Please stand by. We're about to begin. Good morning, and welcome to Beasley Broadcast Group's third quarter 2022 conference call. Before proceeding, I would like to emphasize that today's conference call and webcast will contain forward-looking statements about our future performance and results of operations that involve risks and uncertainties described in the Risk Factors section of our most recent annual reports on Form 10-K, as supplemented by our quarterly reports on Form 10-Q.
Today's webcast will also contain a discussion of certain non-GAAP financial measures within the meaning of Item 10 of Regulation S-K. A reconciliation of these non-GAAP measures with their most directly comparable financial measures calculated and presented in accordance with GAAP can be found in this morning's news announcement and on the company's website.
I would also remind listeners that following its completion, a replay of today's call can be accessed for five days on the company's website, www.bbgi.com. You can also find a copy of today's press release on the Investors or Press Room sections of the site. At this time, I'd like to turn the conference over to your host, Beasley Broadcast Group CEO, Caroline Beasley. Please go ahead.
Thank you, and good morning, everyone. Thank you for joining us to review our third quarter results. Marie Tedesco, our CFO, is with me on the call this morning. I'm happy to share that our third quarter results continue to show year-over-year improvements in both revenue and SOI. Overall, net revenue increased 1.5% year-over-year, exceeding the guidance we provided when we reported Q2 of a projected flat to slightly down quarter.
Now, breaking that down, over-the-air local spot revenue increased 1% or by $275,000, while national revenue declined 8.7% or by $1.2 million, and that includes the benefit of $1.9 million in political. Impressively, third quarter digital revenue grew 23.2% year-over-year, while audio revenue decreased 1.9%.
Similar to previous quarters, new business initiatives, sports betting, political, and a $1.9 million year-over-year increase in digital revenue were the primary drivers that offset the continued national revenue decline. Now, to dig into that a bit, national, excluding political, was down 20% or $2.7 million for the quarter, and it now accounts for about 15% of our total revenue.
This trend is consistent with the past several quarters where we've been successful in offsetting declines in national with higher local and, more notably, digital revenue. As a matter of fact, in both the second and third quarters, digital was a larger part of our revenue mix than national. Third quarter digital revenue represented just over 16% of our total revenue, up from 13.2% in the year ago third quarter.
Our goal remains that digital revenues will be close to 20% of total revenue by fourth quarter, with continued growth thereafter. As a reminder, we completed the acquisition of Guarantee Digital on June 23rd, and this will continue to accelerate our digital revenue growth and provide meaningful synergies with our growing digital platform.
Historically, national has accounted for as much as 20 and sometimes 30% of our total revenue mix. As I just mentioned, it now represents about 15%. We expect national to control platforms while continuing to aggressively develop local direct new business. We recorded $6.4 million in new business this quarter. Given the economic backdrop, we began reducing costs early in the quarter.
We executed our first of two RIFs at the beginning of July, which eliminated approximately $1.5 million of permanent wages. Our second RIF, which was executed in early October, reduced annual wages by an additional approximate $3.5 million.
These initiatives were executed as we remain watchful of all expenses as we near the end of 2022 with our eyes on 2023. Now, touching on sports betting. We recorded $3.8 million in revenue or 6% of total revenue in this category during the quarter, which was driven by Detroit, Philly, and New Jersey clusters.
We expect that sports betting will begin in Massachusetts sometime between the end of fourth quarter and first quarter of 2023, and we're well-positioned in this market with our five FMs that have five distinct formats reaching 5 different demographics, including 98.5 The Sports Hub, home to the Patriots, Bruins, and the Celtics.
Operating expenses increased 0.6% year-over-year or by $326,000, with our June acquisition accounting for $926,000 of new expenses. SOI grew by $595,000 compared to third quarter 2021, with margins now at just over 19%. Of note, when comparing third quarter 2022 to third quarter 2021, digital SOI increased to $2 million, and that was from $10,000, marking another indication of the great progress we are making in digital.
Like previous quarters, we were able to take advantage of our bonds trading below par, and we repurchased an additional $3 million at 77% of par for a total of $5 million that was settled in the quarter, permanently reducing our debt to $290 million. With that, I'm gonna hand it over to Marie, and she's gonna provide you deep insights into the quarter. Marie?
Thanks, Caroline. Good morning, and good morning, everyone. Let me start with a review of our third quarter results, followed by a review of our balance sheet. Third quarter net revenue increased 1.5%, or $921,000 to $63.8 million, which includes $586,000 from our two LMAs, as well as $1.1 million from Guarantee Digital, our second quarter agency acquisition.
We grew revenue year-over-year in all but two of our markets, and we generated approximately $1.9 million in net political revenue in third quarter compared to $258,000 last year. We continue to see higher political spending than initially expected, which will also be evident in fourth quarter. As of today, we have exceeded the full-year political revenue received in 2018 midterm election by approximately 40%.
Excluding political, third quarter revenue declined 1.5% or $724,000 due to the decline in national. We saw a slowdown in July and August related to inflation, labor shortages, interest rate increases, and the overall slowdown in the economy. Looking closer at the quarter, July was down approximately 3% with local flat and national down 28%.
August came in flat with local up 5%, offsetting a 24% decline in national. September was up 2.8%, with local up 3% and national up 5%, thanks to political. Digital revenue for the quarter grew 23.2% to $10.2 million and represented approximately 16% of total third quarter revenue compared to a 13.2% in the prior year quarter.
We grew our digital margin from 14.4% in second quarter 2022 and from 3.3% in prior-year third quarter to an impressive 19.6% this quarter as we close in on margin levels closer to pre-pandemic over the year margins.
Station operating expenses for the quarter increased $326,000 or 0.6% to $51.5 million, resulting in third quarter SOI of $12.3 million, a year-over-year increase of approximately $600,000. Breaking down the increase in operating expenses, the main drivers were the acquisition of our white-label agency, Guarantee Digital, which added $926,000 of new expenses for the quarter, and severance costs from part one of two RIFs completed first week of July of approximately $200,000.
Pro forma for the severance and the annual wage savings, our expenses would have declined 2.4% and our SOI would have increased 18.4%. Now looking at our revenue categories for third quarter, consumer services remained our largest revenue category at 28.5% of total revenue, with an increase of 1.1% year-over-year for the quarter.
Our second-largest category was entertainment, which switched place with retail. Entertainment was flat year-over-year and accounted for 15.8% of total revenues. We saw entertainment spend increases in all but four of our markets, and sports betting added $3.8 million compared to $4.3 million in the prior year quarter. Retail grew 9.6% year-over-year and accounted for 15.7% of total revenues.
We saw double-digit growth in Philadelphia, Tampa, Detroit, Charlotte, and Las Vegas. Auto, our fourth largest category, saw revenues down 5.5% year-over-year, and the category accounted for 8.3% of total revenue. We saw double-digit increases in auto at our Detroit and Seattle clusters and low single-digit increases in Boston, New Jersey, and Las Vegas. The year-over-year decline in this category in third quarter was again less than $300,000.
We believe this revenue category can show improvement as supply chain issues normalize and stabilize and as inventory levels continue to build at the dealership level. Consumer products were in fifth place, down 24% and 5.4% of total revenue, and telecom was in sixth spot, down 5.5%, representing 4.9% of total revenue.
Corporate G&A expenses for the quarter increased 29% or by $1.2 million compared to the same quarter a year ago to $5.1 million. The year-over-year increase in corporate G&A is mostly related to an increase in corporate digital expenses of approximately $900,000, as well as severance expense from a reduction in headcount. Non-cash stock-based compensation increased $19,000 or 7.5% to $270,000 in the quarter, and we had an income tax benefit for the quarter of $1.3 million.
Third quarter 2022 operating income declined $170,000 to -$4.7 million, compared to -$4.9 million in the year-ago quarter, driven by the increase in corporate expense, mostly offset by an increase in station operating income.
Third quarter interest expense decreased $400,000 year-over-year to $6.6 million related to the repurchase of our bonds over the past two quarters. We did not have any scheduled debt payments during the quarter, leaving us with a total debt of $290 million. Our next semiannual interest payment is scheduled for February first, 2023.
EBITDA for the third quarter was $7.2 million, and our adjusted net leverage, including add backs such as certain taxes, non-cash compensation, a PPP loan from fourth quarter 2021 and pro forma for the agency acquisition and our LMA risk was 5.87 times. We ended the quarter with cash on hand of $32.8 million. That's net of the cash used for the bond repurchases.
Our cash balance continues to allow us flexibility to reduce debt and or pursue additional investments in the digital space should an opportunity arise that could further accelerate our digital growth and provide significant synergies and free cash flow. However, given the uncertain economic environment, we are inclined to keep our cash on the balance sheet for the time being.
Our capital expenditures for the quarter were $4.7 million, which was almost entirely related to the relocation and build outs of our Boston studios and offices, which were completed on August thirtieth.
We have received $2.6 million in a build out allowance from the landlord with an additional $1.5 million on the way. This compares to prior third quarter of $1.2 million and year-to-date CapEx spend was $11.2 million or $8.6 million net of the build out reimbursement received so far, compared to prior year-to-date of $3.7 million. With that, I'll turn it back to Caroline.
Thank you, Marie. Our multi-platform local content strategy continues to drive more audience in our markets. In the third quarter, our owned and operated audience grew by 22% compared to Q3 2021. This growth was particularly evident in our digital O&O assets, with unique users increasing from 16.3 million in Q3 2021 to 23.6 million in Q3 2022.
That's an increase of 45%. More important, this expanded audience spent more time and consumed more content on our digital platforms, which led to higher sellable digital impressions, which has been our focus in driving digital growth. Our O&O impressions were up over 128% from Q3 2021, and we expect to reach 1 billion impressions by the end of this year.
In addition to this incredible growth on our digital platforms, our radio stations continue to maintain dominant positions in Nielsen, where we currently have the highest average cluster share when compared to all other major broadcasters in PPM. Overall, our PPM market share increased 1% year-over-year with adults 25-54 in prime.
In fact, we have the number one station in most of our largest markets, including Boston, Philly, Detroit, and Charlotte amongst adults 25-54. Now, according to eMarketer's Global Media Intelligence Report, total audio listening in the H1 of 2022 grew 10% year-over-year to a total of four hours and five minutes per day. Broadcast radio increased from one hour and seven minutes to 1 hour and 11 minutes, and this is likely due to an increase in at-work listening with a return to work.
Between broadcast radio and podcasts, average daily time spent increased 10 minutes, with podcast listening moving from 52 to 58 minutes daily. Digital audio listening is up across the board, moving from 72% penetration during the H1 of 2021 to 79% in the H1 of 2022. The growth is especially notable in the 16-24 demographic, where those reporting having listened to content in the past month went from 84% to 91%.
I hope that you can see from our comments this morning that we are well positioned to take advantage of these trends. Now, moving on to esports. The Overwatch League had its best season to date, and we just ended the season and we were ranked three, number three in the world.
I have to say that I'm really proud of our team and the accomplishments that they were able to achieve this year. We're now planning for the 2023 out season, which should be very exciting given the fact that the Overwatch two game was released on October fourth, and they had more than 25 million players registered to play in its first 10 days.
Our Rocket League team, Team AXLE, has a new and upgraded roster, including one former world champion, and we're currently ranked number 11 in North America, and that's out of 200 teams. Last month we were pleased to announce that we entered into an asset exchange agreement with Audacy, whereby we will exchange KDWN AM and a translator for their Alternative 107.5 KXTE FM and makeup.
As part of this agreement, longtime Las Vegas-based syndicated morning personalities, Dave and Mahoney, will continue to be heard weekdays from 6:00 A.M. to 10:00 A.M. under the Beasley Media Group banner. The planned asset exchange highlights our focus on premium local content, and it's very complementary to our other four stations in the market, and the transaction is expected to be completed sometime this quarter.
Now, looking at fourth quarter, as we stay focused on driving further revenue diversification and growing our audience, especially on our digital platform with our new strategic initiatives, we've seen some political crowd out, leading to declines in certain categories, offset by stronger than expected political revenue.
However, we have prepared for an overall slowdown in the economy given the overall declining environment that we're seeing today. Fourth quarter revenue as of today is pacing flat to slightly up to prior year.
Breaking that down, October was up 8.5%, and November and December are pacing just north of -3%. As noted earlier, we are ever mindful of the current economic environment and initiated a second RIF and other permanent cost reductions effective October 1 of approximately $10 million on a combined basis.
Before going to Q&A, I'd like to thank our teams in Fort Myers and the corporate office here in Naples for the outstanding job of getting us back on air and for their incredible commitment and dedication during Hurricane Ian in September of this year. Our on and off-air teams were a direct lifeline to the local communities that were impacted by the storm, staying on the air around the clock to provide important life-saving news and information.
Their selfless brave and unwavering acts of heroism during this time were awe inspiring. I'd also like to acknowledge our team members once again across the company for everything that they're doing to help us move past these economic challenges that we're currently facing and we are expecting to face going forward into 2023. Thank you for your time this morning, and please feel free to call with any questions. We do have some questions that were submitted, so we will take some time to review those.
Okay, great. Thanks, Caroline. We did receive a request to disclose our quarterly EBITDA numbers. As you could see in our prepared comments, we have included both EBITDA and our net adjusted leverage, and we will continue to do so on a go-forward basis. Going to the first question, Caroline, what is the minimum cash balance, what you are comfortable with? And also, to follow up with that, are you interested in buying back any more bonds?
Yes. The minimum cash balance that we feel comfortable with is about $25 million. As far as buying back more bonds, our goal is to be opportunistic in buying back bonds. However, as I said, our minimum cash balance is $25 million, and we're very conscious now given the uncertain economic environment. That's where we are.
Great. Another question was what products and or services are driving the digital growth? Could you give us an update on expectations for digital revenue as a % of total revenue for both 2022 and 2023?
Yeah. I think that hopefully you heard from the comments that I made earlier today, you know, our focus has been growing our O&O audience on the digital platform. We have rolled out an editorial content initiative, which has really driven our page views and therefore impressions. Our O&O products, as a result of this, were really the driver of revenue growth, and we saw a 23% increase in revenue.
What are these products that we're able to sell? We've got programmatic audio and display, and then of course, direct sales from our podcast and display sales. Our TPP products for the quarter were flat. Again, this is all driven by O&O products this year.
Great. Then, we have one more question here, and this is about the timing of the cost reduction plan and what are the cash costs of implementing those cuts. I will take that. Of the $10 million annualized cost cuts, half of those are permanent reduction in headcounts, which cost us just under $600,000 in severance.
The headcount reduction was effective in October, so we will see some benefit of that in fourth quarter, less the added severance expense. That's it. We had a few more questions, but they were all covered in our prepared comments.
All right. Well, thank you very much for your time today, and feel free to reach out with any additional questions that we may not have covered. All right, bye.
This concludes today's call. Thank you for your participation. You may now disconnect.