Greetings, and welcome to the Sinclair Broadcast Group Second Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, David Amy, Executive Vice President and Chief Operating Officer for Sinclair Broadcast Group. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Participating on the call with me today are David Smith, President and CEO; Steve Marks and Steve Pruett, Co-Chief Operating Officers of Sinclair's Television Group; Chris Ripley, Chief Financial Officer; and Lucy Rutishauser, Senior Vice President, Corporate Finance and Treasurer. Before we begin, Lucy will make our forward-looking statement disclaimer.

Thank you, Dave, good morning, everyone. Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ from those described in the forward-looking statements as a result of various important factors. Such factors have been set forth in the company's most recent reports, as filed with the SEC, and included in our first quarter earnings release. The company undertakes no obligation to update these forward-looking statements. The company uses its website as a key source of company information, which can be accessed at www.sbgi.net. In accordance with Reg FD, this call is being made available to the public. A webcast replay will be available on our website later today and will remain available until our next quarterly earnings release. Included on the call will be a discussion of non-GAAP financial measures. Specifically, television broadcast cash flow, EBITDA free cash flow and leverage. These metrics are not meant to replace GAAP measurements but are provided as supplemental details to assist the public in their analysis and valuation of our company. A reconciliation of the non-GAAP financial measures to the GAAP measures in our financial statements is provided on our website under Investors, Reports and Filings.

Thank you, Lucy. Before we go through the results, let me review some of the more meaningful activities that have taken place since our last earnings call. We've been very busy on the content side, entering into multiple development partnerships and production deals as well as expanding syndicated distribution of some of our existing platforms. Over the past three months, we entered into a 26-week national broadcast deal with Discovery Communications' Destination America to carry our professional wrestling promotion, Ring of Honor. Our Sports division, American Sports Network expanded their content offerings beyond college and high school sports to now include Minor League Baseball, AMA Pro Racing Flat Track Events and the Millennial (sic) [Millennium] Dancesport Championships. Through our Sinclair Original Programming division, we formed a joint venture with Michael Eisner's Tornante Company, which is intended to create, produce and distribute first-run syndicated talk, games, court and comedy shows beginning for the fall of the 2016 broadcast season. We are partnering with MGM on the first-ever science fiction multi-channel network we are calling Comet TV, which Sinclair will own but MGN will manage and provide the content. The new network is scheduled to launch in the fourth quarter of this year on our multi channels. As we develop our news content strategy, we can report that we continue to refine and advance our cable news channel, NC8, in Washington, D.C. In addition and across our news platform, we have plans to add another 50 to 60 hours of weekly local news through the remainder of this year. As you may recall, Sinclair news stations are producing over 2,100 hours per week of content. And as part of our continuing growth and development of our national news brand, we announced that we will be launching our own Sunday morning national news…

Thank you, David. Net broadcast revenues for the second quarter were $502 million, an increase of 24% or $98 million higher than the second quarter 2014 and exceeding our guidance. On a pro forma basis, second quarter 2015 revenues were 3% higher than pro forma second quarter 2014, primarily due to retransmission fees, and more than offset the absence of political revenues. Television operating expenses in the second quarter, defined as station production and station SG&A expenses before barter, were $284 million, up 31% or $67 million from second quarter last year. On a pro forma basis, second quarter 2015 television operating expenses were 9% higher than pro forma second quarter 2014 expenses due to reverse retrans, compensation expense, news expansion and ASN costs. Second quarter 2015 television operating expenses were favorable to our guidance on lower media spending for the May sweeps rating books, open positions and timing of other expenses. Corporate overhead for the quarter was $14 million, a decline of 11% versus the same period last year, primarily due to fewer health insurance claims. For the year, corporate overhead is expected to be $57 million including $10 million in stock-based compensation. Research and development costs related to ONE Media's work on the Next Generation Broadcast Platform were $4.2 million in the second quarter. For the year, ONE Media's expense guidance remains unchanged at $15 million. Broadcast cash flow was $196 million or 16% higher than last year's second quarter's BCF. The broadcast cash flow margin on net broadcast revenues was 39%. EBITDA was $185 million in the quarter, up $28 million or 18% higher than the same period last year and higher than our guidance. On a pro forma basis, second quarter 2015 EBITDA, excluding $8 million of future return-generating investments, was down slightly but up when excluding political revenues compared to the pro forma second quarter 2014. The EBITDA margin on total revenues was 33% for the quarter. Net interest expense for the quarter was $48 million, up $8 million versus second quarter last year on acquisition financings. Our weighted average cost of debt for the company is approximately 4.9%. Diluted earnings per share on 96 million weighted average common shares outstanding was $0.48 for the quarter. We generated $84 million of free cash flow in the quarter and converted 49% of our EBITDA into free cash flow during the trailing 12 months ended June 30, 2015. Our free cash flow yield is approximately 14% and our dividend yield is 2%. Now, Lucy will take you through the balance sheet and cash flow highlights.

Thank you, Chris. At June 30, total debt was $3.890 billion. Included in that amount was $136 million of non-guaranteed and VIE debt that we're required to consolidate on our books. Pursuant to a change in Generally Accepted Accounting Principles, $42 million of debt issuance costs were reclassified from other assets to a deduction in the carrying amount of the related debt liability in the balance sheet. We ended the quarter with $65 million of cash on hand and $483 million available on our revolver for total liquidity of $548 million. Capital expenditures in the second quarter were $23 million. For 2015, our CapEx estimate remains unchanged at about $90 million. Cash programming payments in the second quarter were $28 million, and our full-year estimate remains unchanged at $109 million. Cash taxes paid in the second quarter were $38 million. Total net leverage through the holding company at quarter end was 4.6 times. This excludes the VIE and non-guarantor debt and is net of cash. The first lien indebtedness ratio was 2.2 times on a covenant of four times. Our two-year average net leverage at year-end 2015 is expected to be approximately 4.7 times, assuming our current portfolio. David Amy will now take you through our operating performance.

Thank you, Lucy. For the second quarter, net broadcast revenues were up 24% versus the second quarter of 2014. Political revenues were $4 million as compared to $12 million in the second quarter of 2014. Pro forma core advertising revenues were down only $1 million, slightly better than our expectation discussed on our last quarter call. And as we turn to the outlook for 2015, for third quarter of 2015, we are expecting net broadcast revenues to be approximately $483 million to $487 million, up 8% to 9% as compared to third quarter of 2014. This assumes $7 million of political revenues versus $34 million in the same period last year. On a pro forma basis, third quarter net broadcast revenues are expected to be flat to down slightly versus $488 million in 2014 on the absence of political revenues, while pro forma core advertising revenues excluding political are estimated to be flat to up slightly versus the same period last year. On the expense side, we are forecasting TV production and SG&A expenses in the third quarter to be approximately $294 million versus $248 million in the third quarter of 2014. On a pro forma basis, third-quarter television operating expenses are expected to be up 9% versus $270 million in the third quarter of 2014 on news expansions, compensation and reverse retrans. For the year, 2015 TV expenses are forecasted at $1,153 million, which includes $23 million of future return-generating investment costs versus 2014 pro forma TV expenses of $1,065 million. EBITDA in the third quarter is expected to be approximately $155 million to $157 million, a decrease of 8% to 10% versus third quarter 2014 EBITDA of $172 million. On a pro forma basis, third quarter EBITDA is estimated to be down 16% to 18%, due primarily to the absence of political revenues. Based on our guidance, free cash flow in the third quarter is expected to be approximately $52 million to $54 million, and we are reconfirming our expectations for combined free cash flow for 2015 and 2016 of approximately $805 million to $885 million or an average of $4.20 to $4.65 per share per year. So with that, I would like to open it up for questions.

Thank you. At this time, we'll be conducting a question-and-answer session. Our first question today is coming from James Dix from Wedbush Securities. Please proceed with your question.

Thank. Good morning. Just had two. First on the advertising environment, if you could provide some color in terms of your growth in the second quarter and then your outlook for the third in terms of growth by geography – I think you'd called out oil patch states maybe for the second quarter – but anything else by geography. And then also by network affiliation and ad vertical, just on the ad trends. And then secondly, just wanted to know – appreciated your color on – your thinking on the spectrum. Has there been any change in your thinking on your potential to participate in the spectrum over the past quarter? And if so, how so? Thanks. Steven M. Marks - Co-Chief Operating Officer & Vice President, Sinclair Television Group, Inc.: All right. The ad environment for us in second quarter, as we stated on our core advertising, the markets that we participate in were slightly down and we pretty much stayed with those markets. Everybody should keep in mind in second quarter, we're very top heavy FOX and we have an awful lot of MyNet and CW affiliations. And in markets that are soft – and there were markets that were soft, FOX was not performing as well as their peers in second quarter. And seeing that we have a lot of FOX stations, that didn't bode all that terrific for us. Going forward though, however, everybody knows that Empire debuts in September. And we believe in terms of that specific network, we'll start turning the corner when that show debuts in third – and in third quarter – tail end of third quarter. Third quarter looks a pinch better, as we just stated, than second quarter in terms of core. And what's fascinating right now as we speak is we're starting to see the political landscape develop, which is nice. And the numbers that we're enjoying in third quarter to date are better than what we anticipated. Clinton is already spending money in Iowa, and she's spending a busload of money. And we anticipated that and it's coming. And then there's an awful lot of issue advertising that's out there right now. You have the conflict with Israel and Iran, and there's issue money being spent on that. So we're seeing political dollars a little bit ahead of schedule that are pretty bountiful. And I think as we turn the corner and finish off the year, we got everything going in our direction. FOX will be better situated for us. And our exposure with FOX will diminish. Once Empire starts, we'll have fresh programming hitting on both CW and MyNet. We'll have political dollars coming in that are bountiful. And the digital dollars that we're enjoying are really double-digit increases and enormous upside on digital as well. So I think we'll finish off the year pretty strong, actually.

In terms of your question on Spectrum, there hasn't been a change internally from our perspective as to our appetite to participate in the auction. However, I do think there is a market perception that we won't – we don't want to participate. So that's one of the reasons we put that statement in the earnings release here or call today, just to give some people a little bit more specifics around what the upside is for Sinclair, which is about $2 billion with a minimal impact on BCF. And what has changed recently is just more rules, and specifics have come out around the auction and have and enabled us to help quantify for you all what could be the potential and help solidify our optimal strategy. At the end of the day, we're here to maximize shareholder value and the auction is a means to do that. And we're weighing all those alternatives. So we'll know, as was stated on – by David, that the actual outcome is uncertain pending a lot of variables in the auction. But when you do the math and you look to maximize value, there could be some substantial opportunities for Sinclair.

Great. Thank you.

Thank you. Our next question comes today is coming from Alexia Quadrani from JPMorgan. Please proceed with your question.

Hi. Good morning. This is James Kopelman in for Alexia. Just another question on advertising as we look forward into Q3. Could you maybe provide some additional color on – in terms of which categories are driving national and local right now? I know major auto manufacturers have done pretty well in Q2. Is auto maybe playing a role as we move into Q3? And then I have a quick follow-up. Thanks. Steven M. Marks - Co-Chief Operating Officer & Vice President, Sinclair Television Group, Inc.: Yeah. Second quarter, some of the categories that we're enjoying that are rough include telco, retail, healthcare and finance. Third quarter, auto is going to be in the positive category, which is nice. So like I said, the trends are moving in our direction. I also wanted to fill in a blank on the first question that was asked. In terms of the Texas markets that we mentioned on our last call, we were right on the money. Those markets that we participate in Texas were down, and we beat the performance on those marketplaces. So just wanted to add that as well to follow up on questioning that was situated from the last call.

Then my second question is on the presidential election; obviously, you guys are running ahead. Can you just help me understand on sort of bigger picture for next year with such a wide field of Republican candidates, is that a positive or a negative if it potentially delays the resolution of the Republican primary? Steven M. Marks - Co-Chief Operating Officer & Vice President, Sinclair Television Group, Inc.: I think you could probably debate it either way, but we're going to find out at the end of the day. At the end of the day, there's one thing you could count on: we're going to be billing an awful lot of money politically. So regardless of how that situation plays out, we're going to be on the better side of it.

Yes. I think the discussion right now about Joe Biden entering the race and the possibility that he brings to it as well in terms of the Democratic primaries. As Steve had mentioned, the dollars we're seeing from Hillary in Iowa and Biden's of course become a real candidate, that bodes well from us as well in turn.

Thank you.

Great. Thanks a lot, guys.

Thank you.

Thank you. Our next question today is coming from Ed Watts (sic) [Aaron Watts] from Deutsche Bank. Please proceed with your question.

Thanks, guys. You can call me Aaron. Quick clarifier question on the expenses. I think in last quarter and again this quarter, you said there were some timing issues with the expenses that benefited your EBITDA. Are some of those expenses flowing back in to your third quarter guidance, or is that going to be more of a fourth quarter impact?

Yeah. Aaron, we do have timing of expenses, particularly as it relates to, as Dave mentioned, we're rolling out a lot of news expansions here this year so we have timing associated with those. So they are rolling into third and fourth quarter, into both quarters. And you'll notice that when you look at our full-year guidance that we gave you last quarter versus what we're giving you this quarter, our TV expenses really haven't changed.

Okay. Got it. And then thinking about your investment in content – and I think we all understand why you're doing it. How should we think about expenses going forward kind of in the medium term relative to what you have planned? And maybe I guess extrapolating that, looking at the margins of Sinclair historically and in the recent past versus how are you thinking about where you'd like to see margins for the company going forward?

Sure. So in terms of what we're doing on the content side, we don't expect that to affect our margins. The partnership with Tornante is a development partnership that will result in an immaterial amount of expense to Sinclair. To the extent that gets greenlit out of that development, that will be a more significant investment. But it will be replacing a show that we would've already paid for. And we anticipate the economics for us will be improved through that partnership versus buying it from a third party. And in terms of the new deal with MGM and Comet TV, that is going to have a minimal investment, again, kind of immaterial and will very quickly be accretive to us for – our first year out of the box should be slightly increased BCF. So our strategy on content, as you can see, is certainly to go deeper and get more involved in what goes on our air. But we're doing so in a very risk-adjusted way so that we're not overextending ourselves, and we're trying to improve our economics long term. So if anything, we'd expect our margins to improve because of these activities.

Yeah. I think the nature of all that – you have to consider just who Sinclair is relative to the distribution of content and the benefits that come our way, given the scale of our platform. And because of that, it puts us in a great position, as Chris is describing to you, where we can really achieve great economic benefits in terms of not only the value of the programs but in developing the content and having a real voice on what works for our stations.

Helpful context. One last question for me, if I can; a little bit more big picture. But a lot of metrics you could point to that signal that the economy overall is healthier today, certainly than it has been in a while, but yet core advertising seems kind of stuck at around flat. How do you think about that? And what's it going to take to push that to better growth? And is that something that concerns you as you think about going forward, if the economy was to weaken up and what impact that could have? Steven M. Marks - Co-Chief Operating Officer & Vice President, Sinclair Television Group, Inc.: Well I think actually, when you take a look at the advertising dollar, there's nothing wrong with the advertising dollar. Our industry is going through, from a sales standpoint, a transition into new technology. And when you take a look at our digital platform, it's the largest growth platform that we have in terms of sales. And that's not going to change anytime soon. So as we go forward, we're going to continue to invest and we'll continue to perform in getting digital dollars. So in the future, really have to think of spot in conjunction with digital. And when you do that, there's nothing wrong with the advertising dollar. As broadcasters, we have to follow that and that's exactly what we're doing. Digital dollars is a revenue stream for broadcasters, and we are participating in that very aggressively and it is our largest growth area. So when you look at what we do, we do more than spot; we sell multiscreen advertising. That is what we do. And in the future, you're going to see our gains come from the digital platform in terms of revenue.

This is Steve Pruett. We have had some significant inroads in selling what we call integrated packages of a combination of content, regular spot and digital platform. Our digital platform has become very robust. And with the new CMS, the workflow is much improved and we can do a lot more marketing or in the products. But in the future, we go in as a marketing solutions company, in particular on the local side. And we are making substantial gains, and we've been able to also leverage our scale into a footprint and we can sell a regional footprint. In the case of the Southeast, we reached 57% of the people who bought cars in the entire Southeast, based on current data. And so there's lots of opportunity here. I would say that we're very aggressively seeking it, but we also have barely scratched the surface.

Great points, guys. I appreciate the time, as always.

Thank you.

Thank you. Our next question today is coming from Tracy Young from Evercore ISI. Please proceed with your question.

Just two questions from me. First question, usually core is a little bit stronger in Q2 than Q3. Is there any other sort of true-up that's happening as a result of the transmission – retransmission deals that you did in Q2? And the second question is, you mentioned the Memorandum of Understanding with Samsung. What is the next data point we need to see on ATSC? Thanks.

Yeah. So I'm not sure, Tracy, I'm following your question on Q2 versus Q3. What we are seeing is our core on an ex-political basis improve from Q2 to Q3. David D. Smith - Chairman, President & Chief Executive Officer: Tracy, with regard to the Memorandum of Understanding between Samsung, Pearl and Sinclair, high level, the intent of the MOU is to simply signal to the broadcast industry and to the world at large and the federal government that the broadcast industry is about ready to move to the next generation of broadcast platform. And Samsung, as the largest manufacturer in the world, is clearly now fully engaged in the process of preparing prototype products that will be likely on demonstration at the Consumer Electronics Show and certainly in NAB of next year, in all probability. And I think when you look at what we're all going to be doing together, we're going to be demonstrating over the next three to five months some incredible capability to the technology in Washington, D.C.; probably CES, if we're ready; clearly the NAB of next year, what the capability of the platform is. And it's essentially going to demonstrate what we've been telling everybody for the last X years, is just – it's really now on what I would say is a very fast track to being adopted by the industry. And once that's done, then we'll go to the FCC and we'll say, it's time to go and we'll go through that process. And then we'll start to prepare for a transition.

Okay. Thank you.

Thank you. Our next question today is coming from Marci Ryvicker from Wells Fargo. Please proceed with your question.

Thanks. I have really two points of clarification, I guess. Chris, did you say that Q3 2014 pro forma net broadcast revenue was $488 million?

Let me just double-check that for you, Lucy.

Marci.

Or – sorry – Marci.

And I'll ask you the second question, also. The $2 billion for the auction, is that an average? Is that a maximum? How should we sort of frame that number, knowing that you may or may not get anything? But the question I'm going to ask through email is just a point of reference for the $2 billion.

Sure. So that $2 billion is based on the median Greenhill values. So – and it – I guess I'd characterize it – it's not an average. It would be – we could obviously sell more than that; it would have a greater BCF impact. That number is kind of our best guess right now than optimal outcome.

But if you...

Meaning If the median Greenhill values are accurate, then it would tally up to approximately $2 billion and would be only – it would be less than a 3% BCF impact. And it would still give us plenty of optionality on ATSC 3.

So you didn't go station by station; you sort of did what we did, which is just take the market median.

No. I went station by station.

Okay. So yours is specifically those stations using Greenhill numbers.

Correct.

Okay.

Yeah. We went market by market, station-by-station. But the big assumption is that the Greenhill median values are the ultimate auction outcome.

Okay.

Right? All right.

Yep.

So on your other question that was related to pro forma third quarter net broadcast revenues; is that right?

Yeah. You said a 488 number. I'm just wondering what that is.

The $488 is a pro forma number, and the number that we gave you on the $483 million to $487 million, the up 8% to 9%. That's a comparison to an as-reported number. So that was about $450 million, $452 million. Somewhere in there.

Okay. I think...

Don't have that number right in front of me, but that's the 8% to 9% up over third quarter of last year, pro forma we have $488 million.

Okay. I think the confusion for your guide versus consensus is that we have the wrong pro forma based numbers. So your guidance is actually better than what we come off of Street models, which Lucy and I can go through it offline. I just wanted to let you know that.

Okay. Yeah. No, we appreciate that because our numbers for third quarter, when you consider pro forma that were, call it about flattish to the pro forma and that last year in third quarter, there was $37 million of pro forma political versus only $7 million this year. So we're pleased with the numbers that we're seeing.

Yeah. Your guidance is actually better than what we had initially thought. Okay. Thank you very much.

Okay.

Thank you. Our next question today is coming from Dan Kurnos from The Benchmark Company. Please proceed with your question.

Great. Thanks. Good morning. Just maybe a little bit more color around the CBS deal, understanding you won't give specifics on this. But you essentially, what amounted – what it amounted to almost a six-year deal here is somewhat unprecedented. Just love to hear sort of your thoughts on high-level visibility that you have that gives you confidence in sort of maintaining the retrans and reverse margins and getting that deal done. What caused you to get that deal done on such a long term? And certainly, some additional color on the OTT portion of that deal, which wasn't necessarily publicized would be great and how you think about how that deal might serve as sort of a platform or basis as other guys come online. Thanks.

So in terms of that deal, our view is the longer the better in terms of our network affiliation agreements. And being a constructive partner, CBS was willing to grant us a five-year deal that started when our other transaction – or when other deals expired. So I don't think it was any more complicated than that. And knowing what your verse is certainly helps in terms of our visibility on net retrans going forward. Generally, our gross retrans contracts are three-year deals. So we're very pleased with the outcome there and the visibility that it gives us. And in terms of our participation in CBS All Access, we're also pleased to launch that in the top 100 markets that we cover and, of course, be compensated for that as well in terms of the subscribers that sign up in our DMAs.

Yeah. And Dan, I would just add, I think that the fact that CBS was willing to do a long-term forward contract really goes to show that symbiotic relationship between the networks and the affiliates. And the other piece I would add is on the retrans, for the clarity. So we have – through the next 12 months, we have 75% of our retrans subs coming up for renewal. And through the end of 2016, we only have 10% of our network affiliate subs that need to be renewed. So we're pretty well locked in now with long-term visibility on all the network side.

Terrific. And then just one other sort of high-level question, maybe just on the content side. I don't know if this is a fair question, given sort of the limited availability of options out there right now. But maybe if you guys can just tell us how you think about balancing new content in terms of focus on sports versus ancillary content like the MGM or Tornante deal. And ultimately, as you continue to move into more of the original programming funnel, just – is there kind of a mix of syndicated verse original programming that you're targeting, and ultimately to develop a significant library that syndication of your own becomes an option? Or is that thinking too far down the curve?

This is Steve Pruett. The mix is sort of pretty natural. It is what it is. Today, I don't see that changing substantially. We have made some changes by adding the Sports Network, and I think that will continue to grow but in kind of what I would call a natural positioning on a TV platform. And then it'll have a separate platform all of its own. In terms of our syndicated product, again, there's an evolution and it's somewhat dynamic. But coming into 2016, we have a slot or so to fill; 2017, we have more; in 2018, we have more. So as we evolve through our syndication needs, we judge that based on the slots that come available. And to some degree, we're developing to that, but we're not forcing an issue where we say we have to have X number of shows. We're going to look at all options that are out there. In terms of from the major syndicators, we have many opportunities as well as from our in-house. I think the purpose of our in-house is, one, to serve our programming needs but also to make money beyond our own programming needs. So we do intend to have a successful syndication model. We already have a few things that we have been successful on a one-time-only basis and on a barter basis where we're starting to put things in the market and work with partners. And then the Tornante product is of that nature that we're developing to syndication, specifically. And then the MGM deal is straight up. We have the platform. Why not be in the D2 network ownership business? It makes sense. It can generate a profit very quickly, and we think that, that business can expand with these kinds of partnerships beyond the first network.

And I would just add to that philosophically, when you look at what we're doing in content, our biggest moneymakers for Sinclair are first, news is where we get most of our revenue, which is very close with syndication. And news we control ourselves. We are from a position of strength there that we continue to expand there. Syndication is really related to what we're doing with Tornante and Sinclair Original Programming. And we're looking to buttress that area as well because it's a big moneymaker for us. And sports, which is represented by the ASN initiative; we get sports primarily through the networks today. We like sports because it's higher barriers to entry and it has scarcity value. So we want to have more of a position there from our own creation. So we're taking the areas of – that we make a lot of money today and we're expanding them and enhancing them with our content strategy.

Great. Thanks for all the color, guys.

Thank you. Our next question today is coming from Davis Hebert from Wells Fargo Securities. Please proceed with your question.

Good morning, everyone. Thanks for taking the question. I just wanted to ask a question on retrans. Given the concern around ESPN and declining subscriber levels, I'm just curious if you're seeing any disruption at all on your subscriber base as you look to renew the 75% subs between now and 2016.

We're not seeing any disruption. I think what you're hearing on ESPN is they're hitting a ceiling in terms of their revenue potential. And so now they have to start rationalizing their costs. But so far, that is not a problem for us in terms of our sub counts, as we're still on the most widely distributed tiers on all of our MVPDs, where that's not in case for ESPN. And we still have a significant gap in terms of what we're paid versus our fair value in allied (42:43) share.

Understood. On the auction, I wanted to clarify some of these numbers. So you said $2 billion with only impacting 3% of BCF. So I just want to understand, would this be isolated to duopoly or JSA markets, or would you look to potentially channel share with someone other than your JSA partner?

So that particular analysis does not contemplate the impact of channel sharing. So that's just done internally, rationalizing our own portfolio. We are in active discussions with people around channel sharing, which would only make the outcome better.

Understood. Okay. And then Comcast acquired Visible World, and I know on the last call you were very bullish on this partnership. So I'm just curious if Comcast ownership, how does that change your view of Visible World?

It doesn't change our view at all. We are in the process of forming a separate entity which will be a joint venture with Visible World, which will keep the data and operations of this venture separate from Visible World. And that's just really important not only for Comcast but for the other broadcasters to ensure that their information is kept separate from all the other broadcasters, not the least of which is Comcast. But Comcast, when you take a look – this is in their tech bucket; it's very analogous to free will (44:22), which lots of other media companies use. So we're not worried at all in terms of the potential conflict there. We're happy that Visible World is going to be well capitalized and investing in their technology going forward.

Okay. That's great. And then the last question for me – appreciate all the color on the core – I just wanted to ask about national. I know last year, there was a lot of commentary around national dollars rotating out of the sector due to events and other things. Just curious if some of those dollars – national dollars – are coming back to the sector. Steven M. Marks - Co-Chief Operating Officer & Vice President, Sinclair Television Group, Inc.: I think the issue with national spot is that to a degree, it's become a little bit cumbersome to buy and that's been evolving over a long period of time. And then to couple that, you have new technology, which we call digital. And some of the budgets on national spot have been diverted over to digital. But what I've been saying all along is you have to look at our business when we're selling something. We sell multi-screen. So national is going through a transition. And if there's an issue nationally, it really is with the rep firms that represent us. They need to be a little bit more aggressive in going after these new platforms, and they're beginning to do that. They're making a very serious investment in doing that. They're playing a little bit of catch-up. So I think really, when you take a look at this situation, if all the players play it correctly, this is a marathon in terms of understanding and benefiting from digital advertising. It's not a sprint. As broadcasters, we're educating ourselves. Dollars have been diverted, but we're going after those dollars. And we could show you that and demonstrate that by the tremendous percentage increases we're enjoying on digital. So the business is going through a transformation and it's just called follow the dollars. And quite frankly, all of this new innovation is tailor-made for our industry. We just need to educate ourselves and catch up on it from a selling perspective. And once we do that – and make no doubt about it, we will do that – the end of the day, the deciding value will be the TV set because we'll be able to package everything. And that's a game-changer down the road and it's coming to a theater near you in the not-too-distant future. So this is all a game of following the dollars and, quite frankly, it's tailor-made for our industry.

So – and I'll just add to that, that the one thing to keep in mind about national spot as we know, they are not national marketing campaigns in the way of network. And the one thing we've discovered is that these dollars can be highly regional and highly focused market by market, and they can be actually changed based on buying criteria. So what we're doing in addition to adding to the national rep portfolio of having digital assets and multi-screen assets, we're also making client calls at the regional level, and where we have station influences and contacts and developing footprint-type of products that we sell at the franchise owner level, at the client level where the decision is being made. So there's a concerted effort to get into the stream of decision-making much earlier than before a spot avail is delivered. I think that's the real future of the business, and we have the advantages of having a broad footprint across the country, major markets where clients are dealing with us, that they come to us for solutions or we go to them with ideas. And I think that will also influence this. The rotation of national spot campaigns is a very natural rotation. It's been going on for years. Sometimes that money moves back and forth between business that's handled by our rep firm, and we call it national, to business that might be handled by an agency that doesn't go through the rep firm and we call that regional. So same type of marketing. Thank you.

Okay. Thank you very much.

Thank you. Our next question today is coming from Barry Lucas from Gabelli & Company. Please proceed with your question. Barry L. Lucas - Gabelli & Company: Thanks and good morning. I have two and hoping that Steve can take another whack at this. Steve, if we look at an auto sales rate above $17 million now and the core auto business looking – I don't want to say anemic but certainly dead flat. If you were to include your digital auto as a category, how much would auto be up in total? Steven M. Marks - Co-Chief Operating Officer & Vice President, Sinclair Television Group, Inc.: That's a good question. I don't have an answer for you on that one because that involves some special math to do. But offline, we could get back to you on that. I don't have that answer on that off the top of my head. Barry L. Lucas - Gabelli & Company: Okay. But the sense you have is that some of those auto dollars in a high-volume environment are shifting to digital and you've got a bucket under there and capturing some of those. Steven M. Marks - Co-Chief Operating Officer & Vice President, Sinclair Television Group, Inc.: Well actually, Lucy's sitting right here next to me, nudging me, telling me she has the info. So...

Yeah. So Barry, when we look at third quarter, we're looking at our auto – this is total auto advertising, including digital to be up kind of mid single-digit percent. Barry L. Lucas - Gabelli & Company: Okay. Okay. That's helpful. Second item. Since Sinclair I guess would be somewhat impartial in the consolidation world just now, at least for the moment. How do you view industry consolidation going forward? And why haven't we seen any more deals? And is that a function of people just waiting for the auction?

So I think the auction certainly has had an impact on M&A. And of course, the change in the – and some of the rules of the FCC in terms of processing rules about new deals has certainly had an impact as well, in fairness. And I'd expect consolidation to continue. There'll be a pause during the auction while we go through a quiet period while that gets done. But after that, I think our expectations for further dereg are still quite high. And even outside of dereg, there's still some natural consolidation happen. And once you get the auction out of the way, I would expect the industry to just follow the natural life-cycle that mature industries do follow, and the number of players to be reduced down further. David D. Smith - Chairman, President & Chief Executive Officer: Barry, in order to let that happen, it means the ownership prescriptions that currently exist in our industry have to be removed. And my sense of being on the Hill for a considerable period of time is, is with the ownership cap at 39% who, there isn't a member of Congress that we haven't talked to that doesn't look at that and say, something's wrong with that. That makes no sense to us. So I think it's going to take a little time. But in the end, in a perfect world, there should be no ownership caps on anybody. And the thing, too – just at a high level, the thing to appreciate is, as I know you do, is that the broadcast industry, specifically the television industry is the only industry in the United States that has caps and restrictions on it. Radio industry doesn't; nobody else does. Satellite doesn't; phone companies don't; nobody does. So I think Congress clearly understands there's something wrong with that equation and needs to be adjusted and dealt with over time. So I think you'll start to see – after we get through the auction, you'll start to see a push in that direction. Barry L. Lucas - Gabelli & Company: Great. Thanks for that added color, David.

Thank you. We've reached the end of our question-and-answer session. I'd like to turn the floor back over management for any further or closing comment.

All right. Thank you, operator, and thank you all for participating on our earnings call this morning. And if anyone has additional questions, please feel free to contact us. Thank you.

Thank you. That does conclude today's teleconference. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.