Ed Christian - President and Chief Executive Officer Samuel Bush - Chief Financial Officer

Ladies and gentlemen thank you for standing by and welcome to the Saga Communications Third Quarter Earnings Call. [Operator Instructions] As a reminder, today’s call is being recorded. With that, I will turn the conference over to Mr. Ed Christian, President and CEO. Please go ahead, sir.

Thank you very much. Welcome everybody to Q3 and our review. And with that, we will start and I will turn this over to, after many, many years, same words that I have stayed the same [indiscernible]. Maybe I should read this.

You could do that and I could do in the introduction, yes.

We can do that. Now I don’t think it will work too well. I would probably screw it up. And that’s why you are here for numbers. And numbers, Bush will now go ahead.

Thank you, Ed. Firstly, obligatory, this call will contain forward-looking statements about our future performance and results of operations that involve risks and uncertainties that are described in the Risk Factors section of our most recent Form 10-K. This call will also contain a discussion of certain non-GAAP financial measures, reconciliation for all the non-GAAP financial measures to the most directly comparable GAAP measure are attached in the selected financial data table. It was a good quarter. During the quarter, historical net revenue increased 6.8%. Adjusting for same station, net revenue increased 2.2%. Gross political revenue for the quarter was $1.8 million compared to $130,000 for the third quarter last year. All $130,000 for the quarter last year was radio. For the quarter this year, radio was $529,000, while television was $1.2 million. I should point out that we reported $1.4 million of other operating income in the quarter. This is the result of our selling a tower in the Norfolk, Virginia market, SBA towers for $1.6 million. We also entered into a favorable long-term lease on the tower for our radio station, one of our radio stations in the market. Year-to-date through the end of the third quarter historical net revenue increased 8.3%. Adjusting for same station, net revenue increased 3.1%. Gross political revenue through the third quarter was $3.4 million compared to $413,000 for the same period last year. All but $10,000 of last year’s political revenue was radio. Year-to-date, radio was $1.9 million and television was $1.5 million. Keep in mind that relative to a same station and a historical comparison, we closed on the bulk of our Harrisonburg acquisition last year on August 1 with the final piece closing on September 1. So Harrisonburg will be fully reported in our historical numbers with the fourth quarter.…

Did you pick today on purpose to announce?

I figured with the election, which would make a big difference on who people voted for.

Yes, you think so? Well, I don’t know, I am not sure of that. Well, in one other question, why do you always start out your discussion with using the words, risk and uncertainties? I mean, that’s a really kind of a downer when you start off with that. Could you try next time to use something happy words for the whole thing?

I will see if the SEC will let me use happy words. I am not sure they will...

All of your report contains risks and uncertainties. I think our business is somewhat certain. A couple of things I would like to talk to you about today. National is still under pressure, no question about that. We are at – been holding about the 12%, between 11% and 12%. And I think as you know that if you have been on these calls for years that we used to be able to talk about 18% to 20% national. I don’t think we are spending less in terms of national business, in terms of spots, but what we have seen is an erosion – continued erosion in the rates. And the pricing nationally was groups in stations, which were under tremendous amount of pressure on that. And it’s about time that the industry needs to understand the pricing paradigm and like other industries that use a small offer demand pricing. If not, I think in a couple of years, few years down the road, not in the immediate future, but you could see things where spaces say listen, we have a $100 coupon here for you for advertising to give you – to get you back into the – I mean it’s really getting on to the point. And so I ask others on the call who we know friends of the broadcasting industry to really begin and look at the pricing models and paradigms and shifts and everything. And we are an industry that really just doesn’t embrace that or handle that. I mean, it’s been attempted over the past they were in companies that you could go in and subscribe to them or user our service for pricing models. We – there was a point in time when one of the largest companies used the hotel revenue models…

A lot of golf tournaments.

A lot of golf tournaments. Yes, there is lot of things like that. We are doing one now away when the Norfork did just a G tournament [indiscernible], what was the one that Wayne just talked about?

The auto...

Auto tours and sort of things like that.

Yes, yes.

But these are the types of things that we find that we can use to enhance exactly what we are doing and the party enhancers that we keep working for different things to do. And new categories, let me just talk a little bit about that. Things that have been very successful initiatives for me, we have gone very deeply into recruitment advertising. That’s become a very important product category for us. As newspapers have lost the one ends or the hiring, radio has been natural for this. We do recruitment seminars where we invite HR leaders in the community and to attend a meeting where we discussed radio reach or the frequency on a radio and what it can do. And in some of our markets, there is hundreds of thousands of dollars per market coming in on recruitment advertising that has not been done in the past. It’s a very, very big thing for us. And then there is kind of like the one-offs that we do on that. By the way, we call these like HireMe Columbus, HireMe Des Moines, whatever it might be. Those are the – how we promoted on the air and also the websites right here. Warren is writing me a note that says, if you can hold the note up, it says, yes, okay, well, that’s a cash back rate and it was something we have talked about before. That’s a company that we use where we have – there are three companies in the United States. We have market exclusivity on it, which is Creative Services, which we use as revenue enhancers or door openers. It’s huge for local, for us where we already go along with a pre-produced spot which the company does within hours. So when the person goes…

That’s good. And we always ask for questions. But we must have mailed it. As my 6 year old granddaughter would say after a good event because the questions that we were asked were all covered in your or my comments. Lot of crowd there in the background.

Thank you all for coming today. We appreciate it and thank you for voting the America way today. And we will turn it back to the operator for final summary instructions.

And ladies and gentlemen, that does conclude your conference. Thank you for your participation. You may now disconnect.