Unidentified Analyst: Okay. And then by end of the year you’ll be around 3.8. Does that actually incorporate maybe some incremental debt reduction or just some moving around in cash? I mean…
Peter D. Thompson: Yes. So, the fact that it’s moving upwards between where we’re at now and between Q2 and the end of the year, was that the question, or no?
Unidentified Analyst: You’re like 3.55 for 3Q. And I was just asking if the around 3.8 by year-end considers any incremental debt reduction, or is it just cash moving around a bit?
Peter D. Thompson: No. It’s cash moving around. And obviously the back half, as we said, is going to be softer, because of the lack of political. So Q4 — when you LTM it, and then we roll into Q4, we’re going to be missing $8 million of political. So, we’ll just have a lower LTM EBITDA by the time we roll into Q4.
Unidentified Analyst: Got it. And then, I think it was the last call you had mentioned free cash flow, maybe in the mid-60 million area, and that depended kind of where CapEx comes out to. Obviously with a number of moving parts, whether it be Richmond or anything else, are you still thinking about it in that context for the year? And then, any comments on CapEx potentially for next year that you’d be willing to share?
Peter D. Thompson: Yes. I think it’s lower than that now. Obviously there was $5 million of referendum costs. And then as part of cleaning up all the material weaknesses, we’ve had to hire a bunch of consultants, and that’s kind of $4 million and rising at the moment, just to remediate a bunch of the stuff there. So that’s — so those two things have eaten $9 million, $10 million of cash. So, I think it’s slightly less. Although both of those are one-time only, right? So that’s worth pointing out. And CapEx, we don’t know. We are going through the budgets, as Alfred said. So we have a couple of big things. We need to consolidate in Indianapolis, and that’s going to cost some millions of dollars to put those facilities together and buy new equipment.
I think at the moment, we might be looking at a kind of $10-ish million CapEx for next year. We normally run at $7 million, so that would be a little higher for next year. But it’s preliminary. And we tend to manage the CapEx in a very tight manner. So there may be some other things that we choose not to do next year, if we need to spend the money on the Indianapolis facility.
Operator: And next we’ll go to Hal Steiner with BNP Paribas. Please go ahead.
Hal Steiner: Thanks for taking my question. I was hoping, could you just spend a little bit time talking about the TV network side of the business, and maybe just run through. Like what the — I guess, I am focusing really on like the affiliate fees in terms of what could be the timing of any carriage renewals, if there is any big ones and just maybe what your strategy is heading into all that?
Alfred C. Liggins: Carriage renewals, we just renewed with Verizon. They were up in October, and we just renewed them for another couple of years. Our next carriage renewal is not till the end of ‘25, right, Jody?
Jody Drewer: In the third quarter of ‘25.
Alfred C. Liggins: In the third quarter of ‘25. So, we got a small one. We got one small streamer that we did a one year extension on that we got to come up with. But, it’s a bit small. But our big deals don’t come up until — the first one is the end of ‘25 and then the next one is the end of ‘26 beginning of ‘27.
Jody Drewer: Yes. And that’s 97% of our sub base was locked up through the third quarter of ‘25.
Hal Steiner: Got it. That’s great. Okay. That’s very helpful. I guess just, can you maybe give a little color about how you think about sort of just what like your sort of positioning is and sort of the bundle, right? I mean, there is just a lot of talk about that and concern about that and how the bundle sort of evolves. And just if you could give any color about what you think your position is and ability to stay in there would help.
Alfred C. Liggins: I mean, we feel good about it. I mean, we’ve always been an independent network. I mean, we’ve never been part of a big group. And yes, I mean, I think that the environment has changed. But there has also been a move towards more diverse content, which we have. I do think that the fact that we are an African-American owned entity is important. And so, we’ve got great relationships with all the operators except for we are not on DISH. Certainly we are not on YouTube TV or Hulu at this point in time. So we got to try to figure that out. But, I mean, I am not going to [indiscernible]. I mean, I know the environment has changed dramatically. But we — nothing has led us to believe that operators still don’t see TV One and now CLEO as valuable, including the renewal that we just did two weeks ago.
Hal Steiner: Got it. And I mean, a lot of what you said is what I would’ve imagined, so I really appreciate that color and some of that affirmation. I guess on the digital side of the business, I get — obviously slowing a little bit with some of the cyclical pressures, but could you maybe speak a little bit more about just your ability to kind of grow that business and if there’s maybe properties out there that could be more targets to easily add in? Any color you could give me there would be helpful.
Alfred C. Liggins: I’m happy that it’s profitable, right? And yes, you’re right. There’s ad revenue pressures and so — digital is so tricky. So right now, you got ad revenue pressures, but I think we’ve been doing decently in that slowing environment. The tricky part about digital, and particularly with acquisitions is that the audience sizes change so dramatically depending on how the big platforms of Google or Meta beside to prioritize people’s content and change their algorithms. So you could go out and buy something. Very few of these digital platforms have their own natural organic go to their dotcom traffic, right? Like, they’re getting their traffic from some other source or platform. I think, I’ve read something in BuzzFeed’s last conference call when they were talking about their ad revenue being down significantly and why.
