Ladies and gentlemen, thank you for standing by, and welcome to the Scripps First Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will be given at that time. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Carolyn Micheli, Head of Investor Relations. Please go ahead.

Thank you, Grace. Good morning, everyone, and thank you for joining us for a discussion of The E.W. Scripps Company’s financial results. You can visit scripps.com for more information and a link to the replay of this call. A reminder that our conference call and webcast include forward-looking statements and actual results may differ. Factors that may cause them to differ are outlined in our SEC filings. The COVID-19 pandemic enhances the uncertainty of forward-looking statements we make about our operations and financial condition. Because of this rapidly changing economic climate, we are not issuing second quarter 2020 guidance, and we also are rescinding most of our previously issued guidance, with a few exceptions we’ll discuss today. We do not intend to update any forward-looking statements we make today. We’ll hear first this morning from Scripps’ President and CEO, Adam Symson; and then CFO, Lisa Knutson. Also on the call are Local Media President, Brian Lawlor; National Media Executive Vice President, Laura Tomlin; and Controller and Treasurer, Doug Lyons. Now here’s Adam.

Thanks, Carolyn. Good morning, everybody, and thanks for joining us. Well, those of you who have been with us for some time know that 2020 was supposed to be a watershed for our company financially, and the year certainly started out that way. Despite the impact of the coronavirus outbreak on advertising for the last two weeks of March, we are reporting a 10th straight quarter in which Scripps had delivered better-than-expected results on nearly every measure. While our full year results will be unlikely to meet the high expectations I had coming into the year, I’m heartened to tell you that the plan we have been working over the last two-plus years has made us stronger and better performing. For the first quarter, the Local Media margin is up over Q1 2019 on both the adjusted combined and as-reported basis. National Media segment profit was double last year’s Q1, and the $49 million in total company segment profit for Q1 is the highest profit number for the first quarter that we have seen since we spun-off Scripps Networks Interactive in 2008. The bigger and better performing portfolio we have will pay off during the upcoming political advertising cycle in this presidential year and through the upside we are capturing in retransmission revenue. Even before the impact of the outbreak on advertising, those two revenue lines, political and retrans, were projected to account for more than half of our local media revenue in 2020, and we expect them to hold up well during the crisis. The changes we’ve made to the company to make it leaner and more efficient and the significant M&A we did that doubled the scale of our Local Media portfolio has also made us more durable and better able to withstand the crisis, like the one we’re all living through now. Today, we’re in the midst of a business disruption due to stay-at-home orders, shuttered businesses and a soft advertising market. But the fundamentals of the broadcast industry generally and Scripps’ local and national businesses specifically remain sound. On behalf of the Scripps’ Management and Board, I’d like to thank our shareholders who have supported us during this challenging time. Many of you have been with us for years and some since before the last financial crisis. Today, as always, we appreciate your understanding of Scripps’ near and long-term growth strategies and the value this company has created over the decades and will continue to create in the years to come. Here’s Lisa to discuss our financial picture, and then I’ll be back to cover a few more topics in detail. Lisa?

Good morning, everyone. The first quarter got off to a strong start across the company. In Local Media, we were on track to significantly exceed first quarter budget until mid-March when the COVID-19 outbreak began to impact the economy. We reaped the benefits of our acquisitions of 27 television stations last year. And although core advertising ended the quarter down on a same-station basis, it had started the year with the same momentum we saw in Q4. We received significant early political advertising spending finishing the quarter at $19 million, and we captured retransmission revenue upside as we completed negotiations for about 20% of our subscriber households, with another 20% left to negotiate this year. Retrans revenue was up 21% in Q1 on an adjusted combined basis. The National Media division saw even more positive Q1 dynamics. By far, our largest national business is the Katz Networks, which managed to deliver its best revenue growth since we acquired it, 31%. Newsy also finished up around 30%, a testament to its ongoing appeal with young audiences and driven by programmatic ad growth on its over-the-top platform. Overall, the National Division met and beat our first quarter guidance with $108 million in revenue and more than double its Q1 2019 segment profit at nearly $12 million. Turning to expenses. Local Media’s Q1 expenses came in well below our guidance of up low-teens at up 8% on an adjusted combined basis. National Media’s expenses came in at $96 million versus guidance of about $100 million. Shared services and corporate expenses were nearly $19 million in the first quarter that is consistent with what we guided and much higher than what we’ll see the rest of the year because it included annual compensation and benefit payments. I’ll talk more about our ongoing expense control…

Thank you, Lisa. I shared with you at the outset of the call, how the plan we have been working over the last two years at Scripps was designed to make us a stronger and more durable company and why that work has better positioned us to navigate this moment. Then, after sharing the results of our strong start to the year, Lisa detailed our plan to weather the current storm. Now, I’d like to discuss how we believe the work we are doing today will better position our company for the dawn ahead when we know the sun will inevitably rise again on commerces. As the coronavirus crisis came upon us this spring, we identified three key priorities to guide our actions. Number one, to protect the health and wellbeing of our 6,000 employees; number two, to energetically serve our audiences and communities with the objective news and information they need to stay safe and the entertainment they seek to lift their spirits. And number three, to maintain business continuity and strong financial stewardship of the company. These three priorities have guided our decisions thus far, and they are the reason we believe we will be better positioned after the crisis. It all started with planning, because several weeks ahead of the pandemic’s rise to the top of the American consciousness, we were already putting the pieces in place to safeguard our employees, execute the mission and maintain business continuity. We led our industry in transitioning many of our employees to working from home across both our television station footprint and our national businesses. I’m proud of the creativity and ingenuity demonstrated across our teams to overcome any challenge, and I want to thank our employees for their dedication to their audiences, their true commitment to our mission and…

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

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

Good morning, John. It’s great to hear you on these calls again. I’m going to ask Brian to cover those two.

Good morning, John. It’s Brian. How fast they’re opening? Honestly, it’s just early. We’re just – in the last week, Kentucky, Texas started opening up. Montana, which had very few cases has started opening up a bit. And now we’re beginning to see some of the other states starting to take incremental steps. I think we’ll know better in the next couple of weeks. This past week was very reassuring. We saw quite a bit of business that had been canceled four or five weeks ago reinstate their buys. But I think it’s really going to be on a market-by-market basis. And there are some categories. The medical category is one of the first to start to bring money back into the ecosystem as non-elective surgeries and so forth are one of the first things that are opening back up. So I think that’s a category that we’re starting to see. Services actually has held up okay. Everything’s down, but has held up okay during this. I think with a lot of people home, it was a good time to start to get some self-fix. So I think in the next couple of weeks, we’ll know more, but I expect it to be kind of a market-by-market situation. Relative to Katz, was your question, John, about the first quarter performance or just how they’re holding up now?

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

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

Thanks, John.

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

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

Hi, Kyle. We’re in the middle of negotiating those now. I think that money will phase in over Q2, Q3 and Q4 fairly evenly, a little bit heavier for the back half but some of that money will come up into Q2. Those negotiations are complex, but they’re going well. Even in this period, we’ve continued to have ongoing conversations with them week-to-week in advancing the negotiations. So I would expect sooner than later, we’ll be in a position to announce successful completion of those deals.

Great. On the 1Q '20 political ads, any sense or help that you could give on how those comp on a same-store basis to the '16 and '18 cycles?

Kyle, it’s Brian again. We did 18.7 million in Q1 of '20. We did 3.4 million of political in Q1 of '18. And I don’t have the number for '16 in front of me, but we can work on getting that for you. But obviously, it was good. Bloomberg was about a little over 40% of our spending. But beyond that, we had, I don’t know, 15 states that had primaries. We definitely saw a crowd-out effect that affected our core. The back half of March, Michigan, Missouri, Arizona, Florida, Ohio, all had primaries where we have multiple stations. And so we definitely saw an impact on our core there. But it was a good first quarter and beyond just Bloomberg. Sanders, Biden, Warren, Buttigieg, Klobuchar, everyone was active in those primaries that moved us through the quarter.

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

We are appreciative.

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

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

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

Hi, Kyle. It’s Laura.

Hi, Laura.

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

Okay. Thank you.

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

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

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

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

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

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

Got it. Thanks for all the color, guys. I appreciate it.

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

Good morning, everyone. Thanks for taking the questions. Hope you all are well. I just have one question, if you could, Lisa, give us the last eight quarters EBITDA on a pro forma basis and how that translates to leverage? Thank you.

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

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

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

Okay. Thank you.

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

Thank you. Brian, just to follow up on that. What is the normal sequential month-to-month performance for the – let’s say, the broadcast group from March to April? There’s some seasonality, right?

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

Got you. And then in terms of just looking at the retrans, just going back to that for a second, I’m just trying to get a sense because I understand that you had some renegotiations that kind of kicked in, in March. You already had a step-up beginning January 1st from the Comcast subs. Can you just kind of give us a sense of the progression in retrans month-to-month?

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

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

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

Okay.

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

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

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

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

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

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

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

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

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

Fair enough. Okay. Thank you.

Thanks, Mike.

Thank you. And next, we’ll go to the line of Craig Huber with Huber Research Partners. Please go ahead.

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

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

Okay, that does include OTT, right?

Correct.

And that’s a 2019 – just clarifying, through the end of 2019.

Was that like your latest quarter I guess [indiscernible] fourth quarter down roughly 5% year-over-year?

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

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

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

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

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

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

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

Okay, but how about just April year-over-year pro forma, is that down roughly 40%?

Yes, we’re not sharing that, Craig. Go ahead, Adam.

Yes. Craig, I really appreciate what you’re trying to get at. There is just so many moving parts right now, we’re just not issuing any guidance right now.

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

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

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

Yes, I think – go ahead, Adam.

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

Okay, very good. Thank you.

Thanks, Craig.

Thank you. And next, we’ll go to the line of John Kornreich with JK Media. Please go ahead.

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

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

And none of its drawn?

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

Okay. That’s right. I remember.

Yes, absolutely.

You drew it all?

No, we did not draw it all.

Can you give me an idea what you drew?

175.

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

Look, John, I think it’s a legitimate question. It’s probably a legitimate concern. So to this point, the fundraising levels have been significant and – significantly higher than what we’ve seen in the past. And so the campaigns at this point are well funded. I expect they will continue to be well funded. I think your comment about maybe people will not give the same amount that they were going to, may be valid. Time will tell on that. But I do think that there will be enough money in the ecosystem that TV comes first. And as a result of that, I think that if there’s less money, it could impact maybe some other mediums, but I think local TV is typically where they go first for spending. And we look at our footprint, very strong in the presidential states. Our senate, we’re in 6 of the top 10 considered competitive races. The House is going to be very competitive, 53 races considered toss-ups or lean, and we’re in almost half of them. We think we’re really well situated that even if there’s a little less money in the ecosystem, we believe local television is going to come first, and we’ll be fine.

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

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

Okay. Thanks for the help.

Thanks, John.

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

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

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

All right.

Thanks for the question, though.

Grace, are there any other questions in queue?

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

Thank you.

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

Less than --

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

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

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

Okay, fair enough. Thank you, again.

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

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

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Executive Teleconference service. You may now disconnect.