Urban One, Inc. (NASDAQ:UONE) Q3 2022 Earnings Conference Call November 3, 2022 10:00 AM ET
Company Participants
Alfred Liggins – CEO, President, Treasurer & Director
Peter Thompson – EVP & CFO
Conference Call Participants
Ben Briggs – StoneX Financial Inc
Aaron Watts – Deutsche Bank
Bradd Kern – Atalaya Capital Management
George Michaels – Barclays
Operator
During this conference call, Urban One will be sharing with you certain projections or other forward-looking statements regarding future events or its future performance. Urban One cautions you that certain factors including risks and uncertainties referred to in the 10-Ks, 10-Qs and other report it periodically files with the Securities and Exchange Commission could cause the company’s actual results to differ materially from those indicated by its projections or forward-looking statements. This call will present information as of November 3rd, 2022. Please note that Urban One disclaims any duty to update any forward-looking statements made in the presentation.
In this call, Urban One may also discuss some non-GAAP financial measures in talking about its performance. These measures will be reconciled to GAAP either during the course of this call or in the company’s press release, which can be found on its website at www.urban1.com. A replay of this conference call will be available from 12:00 p.m. Eastern time today until 11:59 p.m., November 6, 2022.
Callers may access the replay by calling 866-207-1041, international callers may dial direct 402-970-0847. The replay access code is 1399699. Access to live audio and a replay of the conference will also be available on Urban One’s corporate website at www.urban1.com. The replay will be made available on the website for 7 days after the call. No other recordings or copies of this call are authorized or may be relied upon.
I’ll now turn the call over to Alfred Liggins, Chief Executive Officer of Urban One, who is joined by Peter Thompson, Chief Financial Officer. Thank you.
Alfred Liggins
Thank you very much, operator. Also joining me are Jody Drewer, who’s the Chief Financial Officer for TV One; our General Counsel, Christopher Simpson and our Chief Administrative Officer, Karen Wishart. Thank you for joining folks. You’ve gotten our press release for our third quarter results. Very happy with the quarter, almost 9% net revenue growth, increase of adjusted EBITDA in the face of increasing headwinds. We thought this was a very solid performance. Even more importantly, our Q4 pacings continue to be strong, particularly relative to some of the other reports that we’ve seen coming from folks that have already reported our radio business, including political is going very well into Q4, political what we’ve done in 2018, we’re expecting double digit revenue growth in the radio segment.
We are experiencing very, very robust growth in our digital segment, this year that’s also continuing from Q3 and into Q4. With that, we are going to update our full-year guidance. I think that we originally had at $145 million to $150 million and then we’re going to do probably better than the top end of that range of $150 million. It’s probably impossible to not update now that we have about 2 months left in the year. And so we feel pretty comfortable that our full-year EBITDA would end up in the mid 160s this year. There are a number of things that happen in the fourth quarter bonus accruals, true-up for TV One, programming amortization that will affect that. But even net of all that, we feel that it’s safe that will be in the mid-160s.
We had a great robust upfront for TV One and CLEO. And again, our radio pacings are doing better than many of our other brother. I think that we owe that to continued demand for our target audience and the move towards more diversity and inclusion in the advertising sector. We’ve had a long history, decades of building a brand that is serving the African-American community and that brand recognition is really proving to be very fruitful during this time period.
A update on the Richmond Casino, it’s — if you’ve been following in the press, it’s a battle. It will be a battle in the upcoming general assembly session starting in January as to whether the casino opportunity stays in Richmond, where we have been the chosen developer or if it moves to Petersburg, Petersburg has announced that they’re working with the Cordish Companies, which is — which was the runner-up in the Richmond process. The legislature is tricky and it will be highly political. I don’t really have a good answer as to ultimately what happens.
My position on the casino opportunity has been muted in previous conference calls, I think investors to really think of that as something that could be a positive, obviously, if it happens, but speculative because again, it’s going to be all about politics and not about where the best place for this casino resort operation to go, but we continue to fight the good fight. We’re most focused on the continued trajectory of the business.
We’re continuing to delever, we’ve been buying back our bonds in the open market, which is actually great. And when we first put this facility in place, we were going to have to pay 103 in order to take out bonds before the first call date and now with pretty much everything in the market trade at a discount, it creates an advantageous delevering opportunity for the company since we’re sitting on a fair amount of cash and we’ve been taking advantage of that.
So with that, I’m going to turn it over to Peter, so he can go through the numbers in more detail and then we’ll come back for Q&A.
Peter Thompson
Thank you, Alfred. So the third quarter was another strong quarter for us with both consolidated net revenue and adjusted EBITDA up year-over-year and also significantly above pre-pandemic levels. Consolidated adjusted EBITDA was $44.3 million for the quarter, up from $42.7 million in 2021 and up from $38.7 million in pre-pandemic 2019. Net revenue was up by 8.9% year-over-year for the quarter, approximately $121.4 million.
Net revenue for the Radio segment increased by 4.8% year-over-year and on a same-station basis by 1.4%. According to Miller Kaplan, our local advertising sales were down 1.7% against a market that was down 2.1%. National ad sales were up 19.7% against the market that was up 0.8% and that was helped by our corporate sales effort and the continuing demand for our target audience. While we outperformed the spot markets, particularly in national sales, we like the market in the NTR category, as a result of disappointing performances on events in Atlanta and Raleigh and that also impacted margins overall of the Radio division.
Midterm election spending started in Q3 in earnest and we booked $2.7 million in net political ad revenue, of which $1.8 million was at radio compared to $711,000 last year. That meant that government and public was our biggest advertising category for the quarter, up 6.7% and Healthcare was up 35.5%, Auto was up strongly 57.3% and telecommunications was up 14.5% year-over-year, while services, entertainment, retail, financial, food and beverage and travel and transportation were all down in the quarter.
Fourth quarter revenue, radio division is currently pacing up approximately 26.5%, including political and about 10.9% excluding political. $5.6 million of net political ad revenue is on the books for the fourth quarter, bringing the annual total to approximately $9.5 million, which is above the $6.6 million net that we did in 2018.
On a same station basis, fourth quarter is pacing up 0.1%, excluding political, with national pacing up 4.1% and local pacing down 2.8%. Net revenue for Reach Media was $10.1 million in the third quarter, up 1.3% over prior year. Adjusted EBITDA was $3.7 million, up by 0.9% for the quarter. Fourth quarter ad sales are holding steady. However, we don’t have a cruise event in the fourth quarter this year and that event generated approximately $7 million in revenue and $400,000 in profit for the fourth quarter last year, which is not returning this year, but we will have a cruise in 2023.
Net revenues for our Digital segment increased by 40.1% to $21 million. The direct sales team continued to build on the momentum that began in the first half ’22. The sharp revenue growth was really a result of the continued demand from advertisers to spend with black-owned and certified diversity publishers, also mid-term political revenue, as well as brands remaining committed to drive deeper engagement and reach with black audiences.
Adjusted EBITDA increased for the quarter by $2.2 million, up 40.7%. Demand continues to be strong and fourth quarter digital revenue is expected to exceed our Q3 number. We recognized approximately $50.8 million of revenue from our cable television segment during the quarter, an increase of 4%. Cable TV advertising revenue was up 16.7% with a favorable rate volume impact of $3.4 million, driven by higher average unit rates, $0.4 million of free video on demand, $1 million increase for CLEO TV and then there was $1.3 million unfavorable or deficiency unit burn-off.
Cable TV affiliate revenue was down by 7.6%, with favorable rate increases of $1.2 million, offset by $2.2 million of net churn and $1 million of increased loan support. Cable subscribers for TV One as measured by Nielsen finished third quarter at $43.6 million compared to $45 million at the end of Q2 and CLEO TV at $41.3 million Nielsen subs. We recorded approximately $2.1 million of cost method income for our investment in the MGM National Harbor property for the quarter, the same as last year.
Operating expenses excluding depreciation, amortization impairments and stock-based compensation increased to approximately $80.5 million in Q3 compared to $74.6 million in Q3 of 2021. Employee compensation increased by approximately $1.9 million. Revenue variable expenses increased by $2.4 million. Travel, entertainment and office expenses increased by $525,000 and outside services, including contract talent and consulting fees increased by $1.2 million.
Marketing promotional and event spending increased by $3.3 million. However, our corporate development cost decreased by $2.1 million and Cable TV content amortization decreased by $1.1 million. About $1 million of increased expense for the Indianapolis Radio acquisition is included in these totals. Radio operating expenses were up 9%. The Indianapolis cluster added $1 million of that increase. Event expenses were up in Cleveland and Raleigh, expenses relating to the revenue increase such as sales, commissions and bonuses were up as well and there were some increases in outside services and employee compensation and benefits.
Reach operating expenses were up by 2%, talent costs drove the increase, but expenses remained mostly flat otherwise at Reach. Operating expenses in the Digital segment were up 39.7%, driven predominantly by variable expenses related to traffic acquisition, sales and integrated marketing. Cable TV expenses were up 4.8% year-over-year, content amortization expense was down $1.1 million, while employee compensation benefits were up by $855,000. And sales and marketing spend was up by $1.4 million.
Operating expenses in the Corporate/elimination segment were down by $1.5 million due to a $2.1 million decrease in corporate development costs relating to the Richmond Casino venture last year. Employee compensation and recruiting fees increased slightly. For the third quarter, consolidated broadcast and digital operating income was approximately $50.8 million, an increase of 3.5%. During the quarter, the company repurchased $25 million of its 2028 notes at an average price of approximately 91.1% par, resulting in a net gain on retirement of debt of approximately $1.8 million.
An additional $18,271 million of the 28 notes were repurchased in the fourth quarter at an average price of approximately 85.75%, bringing total gross debt to a balance of $756.7 million, down from $825 million at the start of the year. Interest expense decreased to approximately $15.3 million for the third quarter. The company made cash interest payments of approximately $29.9 million in the quarter, including the accrued interest on the retired notes.
Next, semiannual debt service payment is due in Q1 ’23. A non-cash impairment charge of $14.5 million was recorded for our Atlanta, Charlotte, Dallas, Houston, Philadelphia, Raleigh and Richmond radio market, broadcasting licenses. And that was really triggered by the overall market performance in these markets rather than our specific Radio One performance. The provision for income taxes was approximately $3.4 million for the quarter and the company paid cash tax — income taxes in the amount of $247,000.
Net income was approximately $4.2 million or $0.09 per share compared to $13.9 million or $0.27 per share for the third quarter of 2021. Capital expenditures were approximately $1.4 million. Company repurchased shares of Class D common stock in the amount of $439,000 and executed a stock vest tax repurchase of 325,872 shares of Class D common stock in the amount of $1.4 million.
As of September 30, 2022, total gross debt was $775 million. Our ending unrestricted cash balance was $105.1 million, resulting in net debt of approximately $669.9 million, which we compare to $166.3 million of LTM reported adjusted EBITDA for a total net leverage ratio of 4.03x and pro forma for the Indianapolis acquisition, total net leverage was 3.9x.
And with that, I’ll hand back to Alfred.
Alfred Liggins
Thank you, Peter. Operator, could you open the lines up for questions?
Question-and-Answer Session
Operator
[Operator Instructions]. Our first question comes from Ben Briggs with StoneX Financial Inc.
Ben Briggs
Yes. So congrats on the quarter, looks like a great quarter. Congrats on the buybacks. I just want to make sure I heard you guys right, you bought back another — you bought back another $19 million of debt in the fourth quarter so far you said?
Peter Thompson
Yes, $18.7 million, call it, Ben.
Ben Briggs
Okay. Perfect. Thank you. Are there plans to continue this? Is there additional authorization that you need to do any more buybacks? How are you thinking about that going forward?
Alfred Liggins
We actually — that $18.7 million is an odd number that’s — that — we had an additional $25 million authorization. So there’s almost a $7 million balance on that. We’re looking to be opportunistic and I mean, I think that paying down debt is a good thing. So you’ll continue to see us be opportunistic and proven so. Are you there?
Ben Briggs
Yes, I’m sorry, I cut out for just a second, cut off for just a second. So I heard…
Alfred Liggins
Go ahead. There’s like $7 million left of 7-ish left on the last $25 million authorization. So we’ll get through that and then we’ll see where we sit. Obviously, we want to get a feel for what the economy is doing, et cetera. And — but paying down debt is a good thing and we’ll continue to look at being prudent how we utilize our cash.
Peter Thompson
Hey, Ben, sorry, I missed, it was 18.27 — $18.7 million, so I’ll put 7 is close to the mark.
Ben Briggs
18.7, okay. Okay. So you’ve got about, call it $8 million of authorization left?
Peter Thompson
Yes.
Ben Briggs
What is the process of getting authorization to buy back more look like? Is it a quick enough process that allows you to be opportunistic if there’s an aftermarket that makes sense?
Alfred Liggins
It’s super quick. We just do basically reach out and communicate with our Board and they respond. Generally, getting the Board to approve, paying down debt is not that difficult.
Ben Briggs
Right, right, right. It certainly seems that way from your history of buying back debt.
Alfred Liggins
Yes.
Ben Briggs
Okay. Moving on from the debt for a second. So what — I know that there’s a formula where you can put back the MGM Grand National Harbor investment back to MGM. What does that formula look like right now? And what does that look like right now? And what is theoretically put back to — how much is it worth?
Alfred Liggins
Yes, it’s 7x their EBITDAR. There’s a slight adjustment to what their EBITDAR is to what our definition is and it now it equates to several millions of dollars on the EBITDA number, nothing to get crazy about. But I mean, look, it’s worth over $100 million, right? Last year, their EBITDAR, I think our number that we would get paid on like $236 million of EBITDAR. They — there is no threat, but which is they report their revenues, but they’ve been continuing to gain market share here in Maryland this year. They’re going to do over $800 million of gaming revenue. So I suspect that, that EBITDAR is going to go up from last year. And we’ve got a window in the first quarter of every year to put our interest at 7x whatever the previous year’s ultimate reported adjusted EBITDAR is. And so we’ll see what it looks like and make a decision, but it’s worth over $100 million.
Ben Briggs
Okay. Got it. Got it. So it’s a window in the first quarter you’re saying? It’s not something you do nor at any time? Okay.
Alfred Liggins
Yes, it’s not anytime you want.
Ben Briggs
Okay. Got it. So and then — so obviously, this first quarter, once you see their annual results, there’ll be internal discussions and that will be the time that you guys make a decision? Are you leaning?
Alfred Liggins
We haven’t thought about that, I mean we’re sitting — it’s like — we’re sitting on cash now. So we want to pay down debt, we just use the cash on our balance sheet, right? So question is, if we were to put it, what are we going to do with that cash? Are we going to pay down more debt? Are we going to put it into an investment? So we don’t know yet. But there’s no — there’s no pressing reason to have to monetize it today and good that we didn’t because EBITDAR has been growing. So…
Ben Briggs
Okay. Okay. That’s helpful. And then kind of moving on, it was good to hear that the radio pacings seem like they’re well up, I think you said in fourth quarter, they’re pacing up 26%, if you’re inclusive of political. It sounds like you lost a few subs though at the TV One network, you’re down to 33.6%, you said versus 45%. Do you have any clarity sort of mid fourth quarter right now where that sub number stands? And does it continue to bleed subs or has it stabilized?
Alfred Liggins
Yes, I mean, look, I wouldn’t want to give a mid-quarter estimate of what we think churn is going to be. I mean…
Peter Thompson
November Nielsen numbers came out and we actually gained over 200,000 subs.
Alfred Liggins
Yes.
Ben Briggs
Oh, okay. Great.
Alfred Liggins
But look, I — it’s probably the biggest debate in media right now is what is the trajectory of the Pay TV ecosystem, right? And so I don’t know, is it stabilizing? Is it increasing? Now it’s definitely a big debate. We feel good about the TV business given that we’ve gotten more subs launched for our new service CLEO TV. We reupped many of our affiliate agreements, advertisers still have a robust appetite for video programming and advertising, although we are seeing a softening in ad demand in our TV space. And I mean, I think Paramount has — has released earnings and said the same thing, NBCU, Comcast before that the same.
So we’re experiencing it, we’re going to I think be affected less because of our target demo and the commitment to our audience and diversity inclusion. So we feel good about that. But make no mistake, you’re in a macroeconomic headwind that’s affecting national television advertising.
Peter Thompson
Operator, next question?
Operator
Our next question comes from Aaron Watts with Deutsche Bank.
Aaron Watts
Maybe a follow-up on that last answer. Just curious what you’re hearing or seeing within the radio business in terms of any advertiser reactions or concerns related to the macro headwinds to close out this year, roll into ’23. It sounds like you’re feeling a little bit of it on the TV side, Alfred, maybe just a little more on the radio side, what you’re seeing out there?
Alfred Liggins
Yes, definitely seeing radio slowdown in national. However, we’re offsetting that. We’ve got our own corporate sales team and it’s large and robust and they’re really leaning into this ad demand that we have for our space. And so we’re outperforming on a — we’re way outperforming on a national level than any of our other competitors, right? And so what does that mean for next year? I mean I just described to you what fourth quarter is going to look like. And so our results in Radio versus everybody else’s results are going to be night and day, okay? How does that play out for next year, I — we’re going through budgets right now. And so I don’t know yet.
If I had to bet, I think that we’ve got some things that are going to — that are going to continue to bolster us. Our Indianapolis acquisition, I think is going to be a great deal for us in the radio space. We’re already starting to figure out how we’re going to control cost. We’ve got some things that are rolling over like leases where we’re going to be able to reduce real estate footprint. We’re going to have a killer year this year. So are we going to be able to match that next year? The answer is probably not, but quite frankly, I didn’t think that going into this year, I didn’t think we’re going to do as well as we ended up doing this year.
So I can’t really — I can’t handicap what the recession impact is going to be on us at this point in time. But I would say it’s going to be less than it is going to be on others for sure. We’ve got our — we didn’t have Tom Joyner cruise this year, we’re going to have it next year, it’s already 80% sold out. We’re about to announce and we haven’t announced any talent line up. We’re about to announce talent line up soon, it’s really, really big. We think that, that’s going to push us to sell it out before the end of the year.
And so I — this is the first time I’ve gone into a recession where I wasn’t nervous about the impact or stress it was going to put on us as a company. And that’s got a lot to do with where we’ve gotten our leverage level too and our prospects.
Aaron Watts
Yes, I was going to say it must be nice sitting in that position. I know you’ve gone through the ups and downs a couple of times before and it seems like you are in a better position this time around for sure. Do you think, Alfred, that for maybe some of your peers that aren’t as well positioned this time going in. There’s some additional nervousness and stress on their part that there could be some opportunity for you with regards to maybe investments or M&A where you could take advantage of that to grow your platform further?
Alfred Liggins
Yes, I mean I think that could happen. We’ve been super disciplined on stuff that we’ve been buying. And one of the problems that you have right now is that I don’t know if it’s a problem if you’re buyers, it’s actually good if you’re seller is not great. But multiples have come in quite a bit, particularly in the media space, right? They’re bringing multiples down on a quarterly basis for even the big diversified media company. So a lot of the stuff in Radio was kind of trading low fives to 6x, right? So you’ve got to get a seller that wants to be reasonable in this kind of multiple valuation environment. And so — and by the same token, we’ve got to be able to justify any acquisition with that kind of term in a multiple, right, because that’s where we’re trading at now.
So that’s the historical conundrum of the bid-ask between a buyer and a seller. So is there a nexus where there’s a meeting of the minds and something can happen, I don’t know, maybe probably, right? We keep looking at stuff, but if we don’t get to that nexus, we’re going to be happy just paying down debt, continuing to grow the existing platform, but we will — we are absolutely going to be looking to see if we can take advantage of the environment. So that’s kind of how we think about it.
Operator
And we do have a follow-up from Ben Briggs with StoneX Financial Inc.
Ben Briggs
Just one quick follow-up here. I just noticed something with a very strong, I think by any measure, first 3 quarters of the year. Your guidance — the last that I have written down here for the year for 2022 is $145 million to $150 million. At the high end about — at $150 million, that would imply only $16 million of EBITDA in the fourth quarter, which obviously doesn’t sound right.
Alfred Liggins
You must have missed the first 5 minutes of the call. We updated guidance to mid-160s for this year.
Ben Briggs
Okay. I did miss the first 5 minutes of the call, so that’s exactly what it is.
Alfred Liggins
That was in the introduction that I gave. So sorry that I haven’t read it, but…
Peter Thompson
And when you think about and you look at in and you’re modeling it out, you should expect the fourth quarter to look quite like fourth quarter last year overall, right? So sequentially, it’s going to be down on Q2 and Q3 for various good reasons, which hopefully kind of went into in the first 5 minutes, but yes, that would bring you out mid-160s.
Alfred Liggins
And we figured that we needed to update guidance because somebody is going to do the math that you just did, what you guys talked about.
Operator
[Operator Instructions]. And we have a question from Bradd Kern with Atalaya.
Bradd Kern
What I wanted to ask is, how sustainable do you think this — the updated guidance is? How much of an uplift there is do you think is from political? And can we think about that as a sort of a sticky base? Or would you expect — how much regression would you expect in the following year?
Alfred Liggins
Yes, there’s probably about $12 billion of total political across the platform, almost probably $10 million of that is in Radio. So next year, that’s going to go away. It’s not going to go to 0, right? But it’s going to go down substantially. So you got that headwind. You’ve got the headwind of a looming recession, but we’ve got our Indianapolis acquisition. Digital as a category has been robust, right? I don’t think I was having a conversation with the Chief Investment Officer from one of the top 3 advertising holding companies. And they’re still projecting revenue growth next year for digital advertising, even though they’re projecting down for traditional advertising. We’ve got a pretty robust digital platform.
So no, I wouldn’t say that you can look at the mid-160s as kind of like the sticky baseline because if you just take off political and then throw something in therefore a recession, you’re going to go backwards, right? But Indianapolis is going to be a meaningful contributor to our EBITDA next year, probably an additional $4 million, $5 million. And we’ve got other stuff that is coming into play, the Tom Joyner cruise I just mentioned that could be another almost a couple of million dollars of EBITDA.
So we’re kind of working through all of that now. Well, look, TV companies go up and down every other year based on political ad demand. And I think we’re — at least internally, we’re starting to view our business in a similar fashion because it’s a double-digit revenue swing for us now.
Bradd Kern
That’s real helpful.
Alfred Liggins
In 2020, we do almost $20 million of political?
Peter Thompson
Yes, it was 18 unchanged.
Alfred Liggins
Yes, yes, no, it’s a real number, right? And so we’re not going to have that next year and — so look, don’t be surprised if our EBITDA next year ends up being less than it is this year. But again, it’s — don’t know, I mean, I’m probably not going to budget flat, right? But I got one guy looking at me, yes, that’s not what you told me.
Bradd Kern
Okay. And then so, I mean within Digital just to kind of double-click on that. So what kind of growth is sustainable there? And what’s the nature of that, I mean is that website, [indiscernible] website advertising or with an app, what does that look like?
Alfred Liggins
I mean look, we sell — our digital business is primarily display and more and more video, I don’t know off the top of my head, but I think our revenue is probably about 25% digital video right now. Streaming, audio streaming is a growing category in our digital business. And we’ve just seen real explosion of demand against the digital category. And this was a business that before in 2019 was probably low 30s of revenue, low to mid-30s and it’s probably going to be closer to high 70, closer to 80 this year.
Bradd Kern
Well, and that’s — I mean, are you — do you think you’re taking share from just more people listening, are they thinking here from radio or can between Spotify and your…
Alfred Liggins
It’s increased demand and it’s — well, first of all, the share — I mean, the amount of money that we’re doing is a pimple on elephant’s butt in comparison to the entire digital revenue ecosystem, which includes Meta and Google and Spotify. And so — and there’s no Miller Kaplan for digital, right, like where we can sit and figure out what our digital share is. But even if there was, we probably wouldn’t even register, right? And so I can’t tell you — the only thing I can tell you is that national advertisers, a) are putting more money into digital; b) they are now recognizing the contextual value of targeted digital media and diverse owned platforms. And as their increased interest in diverse audiences and diverse ownership has evolved, we started Interactive One in 2008.
So we’ve been pounding the urban digital message for a very long time. And I think I said it earlier as well, that brand building has helped us, plus we’ve got the largest urban or African-American targeted digital audience in the — as it relates to Comscore among all the competitors, right? So…
Bradd Kern
That creates my next question, I’m sorry.
Alfred Liggins
So that’s what’s happening.
Bradd Kern
Okay. And that’s a great segue into my next question, which is on the diversity and inclusion initiatives. Can you speak to the — what the nature of those commitments from advertisers look like? Are they kind of year-to-year? Have they committed a certain dollar amount? How much visibility do you have on those commitments? And second of all, are they — are you able to quantify for the advertisers, what the — are the economics pretty similar to maybe just like a typical pop station? Are they different? I mean how are the advertisers thinking about, is it more for them, the same economics better? Is it a marketing expense for them in terms of the diversity and equity inclusion initiatives. How do we — those are my 2 questions on that front.
Alfred Liggins
I mean, the same — as they’ve increased their — look Procter & Gamble and McDonald’s and General Motors, these are all entities that have said that they’re going to — and I don’t have the exact numbers off the top of my head, but they’re going to grow their spend with black owned media from 2% to 4% over the next 2 years. So they’ve made multiyear spend target commitments. They actually haven’t come in and given us a 2 or 3 year contract that hardwires that. There are some conversations going about multiple about contracts for multiple years that we’re working on now.
I can tell you that rates have gone up because with ad demand rates go up, but rates for our audience in comparison to what advertisers have historically paid for general market audiences were already low, right? So I think when you match us up in comparison, we’re not — they’re not paying an outsized premium to Reach at least our particular audience at Urban One.
I think there are some diverse owned platforms that really don’t have a lot of audience or some have no audience that are now getting money. So the CPMs there are probably through the roof or not even calculable because there’s — I know some platforms that are getting real money there in, right, but they’re getting money now. We’ve always been rated. We’ve always had a decent size audience. And so even when — if we get a 40% rate increase, we’re not more expensive than just Warner Discovery networks, we’re probably still at a significant discount to what advertisers pay for those networks.
Operator
[Operator Instructions]. And we have a question from George Michaels with Barclays.
George Michaels
First of all, I want to congratulate you guys on another great quarter. Just quickly, is there any thought to doing any additional equity buybacks? Or can you talk about that?
Alfred Liggins
We’ve been discussing it. I think our focus has been on bonds. We’ve been talking about it internally, I don’t know. We haven’t landed anywhere just yet. We always like — we always like — we used to have over 100 million shares outstanding and now we got 48 million. So we like to do it opportunistically and it’s been good. I mean we’ve generally bought at the right time, our last big purchase was I think last — a quarter ago, when we bought like 4.5 million shares back. And I think the average price was like in the low 5s. But then the stock proceeded to trade down after that. So it wasn’t feeling great a week after doing that trade, but ultimately kind of felt good about where the company was going. And the opportunity to buy that those — that many shares back in one fell swoop was, well, was a good opportunity.
The fact of the matter is the volume is not huge on the stock, so even if we go in when the stock is depressed, you can’t — you won’t be able to buy a ton of it. So we’re assessing our options now. I don’t know exactly where we’re going to land, but I think we kind of want to get through budgets, see how we feel about it. If an opportunity to take a sizable block came up, I think we would look at that because it just doesn’t happen that often.
The other thing that we’ve been watching, but I kind of feel good about it now is that our EBITDA has been increasing, our debt has been coming down, but the stock has kind of been just hanging in there. And that’s because multiples have been about coming in, right? So — and what I feel good about now is I kind of think where the company is trading at now, probably low 5s, not including the value of MGM. I kind of feel like that should feel like a floor for this business. When I look at the low watermark in the cable space, which is AMC, which trades at about 5x, you look at what newspapers have historically trade at, which I think we have a much better business than that, even the radio guys, iHeart is trading at almost 7x I think, Cumulus is trading at about 6x.
I think if our company is trading in the low 5x EBITDA, that’s a pretty safe entry point. So given that if you were to buy back stock and keep paying down debt at the same time, it’s probably a pretty good trade. What I don’t know and again we’re going through budgets right now is where do I think we’re going to end up next year and how does that factor into it. So — but we’re long-term shareholders, the family is the largest shareholder out there. So we’re the leaders in it and we generally like to own more of the company than less over time. So — but we want to — we want to do it right. You don’t like the stores and you see a bunch of people who believe and believe and believe and they buy at the high and then the stock takes a valuation adjustment and just burn through a lot of money. We don’t really want to — we don’t want to see that happen to us. But I don’t feel like the valuation of where we’re at now, there’s very much risk in that at all.
Operator
[Operator Instructions]. And there are no further questions.
Alfred Liggins
Thank you, operator. Thank you, everyone. We’ll talk to you offline if you have any additional questions and we’ll see you next quarter.
Operator
Thank you. Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Event Conferencing Service. You may now disconnect.
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