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Edited Transcript of ETM earnings conference call or presentation 25-Feb-20 3:00pm GMT

Q4 2019 Entercom Communications Corp Earnings Call

Bala Cynwyd Mar 6, 2020 (Thomson StreetEvents) -- Edited Transcript of Entercom Communications Corp earnings conference call or presentation Tuesday, February 25, 2020 at 3:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* David J. Field

Entercom Communications Corp. - Chairman, CEO & President

* Richard J. Schmaeling

Entercom Communications Corp. - Executive VP & CFO

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Conference Call Participants

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* Craig Anthony Huber

Huber Research Partners, LLC - CEO, MD, and Research Analyst

* John Ellis

Palmer Square Capital Management LLC - Credit Analyst

* Se Hyun Kim

Wolfe Research, LLC - Research Analyst

* Steven Lee Cahall

Wells Fargo Securities, LLC, Research Division - Senior 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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Good morning, and welcome to Entercom's Fourth Quarter 2019 Earnings Release Conference Call. (Operator Instructions) This conference is being recorded.

I would like to introduce your first speaker for today's call, Mr. Rich Schmaeling, CFO and Executive Vice President. Sir, you may begin.

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Richard J. Schmaeling, Entercom Communications Corp. - Executive VP & CFO [2]

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Thank you, Ted. Good morning, and welcome to Entercom's fourth quarter earnings conference call. This call is being recorded. A replay will be available on our company website shortly after the conclusion of today's call and available by telephone at the replay number noted in our release.

During this call, the company may make forward-looking statements, which are based upon the company's current expectations and involve risks and uncertainties. The company's actual results could differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause actual results to differ materially are described in the Risk Factors section of the company's annual report on Form 10-K. As such, risks and uncertainties may be updated from time to time in the company's SEC filings. We assume no obligation to update any forward-looking statements, except as may be required by law. During this call, we may reference certain non-GAAP financial measures. We refer you to the Investors page of our website at entercom.com for reconciliations of such measures and other pro forma financial information.

I'll now hand the call to David Field, CEO of Entercom.

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David J. Field, Entercom Communications Corp. - Chairman, CEO & President [3]

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Thanks, Rich. Good morning, everybody. Thanks for joining us for Entercom's fourth quarter earnings call. Q4 was our fifth consecutive quarter of growth. For the full year 2019, Entercom delivered strong financial performance, with net revenues up 2% or 3% ex political. Adjusted EBITDA up 10%, and adjusted net income per share, up 19%.

Our significant investments in podcasting, digital and data and analytics, along with the expansion of our sports, network and events businesses are beginning to reshape our company and position us for sustained growth as we enhance our integrated multi-platform offerings to advertisers increasingly interested in the undervalued and emerging audio space.

As we think about our business at a time when podcasting, smart speakers, hearable devices and audio search are leading an audio renaissance, and at a time when competitive media is increasingly disrupted, we are evolving to capitalize on our scale. We are making strong progress in enhancing our product line and capabilities, expanding our lineup of original content and elevating our customer relationships.

We are the #1 creator of original local audio content in the United States and one of the 2 radio broadcasting companies with nationally competitive scale. The strength of our station lineups across the country's top 50 markets is second to none. And now by virtue of our acquisition of Cadence13 in the fourth quarter and Pineapple Street Studios during the third quarter, we are also one of the country's 3 largest podcasting companies.

I'm pleased to report that the podcast that our company now creates, or exclusively represents, just surpassed 2 billion annual downloads at our current run rate. Our podcast portfolio features numerous titles that have reached the Apple top 10 list and includes Revisionist History with Malcolm Gladwell; Gwyneth Paltrow's goop; The Clearing; Ronan Farrow's Catch and Kill; Anything Goes with Emma Chamberlain; Pod Save America; Against the Rules with Michael Lewis; and new this year, unlocking us with best-selling author, Dr. Brené Brown, whose trailer just debuted at #1 on the Apple chart. This is just a small sampling of the list.

In addition, we have built Radio.com essentially from scratch into the fastest-growing digital audio app in the country during 2019, and established important strategic relationships with partners, including Apple, Amazon, Google and others.

Our events business continues to grow nicely, and in 2019, featured a host of shows across the country, headlined by the likes of Taylor Swift, Billie Eilish, Mumford & Sons, The Killers, the Zac Brown Band, Keith Urban, among many other A-list artists. And the Entercom Audio Network completed its first full year of operations with rapidly growing revenues and profits and is positioned for significant growth in the future.

In sum, we are a significantly stronger company today than a year ago. I will share some additional color on our progress in each of these areas, but first, I'd like to touch on our financial results for the quarter.

Fourth quarter revenues increased 1%, 3% ex political. Adjusted EBITDA was up 2% for the quarter, while adjusted net income per share increased 14%. Revenue growth was driven by solid increases in digital, events, national and network. Political revenue was down significantly as expected, albeit stronger than a typical off-cycle fourth quarter. Spot radio ex political was flat for the quarter.

We also achieved modest margin growth during the fourth quarter. For 2019 as a whole, we grew margin by close to 2%. Rich will provide further color on our financial results during his remarks.

As the business evolves, scale is becoming an increasingly meaningful competitive factor within the radio industry. Having a multi-platform integrated product line that can deliver robust nationally scaled solutions to clients through broadcast radio with its unmatched reach, along with podcasting, digital and data is becoming an important factor in building marketing partnerships with large clients. And this is particularly significant as national advertisers who have long since underinvested in radio are becoming more interested in rethinking their media mix strategy and increasing their audio investment.

Entercom is well positioned for the emerging opportunities in this new competitive landscape. As I touched on earlier, Entercom has a local station lineup second to none in the top 50 markets, plus our newly established leadership position in podcasting and our strong platforms in sports, digital, data and analytics and events offer a powerful set of capabilities for customers at scale.

To add some context to this point, let's take a quick look at Entercom New York and how it provides a uniquely powerful platform for customers. Our station group there includes WFAN, the most listened to sports station in the United States; 1010 WINS, the most listened to all-news station in the United States; plus all-news WCBS-AM; and top music stations, including WCBS-FM, NEW 102.7 FM, ALT 92.3 and New York's Country.

We are also the radio home for the New York Yankees, Mets and Giants, plus the Jersey Devils and the Brooklyn Nets and feature a robust lineup of local events, digital products and so much more. We have similarly powerful positions in most of the country's leading markets and are the #1 radio revenue producer in many of these markets.

I'd also like to provide a little more color on a few other areas of the business. Our events business is driving higher revenues and margins and is now enhanced by the addition of 4 new performance spaces that we recently constructed at our facilities in Los Angeles, Philadelphia, Atlanta and Miami.

This January, Coldplay performed live at our grand opening show at the new HD Radio Sound Space on Wilshire Boulevard in Los Angeles in front of 300 invited guests. Similarly, the new [Verizon Theater] in Miami and our new facilities in Philadelphia and Atlanta should be active spaces for small exclusive boutique shows, live podcasts and other programs and entertainment across the year.

We have recently begun live video and audio streaming of some of our shows on Radio.com, along with other social platforms, including our Coldplay show as well as our Zac Brown Band show the night before the Super Bowl. We continue to achieve significant progress from our national client partnership team and their work to elevate our marketing relationships with the country's largest brands. And we are growing our unrivaled local radio sports business with further opportunities as more states legalize gambling.

Last week, we announced the sale of a nonstrategic FM station in Worcester, Mass. that provided limited coverage of the Boston market for $10.75 million. The sale is accretive, and the proceeds will be used to reduce debt.

Our Radio.com digital platforms continue to grow nicely, posting double-digit total listening hour growth and making us the fastest-growing of all the major commercial broadcasters over the past 6 months according to Triton's webcast metrics.

Our TLH growth is being driven by an acceleration in listening across smart speakers, continued expansion of our strategic distribution relationships and lift from our new RADIO. COM REWIND feature. As a reminder, on our previous earnings call, we announced RADIO. COM REWIND, the audio industry's first automated end-to-end DVR-like experience. We are also achieving strong growth in monthly active users of Radio.com, surging by over 50, 5-0 percent, in 2019. Streaming revenues were also way up due both to audience growth and improve revenue per 1,000 listening hours as we enhance digital sales execution.

One final note on digital. We continue to deepen our strategic relationships with key partners, becoming the only commercial broadcaster to serve as a beta partner for the new Google News audio product on Google Assistant and the first partner to launch on Amazon's new radio Skills Kit for Alexa.

A few summary thoughts before I turn it over to Rich. We feel good about our outlook for 2020 based on the growth opportunities we see across the business in areas including digital, podcasting, events, sports, political, plus the work of our national client partnership team and the increasing impact of our Entercom Advanced Audio products with its data analytics and attribution capabilities. As a result, we expect to generate solid revenue, EBITDA and free cash flow growth in 2020 and continue to build on our 5 consecutive quarters of growth.

We are focused on reducing leverage from our current level of 4.8x by at least half a turn by year-end 2020. We believe the current stock valuation remains disconnected from the strength of our business and the opportunities that we see for growth and value creation. It currently trades at a free cash flow yield of 25%. We are excited about the future and look forward to continuing to work hard to realize great value for investors.

I'll now turn it over to Rich and then your questions. Rich?

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Richard J. Schmaeling, Entercom Communications Corp. - Executive VP & CFO [4]

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Thanks, David. 2019 was an important transition year for Entercom. We made significant investments in support of and progress against our strategic growth initiatives, while posting solid EBITDA and net income per share growth.

During 2019, we completed the CBS Radio integration program, which generated over $175 million of gross cost synergies and about $100 million of realized net cost synergies through the end of 2019. We will recognize another $25 million of synergies from 2019 actions during this year, and we are already hard at work defining the next round of initiatives to continue to transform our cost structure and adapt to the rapidly evolving advertising landscape.

We also made significant strides in building the Entercom Audio Network, gaining momentum in the national advertiser direct sales channel through our national client partnership team and fielding an audience targeting and attribution offering, fueled by our significant first-party data that is second to none in our industry.

We are also excited about the power of the acquisitions of Cadence13 and Pineapple Street Media in combination with Entercom. We are just getting going, but podcasting is highly complementary to Entercom's core business. And over time, this new high-growth business will also be a source of significant revenue synergies.

Turning to our results for the fourth quarter, our net revenues were up 1% and we're up close to 3% ex political. Our podcast revenues came in for the quarter at $12.4 million versus our guidance range of $10 million to $12 million. Our fastest-growing markets during the fourth quarter were New York, San Francisco, Philadelphia, Washington D.C., Cleveland, Pittsburgh and Richmond. Overall, across all our markets, we continue to gain spot revenue share in the quarter and for the full year as reported by Miller Kaplan.

Our best-performing ad categories were professional services, financial services, insurance, entertainment, gambling, home improvement and beverages. December was the strongest month of the quarter, and October was the weakest largely due to decline in political year-over-year.

Our total operating expenses for the fourth quarter came in at $869.6 million that include a $545 million noncash impairment charge, $5 million of refinancing, integration and restructuring costs and a $5 million nonrecurring charge, included within our corporate expenses for the estimated combined cost to settle the SEC matter discussed in our third quarter 10-Q and for cyber event-related costs.

Our annual impairment assessment conducted during the fourth quarter concluded that the carrying value of our goodwill exceeded its fair value based on an independent appraisal and has applied -- as implied by our prevailing stock price. After this charge, our remaining goodwill balance of $44 million represents the goodwill associated with our recent acquisitions of Cadence13 and Pineapple Street Media.

For the fourth quarter, excluding the impairment charge and onetime costs and adjusting out $12.5 million of podcast costs and noncash items like D&A, our total same-station basis, cash operating expenses came in at $288.6 million or down 4% from the $300.2 million we reported in the fourth quarter of last year.

For the full year, our same-station total cash operating expenses are down $18 million grew 1.5% and our realized net cost synergies for the year totaled $41 million. As mentioned earlier, we expect to realize another $25 million of costs synergies in P&L this year from actions taken during the course of last year. In addition, the company is hard at work developing new strategies and actions to continue to transform our cost structure and leverage our significant investments in technology and data. We'll provide further details about these ongoing efforts as the year progresses.

Adjusted EBITDA in the fourth quarter grew 2% year-over-year, and our EBITDA margin expanded by 30 basis points to 27.3% despite the impact of a significant decline year-over-year in political revenues. For the full year, our EBITDA margin was 22.9% and was up 170 basis points year-over-year.

Our adjusted free cash flow for the fourth quarter was $59.5 million and $145.6 million for the full year. Given our diluted share count of 134 million, our current free cash flow yield based on 2019 adjusted free cash flow is over 25%. For the first quarter, we expect our revenues will be up 3% to 4% year-over-year, and we expect our adjusted EBITDA will grow by low to mid-single digits.

Turning to our financial position. During the fourth quarter, we amended and extended our revolver to better align its maturity of our Term Loan B. We also repriced our Term Loan B, reducing the margin by 25 basis points and added on $100 million to our second lien notes. We used these proceeds to partially pay down our Term Loan B.

After these transactions, our weighted average cost of debt was unchanged at 5.4%, and our percent fixed is now 48% versus 21% at the end of 2018. Our net debt at year-end was $1.69 billion. Our first lien leverage was 2.5x and our total net leverage was 4.8x, both calculated in accordance with our credit agreement.

The company's top priority for the use of its free cash flow was to pay down debt, and we expect to reduce our leverage by 0.5 turn or more by the end of this year and to get to our total net leverage target of 4x before the middle of next year.

Our capital expenditures for the fourth quarter were $10.2 million net of tenant installation reimbursements. And our full year net expenditures totaled $68.3 million. Now that the CBS Radio integration program is behind us, we expect that our capital expenditures will decline in 2020 and equal about 3% of net revenues.

With that, we'll now go to your questions. Ted?

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question in the queue is from Se Kim with Wolfe Research.

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Se Hyun Kim, Wolfe Research, LLC - Research Analyst [2]

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I have a couple. First, for your first quarter pacing, what is your same-station growth ex podcasting?

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David J. Field, Entercom Communications Corp. - Chairman, CEO & President [3]

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Yes. So I think you can -- as you saw, we are not giving up pacing information at this time. We talked about guidance. The guidance is, I think, consistent with what we're seeing in the marketplace, and we're looking at a 3% to 4% increase for the quarter. And basically, that would imply sort of flattish outside of podcasting.

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Se Hyun Kim, Wolfe Research, LLC - Research Analyst [4]

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Got it. Now I was wondering if you could dig a little deeper on your monetization plan now that you had a couple of months to digest your recent podcasting acquisitions. What is the potential opportunity to cross-sell, say, your podcasting spots along with your terrestrial network and digital spots across your platforms to bringing incremental advertisers in revenue?

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David J. Field, Entercom Communications Corp. - Chairman, CEO & President [5]

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Right. So we see 2 real fundamental areas to incorporate podcasting into our business. One is, as you just alluded to, in terms of the sales side, being able to offer advertisers a truly integrated multi-platform solution. And we're finding that is resonating with customers, and expect that to become an increasingly important part of our offering going forward as we can provide, again, not just the reach and scale of our radio platform and our network and our digital offerings, podcasting, et cetera. We think that's increasingly important. But it's also true, frankly, on the building our listenership as well as we look to cross-pollinate our digital platform, our podcast platform and our radio stations to drive listenership across all 3, enhancing the number of salable impressions that we have across the entire business.

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Operator [6]

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Next question is from Zack Silver from B. Riley FBR.

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Zachary Alan Silver, B. Riley FBR, Inc., Research Division - Associate [7]

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Okay. Great. First one for David. You mentioned in your prepared remarks, you expect to see solid revenue growth in 2020. Just wondering if you can help maybe parse that out a bit more, particularly as I think we are going to see a pretty good year for political advertising, maybe what -- is there a big political lift? And also as maybe there's more political crowd out on TV stations, is there sort of a secondary effect where more local advertisers will come to you guys since they're getting squeezed out of TV?

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David J. Field, Entercom Communications Corp. - Chairman, CEO & President [8]

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Sure. I'd be happy to. And this goes to what we talked about earlier about as our business evolves and gets reshaped, we see, as we look across 2020, significant growth opportunities in several of our product areas. So whether it's digital or podcasting or network business, political, as you mentioned, sports, events, national and so forth, all of them, we put in the plus column. Some more robust than others as we go through the year. And yes, to talk more about political, we are seeing, as you know, it is a less substantive component of our model than television. Nonetheless, relative to past years, we're seeing, so far, political significantly ahead of what it has been in the past.

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Zachary Alan Silver, B. Riley FBR, Inc., Research Division - Associate [9]

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Got it. That's helpful. And then did you guys buy back any stock in the fourth quarter?

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Richard J. Schmaeling, Entercom Communications Corp. - Executive VP & CFO [10]

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Not in the fourth quarter.

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Zachary Alan Silver, B. Riley FBR, Inc., Research Division - Associate [11]

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Okay. All right. In terms of 2020, capital allocation, it looks like you're -- given the political lift this year, you're going to be sort of approaching your leverage target by the end of 2020. Your -- you guys mentioned a few times, your stock is trading at a 25% free cash flow yield. Can you talk about the opportunities to -- I think you still have some authorization remaining to repurchase stock in this coming year.

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David J. Field, Entercom Communications Corp. - Chairman, CEO & President [12]

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Sure. So as we all know, one of the great things about the radio business is the enormous amount of free cash flow that it generates. And we are in an interesting position because we have lots of great options as to how we utilize that ample free cash flow. I think based on what we have done in the fourth quarter and what you've heard from Rich and me consistently, we are making our first priority delevering. And we think that's the right and best use for our capital. It's -- certainly, we think our stock is highly undervalued, and we continue to look at solid organic growth opportunities within the business, but first and foremost, it's going to be delevering.

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Zachary Alan Silver, B. Riley FBR, Inc., Research Division - Associate [13]

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Got it. And then one more, if I could. Just on the expense trajectory for 2020, excluding the incremental podcast OpEx from the acquisitions, and also I guess, sort of factoring out that $25 million in net cost synergies. Can you give us a sense -- I understand that there's some inflationary costs with sports rights and with other sort of labor costs in the business, but can you give us a sense of maybe what the organic same-station cost trajectory is in 2020?

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Richard J. Schmaeling, Entercom Communications Corp. - Executive VP & CFO [14]

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Yes. I mean I think that what we've said historically is that our organic expense growth is about 2%. It's probably a little bit more now. It's closer to 3%. We are seeing some pressure in wages. We're experiencing increases in the cost of medical benefits. And then we have, within our digital business, a growing digital agency that resells other people's products, and that creates cost of goods sold. That's a key driver for us. So there's other drivers that are variable costs that are driving relative to revenue. And those are increasing more rapidly and becoming a greater proportion of our total cost base.

We do plan, Zack, to provide further detail of revenue by type in our reporting model for 2020. So you have greater visibility of the drivers of revenue, but also of the underlying costs.

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Operator [15]

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Next question is from Steven Cahall with Wells Fargo.

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Steven Lee Cahall, Wells Fargo Securities, LLC, Research Division - Senior Analyst [16]

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A couple for me. Maybe first, I think you'd previously talked about getting down to leverage of around 4x by the end of 2020. And if I'm doing my math right, I think your new guidance gets you to the mid-4s by year-end. So I just want to make sure, see if I'm doing anything wrong there. And maybe if I'm not, you can talk through the incremental delta? Is it lower free cash flow? Is it a bit of a buyback carve-out? And just help us understand maybe that shift versus what you were talking about towards the end of last year.

And then on the digital side, I was wondering what sort of growth you expect in podcasting revenue this year. And I think probably all your digital revenue growth is accretive from a growth perspective versus the overall company.

So how do we think about the margin profile of the business as that digital revenue grows faster than the spot radio revenue? And maybe just related on that, if you could give us what the MAUs currently look like for Radio.com, that would be great.

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Richard J. Schmaeling, Entercom Communications Corp. - Executive VP & CFO [17]

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Great. Yes. So from a leverage perspective, nothing's changed. We expect to take off 0.5 turn or more, and our projection shows us just to be a little bit above 4x. So nothing's changed. I just don't think we're going to be perfectly on top of 4.0. We'll be a little bit north of that, and we think we'll be comfortably inside that target by the middle of 2021. So again, nothing's changed on that score, maybe how we language the change a little bit, and sorry if that caused any confusion.

From a digital perspective and other growth drivers, we've talked about our podcasting business. We've pointed to the market growth projections by IAB and PwC, who are projecting that podcasts will grow about 27% in 2020. We think it's a good baseline measure to point to, of course, we aspire to do better.

From a profitability perspective on the podcast front that you saw in the fourth quarter as we had previously guided, we were about breakeven. And we do expect in 2020 to start marching that margin up over time. And we think for the full year, our EBITDA margin will be mid-single digits to perhaps somewhat better.

And then over time, we said, we think over the next 3 years, we're going to get that podcast business to a margin about consistent with the overall business, call that 20s in the '20s. And we think there's lots of levers to work there.

We think about our -- rest of our digital product line, excluding podcasting, that business has a margin profile that's about consistent with the overall broadcast business. It's not dilutive to our overall margin. It's about the same. And we see opportunity for growth, in particular, as the streaming business keeps growing quite rapidly. And we've said in past calls that if you looked at per IAB in the first half of 2019, the digital audio market grew about 30%. They haven't yet published, of course, for the second half of 2019. But we've grown a little bit faster than that, and we think we're going to enjoy similar growth in 2020. And we're getting better extracting higher CPMs and improving the profitability of that revenue.

So I do think you're right that the overall composition of our revenues outside of so-called the core is accretive to our overall revenue growth profile and is helpful, and it will be a source of improved profitability on the bottom line.

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Operator [18]

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Next question is from Craig Huber with Huber Research Partners.

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Craig Anthony Huber, Huber Research Partners, LLC - CEO, MD, and Research Analyst [19]

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A few questions. My first one, the political ad revenue, Rich, in the quarter, was that about $3 million, down from I think $12 million the year before?

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Richard J. Schmaeling, Entercom Communications Corp. - Executive VP & CFO [20]

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Yes. I think it's -- I think you have that right. Let me check right now. And interestingly, you go back and look at -- if you go back and look at the prior cycle. So 2017, in '19, the revenue in the quarter was close to double what it was pro forma combined in 2017.

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Craig Anthony Huber, Huber Research Partners, LLC - CEO, MD, and Research Analyst [21]

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Okay. And then also on -- can you just say, again, if you would, the organic expense growth in the quarter we just finished? And then your outlook for this new year, I thought you said up 3% for this new year, given the wage increase, medical, et cetera. But can we just go with that again, please, for the quarter and for this new year?

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Richard J. Schmaeling, Entercom Communications Corp. - Executive VP & CFO [22]

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Yes. So we've said historically, as you know, that our organic expense growth has been about 2%. And that profile evolving, given the growth of our digital business that has cost of goods sold elements tied to it and just some wage pressure and increases in our cost of our benefits. So when I look at underlying organic growth profile, it's a little bit more than 2%, let's call it, about 3%. And so...

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Craig Anthony Huber, Huber Research Partners, LLC - CEO, MD, and Research Analyst [23]

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What was that number, I'm sorry, the quarter we just finished, organic?

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Richard J. Schmaeling, Entercom Communications Corp. - Executive VP & CFO [24]

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It's a little over -- well, so we get to -- the 40 -- the $41 million math of full year net cost synergies was based on 2% organic growth. And that's what we used for full year 2019 to look at the benefit of our cost savings initiatives.

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Craig Anthony Huber, Huber Research Partners, LLC - CEO, MD, and Research Analyst [25]

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A nitpick question, Rich. Your noncash compensation, nearly $6 million, up significantly from the first 3 quarters and also year-over-year. Was that just a true-up at the end of the year, given the performance of the company?

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Richard J. Schmaeling, Entercom Communications Corp. - Executive VP & CFO [26]

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Yes.

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Craig Anthony Huber, Huber Research Partners, LLC - CEO, MD, and Research Analyst [27]

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Okay. And I guess my last question, is there any more appetite to do any more podcast acquisitions going forward? Are you quite content with what you have here? I know you want to focus on paying down the debt. But if you see the right podcast acquisition available, would you jump? Or are you quite content with what you have?

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David J. Field, Entercom Communications Corp. - Chairman, CEO & President [28]

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Well, we are content with what we have. We deliberately acquired both Cadence13 and Pineapple Street to give us a deeper set of capabilities and talent to be able to create original programming and we feel really, really good about our teams and the quality of work that's being done and the slate of product that's being created for 2020 and so forth. That said, if we found something that made a ton of sense and was super compelling, you never say never, but we don't feel strategically that there is a need to augment the strength that we already have.

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Craig Anthony Huber, Huber Research Partners, LLC - CEO, MD, and Research Analyst [29]

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And then my last question, if I could. I don't think you've mentioned auto advertising. How did that do in the quarter particularly after the election? And is the trend change at all here in the earliest part of 2020?

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David J. Field, Entercom Communications Corp. - Chairman, CEO & President [30]

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Yes. So we -- Rich mentioned a number of categories that were lead performers. Auto business was down mid-single digits in the fourth quarter.

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Craig Anthony Huber, Huber Research Partners, LLC - CEO, MD, and Research Analyst [31]

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That trend is similar here in early 2020?

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David J. Field, Entercom Communications Corp. - Chairman, CEO & President [32]

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We've never talked about current trend line stuff from a category standpoint. So we just -- you just do that on a historic basis, for competitive reasons.

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Operator [33]

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The final question in the queue is from John Ellis with Palmer Square Capital Management.

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John Ellis, Palmer Square Capital Management LLC - Credit Analyst [34]

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Congrats on the good quarter and year-end. My first one was already answered, it's about stock-based comp -- sorry, stock buybacks. But my second question as regarding your switch from floating rate to fixed-rate debt. Do you guys continue to plan on doing more conversion of your mix shift as you continue to pay down debt? Or do you just want to focus on paying down debt?

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Richard J. Schmaeling, Entercom Communications Corp. - Executive VP & CFO [35]

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Yes. So at end of year '19, we're at 48% fixed. During the course of 2020, as we pay down more of our floating rate prepayable debt, we'll become a little bit more fixed, and we think that's perfect. We think we're at a mix that makes sense and don't expect to do anything more from a capital markets perspective to change that mix.

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Operator [36]

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I'm showing no further questions at this time.

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David J. Field, Entercom Communications Corp. - Chairman, CEO & President [37]

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Great. Well, we appreciate everybody showing up this morning for the call, and we look forward to reporting back in another few months. So thank you. Take care.

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Operator [38]

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This concludes today's call. Thank you for your participation. You may disconnect at this time.