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Gray Television Inc (GTN) Q2 2019 Earnings Call Transcript

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Gray Television Inc (NYSE: GTN)
Q2 2019 Earnings Call
Aug 7, 2019, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning. My name is Kelly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Gray Television Second Quarter 2019 Earnings Conference Call.

[Operator Instructions]

I would now like to turn the call over to Hilton Howell, Chairman and CEO. Please go ahead.

Hilton Howell -- Chairman & Co-Chief Executive Officer

Good morning, and thank you, Kelly. I want to thank all of you for joining us this morning for our second quarter 2019 earnings call. I am joined today by our President and co-CEO, Pat LaPlatney; our Chief Legal and Development Officer, Kevin Latek; and our Chief Financial Officer, Jim Ryan.

We will begin this morning with our usual disclaimer that Kevin will provide.

Kevin P. Latek -- Executive Vice President and Chief Legal and Development Officer

Thank you, Hilton. Good morning, everyone. Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results. Those statements are subject to a number of risks and uncertainties. Actual results in the future could differ from those described in the forward-looking statements as a result of various important factors. Such factors have been set forth in the company's most to recent reports filed with the SEC and included in today's earnings release. The company undertakes obligation to update these forward-looking statements. Gray uses its website as a key source of company information. The website address is www.gray.tv.

We will post an updated investor deck to website within the next few weeks. Included on the call will be a discussion of non-GAAP financial measures, and in particular, broadcast cash flow, broadcast cash flow less corporate expenses, operating cash flow, free cash flow, adjusted EBITDA and certain leverage ratios. These metrics are not meant to replace GAAP measurements but are provided as supplements to assist the public in their analysis and valuation of our company. Included in our earnings release as well as on our website are reconciliations to the non-GAAP financial measures to the GAAP measures in our financial statements.

I now return the call to Hilton.

Hilton Howell -- Chairman & Co-Chief Executive Officer

Thank you, Kevin. We're extremely pleased to report our results for the second quarter of 2019 and for the much larger and much more diversified Gray Television. Our total revenue for the second quarter was $508 million, an increase of 103% from the second quarter of 2018, and obviously, an all-time record for our company. Our net income available to common stockholders for the second quarter was $31 million, and our net income per diluted common share was $0.31.

Excluding transaction-related expenses and noncash stock compensation, our net income available to our common stockholders would have been $0.34 per diluted common share. This figure represents a strong increase over first quarter of 2019. Our broadcast cash flow was our best ever for the second quarter at $185 million, which was a 71% increase over the year-ago quarter. We ended the quarter with our total leverage ratio as defined by our senior credit facility at 4.71 times on a trailing eight-quarter basis, netting our total cash balance of $251 million and excluding transaction-related expenses. We continued to see improvement in our local advertising business from the first quarter, which itself reflected improvement from prior quarters. We began this year, as I have said, as a much larger and much stronger company.

With today's report, we are confident that you can clearly see why we had so long valued Raycom as the best single partner for Gray Television. We are happy with how the company has performed through the first half of the year, and we're excited about the coming quarters and years ahead of us. The vast majority of our consolidation and integration efforts merging our operations, our management, and most importantly, our corporate cultures has been very successfully carried out so far. And of particular note, as Jim will discuss in more detail later this morning, we have raised our realized synergy number from a previously announced $80 million to $85 million, and I personally believe there will be more to come.

I will now ask Pat to address a few operational milestones and further progress for our company.

Patrick D. LaPlatney -- Co-Chief Executive Officer and President

Thanks, Hilton. Good morning, everyone. As Hilton said, we continue to see improvement in general market conditions over the prior quarter, building on a trend that began last summer. And while we remain disappointed with the weakness in national ad revenue and especially the auto sector, we've been pleasantly surprised by the strength in other categories, notably legal and financial, as well as more and widespread demand for political advertising than we had expected during this off year of the cycle. Next month, we will launch our first weekend political show, which will be called "Full Court Press with Greta Van Susteren." This new weekend program will focus on how policy and national events impact on local communities across the country. We've already reached commitments to clear the show in nearly 70% of the country.

Meanwhile, we're equally excited about the progress made in recent weeks on the new premier linear multi-cast and SVOD service that we own with Opry Entertainment Group, which is a subsidiary of Ryman Hospitality Properties. The new team at national is busy building up the programming, branding and marketing plans for the channel, which will be dedicated to the country lifestyle. We are also having very positive discussions with numerous station groups and owners about clearing the new networks on their multi-cast channels where launches in early 2020.

Turning next to Political. We experienced stronger demand and they just completed quarter than we expected. Political spending from Democratic primary contenders has certainly started in the stage with early 2020 contest. Although the numbers are not yet significant, we find it encouraging to see any spending this far out. We saw meaningful spending in the governers' races in Kentucky, Louisiana and Mississippi as well as two-statewide issued campaigns and the special election for the house seat in North Carolina, District 9. The Q2 political revenue, in other words, has been concentrated in markets other than the early presidential primary and caucus states, which is another encouraging sign. We expect the political revenue will continue to grow in each of the next two quarters as we approach election day 2018-2019, and as we get closer to the start of the presidential primary contest that begin next February.

In the recent weeks, we've seen some very bullish estimates coming from ad agencies in the press about potentially significant increases in political ad spending coming in2020. We're not preparing to make a guess today as to the amount of political ad revenue we might see at our stations in 2020. Nevertheless, we believe that we have the right stations and the right markets to capitalize on the majority of the most competitive races that will take place next year. Finally, we have continued negotiating with FOX on the terms of a new global affiliation agreement covering all of our FOX stations. We have agreed on the reverse comp fees for 2019 and certain other issues. And it's our hope that we'll conclude the negotiations in the next few weeks.

I'll now turn the call over to Kevin.

Kevin P. Latek -- Executive Vice President and Chief Legal and Development Officer

Great. Thank you, Pat. I want to take a few minutes to discuss retransmission. As most of you know, we do not disclose the terms or tenure of our retransmission consent agreements with our roughly 500 separate MVPDs. That said, I can confirm that we are not in negotiations with any distributor at this time. The next line of agreement expirations occurs at year-end, and those negotiations will take place in the fourth quarter. At this time, we anticipate that retransmission revenue will range between $804 million and $807 million in calendar year 2019. The revenue breaks down about $200 million per quarter.

The first quarter of this year was slightly ahead of that figure as a result of nonrecurring billing adjustments. Provide Q2 and full year retrans guidance, we underwent a complex months-long process to combine legacy Gray and legacy Raycom retrans billing systems and to model various scenarios with estimated subscriber counts and rates across our 500 distributors. Unfortunately, we had not fully integrated the necessary inputs, and we provided a Q2 retrans guide that was slightly higher than our actual results. I'm taking these results into consideration when calculating our Q3 retrans guide. We do want to note, however, that our total subscriber numbers across the full universe of traditional and nontraditional distributors across our large and small markets were virtually unchanged from the start of the first quarter to the start of the second quarter, which exceeded our expectations.

In the end, we are still anticipating a 20% year-over-year increase in retrans revenue. This is the same magnitude of increased that we estimated in our 2018 year-end earnings call in late February. The retrans revenue for this year, therefore, is consistent with our initial expectations when the year began as well as consistent with our synergy expectations underlying the Raycom merger. Let me turn now to the retrans expense. For the past several years, the terms of our retrans and network affiliation agreements have extended far and up into future to allow us to estimate our retrans expense, a reverse compensation fees that we paid to the networks. We have also explained that at various points during 2019, we would reprice the retrans comp rates for all of our NBC affiliations, all of our FOX affiliations, most of our CBS affiliations and many of our ABC affiliations. Up to now, we've not been able to provide a full year guidance on retrans expense due to the ongoing FOX renewal negotiations.

As Pat said, we have reached an agreement in principle with FOX and the reverse comp fees for calendar year 2019, and we will remain in negotiations with FOX and some of the terms for the new affiliation agreements. Yet with the FOX numbers now set, we are able to estimate retransmission expense for calendar year 2019 will fall within a range of $422 million and $426 million. Looking out beyond 2019, we still see a very significant gap between the extraordinary value delivered by our local broadcast stations and the compensation we received for the right to retransmit our signals and use our brands and our programming to acquire and retain subscribers. Consequently, we continue to expect continued growth in our retransmission revenue as well as the amount of retransmission revenue retained net of our retransmission expense. Finally, we remind you that we have 78% of our MVPD subs renewing over the next 18 months.

Thank you for your time. I will now turn the call over to Jim Ryan.

James Ryan -- Chief Financial Officer

Thank you, Kevin. Good morning, everyone. Our earnings release over the 10-Q that will be filed later today provide a great deal of information for the quarter. As always, we report results on a GAAP basis, which we call as reported basis. In addition, we present results and guidance in the earnings release on a combined historical basis, which gives effect to acquisitions and dispositions as if such transactions occurred on January 1, 2017. We have revised some of our reporting format; in particular, we have tried to make our transaction-related expenses, especially in 2019, more transparent and easier to see what our results would look like if you excluded the transaction-related expenses.

I'll keep my comments on the results of operations for Q2 and our guidance for Q3 to a combined historical basis, which does include the 2 stations acquired from United Communications. In the next few days, we will update our combined historical information by quarter from Q1 '16 through Q4 '18 to reflect the United acquisition. We're generally pleased with the overall results for the second quarter. In general, our second quarter revenue were toward the higher side of our guidance.

Our local revenue showed some modest sequential improvement over the first quarter. Our retrans revenue of $201 million was about $4 million to $5 million below our guidance due to some forecasting adjustments on our part and for which I apologize for. As Kevin mentioned, our total count -- sub counts are stable. Overall, our retransmission revenue increased quarter-over-quarter by a very healthy $37 million or about 23%. As Kevin mentioned, we expect our retrans revenue for the year to increase 20% over 2018.

Second quarter broadcast operating expenses were better-than-expected with overall quarter-over-quarter increase of $16 million, which included an increase in retransmission expense of $20 million, consistent with our increase in retransmission revenue. That $20 million increase was partially offset by a decrease of about $5 million in overall compensation expenses. Our production companies and corporate expenses were both within our expectations.

In the second quarter of 2019, we had a total of $2 million of transaction-related expenses, of which $1 million was recorded as a broadcast expense and the remaining $1 million was recorded as a corporate expense. As a reminder and as discussed in our Q1 call, in Q1, we had approximately $68 million of one-time-only costs of transaction-related expenses, of which $36 million was included in the broadcast expense line and $32 million in our corporate expense line. To update you on our Raycom merger, estimated annual net retrans revenue improvements in various cost savings we have now identified have allowed us to take the $80 million of initially predict I've first year annualized synergies and raise it an additional $5 million to $85 million. Those synergies can be divided into two categories.

Payroll synergies will reflect approximately $42 million contractual arrangements, which include our net retrans synergy and savings from contract revisions or contract terminations such as our national rep contract and elimination of various other duplicative costs will produce synergies of approximately $43 million. On a realized synergy basis, we estimate that we actually realized about $16.4 million of synergies in the quarter, and at a six-month year-to-date basis, we have realized approximately $28 million of synergies.

Turning to the balance sheet. Our leverage ratio net of all cash at June 30 was 4.71 times. Our operating cash flow as defined in our senior credit facility was $788 million. Our outstanding debt was $3.963 billion and our cash on hand was $251 million. Turning to our third quarter guidance. We currently anticipate that local broadcast revenue to be approximately even with 2018 results. National broadcast revenue, while still challenged, especially with auto, is expected to show modest improvement over the results for the first six months. And our retransmission revenue is expected to grow in Q3, $30 million to $32 million over 2018.

While not in our Q3 political revenue guidance, we are cautiously optimistic that political advertising for 2020 elections will pick up as we move through the third quarter. For broadcast expenses, we're anticipating an $18 million to $19 million increase, and that is explained entirely by increases in reverse retransmission expense, again, driven by the strong growth in our gross retransmission expense. As we look for the full year, we currently anticipate the full year revenue will approximate $2.1 billion. Our release today includes a full year 2019 guide for our gross retransmission revenue of $804 million to $807 million.

Total operating expenses for the year before depreciation, amortization and gain and loss in disposal of flip assets, which would include approximately $80 million of transaction expenses, are estimated to approximate $1.5 billion. Our full year noncash stock compensation is currently estimated to be approximately $13 million. Our operating cash flow for 2019 will be nearly $700 million. Our capex, excluding repack, will approximate $80 million. Cash taxes are currently expected to approximate $10 million to $12 million as we benefit from a larger than initially anticipated NOL acquired from Raycom.

Finally, we anticipate that free cash flow for 2019 on a full year basis will comfortably exceed $300 million, and I'll remind everyone that free cash flow in 2018 was approximately $522 million. So on a two-year blended average; we are anticipating a blended average free cash flow per share and in '18, '19 basis above $4.

At this, I'll turn the comments back to Hilton.

Hilton Hatchett Howell

Thank you, Jim. And Kelly, if it's all right, I would like to open up the call for any questions that there may being

Questions and Answers:

Operator

[Operator Instructions]

Your first question comes from the line of Aaron Watts with Deutsche Bank. Please go ahead. Your line is open. Aaron Watts from Deutsche Bank. Please go ahead. Your line is open. Your next question comes from the line of Marci Ryvicker from Wolfe Research. Please go ahead. Your line is open

Marci Ryvicker -- Wolfe Research -- Analyst

Thanks. I have a couple of questions. Just to confirm, the retrans step down is not due to any hit from CBS being off of direct TV now, is that correct?

Kevin P. Latek -- Executive Vice President and Chief Legal and Development Officer

Hi Marci, the step down from Q1 to 2Q had nothing to do with that because...

Marci Ryvicker -- Wolfe Research -- Analyst

The guide for Q2 to Q3, because that happened in Q3.

Kevin P. Latek -- Executive Vice President and Chief Legal and Development Officer

Yes. The Q3 guide is consistent with where we came out in Q2. So we do not expect a significant hit there.

Marci Ryvicker -- Wolfe Research -- Analyst

Okay. And then for FOX, you're talking about 2019 in principle. So is this a one-year deal?

Kevin P. Latek -- Executive Vice President and Chief Legal and Development Officer

No. We are negotiating a multiyear deal. But we have agreed on some terms and not, and we are negotiating other terms. The term has been resolved, in principle, is the fees for 2019, and that's what allowed us to provide the retrans -- a reverse retrans guide for this year.

Marci Ryvicker -- Wolfe Research -- Analyst

Okay. So based on the numbers you gave for retrans in reverse, that looks like your margins would fall to about 47% if I take midpoint of both for 2019. But I assume that that's from a timing issue given that you had your -- all of your -- most of your reverse come up this year versus your retrans. Then maybe margins would be higher next year?

Kevin P. Latek -- Executive Vice President and Chief Legal and Development Officer

Well, we haven't looked at next year. And again, FOX, we've not discussed -- and we don't have any agreement with all of our networks on fees for next year. So FOX, again, is still outstanding. You're right with the math for this year. Reverse is at about 47%. And that we renewed the selling of the majority of our network affiliate deals, or I should say, majority of our network affiliate deals we have priced in 2019 at different points.

Marci Ryvicker -- Wolfe Research -- Analyst

Okay. And then, just -- Jim, going back to the $5 million of incremental synergies from Raycom. I know you broke out $42 million payroll and $43 million from that retrans and contract revisions or terminations. But for that $43 million, it's hard to believe that any of that's going to come from that retrans, if you just redid all of the numbers including Raycom, right? So that extra $3 million would really come from terminations more than that retrans?

James Ryan -- Chief Financial Officer

Not necessarily. It's a mixture of all those things.

Marci Ryvicker -- Wolfe Research -- Analyst

Okay. Thank you.

James Ryan -- Chief Financial Officer

Thank you, Marci.

Operator

Your next question comes from the line of Kyle Evans with Stephens Inc. Please go ahead. Your line is open.

Kyle Evans -- Stephens Inc -- Analyst

Hi, thanks. I was hoping you guys could dive down into the trends that you're seeing in both your local and national core? And then I've got some follow ups as well.

James Ryan -- Chief Financial Officer

In general, Kyle, I mean, local is doing obviously better as we would have -- as we anticipated, as we always expect. National is more impacted by auto. We have seen, as other people have commented, some of the services categories, and we probably break it out a little bit differently than others. But financial and some other legal has been doing relatively well in the first six months. So we -- obviously, we're pleased with that. As I've commented, I guess, on the last 2 calls, in general, at looking at whether it's local or national, and especially at auto, which you can look at it in other categories too, some of this can be attributed to a couple of main accounts.

So we have commented about Jeep, Chrysler, Dodge several times. But also, it still seems to be a case where up and down the line of our -- in total advertising base, proportionally, more people are taking a little bit more off the table than putting money on the table. There's always a mix of both. But we're not seeing, what I would describe as, wholesale flight. I mean, you get ins and outs, which are routine in any given quarter, and you would expect it. But it's not like everybody's moving large amounts of money to the sidelines. It's just -- it feels like people are just putting some stuff in their pocket for somewhere down the road.

Kyle Evans -- Stephens Inc -- Analyst

It seems like auto has been shrinking for a while now and you've had some of your other verticals showing some strength. What is the overall contribution to the core of auto now?

James Ryan -- Chief Financial Officer

Given our very, very strong news footprint in the overall strength of the stations would be number one's and number two's. We still skew pretty high with auto. It's still up probably in Q2, is around 24%, 23% -- 24%-ish. On a year to date basis, it's probably again, 24%-ish.

Kevin P. Latek -- Executive Vice President and Chief Legal and Development Officer

22.7%.

Kyle Evans -- Stephens Inc -- Analyst

Okay. And you've got some larger stations now with Raycom added to your footprint. Do you see any material difference in either retrans or core between those large and small markets? One of your peers has been pretty vocal about that.

Patrick D. LaPlatney -- Co-Chief Executive Officer and President

Yes. So this is Pat LaPlatney. Our larger markets, just from the straight performance perspective, have grown in the last couple of years. But it's really a bit of a mixed bag in terms of -- you can't say small markets in general are underperforming larger markets. We just happen to have a fair number of our -- the bigger properties in our portfolio performing well, I think, given at the current time. And so I don't really think you can make that assumption.

Kyle Evans -- Stephens Inc -- Analyst

Okay. Thank you.

Operator

Your next question comes from the line of Dan Kurnos from Benchmark. Please go ahead. Your line is open.

Daniel Kurnos -- Benchmark -- Analyst

Great. Thanks. Just 2 quick housekeeping questions for Jim. Just if I kind of back out the accounting adjustment or whatever was it on retrans, does that mean that the trend was basically just stable throughout the year? Does that smooth everything out?

James Ryan -- Chief Financial Officer

On the growth side, yes. I think you can take the Q3 guide and expect that the Q4 number is in that same range.

Daniel Kurnos -- Benchmark -- Analyst

And then, just on the outlook on the back half of the year, either Jim or Kevin, you called stable subs, said it was a bit of a surprise or outside of your -- upside expectations in the front half, but you're still calling for, effectively, equates to flat retrans in the back half of the year sequentially without any material renewals. So is that sort of a similar outlook embedded in there when factoring in your escalators?

Kevin P. Latek -- Executive Vice President and Chief Legal and Development Officer

Our escalators and our sub counts have been virtually unchanged, and our escalators kick in on January 1. So we're seeing a pretty steady state run through the year with the exception of the billing adjustments that we saw in Q1.

Daniel Kurnos -- Benchmark -- Analyst

Great. And then, just one kind of high-level question. You're already getting upside to synergies. We've now got a net retrans number that's probably better than what people were expecting. How do we think about, when you first bought Raycom, sort of factoring this all in relative to sort of the free cash flow or OCF that you talked about, like how do we think about the magnitude of delta now in guide going forward? It seems like you guys have some pretty meaningful upside. And I'm going to assume, Jim, that your free cash flow statements were -- I don't know if those were as reported, but I think CHB would be higher.

James Ryan -- Chief Financial Officer

They were -- those were CHBs. And I mean, we always knew that the Raycom transaction would be extremely highly free cash flow accretive to us. It has proven to be exactly that. That's probably slightly better than what we would have said a year ago or even six months ago given slightly a little bit better improved synergy. There may be a little upside in the synergy number by the time we get to December. As you know, we always work hard to try to be as efficient as possible. And as I mentioned, our -- especially this year, in free cash flow, given our NOL is starting off a little bit bigger than we anticipated, it's allowed us to bring our cash tax number down to the $10 million to $12 million I threw out for the full year. So overall, we are extremely pleased with the transaction and in how it's been playing out over the first six months and our expectations and how it's going to play out over the remaining six months.

Daniel Kurnos -- Benchmark -- Analyst

Got it. Thank you very much.

James Ryan -- Chief Financial Officer

Thank you, Dan.

Operator

[Operator Instructions]

Your next question comes from the line of Jim Goss from Barrington Research. Please go ahead. Your line is open.

James Goss -- barrington research -- Analyst

First, Kevin, last quarter, you were arguing persuasively that, like, retrans has continued upside from the standpoint of the broadcast stations. That -- with the development of some examples of impasse since that time, I'm just wondering if that's suggesting more pushback from distributors and if the notion is as full proof as you seem to be implying at that time.

Kevin P. Latek -- Executive Vice President and Chief Legal and Development Officer

Jim, our -- all broadcasters combined are taking -- have somewhere between 17%, 18%, 19% of the total programming pie. Our ratings are significantly higher than that as a group. The intensity of our viewership is significantly stronger than non-broadcast channels. So yes, I think there is still a huge way for us to go. There are generally drops occurring with one big MVPD who's gone a lot bigger in the last year or two while we're seeing and hearing that other people are getting deals done with other distributors. So we've always had impasses in the programming space. It don't just include broadcasters. The press likes to talk about the broadcast impasses.

But there are plenty of impasses that do not involve broadcasters, that do effect all 210 markets in the country. It's -- these are tough negotiations. They're not getting any easier. But deals are still getting done. Again, we did 500 deals in the last three years without a single drop. And our peers are doing an equal number of negotiations without drops, and maybe there is one or two impasses here or there. The overall percentage of deals that broadcasters get done versus those that result in an impasse is extremely high. So I don't see of others -- some noise right now this summer, I don't think there's anything dramatically different in our expectations for growth retrans over the future.

James Goss -- barrington research -- Analyst

Okay. I figure it's always good to revisit those things. And on the flip side, the retrans expense seems to be edging to 52.5% to 53%. Do you feel that captures much of the existing pressure? Or do you think -- are you expecting the network clawback share to continue to edge higher?

Kevin P. Latek -- Executive Vice President and Chief Legal and Development Officer

I mean, I'll say the same thing I've said for years. We kept 100% of $20 million in 2008 retrans revenue. The margins will continue to come down, and we are managing the company for the money that we deposit in the bank, not the margins. So we are unconcerned and not running the company to hit a particular margin. We are concerned about the dollars that we bring in and our net retrans is -- has been growing for all of last several years, and we see it growing going forward. To us, that's the important matter. The networks need to spend more money to secure programming and in more competitive programming environment. We get that.

At the same time, we all need to get compensated better for the programming and the value that we're delivering. And at the end of the day, the network broadcast affiliate margins aren't going to change because they have changed every single year since 2008. So again, there's nothing new here and there's really nothing that is unexpected. I think across our entire peer group, we've all been saying the same thing. Markets are going down and that's -- but that's going to continue to grow.

James Goss -- barrington research -- Analyst

Okay. And with the Full Court Press, you said -- I think you indicated there was this 70% sell-through so far? And I'm wondering -- and that's nationally. I'm wondering if you're getting takers in the bigger markets as part of that?

Patrick D. LaPlatney -- Co-Chief Executive Officer and President

Yes. It's Pat LaPlatney. And yes, we are getting takers in the bigger markets, and it's -- yes, roughly clear to the 70% in the US, and we think it'll exceed that number.

James Goss -- barrington research -- Analyst

Okay. And finally, I know Jim and I have talked about this over the time. But the shape of the political and Olympic revenues over the course of 2020 is there anything different from past times, this time? Will it be mostly a little bit in the first, mostly in the late third quarter and early fourth quarter? Or any other variance you're expecting?

James Ryan -- Chief Financial Officer

I mean, in general, on a very broad sense, yes. Historically, I've said this for many, many years, it seems like half of the total political revenue usually falls in the fourth quarter, half or more. That being said, given we've got more exposure in 2020 to the early primary states than we've ever had before, we might -- we're all cautiously optimistic that we'll see more activity in first quarter than we have seen historically. But again, given we believe 2020 will be a very significant political spend for the TV industry, the broadcast industry and a very strong year for us, and we're not going to put a number out, but it's -- all signs say it will be a good year. We would expect, as you said, the spending will be heavy at September through Election Day.

James Goss -- barrington research -- Analyst

Okay. Thanks very much.

James Ryan -- Chief Financial Officer

Thank you.

Operator

Next question comes from the line of Michael Kupinski from NOBLE Capital Markets. Please go ahead. Your line is open.

Michael A. Kupinski -- NOBLE Capital Markets -- Analyst

Thank you. Thank you for taking the questions. One other broadcaster indicated that they're already seeing, a very small amount, but already seeing presidential money being booked. And your political is trending better than what I would have expected in an off-election year. Are you seeing any of that at this point?

James Ryan -- Chief Financial Officer

Yes. We've seen some -- I would characterize it as a relatively small dollars. But we actually mentioned this on our Q1 call that we had already seen some small, relatively small orders in Iowa, as early as, if I recall, that came in in February. Maybe it was March, but it was extraordinarily early. And so we take that as a very good sign for -- as we move through the latter part of this year as well as into the -- as well as all through 2020. And as Pat commented earlier, we've also seen very good spend in the nonpresidential races already this year in several gubernatorial races as well as the special election in North Carolina. That -- so we're pleased with the early trends.

Michael A. Kupinski -- NOBLE Capital Markets -- Analyst

It seems like the political dollars are raised by significantly more than the last cycle, certainly on the presidential side. Also, you -- Gray has very deep and long relationships in the broadcast industry with potential sellers. Can you talk a little bit about the M&A environment currently? Are you seeing the sellers potentially coming to the market at this point? Obviously, you still have a nice large cash position and able to execute on M&A if you need to. Just kind of give us the thoughts on what you're seeing out there.

Kevin P. Latek -- Executive Vice President and Chief Legal and Development Officer

Michael, its Kevin. Honestly, it's pretty quiet in the M&A. Front, there's a little activity. There's not a lot going on.

Got you. That's all I had. Thank you.

Sure, thank you

James Ryan -- Chief Financial Officer

Thank you, Michael

Operator

[Operator Instructions]

Your next question comes from the line of Dennis Leibowitz with Act II Capital. Please go ahead. Your line is open.

Dennis Leibowitz -- Act II Capital -- Analyst

Thank you. You said Jim that the full year will comfortably exceed $300 million this year in free cash flow, and it was $522 million in 2018. So on the bonded basis; it's like $4.10 a share. From everything you've said with political and an acceleration in retrans contracts and synergies above guidance, I would resume that 2020 will be higher than '18. So is -- I mean, is there anything wrong with that analysis, which would indicate that the free cash flow per share would be well over $4?

James Ryan -- Chief Financial Officer

We have consistently said for a while that we -- our expectation is that 2020 will look better than what 2018 looked like on a combined historical basis in free cash. And our '18 and 2017 numbers are published on Page 5 of our current investor presentation that's on the website. So we've obviously put out some general numbers now for 2019, and we have been saying for -- it feels to me like about a year now that we do expect 2020 to be better than 2018, yes.

Dennis Leibowitz -- Act II Capital -- Analyst

If I could just follow up. I mean, given what your stock price has done today, I know that you're focus on free cash flow is in debt repayments given the leverage. But the free cash flow yield now is close to 30%. Is there any point at which you would take advantage of that in terms of share repurchase?

James Ryan -- Chief Financial Officer

I don't think we want to comment explicitly on whether it would be the opportunistic or not. There is just shy of $50 million available on our repurchase authorization, and that authorization is good until the end of this year. And I understand what free cash flow yield on any given day may or may not be. And we certainly think it's an extraordinary yield period. But you are right; we've just done a lot of M&A. We have -- we do want to bring leverage down. So we'll have to be very thoughtful on our allocations over the near term.

Dennis Leibowitz -- Act II Capital -- Analyst

Thanks.

Operator

And there are no further questions at this time. I will now turn the call back to Hilton Howell for closing remarks.

Hilton Howell -- Chairman & Co-Chief Executive Officer

Well, thank you very much for all of you joining us this morning. We're very excited about the balance of the year and particularly looking forward to political in 2020. As you know, Gray Television has one of the best footprints in the presidential swing states of any company in the broadcast business. And so we look forward to the future with a great deal of optimism. Thank you for joining us today, and we'll talk to you next quarter.

Operator

[Operator Closing Remarks]

Duration: 40 minutes

Call participants:

Hilton Howell -- Chairman & Co-Chief Executive Officer

Kevin P. Latek -- Executive Vice President and Chief Legal and Development Officer

Patrick D. LaPlatney -- Co-Chief Executive Officer and President

James Ryan -- Chief Financial Officer

Marci Ryvicker -- Wolfe Research -- Analyst

Kyle Evans -- Stephens Inc -- Analyst

Daniel Kurnos -- Benchmark -- Analyst

James Goss -- barrington research -- Analyst

Michael A. Kupinski -- NOBLE Capital Markets -- Analyst

Dennis Leibowitz -- Act II Capital -- Analyst

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