Mr. Howell, you may begin your call.
Thank you. Thank you, operator. Good morning. I am Hilton Howell, the Chairman and CEO of Gray Television. Thank all of you for joining us for our second call this week and our first quarter 2021 earnings call. Happily with me in person for the first time in 14 months are Gray's fully vaccinated non-masks executive officers, our President and co-CEO, Pat LaPlatney, our Chief Legal and Development Officer, Kevin Latek, our Chief Financial Officer, Jim Ryan, and our Chief Operating Officer, Bob Smith. We begin this morning with a disclaimer that Kevin will provide.
Thank you, Hilton. Good morning, everyone. Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results, our pending acquisitions, and the impact of the novel coronavirus and its disease, known as COVID-19, on our future operating results. Those statements are subject to a number of risks and uncertainties. Actual results in the future could differ from those expressed or implied in any forward-looking statements as a result of various important factors that have been set forth in the company's most recent reports filed with the SEC, including our most recent annual report on Form 10-K and our most recent earnings release. The company undertakes no obligation to update these forward-looking statements. Gray uses its website as a key source of company information. The website address is www.gray.tv.
Included on the call may be a discussion of non-GAAP financial measures, and in particular, broadcast cash flow, broadcast cash flow less corporate expenses, operating cash flow, free cash flow, adjusted EBITDA, and certain leverage ratios. These metrics are not meant to replace GAAP measurements but are provided as supplements to assist the public in their analysis and valuation of our company. Included in our earnings release, as well as on our website, are reconciliations of non-GAAP financial measures to the GAAP measures reported in our financial statements. Now I return the call to Hilton.
Thank you, Kevin. As I mentioned on Monday morning, we issued our first quarter earnings release. We beat the Street, we beat guidance, and we're very proud of our financial results flowing from increased economic activity, prudent cost management, and a variety of strategic initiatives. Our impressive first quarter earnings report was completely overshadowed by our announcement five minutes later of our transformational acquisition of Meredith Corporation, our second billion or multi-billion dollar deal of 2021. Both of Monday's big announcement followed our other big recent news of our announcement from just last Thursday, a week ago today, of the sale of the Quincy divestiture stations to our friend Byron Allen and his Allen Media. We have been exceptionally busy lately, to say the least.
Today's call will focus on our earnings release because, as you know, we could only discuss the Meredith transaction in a special investor call on Monday morning. We're quite happy to have reported such great earnings this past Monday, even if it went mostly unnoticed. We hope this call will satisfy that. We reported total 1st quarter revenue of $554 million, an increase of $10 million or 2% from the first quarter of 2020. Net income attributable to common stockholders was $26 million or $0.27 per diluted share. In the first quarter of 2021, our combined local and national broadcast revenue, excluding political advertising revenue, which we call total core revenue, increased by approximately 4% compared to the first quarter of 2020, as advertiser demand has returned amid the end of political displacement.
We reported $819 million of cash on hand at the end of the quarter, with a total leverage ratio as defined in our senior credit facility of 3.88x on a trailing eight-quarter basis after netting our cash on hand and giving effect to all transaction-related expenses. We are very proud of these core results, and we credit the continued dedication and excellent work throughout the first quarter by our mostly working-from-home employees. Our second quarter guidance, which Jim will discuss, reflects our continued optimism in a quickly recovering economy that drives increased consumer spending and increased advertising in nearly every one of our markets and our production companies. On March 31st, 2021, Gray paid its first quarterly dividend to its common shareholders since the Great Recession.
The resumption of this dividend confirms our board's and our management's conclusion that our business is stable, that our prospects are bright, and that a return of capital to shareholders through a cash dividend, together with occasional share buybacks, will not deter us from our long-term goals to continue to grow Gray Television into the finest media company in the country. Our recent acquisitions will have no impact on the payment of our dividend or its subsequent growth and size. We will hear next a few remarks from my colleagues, which I am exceptionally proud to now have around the table with me, with additional color to our first quarter earnings release and other recent news. Thereafter, I will open the line to questions. I'll turn it over to Pat.
Thanks, Hilton. As Hilton just mentioned, our combined local and national broadcast revenue, excluding political, which we call total core revenue, was up 4% in the first quarter of 2021. While we didn't quite rebound to 2019 levels, we were definitely in that zip code. We saw strength in financial, home improvement, health, legal, and the supermarket categories all up mid-single digits to mid-teens over Q1 2020. Our pacings, which are not always a great predictor for future revenue, are still quite strong. There are a lot of positive numbers in our Q2 pacings as of today, and we're optimistic about the quarter. We continue to believe gambling will be the fastest-growing core ad category for us this year. The automotive category is pacing 48% ahead of last year's horrendous second quarter. It nevertheless continues to lag improvement in other categories due to the well-documented chip shortage issue.
Hopefully, the supply chain stabilizes over the summer, and that category will rebound in the back half of 2021. The production company's had a challenging first quarter due to the loss of a number of basketball games on the ACC schedule due to COVID-related issues. If you'll recall, we had some games moved from January back into December, which further impacted those numbers. Going forward, we expect that business to rebound back to pre-COVID numbers as our new business pipeline is healthy, and we expect to produce and deliver all 2021-2022 football and basketball games. In OTT news, our production group is launching Origin Sports this quarter, which will draw heavily from the Raycom Sports archive. We're also seeing tremendous audience and revenue growth for PowerNation, our automotive enthusiast production company in Nashville, in the OTT space.
On the digital side of the business, audience was down a bit from the record numbers in first quarter of 2020, but we still set company records for video plays and weather app users. Our OTT audience for news products is showing nice growth. That includes audience from our station apps on Amazon Fire TV, Roku, and Apple TV. Digital revenue is growing nicely. As a reminder, Gray is an equity partner of Premion, and our rollout is now complete across all of our markets. Revenues for Premion are tracking well ahead of projections for 2021, and these OTT and connected TV ad sales will be a solid contributor this year to our digital products and growth. I now turn the call to Kevin.
Hi. Good morning again. The big news of the first quarter was our agreement to acquire Quincy Media and its very strong stations and employees. That announcement from February now seems like ancient history. Last Thursday, we were thrilled to announce that we had concluded the competitive Quincy divestiture process with an agreement to sell the divestiture stations to Byron Allen's Allen Media for $380 million. We're personally very happy to see these stations added to Allen Media's growing portfolio. In terms of process, our Quincy transaction does not raise any regulatory issues other than the need for approval of the divestiture sale to Allen Media. The pleading cycle on Quincy is closed to the FCC.
The Meredith acquisition should follow this similar pattern of quick filings, no special or novel issues for the regulators, and prompt regulatory approvals. On Monday, we commenced the process to divest our television stations in the only overlap market between Gray and Meredith. Other than finalizing this divestiture sale, the Meredith transaction complies with all FCC ownership rules and DOJ standards. As Meredith and Gray explained in our Monday communications, the parties are very committed to closing the Gray-Meredith transactions prior to the end of this calendar year. Turning to retransmission, after our prior earnings call, we successfully completed the last of our year-end 2020 retransmission consent agreements with another large MVPD. That agreement was retroactive to January 1, 2021. Looking forward, we have two agreements that expire this summer that combined represent approximately 24% of our MVPD sub base.
As we have done with more than 480 MVPDs over the last six months, we anticipate that we will successfully and quietly conclude these two negotiations with economics that reflect the value of our unmatched portfolio of high-quality local television stations. For the second quarter, we anticipate that gross retransmission revenue will increase by 11% to 12% compared to the second quarter of 2020 for total gross retransmission revenue of between $245 million-$247 million. For the calendar year, we expect total gross retransmission revenue for the legacy Gray stations, meaning excluding the Quincy and Meredith stations, of at least $1 billion. That would represent a 15%-17% increase over 2020. Our retransmission revenue, less network compensation payments, is expected to grow between 12% and 13% in 2021.
Again, this annual guidance does not include the impact of the Quincy or Meredith acquisitions. On total subscribers, we continue to see large increases and large decreases among our various cable, satellite, and OTT distributors. All told, however, we are pleased that the total paid Big Four subscribers across all platforms saw only modest declines. Between the first quarter of 2020 and the first quarter of 2021, our total paid Big Four subscribers decreased by only 1.6%. Well, many consumers are shifting from traditional cable and satellite operators to the OTT providers. Most consumers continue to see value in a paid subscription for a service that includes their local broadcast stations. I'll turn the microphone over to Jim Ryan.
Thank you, Kevin. Good morning, everyone. As usual, we're filing our 10-Q a little bit later today, and everybody's had the actual release since Monday. Hilton's earlier remarks on Q1 results covered the key highlights of the quarter. I'll make some brief comments on our Q2 guidance. As Pat indicated, we are encouraged with the continuing improvement we're currently seeing in Q2. As of today, based on our current forecast for the quarter ending June 30th, 2021, compared to the quarter ending June 30th, 2020, we're expecting total core revenue will increase by 38%-40% to approximately $272 million-$277 million. Total core revenue will be very close to 2019 levels of $283.5 million, and we're very encouraged that we're close to the 2019 levels. As Kevin just said, retransmission will grow 11%-12% to something between $245 million and $247 million.
Our total broadcast revenue will increase 18%-20% to $530 million-$540 million. The production revenue will approximate $8 million-$9 million. Our operating expenses, broadcast expenses will be increasing to approximately $360 million-$365 million. $21 million of that increase is explained by increasing reverse compensation to the networks. Production company expenses will range between $9 million and $10 million, and our corporate expenses will range between $17 million and $20 million as we start incurring additional transaction-related expenses with the pending acquisitions. I'll turn the call now to Bob Smith, our Chief Operating Officer.
Thank you, Jim. We're very excited to begin working with the Meredith stations. We believe they are a great fit for Gray both geographically and culturally. It's been a great week for our employees as they responded enthusiastically to the Meredith acquisition. In addition, all of our senior leadership has received positive feedback from Meredith employees who they have known professionally for some time. We're also excited to exchange and share best practices in both news and sales. With the combined companies, 2022 should be a banner year in regards to political advertising. In fact, perhaps the happiest person in Gray on Monday when the announcement came out was Mike Jones, our VP of Political Sales, who's located in Washington, D.C.
We began planning for the transition as of Monday, and I can tell you that all of us are really eager to close both Quincy and Meredith just as fast as possible. Since this call began a few minutes ago, the Radio Television Digital News Association announced that it has awarded a combined 57 regional Edward R. Murrow Awards for excellence in journalism to 26 of Gray's local stations. RTDNA selected WVUE in New Orleans for nine separate awards. We're also honored with three awards for overall excellence, the highest honor bestowed, to again, WVUE in New Orleans, WKYT in Lexington, Kentucky, and KWQC in Davenport, Iowa.
Six of our stations won regional Murrows for best newscast, starting again with WVUE in New Orleans, which is joined in this category by WAFB in Baton Rouge, Louisiana, WMTV in Madison, Wisconsin, WKYT in Lexington, Kentucky, WTVG in Toledo, Ohio, and WWBT in Richmond, Virginia. We also had four winners from the investigative reporting category, starting again with WVUE in New Orleans, as well as Honolulu-based Hawaii News Now, WRDW in Augusta, Georgia, and WBAY in Green Bay, Wisconsin. Finally, I want to highlight WKYT in Lexington, Kentucky, and KYTV in Springfield, Missouri for the regional Murrow Awards for excellence in innovation. Congratulations to all these winning news teams and professionals. The competition for any journalist award for 2020 had to be the strongest ever in light of all the unprecedented and historic news events, as well as tremendous investigative efforts by local media companies in every market.
Truly, we are Gray proud this week. I'll now turn the call back to Hilton.
Well, thank you very much, Bob. We are exceptionally pleased with the news out of the Radio Television Digital News Association and very proud of the professionalism of all of our folks in the fields. Right now, our operator, we will open the line for questions from anyone that may have them.
Thank you, sir. At this time, we would like to take any questions you might have for us today. We have our first question from Kyle Evans from Stephens. Your line is now open.
Hi. Thanks for the detail around gross and net retrans for this year. Could you help us think about the cadence on the 20% that's renewing next year? Help us think about what quarters. Thanks.
Kyle, this is Kevin. We have about 24% of the subs renewing this summer through the two big contracts I mentioned on the call. We actually have no retrans up for renewal next year. We've pushed through everything starting last year, and the cadence of what we've done has been pretty intense, but that means that on the backside, there's no retrans renewals of any substance between this summer and the end of 2022.
Great. Then my recollection is that you just got done with all your networks as well, but just remind me when those all queue back up.
Yeah. Actually, the network deals were done a few years ago. We haven't done a network deal in probably three years, four years, depending on the network. We have all of our CBS up at the end of this year, all of Fox up at the end of 2022, all of ABC and NBC up at the end of 2023.
Great. Then last one. Help us think about the puts and takes for the 2020 political cycle versus, I'm sorry, the 2022 political cycle versus 2020 by sizing presidential and maybe the Georgia windfall. Thanks.
Presidential is 25%, 30% of political last year. The Georgia number was, I would say, fairly significant. You can look at what we reported. We reported right around election day, and then we ended up reporting $430 million for the calendar year. That delta was entirely the Georgia runoff. There's about $4 million-$6 million of political revenue that hit in the first quarter of this year, those first few days of January. I think we can assume there won't be a double runoff of the Senate in Georgia in 2022. The rest of what you saw were very competitive races up and down the line from U.S. Senate to governor, House seats, levels we hadn't seen before, and even other races and ballots. I think we're all feeling very good about political in 2022. As you know, House and Senate are razor close.
People have not dropped their political divisions and started singing Kumbaya, so we expect that politics will continue to be a very important area for the company in 2022 and beyond. When the control of the House or Senate gets very close, you see lots of political activism, fundraising, and therefore spending, and Georgia exemplifies that. I think you also saw that throughout the year with spending on the House and Senate races. When we fast-forward to 2022, it's really almost Georgia all over again. House and Senate are both up for grabs in 2022. We are very optimistic about our current platform and our current portfolio, adding the Quincy stations, which had extremely good political last year, and then, of course, Meredith stations rounding out for us, Nevada, Arizona, giving us a lot more exposure to Missouri.
It's really an unmatched, unparalleled portfolio in terms of the hot political races in 2022 and beyond with, again, the sole exception for us not being in the state of Pennsylvania.
Kyle, this is Hilton. Let me just reinforce what Kevin said, and what I think is an exceptionally propitious timing for both of these acquisitions because they will both close, Quincy first, but then Meredith second in 2021. Our new leverage numbers, which will be right at where we were when we closed our transformational deal with Raycom, will be almost immediately begun to be paid down by some of the most really exciting political races in 2022. Literally, the House is divided by two or three or four seats. It's a 50/50 Senate. We're going to see political dollars from Alaska to Florida, from Arizona and Nevada. Georgia alone will have both a very, I'm certain, contentious and expensive gubernatorial race and senatorial race. Our new portfolio gives us ubiquitous coverage for this whole state everywhere.
I really do think, to echo, I guess it was Bob's comments, the happiest person upon the announcement of this deal was the person responsible for selling all of our political ads. I think that gives you a true professional's view about what 2022 is going to be doing for Gray. I do not believe, while I love our broadcasting peers, I do not believe that any company has a better political footprint than Gray Television.
Thank you.
Thank you. Our next question is from the line of Aaron Watts from Deutsche Bank. Please go ahead.
Hi, everyone. Thanks for having me on. A couple questions. First, encouraging to hear core advertising is turning the corner. If I'm hearing your comments correctly, is it fair to say that core will essentially return to pre-pandemic levels, give or take, if we look at 2021 on the whole? Is the visibility improving as advertising recovers as well? Are you seeing bookings coming in for later in the year at this point?
On your first question, tough to make commentary on the full year at this point, but we're optimistic about second quarter getting close to 2019. I think Bob can chime in here, but I'm not sure that there's this big movement towards placing earlier for the quarter. I think the business is generally being placed later than it used to be, and I don't think that's really changing much. Correct, Bob?
Yes. I would add that for some time now, it's quarter by quarter for the most part, and it does tend to be placed a bit later than historically it had been. Right now, as Pat said, we're optimistic. Second quarter looks solid. I think the trend will continue in that business will be placed right before the quarter and then inside the first month of every quarter, as it has been for some time.
Okay. That's helpful.
Let me add something.
Yeah.
I think that we, Aaron, I think we are having a very healthy return to advertising demand. My personal feeling is the fact that it's not at double digits is largely to do with well-documented publicity about supply chain problems. Literally everything in the world economy is being slowed down by production. Automobiles are behind in terms of new production by six and seven months. I've got a car that I ordered a year ago, and I still don't know when it's going to get in. Chip supplies, you can't get those in. There is a huge resistance. You're not going to advertise if you've got nothing to sell, right? That is a hangover from COVID-19, but I think it's been ratified or been rectified.
I think that as that gets settled, I think you're going to see advertising ramp up much more aggressively. That's just a personal opinion.
That's all. I was actually going to ask you how much pent-up demand you think there is because of those supply chain issues, especially with auto, but I think you just answered the question.
Yeah, I think it's huge.
Thank you.
Just think about the ship that got turned horizontally to the Suez Canal. Now, I'll tell you, we could send four or five of the kids from Chick-fil-A over there, and they would have had that fixed in a minute. It slowed down everything worldwide for a long time. The shipping and the international dependence that we have for all products is really quite remarkable, and I think it is a weakness and a strength that has just recently been exposed to the average consumer.
Okay. Thanks very much.
Thank you. Our next question is from Steven Cahall from Wells Fargo. Please go ahead.
Thanks. Maybe first, just curious what your comments are on the private market. You've been a competitor for stations. You've been a seller, probably in competitive processes. I think sometimes investors wonder how much private capital there is out there looking in broadcast, and we've certainly seen it come in from time to time, most recently with Allen Media. Just curious, your color on how much demand there is for stations in the private marketplace and maybe how that differs from multiples in the public marketplace. It seems like sports betting or gambling is becoming a really big category. Like political, it also seems like it's a very local category because you can target around games and areas where it's legal. I'm just wondering how big you think that category could get to over the long term. Thanks.
Hey, Steven, it's Kevin. I don't know how we can give an overall view on what private market multiples would be. All we see is we have just one data point here. The data point is the Quincy transaction. Our acquisition of Quincy went through an auction conducted by the Wells Fargo investment bank team. It was a competitive process. We know there were others there. Obviously, we were happy to cross the finish line before others with terms that were acceptable to Quincy. I think that's an interesting data point, but it's for a group of TV stations in a certain number of markets with the way the transaction was structured that may or may not be applicable to smaller transactions, or for that matter, larger private market transactions. Our divestiture process began with more than three dozen parties asking for an NDA.
Some of those were new entrants. There were a few of the larger names you would know, but I'd say most of it was. Actually, I can tell you, almost all the parties that signed an NDA were private buyers or non-publicly owned buyers. We had a private transaction, again, Wells Fargo conducted an auction process over a couple of months with the interested parties, and we crossed the finish line with Byron Allen. We have the data points here from the Quincy transaction, but I don't know what that would mean if I just wanted to buy a TV station, a DMA number 100 or 150 or 200. Also remember that competition drives a lot of that, but so too does the station's performance. That can vary based on all kinds of factors. Is it a legacy number one? Is it a market that's super competitive?
Is it a high-cost place to do business? Is it a low-cost place to do business? It's just a little hard for me to answer. We've shared everything that we possibly can share publicly, and I hope you can get some feel from there, but I don't have a better sense of what's happening in the private market and conversations in which we're not involved.
Got it. Sports betting?
Yeah. As far as the sports betting, it's Bob Smith. It's going to be the big story for some time, especially in our markets. We're well-positioned. I think right now, currently in the country, is roughly, I believe, 25 states with legalized gambling. In those states, we're seeing quite a bit of money. First quarter was quite big. Second quarter is significant, even though it's probably the lightest sports calendar to a certain extent from a betting standpoint of the year. When football kicks off again in third and fourth quarter, I think we'll even see bigger spending at that time. Also next up, it appears the three next states that are going to legalize it, South Dakota, Louisiana, North Carolina. We are really, as you know, in those markets well-positioned.
As soon as that happens, they get into the market pretty quickly, with pretty heavy rating point schedules.
Thanks.
Thank you. Our next question is from Jim Goss from Barrington Research. Please go ahead.
Thanks. I've got a couple. Just one further thing on the political situation. It does sound like you're in a very great position. I am curious in terms of the increased coverage within a state with the additional stations, I imagine is a big positive. Is there any difference in terms of the greater competition in the larger markets you're acquiring for both viewers and ad dollars, including political dollars, that influences any of this as well?
Yeah, I'll take that one. It's Pat. If you think about some of the additions that'll be coming online, there's Atlanta and there's Phoenix. There's going to be a lot of money out there and, because they're larger markets, the dollars are going to be bigger. In general, there is more competition in larger markets. There's more television stations. I think what we're concerned about is really your dollars coming in, and those dollars will be significant.
I would just add, too, in our own footprint, current footprint, Charlotte, in 2020, had an enormous amount of money in a very competitive market. In fact, a record-setting amount of money in 2020.
Okay. Another thing. In broadcast usage evolution, I'm wondering if you sense a share of the incremental viewing you began to develop a year ago as the pandemic made its presence felt at your properties? Have you held onto a fair bit of that viewing or has it sort of gone back to more of a normalized state?
It's dropped a little. I think the unfortunate benefit of the pandemic was that local television was rediscovered or discovered for the first time by a lot of people. Because of the service we provide locally, the numbers did pop. They have returned to elevated but more normal levels. The reality is that's true both in digital and in linear.
Okay. Last thing, the retrans uplift you noted the other day with the Meredith acquisition. Is that the same for programming fees? Were both situations advantageous for Gray's ability to negotiate and its positioning relative to Meredith, so both are positive?
Jim, the synergy number we talked about with Meredith on retransmission is a net number.
Okay.
We've already factored in the network affiliation fees. Keep in mind that with any of our acquisitions, when we acquire a station or a station group, we inherit the existing network affiliation agreements. Those are assumed until they come up for renewal in the ordinary course.
Okay. All right. Thank you. Thanks for clarifying that.
Thank you. The next one is from John Conright from JK Media. Your line's open.
Good morning. A couple questions. I believe, Jim, you said that, as a projection for this year, gross retrans should be $1 billion or more, which is up 15%-17%, retrans expense up 12%-13%. I understand the top line, if you haven't had a network affiliate contract come up in three years, why should retrans expense be up 12%-13%? Are the escalators that high?
Each year of a network agreement, your retrans is going to go up.
By double digits?
It varies a little bit year to year, but it goes up and it's a rising rate market on both sides of the equation. As gross continues to go up, reverse has been going up as well.
Jim, also, Kevin, let me add. John, sorry, let me add. Two of the networks also have a percentage fee basis.
Right.
That percentage ratchets up typically every year. As our gross grows for affiliates of that network or those networks, they're taking not just an outside share of our increased gross retrans. They're taking an increased share over the amount that they were taking, the percentage they were taking previously.
Okay, now I understand. One other question, Kevin. What's your feeling about why your subs decline is like three, four points better than the industry? I mean, just yesterday, Fox, I think it was Fox, that said they're still trending down more than 5%.
Again, this is our speculation judgment. Part of that is that our virtual sub-growth was very significant throughout last year. We saw that with the year-end numbers we talked about. Some of that is because Hulu TV and YouTube TV only came to some of the Gray markets in the last two years.
Right.
They haven't quite reached perhaps the saturation that they've reached in some of their original markets. Broadband seems to have been more deployed, and we see this right in the broadband sub numbers from the MVPDs. Broadband is expanding and we're seeing in our markets, the smaller markets, the rural markets, a lot more uptake, which makes Hulu and YouTube TV, and others, even if they were in the market for the last couple of years, they were not actual competitors to cable and satellite until people subscribed to broadband. Finally, we have some overexposure to satellite given the portfolio of stations we have, given the markets in which they operate. We were hit by some, and continue to be hit by some significant losses in the satellite space. We took some of those hits earlier.
While there's still some real challenges with the satellite subscribers, some of that pain we took before other people did. It may be, again, this is speculation, it may be that some of these big hits from satellite are now more pronounced in the larger markets than they are for us, just because we already saw some of those hits earlier.
Okay. All sounds reasonable. That's a good explanation. Thanks for your help.
Sure. Thank you, sir.
Thank you. The next one is from Alan Gould from Loop Capital.
Thank you. I've got two questions. First, on core advertising, you don't have many of the big markets, so are you seeing much variability across the country in terms of advertising coming back in your various markets?
Not really.
Okay.
Pretty consistent.
Yep.
Okay. The second one is directed more at Jim. What are your thoughts about fixed versus variable rate on your debt going forward? I know on the Meredith deal, it's roughly half-term loan, half-bridge loan. Do you think that bridge, would you like to lock in fixed rates? Or given all the free cash flow that you should generate with the political year, do you want to keep it more short-term variable?
Well, as we talked a little bit on our Monday call, the commitment is there. As we get closer to a closing date later this year, we will be going to market and the mix of the final structure is going to be dependent on market conditions later this year, and we'll make some decisions at that point. I think if you look at it historically, we've had a pretty balanced approach between fixed and floating. We probably won't stray too far away from a reasonably balanced approach as we move forward. Now, again, we've also been, from time to time, opportunistic in the markets, depending on what market or markets are willing to offer more favorable terms. We're certainly going to be evaluating any opportunistic opportunities we get too, as we get closer to a marketing date.
Jim, if I could just follow up, what rate are you paying roughly on your floating rate debt right now?
LIBOR 250 on the highest price tranche, and the older tranche is LIBOR two and a quarter.
Okay. Thank you.
Thank you. The next one is from Michael Kupinski from Noble Capital Markets. Please go ahead.
Thank you, thanks for taking the questions. In the last call, I asked a question about the new broadcast standard. Some broadcasters have been talking about this might be the new revenue growth opportunity for the industry. I appreciated, Kevin, the fact that you outlined for us your station upgrades and the schedule there. How should we think about the revenue opportunity for the new broadcast standard? How do you plan to use this new opportunity? What are you seeing in terms of the opportunity in terms of revenues from different types of services and things that you might have explored here?
Thanks for the question. It's Pat, by the way. It's still a little difficult to size the opportunity. You've heard this before, but the 3.0 standard has a number of features that will allow stations to do more in terms of targeted advertising, become essentially a data pipe into cars, while we can't size it today, we feel strongly that it's a good investment in the industry and the company's future. Candidly, today, I can't throw numbers at you.
In terms of that upgrade cycle, can you just give us a sense of how expensive it is, first of all? Secondly, how many stations do you plan to have rolled out, let's say, by the end of the year, end of next year?
Yeah. It varies by market and the technical configuration at each station. Again, by the end of this year, with the current Gray portfolio, I think we were looking at just at three markets. As Kevin mentioned earlier in the week, once the acquisition of Meredith closes, that rate will accelerate a little. There'll be significantly more launches in 2022 than 2021.
Okay. Thank you. Appreciate it.
Thanks a lot.
Again, if you would like to ask a question, simply press star then the number one on your telephone keypad.
All right. Well, operator, thank you so much, I want to thank everybody here that has joined us for this call this morning. We appreciate your time. We appreciate your support. We will talk next quarter, if not before.
This concludes today's conference call. Thank you for participating. You may now disconnect. Have a great day.