Ladies and gentlemen, thank you for standing by, and welcome to the Scripps Second Quarter Earnings Call. At this time all participant lines are in a listen-only mode. Later, there will be an opportunity for your questions; instructions will be given at that time. As a reminder, today's conference call is being recorded. I would now like to turn the conference over to the Vice President of Investor Relations, Carolyn Micheli. Please go ahead.

Thanks, Lea. Good morning everyone and thank you for joining us for a discussion of The E.W. Scripps Company’s 2016 second quarter results. A reminder that our conference call and webcast includes forward-looking statements and actual results may differ. Factors that may cause them to differ are outlined in our SEC filings. You can visit scripps.com for more information, such as today's release and financial tables. You also can sign up to receive e-mails anytime we disclose financial information and you can listen to an audio replay of this call. A link to the replay will be up there this afternoon and available for a week. We'll hear first this morning from Scripps’ President and CEO, Rich Boehne; then from Chief Financial Officer, Tim Wesolowski; and then Brian Lawlor, who heads our Broadcast Operations; followed by Adam Symson, our Chief Digital Officer. Also, in the room are Radio Division Head, Steve Wexler; and Controller and Treasurer, Doug Lyons. Now here is Rich.

Good morning. Thanks for joining us to talk about our terrific second quarter and to look ahead to the rest of the year. We are now more than halfway through 2016 and past the two party conventions, entering the period that typically marks the heaviest and most concentrated advertising spending in the four-year presidential election cycle. Over the next 13 weeks, we expect to see more than 80% of this year's political advertising packed into our local news shows and other programming. Our far-reaching local TV footprint delivers a concentration of critical audiences in markets across America. As we've seen in the past, TV remains the most attractive platform for sharing messages with voters when it really matters. So while the bulk of the potential spending is still ahead of us, the election has been a television news spectacle for many months now. Colorful politics makes for great television and big audiences. More than 34 million households tuned in for Donald Trump's acceptance speech at the Republican National Convention, and about the same for Hillary Clinton at the Democrats' Convention, that's about a third of U.S. TV households. Both conventions averaged between 25 million and 30 million viewing households each of their four nights. It's clear the country is deeply engaged in this one. As the electoral map has shifted and even constricted, one thing is clear: if you want to be President of the United States, you will need to spend a lot of money in key Scripps states of Ohio, Florida and Nevada. Additionally for many the path to the Senate, the House and in two states, the Governor's mansion will run through Scripps markets. We're proud to be the point of contact that helps educate our viewers on these elections and content and connects the direct messages of candidates to the potential voters. Brian is going to talk much more about the political outlook in just a minute. We will also get an update on our digital reporting segments and strategies from Adam. Now here's Tim with a recap of the financial performance and highlights from the second quarter.

Good morning, and thanks for joining us today. The press release contains the details of our second quarter performance, and we will be filing our 10-Q later today, so you can get more details there. So right now, I would like to spend a couple of minutes going through the highlights of the quarter, our balance sheet and cash position, capital allocation and third quarter guidance. And just a reminder that we have nice now cycled through a full year of operating the former Journal TV and radio stations that transaction closed April 1 last year, so we’re no longer using the adjusted combined figures to provide our year-over-year comparisons. All comparisons are now to results as reported. Other than our political revenue being a few million dollars less than we anticipated, the second quarter turned out pretty much in line with our expectations. Our total segment profit was right on our guidance. Our television group's total revenue in the second quarter was up 15% compared to the prior-year, and expenses were up 13% both in line with our guidance. The biggest factor driving the expense increase was higher network license fees. Retransmission revenue in Q2 was up 46%. Radio revenue was down about 6% in the quarter, which was also in line with our guidance. Expenses were down 2%, which was better than our guidance. Our Q3 expenses in the radio division will be up due to damage from a flood at our Wichita stations during a series of strong storms in July. We are now incurring cleanup and restoration expenses at the site. No one was hurt, and only one of the stations in our Wichita cluster, KFTI-AM, was off the air for a few days. Second quarter results in our digital segment include Cracked and Stitcher, which…

Thanks, Tim. Good morning everybody. As we've told you before, our sales strategy in the TV division relies on focusing our effort where we see the greatest contribution to the bottom line. In the first quarter that meant reaping the benefits of strong political spending in seven key primary markets. In the second quarter, with a lighter primary schedule, we saw strong performance in local ad spending, which is up more than 2.5% on a same-station basis, driving core TV advertising up more than 1% on that same-station basis. Helping to drive the increase in local spending was a 6% rise in automotive advertising. In fact of our top seven advertising categories, all but one saw year-over-year increases. One of the benefits of the Scripps footprint is our association with major sports cities; in the past quarter, two of our markets where at the centerpiece for the nation's sports attention. Our ABC station in Indianapolis served as the host of the 100th running of the Indy 500, while our Cleveland ABC affiliate enjoyed the back-and-forth of the Cavalier seven-game series that finely brought a major sports championship back to Cleveland. Local sports can be a great revenue generator for our stations, and it can often bring a community together for something special to share. In the final minutes of game seven, 87% of all the TVs that were turned on in Cleveland were watching our station. It was the largest quarter-hour share we had ever seen and a moment Cleveland will never forget. On the political advertising front, we are closely watching the fast-moving dynamics of the presidential race, sizing up how the remainder of the year will unfold. As Tim just referenced, decisions can be made quickly based on new polling that can dramatically alter the advertising strategy in…

Thanks, Brian, and good morning, everybody. Let's start by touching on our second quarter revenue results. Our digital segment was up 77% year-over-year, surpassing our guidance in the high 60s range. The upside was driven by stronger than expected sales in our local digital operations plus the rapid pace of growth at Midroll. On the expense side, we were a little higher than we had guided because of expenses associated with the higher Midroll revenue for the live tour, as Tim mentioned earlier. I would like to thank everybody, who joined us in June for an Investors Day in New York, focused on the Scripps digital brands. If you haven't had a chance to listen, the webcast and presentation are available on our website. We've received good feedback on the presentation and hope the discussion with me, Rich and the leaders of our local and national digital businesses helped you to better understand the industry, the size of the opportunity, and our strategies. As you heard that day, our focus continues to be on building businesses that developed a younger, organically growing and profitable audience. Today people move seamlessly between on-air and digital platforms, so building digital media strongholds in our local markets is as critically important for the broadcast business as it is for the digital segment alone. Our local digital business is made up of the web, mobile and OTT brands in our TV and radio markets, and we monetize that business through local, regional and national advertising as well as marketing services. The local business revenue is growing at about 20% year-over-year. At the same time, we are building national businesses with large younger audiences that hold the potential for greater scale. These businesses include over the top over-the-top video news service Newsy, satire and humor brand…

Thanks, Adam. By the time we talk with you all again it will be just days away from knowing the outcome of the 2016 election. Its years like this when we're all reminded the powerful role we play both as journalists and as the distributors of strategic and targeted and paid campaign messages. We've been preparing to best capitalize on this election season by building strong local news brands and broadcast-to-digital platforms. Over the coming weeks this effort will help us get more than our share of political advertising. As Tim and Brian said, the combination of political advertising and continued strong growth in our retransmission revenue will position us to generate lots of cash heading into 2017. That financial flexibility puts Scripps in a strong position to take advantage of growth opportunities where we see attractive returns on investment. And now, operator, we’re ready to take questions.

Thank you. [Operator Instructions] And we will go to the line of Michael Kupinski with Noble Financial. Please go ahead.

Thank you, and thanks for taking the question. Good morning. I was wondering in terms of your political concern or just a question mark that you have around political, and you mentioned a couple of the states that you think might have a smaller role. Is it because that the dollars are not being booked or you're not seeing the bookings, or is it because the polling numbers are kind of wide where you just don't think the candidates are going to spend money there? Or can you just give us a little bit more color of why you think that there might be a contracted amount of spending in certain of your markets?

Hey, Mike, it's Brian. I think it's kind of all of the above. We've seen some spending levels decline, but I think more importantly we’re having direct conversations with the campaigns and better understanding the polling numbers they’re seeing. And in a couple of states that I mentioned, the distance between the two candidates has moved to double digits. And as you know, typically 5%, 6% is kind of the gap you want to stay within for a race to maintain being competitive, and we see some of that drifting. It doesn't mean it couldn't come back in, and especially both parties are quiet in a specific market, then maybe there's an opportunity if things start to get a little bit closer, but right now we see them kind of really concentrating Florida, Ohio, we're seeing very aggressive spending there. Nevada has done very well for us as well, Iowa. So, some of those other kind of fringe markets right now, the polling is indicating that it's drifted a little bit, and at least at this point the candidates aren't putting as much money as they have in the past into those markets.

Okay. And in terms of auto, you indicated it's very strong and it sounds like it's been strong across the board for most in the industry. But I was wondering if you could give us some thoughts on how that's shaping up for the third quarter? And in particular, I understand that there is at least one – Florida I think has been kind of a little choppy on their advertising. Can you kind of give us some thoughts on how things are shaping up for the third quarter for that category?

Yes, we had a great second quarter, plus six. We're really pleased with that number. And we still got quite a bit of business to write for September, but I'll say July and August were both up. And even with the Florida, which you mentioned, we did see some cancellations there. We have been able to absorb those with other automotive business. In the second quarter, some of the domestic dealer groups that I've talked about previously as having disbanded, we've actually seen a couple of those come back. We've lapped ourselves in it, but we also, I think, based on some sales in some regions are starting to reassemble by dealer groups, which has brought some money back. And so that was a really positive segment for us in a couple of specific markets that drove our plus-six. And as I said, third quarter with anything, depending on the political – how September lines up for the categories, but July and August has been very strong.

Thanks. And just one quick question about any M&A activity, any thoughts about – is everybody pretty much sitting quiet as I would expect for the – given the political season as well as the spectrum of options – M&A activity pretty still silent or any thoughts on that?

Hey, Michael, it's Rich. If not silent, I think we would say it's pretty quiet. And as you point out people are start to getting through the auction, get to the backside and things will probably pick up then. But, yes, it has been pretty quiet in the last couple of months.

Okay. I’ll get back in queue for additional questions. Thank you.

And next we go to line of Dan Kurnos with Benchmark. Please go ahead.

Yes, thanks. Good morning. Brian, let me just start with you. I guess I kind of – I think the questions we're getting this morning really just center around sort of the balance between core and political. I know last quarter you were one of the few companies to call out taking higher margin dollars. And this quarter, obviously political came in below your expectations, and core was still somewhat, I think, muted versus where we thought it would have coming in the absence of those dollars. Now, there may not have been any crowd-out trends. So I just want to clarify if there's really just any geographic or impact or frankly they would have just been incremental dollars from political and core just performed as you expected?

Actually perform – I thought local performed pretty well, up 2.5, and we felt pretty good about that number and I think based on some of the reports that we have seen that was a market leading number. So we're an industry-leading number. So we felt pretty good about it. And I think that really speaks to exactly the question you’re asking. We're going to go where there's the best opportunity. In the first quarter with seven big primaries, back half of March we really went after those dollars aggressively and that did display some stuff. And this quarter is the primary season, dragged on a little bit. Most of our relevant markets had – already had their primaries. In the first quarter, we saw better opportunity on the local side. And I think we really took advantage of that where there was political dollars we did well with that. But we just keep in open mind of where is our best opportunity, where is the opportunity for the best – the most high priced inventory. And I think that's why you see kind of the shift. And we seized the political opportunity in the first quarter. There was less of that opportunity in second. And I think our local sales teams were very aggressive on new business and we felt really good about our performance there.

Got it, thank you. And then just shifting back to political maybe asking the political question in a different way. It sounds to me like your political is more geographic related than other commentary we’ve been hearing, maybe it's because you actually gave a number out there versus others. But I just curious that if you would characterize it as the more of a geographic for you guys and on the flipside we've been hearing obviously whether or not the Republican Party tried to do something to – Trump is the primary candidate, it would be a little silly, but it's possible. There seems to be more money being raised on the anti-Trump front. And subsequently the House and Senate races become more important now to maintain sort of that check and balance if Hillary wins. So, are you seeing any uptick in sort of the second tier races as a result?

Yes, I think, we absolutely are, so let me kind of just start with the backside first. In the second quarter, only 12% of our revenue came from the presidential candidates and only 26% came from anything associated with the presidential. In the first quarter that number is 60%. So in the first quarter heavy presidential, this quarter much more about Senate and house. I think that down ballot stream that we expected and a lot of the PAC money and other money going to many of those races is exactly what we are seeing. We have now seven really good competitive races. A couple of the Senate races have actually gotten more competitive for us. So, I think, we're feeling better about that. We've got 12 competitive House races, a couple of them really strong. So, I think, what you're speaking to is in this interim time where the presidential candidates are still raising their money, we have been able to match some of that with the Senate and The House. So we think that's going to continue to be the case all year. In terms of the presidential, it really does, it comes all down to geography. I think maybe the reason why we speak to it more specifically is because we’re only in 24 markets. So some of our peers are in 50, 70 more markets and they are a bit more leveraged. We are in 24 specific markets. We really like our political footprint. It served us well. It's served us really well through the primary season. But as polling changes and things come out of move in terms of what those polls say, it becomes a market by market thing. We probably have more visibility in just because of our condensed number of markets.

Got you. And then – thank you, thanks for that color. A quick one for you, Adam, just on – can you just give us a little bit more color around the live tour and then are you – is the Bill Simmons situation kind of settled? Are you still dealing with that headwind?

Good morning, Dan. Sure, we produced Comedy Bang! Bang! tour. Comedy Bang! Bang! is one of Midroll's longest standing shows that’s popular. And at the end of the day, in fact, we added more shows, sold out more shows, which drove more revenue and of course drove more expense. And so that was reflected in the performance. But we expect to continue to be in the live tour business especially with some of our biggest podcasting brands. It not only helps drive engagement and obviously revenue, but it also continues to be able to expose new audiences when we partner with top talent like Scott Aukerman and Paul Scheer. And bringing them into markets where we build new fan bases and get them to continue to download the shows. On the Bill Simmons show, yes, Bill Simmons is continuing to produces his podcast and we continue to help him to monetize that podcast. We've been fortunate that Bill has agreed to continue doing audio programming despite his arrangement with HBO. I think everything is very good. And right now we continue to see that moving through the end of the year at least.

Got it, great, thank you. And one last housekeeping question if I could just I guess maybe Tim or Rich, on the flood in Wichita, are you guys insured there or are you going to recoup that?

Oh, yes, we’re definitely insured. And we just got it and we’ll pay up to the amount of the deductable. So, the reason I brought it out is that expenses were down in the second quarter in the radio group and they will be up in Q3 as we pay up to that deductible amount.

I just want to make sure it wasn't anything incremental. Got it, thank you.

And next we go to line of Marci Ryvicker from Wells Fargo. Please go ahead.

Thanks, I just want to make sure we have the political numbers right for the back half of the year. So based on the comments in the release and on the call, it looks like full-year political will be between $135 million and $150 million with half of that falling in the fourth quarter, we’re looking at $67.5 million to $75 million, which being the third quarter – sorry for the numbers, is between $50 million and $57 million?

That’s right, Marci.

Okay. And then digging into the third quarter more, $9.5 million Olympics, you’re going to 10% on that, so you’re looking at $10.5 million of Olympics, which means your core will be down anywhere from 5% to 15%. I guess the question I have is how incremental is the Olympics and how does it split out in terms of local versus national because we heard on Grace call yesterday, it's like 75% local, so we were able to get a really clean sort of spot number for them. Do you have the same information?

Yes. It's again about 75% local and it's about 40% incremental.

Okay, great. And then question on the radio side of the business. Are the markets you're talking about soft because of your specific stations or are they soft in terms of just the general markets?

Hey, Marci, it’s Steve Wexler. It's really isolated, as Brian mentioned in his remarks, to a couple of places. On Milwaukee where we've talked about Brewers being more challenging than it had been in the past and that's clearly driving some of that second quarter concern and a little bit of that third quarter guidance that we provided as well. And then our Tulsa market is both soft and we've got some rebuild that we're doing down there. So, it's really been isolated to primarily a couple of places. We've actually seen some local growth in our other markets.

And last question is for housekeeping. So shared services and corporate came in lighter in the second quarter, the guidance is a little bit heavier in the third quarter. Is this just a timing shift?

Yes. We had some favorable medical expenses and employee benefit expenses that came through in Q2. We're not sure if they're going to repeat in Q3 or not. So, that's what the slight uptick is in there. And Marci I wanted to just talk a little bit about what you were talking about core. As I think about the guidance that we laid out for Q3 and TV, the TV revenue is up 35% to 45%, included in the guidance as we said. We’ve talked about a range of political. And there is a numbering there of around $50 million or so. Retrans will be on a run rate pretty similar to what it’s been because those renewals will occur at the end of the third quarter. So, right now, we've got core pacing up a bit in Q3 and that includes that Olympic money that Brian talked about.

Okay. Thank you very much.

And next we go to line of Craig Huber with Huber Research Partners. Please go ahead.

Yes, good morning. We’ll just start off on the digital front. Your press release talks about excluding the acquisition of digital just up about 20%. I’m just curious first the local properties how much were they [indiscernible] year-over-year for digital?

Local was up about 20%. Craig.

Okay. And then as you just kind of think out – but when you think out long-term in the digital front, I’m looking at your budget there. How long out should investors expect, I am assuming the economy holds together here and things hit your budget. What’s your best guess when you think you hit the profitability and you report things in your digital line?

I would say at the start, when you look at the first six months of the year, we're pretty happy with the revenue growth we’re seeing and we think that’s going to continue on track. We’re standing firm on our guidance and you see the third quarter guidance there. You have to remember I think that spending in digital is very much an intentional investment. So, we're making an investment only where we expect to create value and see return. And I think we're in a period of investment right now especially with those national brands, Newsy, Cracked and Midroll, because we’re expecting greater return down the roads, return that we think shareholders will appreciate. So, it's tough to put a number on it right now because I think it all depends on how things evolve over the next 18 months. And we…

Craig, it’s Rich. And we should say it’s tough to put a date on it to. We continue to put investment into that digital group. If we kind of – we stand back and think about it, we're building large organically growing brands at a very low-cost. If you look at let's say Cracked and Midroll and Newsy for example. In each case, the investment in those individually was about the same as a very small market TV station. But the opportunity, especially the scale opportunity we think is much, much larger. So, the investment in Midroll is the podcasting industry leader. We just we added on Stitcher, which gives us much deeper reach. Newsy with its OTT carriage opportunities and then we’re going to leverage those for Cracked. So again, we look at it as we’re making investments with very large scale potential at the very minimal cost. And I personally am not very eager to get a date on when we try to turn the segment profitable. I think it's more important that we keep investing to build out the opportunity that we see today.

Okay, let me switch over to TV if we could please. I’m just looking at your national number there and in the quarter down 2.9% and was down roughly 2% in the first quarter in a pro forma for the large acquisition. Brian, I'm just curious your thoughts on – I mean the better broadcast network, TV ad numbers that we've seen in the last two to three quarters at the network level. Obviously, you’re not spilling down to the national ad bucket – your TV stations and some others as well. I’m just curious what your updated thoughts on why that is?

Craig, I've spent a lot of time kind of digging inside a national and to be honest with you it's really one sector on category and it's the insurance academy – the insurance category. A year ago, there were a couple big insurance wars in a few of our markets. And we’ve talked about what we call our desert region being Phoenix, Las Vegas and Tucson. A couple of major insurance companies kind of duked it out there a year ago. And in the first half of this year, I guess they signed up all the insurance they were targeting because they have really dried up to the tune of several million dollars. And that is really – and all of that stuff gets booked nationally. So, these are the big – the Geico's and the State Farm’s and the people like that it's all national spending. But that that segment of our services category is almost exclusively responsible for the decline in our national over the first half of the year.

Obviously, you said you take that out. You were saying you’d be up slightly maybe zero to one – zero to…

I am just thinking it brings us much closer to kind of flat to up.

Okay. And then Brian or someone, your retrans for renewal, just update us on that number, the number this year, next year and maybe 2018 as well? How’s this looking here?

So, between now and the end of this year, we will still negotiate another 17% of our subs. Next year – in the year, it will be 8%; and then in 2018, in that year, we will negotiate 36% of our subs.

I wanted to just ask you that for full year 2016 what is that number, please? And what is it for 2019 if you have it?

I think for full year it was 19% this year.

Okay. What about 2019, if you have it?

39%.

Okay. And then when you look at your – we've talked about this in the past, I mean, the margins on your TV Station group, if you think out long-term here, obviously the Comcast contract when that kicks in late this decade, that would really help in the retrans fund, especially for free cash for E. W. What else other than just raising ratings? Is it simple as that to get the working – blocking to have ratings up and the ad dollars will fall over time to get those margins up higher? I know you really want to get them.

Yes. Look, I think we’ve made major progress here in the last couple of years. I think we've been very proactive since this part of our Company focused on that number one in terms of the growing our ratings and I think we've had some success there, but to your point that remains our biggest opportunity. We've done significant amount of centralization, hubbing of traffics and graphics and master control and many services there that have created efficiencies. I think one of our most aggressive innovations has been on the programming side, where we've taken $40 million to $50 million just out of our core stations in terms of programming costs. And now that's become a major opportunity for us as we continue to scale our margin as we've acquired all of these new stations. We've got three shows in daily production that we scale across our group. We talked about the success of the list that will expand into a couple more markets, the Scripps markets this year and we still have a few more to go. Every time we expanded that we pay zero incremental cost. And we save all of the syndication fees that we've been paying. So, I think that’s a continued big opportunity for us. We are very focused on margin, you're well aware that we've had some challenges on the retrans front, but we've overcome all of those except for Comcast. We continue to see but we think are becoming very competitive margins and as we look out a couple years I think with the programming initiatives that we have underway and the level of profitability that those drive everyone of those is very profitable for us. We have the potential to perhaps even outpace some of our peers as we capture a 100% of our retrans.

When you're talking earlier, when it came of July and August TV ad pacing, I heard you say the number 6% and I wasn't quite 100% sure that was referring to mostly curious what the month of July looked like, it’s obviously not influenced by the Olympics. So just can you talk about core is up or down in July?

The 6% number I referenced was the second quarter automotive. It was an automotive question I was responding to relative to July and August felt pace. We don't give out specific numbers now but I can tell you that July’s core was up year-to-year.

Okay, great. Thank you.

And next we go to line of Kyle Evans with Stephens. Please go ahead.

Hi, thanks. I’ve got a few for Brian and a follow-up for Adam. Brian, just wanted to double check on some of the presidential contribution to total political numbers that I think I heard you say earlier on the call and I just want to double check. Did I hear you say 60% in 1Q and 12% in 2Q.

The number in 2Q was 26%, the 12% was just presidential and if you combine presidential and PAC, Q2 was 26% and in first quarter that was 60%. But Kyle that really shouldn't scary you, that's a number we were really kind of expecting as a result of just we had a bunch of primaries in Q2 – in Q1 where you had multiple rate, back then you had six Republican candidates you had Bernie Sanders spending in all that and in Q2 we had very few primaries that garnered much dollars. Obviously Hillary started spending towards the back half of the quarter, but Trump had not yet spent. So you can see the dichotomy there. But those numbers weren’t alarming to us they were kind of what we expected. I think it will grow as we said. We expect the presidential to settle in and probably represent 30% or a little bit more than that percent of our total political spending this year.

Great. Just to be clear, I wasn’t alarmed just making sure.

Yes, that’s okay.

On the retrans side, could you give an update on subscriber volumes, has it historically been flat to flattish any update there?

Yes, I think that we are not seeing any declines. And so we continue to negotiate deals and obviously true up numbers at the end of each quarter. We remain very consistent to where we’ve been.

Great. And then a follow up for Adam, you talked about 20% growth in local digital I was wondering if you could comment on what the drivers are there and how sustainable you think that growth rate is. Thanks.

Good morning, Kyle. I mean, we don’t necessarily think that abates at least in the near-term, I mean, right now, we’re continuing to see very strong growth in programmatic advertising particularly on the national side with strong rate growth as we continue to sort of hone our strategy there. Our rates have grown – I think I mentioned this in New York a couple of weeks ago about 250% over three years and from $0.90 at this point to just around almost $3 as an effective CPM on display advertising. And when we talk about video which is where we put a lot of our focus and we’ve driven our rate up to $11.50 on programmatic. And that’s before we really talked about the effort we have in everyone of our markets with our integrated sales teams and our digital and new sales teams to service our local advertisers, obviously a huge focus of ours. So we think local is very healthy and continue to see it growing.

Thank you.

And next we go to line of Barry Lucas with Gabelli & Company. Please go ahead.

Thanks and good morning. If I could just start with a little housekeeping Tim, what was Capex in the quarter and what would that number be for all of 2016?

Capex for the quarter was – hold on a second – was about $7 million for the quarter. And for the full year, would be around in $30 million or so.

Great, thanks. Brian, I wanted to go back to the list and since you've mentioned it several times. But originally the programming initiatives were largely to drive costs lower to eliminate expensive syndicated programming. And if you are sort of breakeven on that and now have 40% clearance. How big can that be and what does it take to – in terms of clearance, to really make that a positive contributor as opposed to just a cost offset?

Luke, the list is very profitable for us now across our group. And obviously our ability to scale it just adds more revenue to the bottom line. What's the potential? I guess it depends on how good a show we produce. RightThisMinute, which was as you know our first foray into the programming space and that’s partnership with us and Cox, and Raycom is now in 94% of the United States. It has national distribution, national sales, it did very well in the UpFronts. It's clear on the ABC O&O’s this September. And so I think we look at the list, the lists ratings in this last season if you take the 100 plus shows that are in syndication on adults 25 54, the list was ranked number 11. We've got a really good show here. And you can see from the quality of the cities that we've cleared early that this is a program that we expect is going to continue as we move into 2017 sales and when we take it out to [indiscernible]. Now, it obviously has a proven history in syndication. We think there's a lot of growth still for the show. And as I mentioned it's very profitable. And we expect it to continue to be. It is produced out of our facility in Phoenix. So we’ve built out some space there. We're able to control that it's not produced in LA or New York. That's very much by design when we were building our shows we wanted to try and control the costs of the production. And I think we've been able to do that. I think we're producing a very successful national show quite frankly at a fraction of the cost of what you see some of the big shows produced by the networks or the big studios. So I think our business model is intriguing I think that's why you see a lot of our peers following our footsteps. And quite frankly, I think you see some of the production studios even trying to learn more about how we do, what we do at such an effective cost.

Great, thanks. If I could switch to Adam for a second. As I recall at the Investor Day, Adam, so fair amount of conversation about moving traffic away from either social media sites like Google and going directly to the websites like Newsy. I'm just wondering if you had an update there some other people have mentioned that changes at Facebook have contributed to reduced traffic. So I'm just wondering if you could share some observations there.

Sure, Barry. And just for everybody's benefit let me sort of get everybody up to speed. We talked in New York about distributed content going – and distributing our content directly in relationships with Facebook through their Instant Articles program, using Google App to get preferential treatment from Google. And we are just in the beginning of those experiments. Barry what you – so I don't have any results yet to report back on. The way we define that experiment was sort of a math problem. When you have audience click over to our site the site does naturally load a little bit heavier or little bit slower. There's some drop off there, but we're able to monetize that audience with three, four, five different advertising opportunities, whereas inside of Facebook’s environment with instant articles the site our stories load instantly, blazing fast, especially on mobile, but there is a limited opportunity to monetize them. So our experiment really what we're doing is we're sort of beta testing whether or not we are going to make more money doing it directly with and in partnership with Facebook where we know that Facebook is giving you a little bit of extra juice, a little bit of favoritism there or if we're going to continue to use the model we’ve used thus far. What everybody is referencing relative to be algorithm changes is really the impact of not doing the work we are doing with Facebook. Publishers who have relied on or over relied on social media in the past are seeing a little bit of a negative reaction because Facebook’s got that control over how much audience flows directly back to you. They are able to decide how much they want to showcase, publish content, news content to consumers. So really the work we are doing is in fact a hedge. The other thing I’d mention though and why local media is a lot less and quite frankly even our national brands a lot less subject to what you've read is about brand royalty. We still have a lot of people – the vast majority of our audiences still coming to our local news sites. Kraft, I've mentioned this before directly, because they have an affinity to our brand. If you live in one of our local markets and you and your family have relied on us as a leading news information provider for years, we’re absolutely connected with you on Facebook and Twitter and Snapchat. But at the same time you can come directly to us on the web and that continues to be something that we work very, very hard to maintain.

Great. Thank you.

[Operator Instructions] We go to the line of Tracy Young with Evercore. Please go ahead.

Yes. Hi, two questions on the TV side. I don't know if you discussed this, but Tim mentioned the retail category, how that performed in the quarter.

Hey Tracy, it's Brian. Retail was up low-single digits.

Low-single digits, okay. And then I know we are all asking questions about political, I think there are some concerns obviously this year hasn't formed the way that people would have expected that I think. So the guidance you provide for 3Q provides some acceleration versus others. Can you give us some kind of senses to what percentage of revenues you have in your books versus 2012, what kind of confidence you have on your Q3 number?

Are you talking about our political number?

Yes.

Let me take a look here. Yes, I don't know off the top of my head the percentage we have on the books. Can we get back to you on that Tracy?

Yes – versus 2012. I don’t have the 2012 numbers in front of me.

I'm just saying I think people are concerned that you're expecting a big ramp-up in Q3 that others aren’t really seeing, I don’t know if its in a market that people aren't in, that you really have a competitive advantage or what it is that you can give people confidence about that?

Yes. I think if you look at a lot of the – what's been reported relative to where are the critical states and where are we seeing quick ramp-up in terms of spending, there's really been three primary states reported Florida, Ohio and Pennsylvania. And our footprints really favorable in those and those markets are active right now. So we've got two big Ohio markets in Cincinnati and Cleveland, and there is spending going on now and it's ramping up with new buys being placed on a regular basis. And then you get to Florida and that’s a great footprint for us being in West Palm Beach, Tampa and Fort Myers. And so we think that a lot of the focus is going to come down to those three states and we've got five good stations in two of those states that the spending is happening now. And since the conventions quickly ramping up there and we think Ohio and Florida are going to be two of the battlegrounds if not the battleground states. And we think we're going to remain very consistent with spending through all of third quarter there.

Okay. Thank you very much.

And we have no further questions. You may continue.

Thanks, Lea. Thanks to everyone for joining us today and we will talk to you soon. Have a good day.