Hal Steiner: Hi, guys. Thank you so much for taking the question. I think I just wanted to clarify for one, I think your ‘26 and ‘27 are trading at yields actually below 10%, nowhere near 12%. So I just want to maybe straighten that out because thought that was a law. But anyway, I think notwithstanding maybe a little bit of a softer guide or for 1Q, you guys are still going to generate a substantial amount of free cash flow this year. And in light of the equity coming off a little bit your data bonds coming off a little bit, is it still right to think that the main priority for free cash flow should be addressing the front end ‘26, ‘27, and not pursuing any discounted debt buybacks or anything like that?
Jim Ryan: I think that is more likely than not, yes. You always got to say, I can’t never say never. But I think — and as clearly as we did start a refinancing of the ‘26 term loan a couple of weeks ago. And then because of a market dislocation that had absolutely nothing to do with us. We put it — we postponed that just to wait for a little bit better time in the market. So I think our — we’ve clearly signaled that it’s more likely than not that we’ll be focusing on the ‘26s and ‘27s first, and then thinking about the longer-dated stuff later.
Hal Steiner: Got it. That’s super helpful. Thank you so much. That’s it all my questions. Thank you.
Operator: Our next question is going to come from Alan Gould with Loop Capital. Your line is open.
Alan Gould: Thanks for taking the question. And first, Jim, congratulations on your retirement. I have two questions left. One is the reimbursements on the Assembly plant appear to be a little bit less than I was expecting. I was wondering if that might be in some other line items. And secondly, if Hilton or someone can comment, if the Georgia production tax credit bill has any significant impact on what you see coming to Georgia?
Jim Ryan: So I’ll take the first question. Yeah, there’s a little bit of a timing difference in ‘23 we — some of that we had expected to get in ‘23, and it’s actually showing up now in the — in what we’re — about roughly $31 million we’re expecting in ‘24. Part of it was just a shift in the timeline of some of those projects. So as I’ve commented before, the public side has to be done, completed, inspected, valued. And I think there’s several other steps involved. So one, some of the public stuff, it wasn’t critical to get it done to activate the NBCU lease. So we let it slide a little bit. So the public funds are following it as well in the construction schedule. And I’ll remind everybody that those public funds, which we referred to is the CID, all of that money has been in a trust account.
So it’s — it is dollar good. It’s just the related public infrastructure has to be completed in order for us to go through the process of getting the funds out of the trust account and into our bank account.
Hilton Howell: And then with regards to any questions about the Georgia Tax film credit, we’ve obviously been deeply involved. I personally have been deeply involved in all of the negotiations. During the summer, the State of Georgia launched a review of all tax credits in an effort to begin a process of reducing the overall tax burden on the Georgia Citizens here. And we don’t see any effort on the part of anyone in the general assembly to get the tax credits. We don’t think that’s an issue at all. In fact, everyone wants to make sure that Georgia remains a competitive player in the film industry, because it is now a permanent part of our economy and generates a huge amount of revenue for the state. There’s all kinds of discussions about how much that really revenue is.
And there’s room for people of good faith to differ with what that is. But I’ll tell you one thing, it’s the film business that has a big chunk of the reason that the State of Georgia is sitting on close to an $18 billion surplus this year. And so — and I think everybody at the general assembly understands that, because it creates revenues from everything from restaurants to lumber mills to carpet mills to every industry in the state. And so, plus all the creatives that we have. And Georgia has spent two decades, two generations really through Georgia Film Academy of building up a huge reservoir of local talent that can operate in the production space. And that employment base is in the hundreds of thousands. And so there’s a huge constituency here for that in this business.
And so I expect to continue. The slowdown that we have in terms of leasing, I think you’ll probably hear about it in a lot of places. People are reassessing a number of things. Hollywood is just not green-lighting on enough. I think that will change dramatically when this potential strike is settled and when subscripts get written.
Alan Gould: Okay. Thank you, Hilton.
Hilton Howell: Thank you.
Operator: And we have enough time for one more question, and that’s going to be from Steven Cahall with Wells Fargo. Your line is open.
Steven Cahall: Thank you and thanks for squeezing me in. Maybe first, Kevin, just as it relates to reverse, the slowing rate and you said the comment about how reverse isn’t working for broadcasters any longer. I think you’ve maybe been leading the charge here to try to change the norms, whether it’s negotiating directly with the MVPDs or changing the structure of reverse. Can you give any more clarity on how you think this can work for affiliates over the next couple of years to start to realign expectations in reverse your outlook for growth? And then maybe Hilton or Pat, how do we think about margins on sports rights? So it certainly seems like the viewership is strong. The advertising and the revenue generation is strong.
I think one of your peers have said they expect to be essentially cash accretive on sports in year one. So wondering if you could confirm that with your sports right as well? And then lastly, Jim, how do you just think about when you want to restart the refinancing process? I know there was a lot of volatility in the stock that caused you to delay that, though with the completion of the upsized revolver. But what do you need to see to kind of get back on that track? Thank you.
Kevin Latek: We’re going to do these really, really fast, because we have the post calls actually starting a minute ago, and I think I got your team coming up this afternoon. So it’s super-fast. All the affiliates of the content companies, cable satellite virtual pay for all channels on a per sub basis, broadcasters are the only people who are paying the conglomerates on a fixed fee basis. And so I think the simple answer there is, that we should be paying a per sub basis as well. So a quick answer on sports?
Pat LaPlatney: Yeah, sure. So these deals will be accretive.
Jim Ryan: Sorry, Steve, can you — what was the third leg of the question for me?
Steven Cahall: To restart the refinancing process?
Jim Ryan: We will more likely than not be coming sooner than later. That’s not necessarily Monday, but we certainly would like to get back to the market and get that done in the reasonably near future. Obviously, that was an opportunistic refi, and we want to hit a good market window where we can conclude that opportunistic refi.
Steven Cahall: Got it, got it. Thank you. That was sufficient. Talk to you soon.
Hilton Howell: Listen, and thank all of you for being here this morning. We really do appreciate it. We can’t wait to talk to you about our first quarter 2024. It’s wonderful to bring 2023 to an end. As you all recall, we began everybody was nervous we were going to have a recession going to be a bad year, turned it to be a fabulous year. I expect the same thing to happen in 2024. So talk to you next quarter. Bye.
Operator: Okay. This concludes the call. You may now disconnect.
