Mary Berner: Well, it’s really — it’s — we’re — our focus is on the advertising and monetization. So generally, we rep other people’s content. So for us, it success or failure fits in what — who we wrap and what we develop ourselves. So we’re very focused on the news talk or personality driven big bold voices, and that served us quite well in that niche. And so as we’ve mentioned in the prepared remarks, as audience starting to grow again, up 17% in September. And as that happens, we’re able to monetize. So we have our expansion, we have pretty much five podcasts in the top 100. We have Bongino and Levin and Sean Ryan and Rick Geisen and Gibson Wallace we’ve got in a bunch of daily wire shows. So, we’ve got really, really good inventory.
But the upside for us also is developing into non-conservative talk radio into, other big, bold voices. So, we’re pretty bullish on that as well. Although, albeit the rate of growth has, like with the other national advertisers, it was very, very pressured in the first half. But it seems to be coming back.
James Goss: Okay. And one last one. Is there any appreciable difference between the tone of national advertising between Westwood One and the station group national advertising. So I guess it would be more of a national ad versus a national spot.
Frank Lopez-Balboa: There’s no real difference. Not really. It’s all national.
James Goss: Okay. All right. Thank you very much. Appreciate it.
Mary Berner: Thank you.
Operator: Thank you. The final question comes from the line at Dan Day with B. Riley Securities. Your line is now open.
Dan Day: Yes. Good morning, guys. I appreciate you taking the question. So I got a two-part question on what’s the one and the network segment. So just first can you talk about, whether there’s been a materially different performance this year between your live sports content on the Westwood one versus the talker other nationally syndicated content just been seeing some good things about you know live sports ratings on the radio, wondering if there’s a dichotomy at all there and whether that impacts your decision to invest more or less in live sports rights moving forward with Westwood One? And then second on Westwood One, if we put the macro to the side, is there anything you feel you need to invest in specifically to get that back to growth? Maybe it’s improving the ability to sell the inventory programmatically, better measurement and attribution technology, just anything you feel you can do that’s in your control to get that back to where it was a few years ago.
Frank Lopez-Balboa: I’ll take that, Dan. With regard to the first part of your question on sports, when we look at our pacing – our pacing in the fourth quarter. And obviously, as you know, we have the NFL, which started in the third quarter, but it’s really large in the fourth quarter, that’s actually pacing pretty close to flat versus last year, which underscores your point, which is the high demand from advertisers for live sports. So the national weakness we’re really seeing is general market weakness away from sports. Now having said all that, when we look at any type of contract in the future, we will analyze the economics of that and see if that makes sense. But at this point with Westwood One having the NFL rights, including digital, plus CMCAA were pleased with that sports portfolio.
With regard to looking at the network further opportunities, that business is challenged by the national advertising market, and we’re always looking at ways to increase and improve our revenue-generating opportunities. So whether it comes from programmatic targeted sales et cetera. That’s something — it’s a continuous focus. And that’s a market — the network market has probably changed more dramatically over the past several years than the local market by virtual technology and ways advertisers go to market. And we’re in the forefront and looking at all those alternatives. And that’s something that will continue to always be a work in progress for us to maximize revenue opportunity.
Dan Day: Thanks. And then — it’s been a while since we’ve — it’s nice to see podcast back to growth. It’s been a while since we’ve revisited the profitability of that revenue. I know you talked about it mostly being kind of rep relationships in my experience as tend to have relatively low gross margins. Any update you can provide there on margins within the podcasting segment, anything you’ve done recently to improve the profitability of that podcast revenue.
Frank Lopez-Balboa: The margin profile really hasn’t changed because as Mary discussed, we’re by and large, a reference for podcasters, so it’s a revenue share model, which we like because we don’t take the embedded risk of being in a studio business, which podcasts can work when they’re successful, but they’re expensive from a studio perspective. One of the things we’re really focus on is some of the declines that we saw in the first half of the year had to do with national advertisers, but in particular, direct response advertisers. So, part of the — and we’re pleased with the growth of some of the national advertisers coming back, but we’re also adding new podcasting talent to our portfolio, which also appeals to a broader subset of the advertising environment brand advertisers, and we’ll continue to do that to downer portfolio. But the margins are in the 20s for that business, but it’s a low-risk from our perspective because it’s not a fixed cost business.
Dan Day: Got it. And then just last one should be quick. Is there — just talk about like the hurdle rate for using that cash balance really for anything other than been paying down your debt at this point and just more on the decision to focus on the term loan versus the notes in the quarter and the balance between those two moving forward? Is it just sort of a mechanical which has the better yield? Or is there anything else to think about there?
Frank Lopez-Balboa: It’s necessarily only the better yield. As I mentioned in my prepared remarks, the term loan has a mechanism that any excess cash flow at the end of the year, we have to pay back at par, leverage is above a certain level. And so being able to — and we don’t know what our excess cash flow sweep will be, if any, at the end of the year. But from a planning perspective, having to pay that back and this kind of prepayment counts for that mechanism being able to pay that back at $0.835 versus par is just compelling. In terms of our capital allocation, as you know, in the third quarter, we did not buy equity and our near-term focus on debt reduction. But one of the things that we remain very focused on is with our balance sheet and our liquidity is to maximize not only financial flexibility, but strategic flexibility to the extent there are opportunities have come around.
So, it’s fairly robust move from quarter-to-quarter. But one thing that we’re proud of is that we’ve continued to reduce the debt dramatically the company over the past for years, which accrues to all the benefits, not only to the existing debt holders, but the equity holders. So, — and that operating leverage is something that’s very meaningful and will benefit from in the future.
Dan Day: All right. Thanks for the time.
Frank Lopez-Balboa: Thank you.
Operator: Thank you. There are no additional questions waiting at this time. So, I would now like to pass the conference back over to the management team for any additional or closing remarks.
Mary Berner: Thanks everybody. We very much appreciate your time and we will look forward to talking to you next quarter. Thanks.
Operator: That concludes today’s conference call. Thank you for your participation. You may now disconnect your lines.
