David Lougee: Well, I will say I have to think my memory all my time and years from working with, in some cases, running the National Association of Broadcasters. From a board perspective, the republican administrations were generally friendlier, right. And in fact, there was an opening to, frankly, potentially raise the ownership cap in the last republican administration that in some ways the industry didn’t choose to go through for a variety of reasons. But that said, even without a change in administration, what I would call the marketplace irrationality of the rules becomes more and more obvious as time goes by. So I would say, regardless of administration, am I optimistic about the change in regulation — change in regulations going forward.
It’s the timing that matters. Right. The FCC was way too late on changes in the newspaper industry, like media cross ownership was approved ten years after it should have been. So I will say, though, I feel like the industry is far more organized, we have actually one of the greatest lobbying organizations, when you think about television station journal managers and companies across the country. And we have that value that I reference, that we bring to the local marketplace, appropriately brings with it great lobbying power, given the service we provide. So I do have some optimism, but on a two-year horizon, very difficult to say.
James Goss: All right. Thank you very much.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of David Karnovsky with JP Morgan. Your line is open.
Unidentified Analyst: Yes. Hi, this is Ted on for David. I had two questions. The first is on your latest thoughts on the NBA rights and the potential impact to broadcast if NBC replaces Warner. And my second question is on how you’re thinking about national and local advertising trends moving through the year, particularly in the back half. Thank you.
David Lougee: Thank you, Dave, for the question. I’ll take the NBA and make a comment on advertising and turn that part over to Julie. But yes, so we’re very positive about the NBA going to NBC. That obviously, as a reference to my Olympic comments, we have by far the largest — we reached the, by far the largest number of NBC homes than any other affiliate broadcast group. And our NBC stations are very, very strong. So getting that content on our stations overall, we got, if they (inaudible) they get the deal, we’ve got some things to work out on placement of games and time zones and stuff like that. But that said, we’re very optimistic. I think Turner losing it. I think the questions that it raises for us is we think there was probably way too much concern for broadcasters raised when the sports service, now affectionately known as Spulu, was announced a few months ago.
I think this really calls into question what Spulu will be. And we just have a hard time imagining how they’re negotiated rights, deals. First of all, right now in the middle of, with each of these being the players in the NBA. So bottom line is for us, the games moving from Turner to NBC, we see as a very much a net positive. As it relates to national, local throughout the year, in terms of trends. I think we’ll, I think we’ll continue to see local be very strong and national is hard to tell, right. Some of the national is it’s unclear what the causes are. But remember, we have very large stations. We have big stations in the top 10 markets, which, from a quantity standpoint, far more than any of our peer groups, publicly reported peer groups.
And that’s where you see things like auto, while auto is a good Tier 1 is not great, and that probably is Tier 1 come at and that affects us a little more. And there’s also some secular thing. I mean, some economic things clearly taking place that like — as home sales slowdown, that affects some services category, but there’s other puts and takes. So I think — we think — I think local will continue to be very good. And for us, we’ve got additional drivers with Octillion and Premion, National is a question mark.
Operator: Thank you. Please stand by for our next question. Our next question comes from the line of John [Cornorich] (ph) with JK Media. Your line is open.
Unidentified Analyst: Hi. Three pretty quick questions. One on the Fever and the Kraken. I assume they’re one-year deals, which is probably good, because you can renew for more games next time around. That’s one question. Secondly, what goes into the low end of your free cash flow, two-year forecast versus the high end? And finally, Julie, if you assume no more acquisitions this year and you do return $350 million to shareholders, your leverage will be down around 2.5X at the end of this year. Is there any purpose to going lower than that, going into the future? That’s it. Thanks.
David Lougee: Hey, John. Good to talk to you. I’ll take the Fever, Kraken and comment very quickly, and then I’ll let Julie, answer the low-end free cash flow and the leverage questions. So, simply put, not going to answer, the deals are confidential. We’re not talking about the length of those deals. But, no, I would not assume that all deals are one-year deals.
Unidentified Analyst: Thank you.
Julie Heskett: As far as the sensitivity on the free cash flow guide, I would bucket those into a couple of different things. First, it’s a presidential year, and we have seen competitive races that are extremely hot go flat, and vice versa. Those that are flat become hot. We’ve had runoff seats, and then we’ve not had runoff seats, so political is definitely one of those factors. It could be better, it could be worse. Second is the cost takeout transformation that you heard us talk about from a timing perspective, just making sure that we execute that appropriately on time would be a second bucket. And third, I would say, is the forecasting of subscriber trends and what we believe that to be. Obviously, we’ve included those subscriber trends in this forward-looking guide, but again, that could be better or worse. And therefore, the sensitivity for that range is appropriate.
