarter EBITDA results were driven primarily by higher investment spending in our national media group digital business, along with lower volume in our affinity marketing activities. These declines were partially offset by strong growth in licensing and digital and other consumer-driven, along with political advertising growth in our local media group. Free cash flow grew 22% due primarily to strong accounts receivable collections, specifically past dues and lower restructuring expenses as compared to last year.

Turning to Slide 7. From a segment performance standpoint, I'll start on the left side with national media group. Revenues were down 55 million, 40 million from the portfolio changes I mentioned earlier, evenly split between advertising and consumer. COVID-related cancellations and delays in advertising accounted for 10 million in reduced revenue.

The remainder was lower volume driven by our subscription and affinity marketing businesses that combined accounted for $16 million in reduced revenue, partially offset by growth of $9 million in our licensing and digital consumer-driven activities. Operating profit was materially impacted by the special item I just walked through. Adjusted EBITDA was down 18 million, with 10 million driven by the prior year favorable adjustment. Fiscal 2020 third-quarter adjusted EBITDA was driven by lower volume in our affinity marketing activities, along with a drag in our digital business related to investment spending we communicated at the beginning of fiscal 2020.

These factors were partially offset by growth in licensing. The COVID impact was partially offset by more profitable subscription source mix. On the right side of the page, local media group delivered strong political performance in -- up nearly four x versus fiscal '18 and up two x from the last presidential cycle in fiscal 2016, along with 9% growth in retransmission consent fees. This growth was partially offset by declines in non-political advertising revenue, 7 million of which is related to COVID-19 cancellations and delays.

Again, similar to national media group, operating profit was impacted by the special items I walked through on the previous page. Local media group adjusted EBITDA increased by nearly $5 million, with the growth coming from strong political advertising and retransmission-related revenues, partially offset by the impact of COVID-19. Now, turning to Slide 8. Liquidity and free cash flow are critically important to us at Meredith.

Starting at the top of the slide, we ended 3Q 2020 with more than $100 million of cash in the bank, nearly double what we had in the prior-year period. We currently have access to another $312 million through our $350 million revolver. Compared to 2Q '20, our revolver utilization decreased by $20 million. Our banking relationships are strong, and we have great partners, and we have no immediate maturities.

Our revolver comes due in 2023, our term loan B in '25 and our senior notes in 2026. As a company, we're measuring our performance in this environment through cash flows from operating activities and free cash flow. For clarity, our definition of free cash flow is CFOA minus capex. We generated $100 million of free cash flow in 3Q 2020, up 22% from the prior year.

This improvement was primarily driven by strong collections, including reducing past dues greater than 90 days and lower restructuring costs. Just to add some current color to the quarter. I can tell you that our cash and bank balance as of the end of April was approximately $150 million with no change in revolver utilization. Now, I'll turn it back to Tom for closing thoughts on Slide 9.

Tom Harty -- President and Chief Executive Officer

Thanks, Jason. Clearly, we are experiencing an environment unlike anything we've ever seen. While we do not know when the advertising environment will return to normal or what the new normal will bring, we have adapted swiftly, focusing on what we can control and emphasizing our strengths. That includes continuing to create, without interruption, content and products that inspire and inform consumers across all media platforms.

We are encouraged by the engagement we're seeing across digital, social, television, video and print. We know that connection with the individual consumer who accounts for approximately 50% of our revenues will also inform our advertising and performance when the advertising recovery happens. Until then, we have and we will continue to take strong measures to protect and grow our cash position, enhance our financial flexibility and position Meredith for the future. This includes the cash conservation measures discussed this morning.

As Jason mentioned, these measures are already driving results. At April 30, we had 150 million of cash with no change in our revolver utilization. I want to reiterate the board's intention to resume the dividend when circumstances permit. The framework we'll use to evaluate includes the factors Jason mentioned-- seeing a path to economic recovery and in particular, the advertising recovery; our cash flow needs, including investment to support future growth; and ensuring compliance with the terms of our outstanding debt and preferred stock agreements.

I know a lot of you will want to know what we're seeing in the advertising marketplace. This advertising downturn has been swifter and more severe than what we experienced during the trough of the Great Recession when local media group non-political advertising revenues were down 30%, national media group digital advertising revenues were down 24%, and national media group print advertising revenues were down 8%. With April complete, we see fourth-quarter pacing for local television non-political advertising and national media group digital advertising revenues down approximately 40% and print advertising revenues down approximately 30% Our other major source of revenue comes from the tens of millions of consumers who engage with our products every day, accounting for approximately half of our total revenue. As I detailed earlier, we are seeing strong growth from consumers across our platforms, including traffic to our digital properties, e-commerce product sales, lead generation referrals and viewership to our television newscasts and high-value magazine subscription solicitation channels.

As an example, so far this quarter, traffic to Allrecipes more than doubled what it was at this point in the quarter a year ago. Traffic to shape, Martha Stewart and InStyle sites is also up more than 80% each. For this reason, while the advertising marketplace is challenging now in the short term, we remain confident over the long term in our brands, which were among the best and most effective in media and our vast reach to nearly 200 million Americans, in particular, our reach to 120 million American women, including 90% of millennial women is unparalleled in media. Another important strength has been the unwavering support and commitment of the Meredith family that has enabled us to focus on the long-term opportunities and success while managing through the weathering short-term storms.

While this is currently a difficult time for our employees, shareholders and other stakeholders, together, we will navigate this difficult period as we have during times -- difficult times in our 118-year history. I am confident we will emerge in an even stronger competitive position. In the meantime, as I've mentioned at the start this morning, our priorities remain keeping our employees safe, continuing to operate seamlessly, supporting our advertising and marketing partners and maximizing free cash flow. With that, we'd be happy to take your questions.

Questions & Answers:


Operator

[Operator instructions] Your first question comes from the line of John Janedis with Wolfe Research.

John Janedis -- Wolfe Research -- Analyst

Good morning guys. Tom, I think your category mix in national and local are very different. So, can you talk about what you're seeing from your large national categories like prescription and non-prescription drugs? Are those holding it better? And based on the way the money flows in, do you think national print will continue to outperform local? And then can you give us some color on national digital, is the traffic being offset by CPM pressure?

Tom Harty -- President and Chief Executive Officer

Thanks, John. Yes. So, and I'll also ask Patrick McCreery, who's on the phone, to kind of chime in a little bit about the local media group categories. But what we're seeing on the national side, not a surprise, the categories that are feeling pressure.

Automotive, entertainment, obviously, luxury, and retail and travel are the categories where we're seeing the most pressure. On the positive side, the areas that are holding up well, pharma, pets, home and food early on. We're seeing a little decline in food now because some food advertisers don't have enough inventory and have actually paused a little bit in the current month. But those are the categories that we're seeing overall.

Print. In the last financial downturn, print held up better than it -- than digital and also the local media group, and we're experiencing that now. These are a lot of brand activities that go on, not a lot of bottom of the funnel activity branding opportunities in print. And we believe that that will continue.

But when we come out of the recovery, we believe -- because of the lead times of print, we believe that the broadcast and the digital space will probably come back quicker. So, we may see a reverse kind of in a timing from quarter to quarter as we start to come out of it. Patrick, do you want to make any few comments about the categories that you're seeing in the local media group?

Patrick McCreery -- President, Local Media Group

Yeah. I mean, obviously, the largest -- the most impacted on local media was automotive. And our largest category now, as has been for the last year, is professional services, and that seems to be suffering less than some of the other categories.

Tom Harty -- President and Chief Executive Officer

Yeah, John, on your question on rates, yes, so the demand isn't there. So, when you look at the programmatic area from a digital perspective, when there's not a lot of demand, you're actually seeing CPMs fall. In the last couple of weeks here, in the last two weeks, we're seeing some firming of the rates. Actually, rates are starting to increase a little bit, which gives us a little bit of optimism, but that really is -- it's a demand-driven inventory model that we've seen decline.

So, we have huge increases in traffic, but not as much demand, and that puts the CPMs down from a programmatic standpoint.

John Janedis -- Wolfe Research -- Analyst

Thank you very much.

Operator

And your next question comes from the line of Dan Kurnos with The Benchmark.

Dan Kurnos -- The Benchmark Company -- Analyst

Thanks. Good morning. Tom, just maybe to go back on some things you commented on, I guess, based on this environment. Does this give you sort of the opportunity to accelerate sort of the rightsizing or the way that you want to go about frequency changes within your portfolio? And then we've heard a lot from private and sort of other channels and certainly in this environment that there's been more of a shift toward an e-commerce focus given the shelter-in-place orders, and I know that magazine has historically been more of like a catalog.

But can you maybe speak to if you're thinking about getting even more involved than you already are in the affiliate channel with some of your brands?

Tom Harty -- President and Chief Executive Officer

Sure. So, we don't have any plans, Dan, on the frequency change. We've done a lot of work on frequency in the past. We kind of take a once-a-year view where we go and look at the frequency that we have, rate bases, et cetera.

So, currently, we don't have any plans to do that. Actually, on the consumer side, as we mentioned on the call, I think one of the biggest learnings and the biggest surprises that we've had is the such -- the increases in demand for magazines. I make a lot of comments in the past that we're past the point where consumers are looking at one medium versus the other. We have -- I always like to say that I have two sisters that are 10 and 12 years older than me that are both digital natives now and they consume magazines and they consume digital.

So, in the last six weeks, we've seen incredible demand for printed magazines. We run direct mail campaigns for People Magazine on a quarterly basis, so it's a regular thing. Every quarter, we're running these, and the one that we just dropped in March saw a 50% increase in demand versus the prior year. So, huge renewals for People are up 13%.

So, when others -- some of our competitors are looking at lowering rate bases and change in frequency, we've been kind of leaning in, actually, in the last month and actually have been making investments to go out and acquire more magazine subscriptions because the lifetime value is there. And actually, the media that we can engage is actually a lot less to go out and acquire subscriptions. So, we don't have any plans, but we do look at that in the future on an ongoing basis. Your second question was related to...

Dan Kurnos -- The Benchmark Company -- Analyst

A shift toward e-commerce and affiliate.

Tom Harty -- President and Chief Executive Officer

A shift toward e-commerce and affiliate. Yes. Yes. So, we're seeing -- again, we're seeing great demand from our e-commerce affiliate.

Early on in the crisis, actually, Amazon was putting a little bit of a halt to some of our links to some of our products because they weren't being treated as critical. So, that was a little bit -- it only lasted a couple of weeks. But actually, now we're kind of reengaged in getting that back up. So, we're seeing -- as not unexpected, you're seeing huge shifts in consumers buying and transacting online for goods and services.

And our investments that we made a few years ago in e-commerce, affiliate marketing has really paid dividends, and we're seeing big, big increases in that.

Dan Kurnos -- The Benchmark Company -- Analyst

Just housekeeping. I'm assuming your -- one of your latter responses to one of John's questions that in terms of the timing of recovery, part of the national timing issue is because April and probably some of May were already printed, correct?

Tom Harty -- President and Chief Executive Officer

That's correct. So, I think the early May and April, I don't think April was completely closed yet, but May was. But we have People Magazine now, so it's a little different. Obviously, we're still closing People Magazine in the quarter, but that did help some of the demand.

But historically, and we believe this is true, that the magazine demand will be better than what we see in local broadcast and digital for the current quarter and possibly into the future.

Dan Kurnos -- The Benchmark Company -- Analyst

Can you just talk about People a little bit, Tom, and just in general, how it's performing? Obviously, given sort of the big -- being a big profit center and sort of relative also in general to what you're seeing in trends at newsstands.

Tom Harty -- President and Chief Executive Officer

We had newsstand overall, early on in the crisis because there was so much demand with people going to the grocery store and retail. We actually had large increases in the first couple of weeks, not surprising. Longer checkout lines, more checkout lines open. Then we saw some not insignificant decreases and actually now that's actually starting to rebound.

So, the current -- the last week, we have some early reads on People Magazine and the last week's issue was almost back to pre-COVID from that perspective from a newsstand sale. Again, it's early.

Dan Kurnos -- The Benchmark Company -- Analyst

Got it. Super helpful color. Thanks guys.

Operator

And your next question comes from the line of Jason Bazinet with Citi.

Jason Bazinet -- Citi -- Analyst

Thanks for the April pacings. I just had a broader question in terms of what your sales people are saying about the environment. I can imagine advertisers -- one leg of this was just the lockdown where everyone's at home. And then there's the sort of second part, which is the recession.

If -- based on what your salespeople are saying, is there any way to sort of tease those apart, so we can get a better sense of how that environment might improve some even if we're still in a recession given the sharp drawdown?

Tom Harty -- President and Chief Executive Officer

Yeah. Jason, what's -- we kind of look at it in three buckets. And again, you'll understand that this can change day to day, week to week. But what we've been seeing early on from our largest clients, we would say that we have three kind of buckets.

One being that they're taking a complete pause. So, we've had -- some not insignificant clients have turned and said, for the next quarter, we're going to go dark, and we're not going to be advertising at all. We've had another bucket of clients that are calling and saying, we don't know how to react to what's going on in this crisis. So, we're actually going to keep our commitment.

We're going to tell you that -- and we're going to move these so like insertions in the magazine, we're going to move the insertions from June to August. So, we have that bucket. And then we have other, not an insignificant bucket of advertising, some of our largest, specifically in the consumer packaged goods arena, that have actually -- haven't changed at all, haven't decreased, see it as an opportunity for them to build share. Their business is actually doing fairly well, and they're remaining their commitment.

So, I can't give you a specific dollar amount for each but that's how we're kind of looking at it from when we look at, obviously, at the corporate account side.

Jason Bazinet -- Citi -- Analyst

And can I just ask one follow-up? For that first bucket where people just went dark, are there -- I can understand travel or maybe auto to the extent no one can go buy a car. But are there other buckets that went dark, where you sort of -- it was a little bit of a head scratcher?

Tom Harty -- President and Chief Executive Officer

Well, I think -- yes, I think that to your example, right, so if you're in the cruise line business or you're in the luxury travel, you're understanding, you're trying to drive people to get online and sign up for a cruise or to book a vacation, and that actually stops. So, those are the ones that do that. We have a smaller number of people that were taking a pause. There were some beauty clients that actually took -- they took a pause.

They weren't saying they're going to go dark forever, but they turned around and say, hey, this quarter, we're going to come back, and we're going to say we're going to go dark for this period of time. But overall, I would say that it's kind of across the gamut. And then we get new news every single day. We get news, like I mentioned, actually early on, the food category was doing really well.

And then we have some specific advertisers with the current demand where there's not enough meat because some of the meat processes are closed down that they're actually pulling some of their advertising. So, it just kind of changes the demand, and that's what you would expect through this crisis. If they don't have product, they're not going to advertise in the short term.

Jason Bazinet -- Citi -- Analyst

Understood. Thank you.

Operator

And your final question comes from the line of Kyle Evans with Stephens.

Kyle Evans -- Stephens Inc. -- Analyst

Welcome, Jason. A few on magazines first. Should we view the adjustments that you've been making to the portfolio, frequency on People and closing down Family Circle and Money, is that an ongoing process where we're going to be continually adjusting going forward? Or do you expect to pause on that front?

Tom Harty -- President and Chief Executive Officer

So we didn't make any adjustments to People Magazine, but we did -- the changes were related to Family Circle and some of the others, right? So I think it's something that we've done, if you look historically back, at Meredith in the 16 years that I've been here, we've always kind of looked at that. We've actually -- in some cases, we've increased rate bases. We've decreased rate bases. We've actually closed magazines or converted them to a newsstand only title.

So, it's just something that I think that isn't going to end. I think it drives some of our analysts crazy because you got to do the comparable and figure that out. But as we sit here today, we don't have any plans for any changes in frequency or rate bases. But again, that's something that's not saying we're not going to make any of those changes into the future.

But that's just -- as we look at our business model, it's all built on profitability and shareholder return, and sometimes we make those choices to increase profitability and also put our resources against where we think the brands are that should have and have the biggest opportunity for growth.

Kyle Evans -- Stephens Inc. -- Analyst

Got it. I misspoke. I meant Entertainment Weekly, sorry about that. Expanding on an earlier question on newsstand for People.

Can you just kind of step back and talk about newsstand at a higher level? How much of that is airport versus grocery store? It's hard to believe that you're back to pre-COVID on newsstand People. And maybe I don't understand exactly where those newsstands are.

Tom Harty -- President and Chief Executive Officer

Yeah. So, I think -- listen, overall, the newsstand side of the business for Meredith as a whole, as we've talked about previously, isn't such a big part of our business. So, when we look at the number of copies that we use for rate base to generate our guaranteed advertisers, we're like 90-10. So, we're 90% subscriptions and only 10% newsstand.

We have a very big, what we would call SIP, or special interest publication, business where we create one-offs and sell those for bookazines and things for over $10 a pop. But when we look at the short term, to your point, exactly right, that -- obviously, people aren't traveling and the newsstands at airports are way, way, way down. And then what we saw, as I mentioned, we saw grocery store sales up. So, it's -- overall, what I would say is that it was down significantly, let's say, around what we were seeing from a print decline where we mentioned as we kind of came out of the gate.

Overall, and again, we had some channels that were up and some were down, but obviously the changing retail patterns. And then as we kind of moved through kind of week to week in the last couple of weeks, we're starting to see that come back. We're not back to being flat, but we're seeing some things that make us a little bright side on something. And again back to People, it wasn't quite back last week to what we would say was the average before pre COVID, but it was -- what I would say is fairly close on a percentage basis.

Kyle Evans -- Stephens Inc. -- Analyst

Got it. And then last one on magazines. I know it's hard to judge the progress you've made on the digital side when CPMs are getting pressed on this as hard as they are. But maybe just an update on those digital investments with some specifics around projects.

And then what are some longer-term milestones that we should be tracking on the digital side?

Tom Harty -- President and Chief Executive Officer

Yeah. So, our digital investments, we are -- again, we were making those investments through three quarters of the year. Some of those are capitalized expenses, investments that we make. We've talked about that.

We are still on track to get us on a unified platform the last I heard. So, that was -- we had put that out as a benchmark that we were going to be on our one platform by the end of the fiscal year or by June, we're right around -- we're going to be right around that target. But we might be -- what I would say is we're probably pulling back, as Jason has talked about, on capital expenditures. So, some of that investment might be pulled back.

But the big areas that we've been -- we've talked about in the past is video. So, we -- that was a huge part of the digital investment that if we knew if we could create more video, we could monetize that, and that's been our plan, and we've been doing that. And then obviously, content to commerce, as we talked about, was Dan's question. If we create more content online that is shoppable, that's an area that we've been making investments in also.

Kyle Evans -- Stephens Inc. -- Analyst

Got it. So, switching over to TV. Could you give most recent quarter sub count trends on the retran side, maybe just some speculation on how you think the sub count would look for kind of the rest of this calendar year? And then a more pointed question, do you expect the retran growth as you look out one, two and three years?

Tom Harty -- President and Chief Executive Officer

Great. So, I'll turn that over to Patrick McCreery to give you kind of his take on what he's seeing from a sub count perspective and outlook.

Patrick McCreery -- President, Local Media Group

Yeah. Our sub count trends are very much in line with the industry that we've seen year-over-year decline. What we're seeing in the most recent set of numbers is, what I would say, about a 1% decline, and I think that's right on target with what we've seen. We've successfully concluded our negotiations with all of our CBS affiliates.

And so, to answer the second part of your question about what we're going to see in growth, I think we still have a few turns of the screw at retransmissions growth.

Kyle Evans -- Stephens Inc. -- Analyst

On a net basis?

Patrick McCreery -- President, Local Media Group

Yes.

Kyle Evans -- Stephens Inc. -- Analyst

OK. And then while I have you, Patrick, the 3Q political, could you square that up against the '16 and '18 cycles just in terms of what you saw there? And then kind of how much of that growth, which I expect is significant, was Bloomberg?

Patrick McCreery -- President, Local Media Group

Yeah. I don't have the exact percentage of Bloomberg for the breakdown, but it was -- our political was double the previous cycle, and a big chunk of that was Bloomberg. I don't have the exact breakdown, but I can get that for you after the call.

Kyle Evans -- Stephens Inc. -- Analyst

Awesome. Thank you, sir.

Tom Harty -- President and Chief Executive Officer

Great. So, we don't have any more questions. We appreciate everyone's time this morning, and we hope that all you and your families stay safe and healthy and well, and we look forward to talking to you in the near future. Thank you very much.

Operator

[Operator signoff]

Duration: 45 minutes

Call participants:

Mike Lovell -- Investor Relations Contact Officer

Tom Harty -- President and Chief Executive Officer

Jason Frierott -- Chief Financial Officer

John Janedis -- Wolfe Research -- Analyst

Patrick McCreery -- President, Local Media Group

Dan Kurnos -- The Benchmark Company -- Analyst

Jason Bazinet -- Citi -- Analyst

Kyle Evans -- Stephens Inc. -- Analyst

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