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Edited Transcript of CMLS.OQ earnings conference call or presentation 11-Nov-19 9:30pm GMT

Q3 2019 Cumulus Media Inc Earnings Call

Dec 2, 2019 (Thomson StreetEvents) -- Edited Transcript of Cumulus Media Inc earnings conference call or presentation Monday, November 11, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Collin Jones

Cumulus Media Inc. - SVP of Corporate Development & Strategy

* John F. Abbot

Cumulus Media Inc. - Executive VP, Treasurer & CFO

* Mary G. Berner

Cumulus Media Inc. - President, CEO & Director

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Conference Call Participants

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* Marci Lynn Walner Ryvicker

Wolfe Research, LLC - MD of Equity Research & Senior Equity Analyst

* Michael A. Kupinski

NOBLE Capital Markets, Inc., Research Division - Director of Research and Senior Media & Entertainment Analyst

* Zachary Alan Silver

B. Riley FBR, Inc., Research Division - Associate

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Presentation

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Operator [1]

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Welcome to the Cumulus Media Quarterly Earnings Conference Call. I'll now turn it over to Collin Jones, Senior Vice President of Corporate Development and Strategy. Sir, you may proceed.

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Collin Jones, Cumulus Media Inc. - SVP of Corporate Development & Strategy [2]

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Thank you, operator. Welcome, everyone, to our Third Quarter 2019 Earnings Conference Call. Before we start, please note that certain statements in today's press release and discussed on this call may constitute forward-looking statements under federal securities laws. Actual results may differ materially from the results expressed or implied in forward-looking statements. These statements are based on management's current assessments and assumptions and they're subject to a number of risks and uncertainties.

In addition, we'll also use certain non-GAAP financial measures. We believe the supplementary information is useful to investors, although it should not be considered superior to the measures presented in accordance with GAAP. A full description of these risks as well as financial reconciliations to non-GAAP terms are in our press release and SEC filings. The press release can be found in the Investor Relations portion of our website and our SEC filings, including our Form 10-Q will be available tomorrow morning.

A recording of today's call will be available for about a month. Details for how to access that replay can also be found on our website.

With that, I'll now turn it over to our President and CEO, Mary Berner. Mary?

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Mary G. Berner, Cumulus Media Inc. - President, CEO & Director [3]

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Thanks, Collin, and thanks, everyone, for joining us on Veterans Day.

Before we start, I'd like to acknowledge and thank all of the men and women who have served and are serving in our armed forces, including our CFO, John Abbot, who joins me today.

We are happy to be reporting another quarter of strong results today. Revenue in the quarter was up 3.9% and EBITDA was up 2.2% on a same-station basis, excluding political. This performance was driven primarily by increases in our digital businesses as well as in national spot and network broadcast revenue channels. On the expense side, net increases were predominantly driven by the variable cost of our growing revenue streams and certain other onetime increases.

Our EBITDA growth reflects continued and focused execution against our key strategic priorities, which I'll update you on shortly. But before I do, you'll note in our 10-Q and press release that this quarter, we have moved to reporting on a single segment basis with more detail provided on our revenue streams than presented previously. During the quarter, we assessed the appropriateness of our segment reporting in light of changes and how the company is organized and how we operate the business and concluded that we have one reportable segment. Said another way, this reporting change was necessary because we operate the business through a single company lens. And as reflected in this year's financial performance, this approach has yielded many benefits, ranging from the incremental revenue gained by moving inventory among all of our channels to the more efficient operations derived from managing important functions or initiatives, such as finance and accounting, digital and revenue and expense management, with a holistic view of the company.

And as I said, in addition to the enhanced level of disclosure we have been providing in the last quarter or 2, we are now also providing more detail than we had previously on our revenue streams, and we believe you will find it more helpful than the old segment reporting that had become less reflective of how we operate the business.

So back to the drivers of the performance in the quarter. Our multi-pronged digital strategy continues to result in meaningful and profitable revenue growth, with combined digital revenue growing 51% in the quarter. C-Suite, our local digital marketing services platform, and our streaming business, both reached milestones in September, each booking over $2 million of revenue that month. Collectively, these revenue lines grew 40% in the quarter as we capitalized on the evolution of our local sales efforts to more deeply engage in the relationships we have with over 30,000 local businesses by selling marketing solutions that combine radio and digital products. We do this with a relentless corporate focus on ensuring strong and efficient execution.

For example, to make integrated radio and digital campaigns easier for both our local sales organization to sell and our local advertisers to buy, this quarter we introduced the Cumulus Creative Concierge, an exclusive white-label platform that provides coordinated spot and digital creative to local advertisers, significantly simplifying process of selling and buying those integrated advertising campaigns. In September, we also saw the highest percentage of streaming and C-Suite attachments that we've experienced to date. And by attachment, I mean that nearly 40% are local direct clients also bought a streaming schedule and almost 10% bought a C-Suite product, reflective of the increasing value we are able to derive from our customer relationships as we offer additional products and services that meet their needs. In fact, we firmly believe that our demonstrated ability to constantly evolve our sales capabilities and digital product set will bear additional dividends in the future in the form of more clients, stronger customer relationships and even higher attachment rates.

Also, on the digital side, we are the fastest organically growing podcast network in the U.S. with nearly 70 million monthly downloads and approximately 85% revenue growth in the quarter. This rapid growth puts us on track to deliver over $25 million in revenue this year, and I would reiterate that our podcasting business has been nicely profitable from the beginning and continues to contribute to our positive EBITDA momentum. From a podcasting content perspective, we have built a stronghold in the News/Talk vertical, anchored by The Ben Shapiro Show, which consistently ranks in the top 5 each month among over 750,000 podcasts.

More recently, we also announced expansions in several other content areas, including sports, where we kicked off a podcast partnership with Pat McAfee former NFL pro bowler, stand-up comedian and social media Star and also developed a weekday radio show with him for syndication. We've also launched an eSports podcast with Kevin Knocke, one of the most popular and experienced color commentators in the rapidly growing e-gaming space.

And in the life and entertainment category, we’ve partner with the Lemonada Network, an exciting new podcast content company, cofounded by the executive producer of Pod Save the People, which, in September, debuted its first podcast called Last Day. Right out of the gate, competing against some of the biggest and well-known podcasts, it ranked in the top 10 in its category.

As we sit here today, we view each of our 3 digital businesses as critical to the growth of both our top and bottom line, with revenue divided among the 3 roughly 1/3, 1/3, 1/3. To give you a little additional color, streaming is our highest margin digital business with contribution margins comparable to core broadcast radio. Podcast is our lowest margin digital business, but we still generate a healthy margin and have from the beginning. And C-Suite's contribution market this fall in between these 2. Investing in these digital initiatives remains a key element of our long-term growth strategy.

Alongside these initiatives, we continue to make progress in enhancing our operating performance in the core business. This quarter, we fully completed the Tracking and Inventory system rollouts to our radio stations that started nearly 2 years ago. A systems change and organizational build-out like this is always a significant undertaking, but the payoff has been great. In Q3 alone, thanks to our new cross-platform pricing and yield management capabilities, we generated over $6 million in incremental high margin revenue, largely from opportunistic bespoke national and network advertising vehicles, that we developed to meet or sometimes generate advertiser demand. To be clear, without the benefit of our new systems and tools, we simply could not have delivered this incremental revenue.

It's also worth calling out some other meaningful contributions in the quarter from some of our standout stations and brands. Our best-performing markets for the quarter were Chicago, Cincinnati, D.C., Indianapolis and Baton Rouge. And speaking of Indianapolis, I would also note that we are continuing to benefit from the swap transactions that we completed in Q2. The station we flipped to a rock format to fill a gap in the market is enjoying ratings increases of over 100% year-over-year, with multiple consecutive months of impressive ratings growth. And across the entire Indianapolis cluster, on a same-station basis, we grew EBITDA by double digits in the quarter.

In Allentown, the other market we expanded through a swap transaction, we mentioned last quarter that WODE-FM posted at #1 in the spring book and that ratings traction converted to revenue share gains in September for the market. In a number of other markets, we've also made some significant programming moves under our new programming head, Brian Phillips. A few examples: in San Francisco, we've been working to cement the leading position of our heritage sports brand, KNBR. We signed Greg Papa, voice of the 49ers, to a multiyear deal. And then added FM distribution to station by flipping KFOG-FM to a simulcast of KNBR. In its first month on the FM band, ratings share for KNBR skyrocketed, up 73% year-over-year. We also recently resigned our powerhouse morning show in Houston, The Roula & Ryan Show on KRBE-FM to a multiyear deal, securing the station's leading position in the market. Notably, KRBE also received a Marconi Award this year, Radio's most prestigious annual award, for CHR Station of the Year. In fact, this year, Cumulus stations received a record number of nominations, with KIPR-FM, Power 92 Jams and Little Rock, also winning for medium market station of the year.

It's also important to note the strong position of our News/Talk platform. Our stations grew ratings share every month this year, and our Power House News/Talk network syndication roster, which includes Mark Levin, Michael Savage and Ben Shapiro, has also performed very well. In particular, Ben Shapiro's success in the 18 to 49 demo has been impressive, with listenership up more than 60% in the simulcast broadcast of his podcast and up over 40% in his live show from the fall 2018 to spring 2019 book. In aggregate, our strength in news talk positions us particularly well for what we expect to be a very robust political environment as we count down to the 2020 election.

These highlights and our continued strong performance are a testament to the great execution by everyone at Cumulus and indicative of the focus and energy the whole team applies to our strategic priorities, and we believe that these priorities support our financial goals, which are singularly focused on driving value for shareholders. Our top financial goal is to maximize free cash flow, which largely comes from the EBITDA that's generated by the operating priorities. And our second financial goal is to paydown debt and to reduce leverage before -- below 4x. And in pursuit of these goals, this quarter, we completed an opportunistic term loan refinancing, and with the bond deal we completed in June, we have fully refinanced our exit term loan facility.

Our capital structure now has a 2026 maturity profile with lower interest rates than we had at emergence and 4.5x net leverage, down nearly 1.5x from last summer. Doing the simple math, we paid down $275 million of debt, which, with around 20 million shares outstanding, translates into $13.75 per share of value from debt paydown since we emerged from bankruptcy.

So we think we're doing the right things, and we're confident that our focus on these financial goals, fueled by strong execution against our strategic priorities will drive value for our stakeholders in the long term. Looking forward to the fourth quarter, we are seeing pacing down low single digits on a same-station basis, excluding political. Political is about a 300 basis point headwind at this point. The quarter got off to a sluggish start, where we saw declines in advertiser demand that we believe reflected the macroeconomic and political uncertainty that has dominated the news cycle. That said, when considering our performance in Q3 and outlook for Q4, we are confident that we will exceed consensus EBITDA estimates for the year.

And with that, I'll turn the call over to John.

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John F. Abbot, Cumulus Media Inc. - Executive VP, Treasurer & CFO [4]

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Great. Thank you, Mary. As with prior quarters, for the sake of comparability, I'll speak to our financials on a same-station basis, adjusting last year's numbers for all of the M&A transactions that we've completed. I would note, though, that our numbers are not adjusted for the announced sale of WABC to Red Apple Media, which we hope to close this quarter.

As Mary indicated -- as Mary mentioned, the way that we're now operating the business is one unified platform, necessitated a reporting change to a single segment this quarter. However, we do expect that the new presentation of the financials will be more valuable to you. And to help with your modeling, I would point you to the last few pages of the press release to see a historical quarter-by-quarter breakdown of the new revenue presentation. Of course, please feel free to reach out to Collin or me if you have any questions bridging the old format to the new.

One other item to note, and Collin mentioned this, the SEC is closed for Veterans Day, so our 10-Q won't be available today, but it should be available first thing tomorrow morning.

With that, moving to the financials. Total revenue for the quarter, excluding political, was up $10.5 million or 3.9%. The quarter had similar characteristics as last quarter in that national spot led from a broadcast revenue standpoint, up double digits. Network revenue was up nearly 5%. And digital, which includes C-Suite, streaming and podcasting, was up 51%, which led the industry this quarter. And as Mary mentioned, revenue management initiatives directly contributed about $6 million of the national spot and network growth.

These positive drivers were partially offset by a continuation of market-driven challenges in local spot revenue performance. Including the impact of political, total revenue was up $8.6 million or 3.2% from Q3 of 2018. We were up against a political comparison of about $3.6 million last year, and we did about $1.7 million of political this year. Moving down the P&L. Total expenses were up in the quarter by $9.1 million or 4.3%. The biggest driver of this increase in the quarter was higher variable cost on digital revenue increases and other growing revenue streams. I would characterize the remaining expense increases as largely onetime in nature, including: an increase in bad debt expense resulting from higher write-offs, particularly the FTD bankruptcy, which accounted for almost half of our increase in bad debt; the increase in amortization of new local commissions; comparisons against credits and certain expense lines last year; and external or largely uncontrollable expense increases, like increases in health care costs.

EBITDA for the quarter, on a same-station basis and excluding political, was up $1.2 million or 2.2%. Without normalizing for political, EBITDA came in at $58.7 million, a decline of $500,000 or 0.8% year-over-year. As a reminder, the M&A activity from earlier this year will also impact comparability as we look into fourth quarter. So to help your modeling, the M&A adjusted numbers for Q4 of 2018, including political, are $298.6 million and $62.3 million for total revenue and EBITDA, respectively. In Q4 last year, we had $11.3 million of political revenue on a same-station basis. And as Mary mentioned, that comp is providing about a 300 basis points headwind to pacing currently.

Moving off the P&L. In Q3 this year, we spent about $6.7 million on CapEx, and we expect to spend a little more than $25 million on CapEx for the full year. Turning to the balance sheet, where we've continued to be very active. We've now fully refinanced our exit term loan facility. In late September, we completed a $525 million term loan refinancing, which was accompanied by a $29 million voluntary prepayment to fully retire the old term loan. The new term loan bears interest at a rate of LIBOR plus 3.75% which, of course, is a reduction from our old rate of LIBOR plus 4.50%. And the new term loan has a maturity of March 31, 2026. And we now have net leverage of 4.5x and total debt of $1.025 billion, which is a reduction of $275 million since emergence from bankruptcy or as Mary mentioned, in the way we like to look at it, $13.75 per share of value from debt paydown.

Looking ahead to additional opportunities for cash generation, I wanted to provide you with an update on the D.C. land sale. As we've discussed on previous calls, the development plans of our buyer, Toll Brothers, have faced and continue to face opposition from community organizations appealing the approvals that Toll has received to date. Last quarter, we noted there was a positive -- there was positive progress as one of those appeals was dismissed. In early October, the court heard final arguments on the other active appeal, and we expect to get a ruling on that sometime later in Q4 or in Q1 next year. And we remain optimistic that with a positive outcome from that ruling, we'll be able to reach a firm commitment with Toll Brothers that's attractive to both parties. As we've said before, we continue to believe that there's value to be unlocked in selling this property, and we'll keep you updated on our progress as we have more to share.

Now I'd like to give you a brief update on the status of the petition for declaratory ruling that we filed with the FCC. Our current equity share structure, which consists of Class A and B shares and Series 1 and 2 warrants was crafted to comply with the rule that limits foreign ownership to 25%. However, to simplify the structure and accelerate conversions of warrants into the Class A shares that trade on NASDAQ, we filed the petition for declaratory ruling on July -- in July 2018 to allow higher foreign ownership in our stock than permitted under the rule. Approval of our request involves not only the sign off by the FCC, but also a review -- the review of a group of representatives from the executive branch named Team Telecom. The FCC issued a public notice on our petition on May 21, 2019, and the Team Telecom review started shortly thereafter. No party other than Team Telecom has filed comments with respect to the petition and the period for filing comments has closed. We're pretty far down the line in the process of responding to Team Telecom's data requests and questions, and we hope to have resolution on the matter in the coming months, barring any unforeseen outcomes to the Team Telecom review.

So at this point, we'd like to open up the line for Q&A. Operator, we're ready for the first question.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from the line of Marci Ryvicker from Wolfe Research.

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Marci Lynn Walner Ryvicker, Wolfe Research, LLC - MD of Equity Research & Senior Equity Analyst [2]

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I wanted to dig a little bit into digital because this was a very big positive surprise. You gave us the margins. Can you talk about the percent of revenue from the streaming, podcast and C-Suite that makes up the total digital number? That's the first question. And then secondly, you mentioned pacing down low singles, but then you also said you're going to hit consensus EBITDA, so that would imply that you are spending maybe less. I don't know if that's what you meant to imply, but can you just talk a little bit about cost control into the fourth quarter?

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Mary G. Berner, Cumulus Media Inc. - President, CEO & Director [3]

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Sure. Thanks, Marci. The percent of digital revenue, it bifurcates roughly 1/3, 1/3, 1/3, between streaming, podcasting and C-Suite. And with regard to pacing on the fourth quarter, largely, we're seeing similar trends that we've seen in prior quarters, with local the weakest at this stage, and again, digital strength continuing. National is also up and the network business continues to be lumpy. I'll let John take on the implication on consensus. I think the question was about expenses.

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John F. Abbot, Cumulus Media Inc. - Executive VP, Treasurer & CFO [4]

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Yes. I don't know that there's a -- the total consensus, I think, for the year is right around $204 million, and we're very confident and feel good about hitting that number. I don't know if there was a specific question, maybe I missed, around expenses?

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Marci Lynn Walner Ryvicker, Wolfe Research, LLC - MD of Equity Research & Senior Equity Analyst [5]

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Well, I think it's because Mary had said that even though they're pacing down, you're still going to hit consensus EBITDA. So I wasn't sure if you were implying that you had more cost controls in the fourth quarter. So it didn't -- I wasn't 100% sure what the reference to consensus EBITDA...

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John F. Abbot, Cumulus Media Inc. - Executive VP, Treasurer & CFO [6]

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Yes, I think we're summing up the whole year. And when you take into account our third quarter performance and our outlook for the fourth quarter, we feel good about the full year. I think it's really all what we were saying.

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Marci Lynn Walner Ryvicker, Wolfe Research, LLC - MD of Equity Research & Senior Equity Analyst [7]

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And then I just have one follow-up on political. How does that $1.7 million in the third quarter compare? Is there a comparison to…

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John F. Abbot, Cumulus Media Inc. - Executive VP, Treasurer & CFO [8]

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You mean the last year?

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Mary G. Berner, Cumulus Media Inc. - President, CEO & Director [9]

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Compared to last year?

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Marci Lynn Walner Ryvicker, Wolfe Research, LLC - MD of Equity Research & Senior Equity Analyst [10]

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Yes.

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John F. Abbot, Cumulus Media Inc. - Executive VP, Treasurer & CFO [11]

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Last year was $3.6 million.

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Marci Lynn Walner Ryvicker, Wolfe Research, LLC - MD of Equity Research & Senior Equity Analyst [12]

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No, the year before, so like, from an -- are you getting more political in this odd-numbered year that you had before?

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John F. Abbot, Cumulus Media Inc. - Executive VP, Treasurer & CFO [13]

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In the last off-cycle year?

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Marci Lynn Walner Ryvicker, Wolfe Research, LLC - MD of Equity Research & Senior Equity Analyst [14]

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Yes, yes.

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John F. Abbot, Cumulus Media Inc. - Executive VP, Treasurer & CFO [15]

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I don't have that in front of me, we can circle back with you on that.

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Operator [16]

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Your next question comes from the line of Zack Silver from B. Riley FBR.

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Zachary Alan Silver, B. Riley FBR, Inc., Research Division - Associate [17]

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Okay. Great. The first one is just on the pacing low -- down low single. If you could give us some more detail on what -- where you're seeing strength and where you're seeing weakness with the categories? And then maybe too early for 2020, but I guess, more qualitatively, how you're feeling going into next year, x political?

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Mary G. Berner, Cumulus Media Inc. - President, CEO & Director [18]

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Yes. I mean we don't have visibility into the category performance until after the fact. It's a little early to call that right now. And as I said, we're largely seeing for fourth quarter that's the similar trends that we've seen in prior quarters at this point. Local continues to be the weakest at this stage; digital is pacing nicely up; national is up; and again, network is lumpy. And with regard to how we feel about 2020, obviously, it's a political year, so we love political years, especially processing what are anticipated to be frothy political years.

We're seeing some early political at this stage, and we do expect it to ramp up with -- moving forward as some of the changes to certain states as they move forward to their primaries in 2020. So I guess, the way I'd characterize 2020 and the way we're thinking about it now is, at this stage, nothing leads us to believe that the trends that we've been seeing are likely to change materially into 2020. We certainly hope that the weakness in local spot abates, but we plan for it to continue. We think national spot and network should have the potential to offset. And most specifically for us, we expect to benefit or continue to benefit from our pricing and inventory management initiatives. Unlike prior years, it should allow us to manage pricing and inventory utilization in 2020 much better than in previous years -- in previous political years. So we expect to be able to minimize spillage and maximize rate across the platform, and we think that's especially important given the fact that reduction -- because there's going to be a reduction in available impressions. You're well aware, Twitter, no ads, Facebook cutting back, and there's going to be high demand with -- put pressure on pricing. So I think that's -- it's a little too early to call, but we don't -- we -- nothing leads us to believe the trends will change, with the exception of political would be a political year.

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John F. Abbot, Cumulus Media Inc. - Executive VP, Treasurer & CFO [19]

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And I would add on, yes, in the fourth quarter, pacing is -- I think we're seeing similar trends that you probably heard from some other operators, right, where it was up. And as Mary said, it was a slow start to the quarter, but looking better on the back end of the quarter. So.

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Zachary Alan Silver, B. Riley FBR, Inc., Research Division - Associate [20]

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Got it. And then, I mean, there's a -- you made a comment in the prepared remarks about $6 million of high margin incremental revenue coming from your Tracking and Inventory upgrade. What exactly was that? And is that something that you think is sustainable going forward?

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Mary G. Berner, Cumulus Media Inc. - President, CEO & Director [21]

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Yes. I mean, it's a capability and a platform. So essentially, we were able to participate in national deals with the visibility required into pricing and placement to ensure that we actually -- we're driving incremental revenue, something we couldn't do before. So we were able to create new channel opportunities, so we created custom networks, for example, so we can -- just because we have a bird's eye view of all of our inventory, we can scoop up and package that inventory to either create demand in the marketplace or to fulfill demand. And so it's been -- we certainly expect that to be a key driver of our, if not overall performance, certainly share.

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Operator [22]

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Your last question comes from the line of Michael Kupinski from NOBLE Capital Markets.

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Michael A. Kupinski, NOBLE Capital Markets, Inc., Research Division - Director of Research and Senior Media & Entertainment Analyst [23]

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Congratulations on your hard work.

First of all, I just want to ask a little bit about ratings. It remained stable at this time. You're not seeing any dynamic changes, especially in some of your higher contributing markets? I know you mentioned when will you put the formats and so forth. But I was just wondering, in terms of ratings, are they pretty stable now?

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Mary G. Berner, Cumulus Media Inc. - President, CEO & Director [24]

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Yes. I mean I would characterize it as saying that we gained back most of the share that we lost from 2012 to '15, and we're back up near those levels. So our challenge at this point, as you point out, is about maintaining and picking our battles where the ratings have the highest impact. As I mentioned earlier, we're seeing real strength in our News/Talk platform currently, which, we think, positions us well going into the next year. Sports remains -- I said this before in prior calls, sports remains our biggest challenge right now on the local side, and really, that's given the alternative ways to consume sports context -- content. However, sports was a big driver for us earlier this year at Westwood One.

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Michael A. Kupinski, NOBLE Capital Markets, Inc., Research Division - Director of Research and Senior Media & Entertainment Analyst [25]

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Got you. And then, obviously, earlier in the year, you began repositioning your portfolio. And I was just wondering, since then, of course, it's been a little quiet is a reflection of the fact that you've kind of settled in on your current portfolio? Or is there a lack of interest from other operators to swap or sell? Can you just kind of give us a sense of what your thoughts are regarding your portfolio at this time and what your plans are?

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John F. Abbot, Cumulus Media Inc. - Executive VP, Treasurer & CFO [26]

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Yes. No, that's -- it -- look, that remains an important component of our strategic and operating strategy is to optimize the portfolio. And to the extent we see opportunities to do that, we'll continue to pursue those. We are comfortable with the portfolio that we have. We think it provides tremendous reach in a nice, broad national footprint, but we'll continue to be opportunistic where they're situations and accretive transactions present themselves or we're able to put a transaction together that's accretive, we'll pursue those. So WABC, we obviously announced a while ago, that hadn't closed yet. But I mean, I think it's just a reflection of -- as opportunities arise, how we're able to transact against those.

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Michael A. Kupinski, NOBLE Capital Markets, Inc., Research Division - Director of Research and Senior Media & Entertainment Analyst [27]

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Got you. Got you. And then in terms of the digital, I want to go back. You talked about your C-Suite products that are really driving some of the growth there, of course, your podcast. I want to turn to the C-Suite products, particularly, can you just talk a little bit about the growth outlook that you're seeing there? I know a lot of your other peers have kind of been a little bit more aggressive in their digital businesses with more attribution type -- data attribution type models and things like that, that they're pursuing. Can you tell me a little bit about where you are in the stage of development of your digital businesses? How fast you think you can grow that going forward whether or not you're actually utilizing data attribution tools at this point? Or is that another opportunity for you to kind of layer in for the growth going forward.

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Mary G. Berner, Cumulus Media Inc. - President, CEO & Director [28]

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Yes. I mean I would take a step back and answer it more broadly. Is that when you think about attribution, essentially, it does 2 things: It's important to prove that radio works. And that's what advertisers are really looking for. So we have some products that are truly unique to us, which is the ultimate attribution, which is guaranteeing results, and that's the EPiC Guarantee locally and the Westwood One ROI Guarantee on national side. I would say that from a data standpoint, we are already capturing a significant data on our digital users across a variety of both owned and third-party platforms. That allows us to drive higher CPMs on the audience. I think where we are now is that it's -- we believe and I believe our peers do, that it's critical that our industry speaks the same language about how we measure our effectiveness and how we prove that to advertisers. And so with the technology that actually exists today. We can deliver similar data, similar proof of performance and attribution metrics that -- and we do, like all of our competitors. We are all working with a number of third-party parties locally to provide those solutions. So I think it's a work in progress.

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Michael A. Kupinski, NOBLE Capital Markets, Inc., Research Division - Director of Research and Senior Media & Entertainment Analyst [29]

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Got you. And then do you have any thoughts in terms of benchmarks, maybe, on what you would like to see the digital business contribute to total company revenues at some point?

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John F. Abbot, Cumulus Media Inc. - Executive VP, Treasurer & CFO [30]

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No. I mean we certainly feel good about the growth opportunity ahead in digital, and we've talked about what percent of our total revenue it is, and we feel good about being able to continue to grow that. I think you asked about C-Suite, in particular. One way we think about that is attachment rates and how many sales that occur in the local market include the C-Suite products, and those attachment rates are still fairly low, and we see good growth from just continuing to drive that.

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Mary G. Berner, Cumulus Media Inc. - President, CEO & Director [31]

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Yes. I mean, just to give you an idea, we reached -- as I said in my prepared remarks, we reached 30,000 local businesses and with just approximately 10% of those attaching C-Suite product. And pretty quickly, there is a lot of upside there.

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Operator [32]

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And I'll turn the call back over to the presenters for closing comments.

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Mary G. Berner, Cumulus Media Inc. - President, CEO & Director [33]

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All right. Thanks, everybody, for joining us today. We look forward to speaking with you again soon. Thank you. Have a great day.

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Operator [34]

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Thank you again for joining us today. This concludes today's conference call. You may now disconnect.