Ladies and gentlemen, thank you for standing by, welcome to the third quarter 2020 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now hand the conference over to your speaker today, Hilton Howell, Chairman and CEO. Thank you. Please go ahead.
Thank you, Mike. Good morning, everyone. As Mike mentioned, our operator, I am Hilton Howell, the Chairman and CEO of Gray Television, and I want to thank each and every one of you for joining us this morning for our third quarter 2020 earnings call. As usual, on the line with me today are 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 will begin this morning with the disclaimer that Kevin will provide now. Kevin?
Thank you, Hilton, and good morning, everyone. Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results. Those 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 filed with the SEC and included in today's 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 will 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 the non-GAAP financial measures to the GAAP measures reported in our financial statements. Now I return the call to Hilton.
Thank you very much, Kevin. It may be hard for all of us to remember how strong we began in 2020, in January and February this year, how much optimism we had at the start of this year. Now, many months into this crazy pandemic, Gray Television is continuing to recover and recover strongly from an historic pullback in economic activity that this country faced in March, April, and May earlier this year. In fact, in many of our core areas, we're returning to normal historical levels of advertising despite the huge displacement of political that has occurred through the course of 2020. Despite all the challenges at the beginning of the year, our total revenues are again increasing by double digits as local audiences absolutely surge and our content continues to warrant improved compensation terms.
All of this is due in large part to the extraordinary efforts of our reporters and sellers and producers and other professionals all around the country. Consistent with this headline, we saw in the second quarter of this year how Gray's business slowed less than anticipated, and it recovered faster than expected. Today's release confirms that the third quarter saw this strong momentum continue. Quite simply, our results in the third quarter were much better than we would have had expected that they would have been over the summer. Our total revenue for the third quarter was $604 million, an increase of $87 million or 17% from the third quarter of 2019. Net income attributable to common stockholders was $109 million or $1.14 per fully diluted share, which is more than double this amount from the third quarter of 2019.
Broadcast cash flow was $271 million, an increase of $79 million or 41% from the third quarter of 2019. Our adjusted EBITDA for the third quarter of 2020 was $261 million, an increase of $80 million or 44% from the third quarter of 2019. Our core revenue continued its sequential improvement from the trough of April, reflecting better business conditions at both the national and the local levels. The big story, of course, is political, which surpassed our most wildly optimistic models.
We began the year predicting political revenues would top our all-time record from 2018 of $234 million on a same station basis. In late February, we predicted full-year political revenues in the range of $250 million to perhaps $275 million. Last month, we publicly increased our estimate for political revenue to be between $275 million and $300 million. Political somehow managed to pick up even more momentum soon thereafter.
As we all still digest the ongoing election process and the results of Tuesday's election, it appears that our political revenue will significantly exceed $380 million. Since we know that there is at least one runoff election in one of our significant states and markets over the next two months, our political revenue could well end the year significantly higher and may even touch $400 million. I want to share some interesting statistics with each of you. Two of these years appear in our investment deck, I would like to share that data with you and then also bring you up to date on the data for 2020. In the last presidential election year in 2016, our total revenue had dropped precipitously because President Trump did not advertise, Hillary advertised, but not in the right places.
Our total revenue was $118 million, but we still had the highest revenue of any operator on a per television household basis of $9.63 per TV household. In the midterms of 2018, our political revenue, then a record, was $234 million, and a once again industry-leading number of $8.80 per TV household. For 2020, using $380 million, which we know we will exceed, yields an all-time record of $15 per television household, which we believe will be industry-leading. I also want to remind you that Gray Television, unlike nearly all other affiliate groups, does not route its political orders through a third-party rep firm. We instead directly sell to all national and political buyers. We can operate in this manner because buyers typically cannot reach our markets without finding and buying our strong local stations.
We started this direct model at the beginning of 2016, and we have implemented it in every station we have purchased since then, including all of those stations acquired from Raycom and Schurz. This business model has saved Gray, and therefore has saved you, our shareholders, over $25 million in rep commissions just on political revenue alone in 2020. Our 2020 savings are even higher when you add in the saved commissions on our national non-political revenue this year. In addition to these real savings, we also have stronger relationships with our customers and more efficient order execution. We believe that this allows us to pick up incremental dollars from agencies when those become available. In short, Gray runs a lean ship, not just because we don't like bureaucracy. We run a lean ship because it works.
For that reason and many others, we remain optimistic about our business over the long term, especially in light of the portfolio, the assets, and most importantly, the people that comprise Gray Television. Last quarter, we again took advantage of what we believe was a significant mismatch between the value of Gray Television and the price at which our company's common stock has traded by repurchasing a further 649,000 shares of our common stock before we were blacked out from trading. During the first nine months of 2020, we repurchased approximately 4.5 million shares of common stock in the open market at an average price of $13.23 per share, including commissions, for a total cost of approximately $59 million.
We remain quite frustrated with GTN's share price and the multiples at which GTN trades, given our impressive performance during this difficult year compared to many of our peers and to many other non-broadcast media companies. We are taking two steps to try to eliminate this mismatch. First, our Board of Directors yesterday authorized a $150 million increase to the November 2019 stock repurchase authorization, of which we had already repurchased approximately $80 million in shares of our common stock through the third quarter.
With this additional board action, the company now may repurchase up to $220 million of outstanding common stock and/or Class A common stock through December 31, 2023. Second, as part of our expanded stock repurchase program, in addition to typical discretionary stock repurchases and consistent with all SEC requirements, we intend to enter into a trading plan in accordance with the SEC's Rule 10b5-1 rules, which will allow Gray to execute trades under that rule during periods when it would ordinarily not be permitted to do so under applicable trading blackout periods. Together, these actions will allow Gray to buy back our shares in an orderly, meaningful manner over the next few quarters, depending upon market conditions and other considerations. Gray Television remains committed to reducing our leverage even as we return capital to shareholders more regularly going forward.
We continue to generate significant, robust free cash flow each and every quarter. We will end the year with a substantial amount of cash on the balance sheet. In fact, barring something unusual, our cash may approximate three-quarters of a billion dollars on our balance sheet by year-end. I can assure you, if and when we deploy it will be done wisely. As we allocate free cash among debt paydown, stock buybacks, and investments, our highest priority remains paying down our debt, just as we have said and just as we have done since we announced the Raycom transaction slightly over two years ago. As part of our keen focus on our balance sheet, we recently refinanced our 2024 senior notes in a tremendously successful new private offering. We sold $800 million of senior notes due in 2030 with a coupon rate of 4.75% at par.
We are exceptionally excited with this outcome. It means that we have replaced not only somewhat near-term maturity notes with 10-year notes at what we believe was a record low rate in the TV broadcast sector for a 10-year note. On top of that, demand for these notes was so strong that we upsized the offering from $550 million to $800 million and still had to turn away huge numbers of orders. We now have no maturities prior to 2024, when our term loan B matures, and all remaining debt expires in 2026, 2027, and 2030. We could not be more pleased with the outcome of this offering, and we are grateful for the support and faith of our credit investors who subscribed to the offering and to the teams at Wells Fargo and Jones Day who managed the offering.
Pat, Kevin, and Jim will now add additional color to today's earnings release, thereafter, I will open the line to any of your questions. Pat?
Thank you, Hilton, and good morning. As you've heard for years, this company is superbly positioned to benefit from political revenue resulting from our high-quality local news operations located in politically important markets. This year has proven that thesis once again. Our political revenues also confirm another critical fact. When you need to promote your product, service, candidate, or issue, there is no better and no more efficient medium to reach consumers than the trusted, brand-safe, universally available, strong local television station. Our job at Gray and throughout our industry is to continue to demonstrate this fact to more non-political advertisers at the national and local level. One thing that political and non-political advertisers alike recognize is that their audiences trust their local news anchors and news teams more than any other media. At Gray, we're fortunate to have both very talented journalists and prestigious recognition of their efforts.
On August 24th, the National Association of Broadcasters Leadership Foundation selected several of our television stations as winners and finalists for this year's coveted Service to America Awards. The Service to America Awards recognize outstanding community service by local broadcasters, pardon me, and selects local radio and television stations and one group owner each year for their exemplary service to their communities. Gray's WJHG-TV in Panama City, Florida, received the Service to Community Award for small-market television for its enterprise series, Remembering the Forgotten. In addition, Gray's WNDU in South Bend, Indiana, received the Service to Community Award for medium-market television for Never Again: Prevent Bus Stop Tragedies. Both of the finalists for awards in the small-market television and one of the three finalists for awards in the medium-market television category were Gray stations.
Gray Television itself won NABLF's Broadcast Ownership Group Award for service to the community in honor of the investigative series Measure of Hate they aired across our stations. The series of reports by lead investigator Lee Zurik exposed significant flaws in the FBI's reporting of hate crimes. This investigative reporting led directly to changes in the way the FBI and law enforcement measure and report hate crimes. We're also privileged to have local stations' impressive work highlighted by the Radio Television Digital News Association. Recently, the RTDNA announced that it selected four of Gray Television local stations as national Edward R. Murrow Award winners for excellence in journalism in the small market television category. Congratulations to WDBJ in Roanoke, WCAX in Burlington, Vermont, WAFB in Baton Rouge, and KWTX in Waco, Texas. National Murrows are a very big deal, we're humbled by the strong showing this year.
In fact, in May of 2020, RTDNA awarded a combined 49 regional Murrows for excellence in journalism to 21 of Gray's local television stations. The news, investigative, and community focus of our television stations fueled significant ratings increases in the spring when the pandemic began, and have helped hold our ratings at elevated levels as the year has progressed. We've also seen large increases in already impressive digital traffic, which continues to grow month after month. We are about to surpass 10 billion yearly page views this month, and we are pacing to finish the year with one billion more page views than the record we set in 2019. In terms of operations, we have aggressively rolled out live local OTT systems to 50 markets this year. These systems allow stations to go live online 24/7 with local news reports.
In fact, it was this system that allowed KPLC in Lake Charles, Louisiana, to continue their coverage during and in the aftermath of Hurricane Laura. We also completed the rollout of Premion across the entire company in the last few months. Our resale agreement with Premion already has enabled us to book several million dollars of new OTT ad revenue this year. We expect that number to grow significantly in 2021. In 2020, we also took our digital agency services in-house. By replacing an outside group with a skilled in-house team, we've reduced our costs by another few million dollars, increasing our digital margins and improving client outcomes. On September 1st, Syncbak announced the launch of VUit, a new free ad-supported national streaming service built in partnership with leading local television groups, including Gray.
Syncbak aims to be the Netflix of live, local, and free, featuring a wide range of local, regional, and special interest programming produced by leading television stations from across the country, along with thousands of VUit originals. VUit has had a strong launch. We are excited to see its quick adoption by consumers as well as other local media companies who want to add their local content to the app. In fact, Gray is such a big believer in Syncbak and VUit that we raised our investment in Syncbak in August to a sizable, though still minority interest. I am also happy to report that our production company has gone from essentially shut down this spring to very busy today. Raycom Sports has produced many college football games since September. Tupelo has picked up and produced a number of games as well as non-sport live productions in recent months.
This summer, Gray invested in bringing a new sport to the U.S. called World Chase Tag. WCT combines the dynamic athleticism of parkour with the age-old game of tag. The first competition began only in 2016, yet it already has built a cult following around the world. On September 28th, the NBC Sports Group announced that it had secured the exclusive U.S. distribution rights for this rapidly growing sport. In October, our production company, Tupelo, began filming the first WCT USA competitions of the season at The Roxy right here in Atlanta. The first matches of this year's season actually debut on November 12th on NBC Sports Network at 11:00 P.M. Eastern, and they'll run through December 23rd, when the NBC Sports Network plans to air a WCT marathon appropriately titled World Chase Tag Day in the USA.
I also need to mention Swirl Films, which is the leading independent TV and urban film production company. Swirl returned to live studio lot production and is as busy as it's ever been. Gray this year increased its investment in Swirl Films, and we now own just over 50% of this very impressive company located in the heart of America's new video and film production capital of Atlanta, Georgia. Swirl has a large and growing book of business that will keep it busy well into next year, and with the lack of available studio and sound stages in Atlanta actually creating the biggest obstacle to execution. This is a high-class problem to have, and in this crazy year, one we will accept without complaint.
Finally, the entire management team needs to recognize the spirit and strength of our colleagues in markets that have suffered historic weather events in the last few months. In August, Cedar Rapids and Quad Cities were hit with a quickly developing major storm called a derecho that produced widespread damage to homes, businesses, and crops well beyond that experienced in the 2008 Iowa flood. In September and October, many of our Louisiana and Mississippi markets were hit with multiple hurricanes and tropical storms. Many of our employees in affected markets experienced significant losses, especially in Lake Charles and Biloxi. Thankfully, every one of our employees in these markets was personally unharmed. During these historic weather events, our television stations in the impacted markets covered the storm and their aftermath in wall-to-wall coverage.
Many of our crews reported bravely from the field, and some of our stations had to move their operations to other Gray markets just to get their life-saving reports on the air and on pay TV systems and online. In these terrible circumstances, Gray's employees once again rallied to serve their local communities first. Meanwhile, their colleagues in other markets stepped up to assist their fellow Gray employees in this time of need with generators, tarps, food, water supplies, and cash donations. These experiences, while never enjoyable, are part of what makes local broadcast stations such valuable, valued, and trusted institutions in their local markets. In short, Gray's reporters, sellers, producers, engineers, all of our employees are working hard to ensure that in 2020, Gray continues to grow, continues to serve, and continues to invest, all of which allows us today to continue to turn in solid numbers.
I'll now turn the call over to Kevin.
Good morning again, and thank you, Pat. As most of you know, the U.S. Supreme Court recently agreed to review the decision of the Third Circuit Court of Appeals that overturned the FCC's very limited relaxation of the local broadcast ownership rules adopted in the summer of 2017. Gray Television filed an amicus brief urging the court to take the case earlier this year. Our brief explained how the FCC's antiquated ownership rules have actually harmed local communities' access to local news sources, which is contrary to the public interest. We are optimistic that the Supreme Court will confirm the FCC has the legal authority and the binding obligation to actually deregulate its antiquated rules precisely as Congress directed the FCC to do way back in the 1996 Telecom Act.
In terms of timing, the court will hold oral arguments in early 2021 and issue a decision by the end of its term in June of next year. A favorable ruling would restore the modest rule relaxation enacted in 2017 that represented the first small step to responding to the radical changes that the media market has undergone since 1996. We hope that such a ruling will also facilitate further relaxation of local rules by a new FCC that understands the importance of enabling local broadcasters to compete more fairly with the unregulated big tech giants. In terms of retransmission, today's release reported that our retransmission revenues grew at a faster year-over-year rate than the prior quarters this year.
Specifically, retransmission revenues increased 4% in the first quarter of this year on a year-over-year basis, then 9% in the second quarter of this year on a year-over-year basis, and now in the just completed third quarter, we book an 11% year-over-year increase in third quarter retransmission revenue. These revenue increases are the result of both annual escalators in all of our MVPD and OTT agreements, as well as the repricing of a portion of our MVPD sub base in the first quarter of this year. Our next set of MVPD renewals occur in January 2021. We are now beginning renewal negotiations covering hundreds of MVPDs that collectively represent approximately 43% of our total subs. Next summer, Gray will negotiate its agreements with the remaining roughly 23% of our sub base.
We expect that this round of retrans renewals will again demonstrate the value of our leading group of local television stations on cable and satellite platforms. In terms of sub levels, we reported on our previous call that we anticipated noticeable sub declines in the first half of the year. Our assessment was based largely on what all of us were seeing in the public MVPD's quarterly reports. Over the past two weeks, we have seen the public MVPDs report better than expected sub-levels, and for the most part, stabilization in their sub counts in the third quarter from the losses at the height of the pandemic in the second quarter. We're very encouraged by these public reports.
We find that the stabilization of subscriber levels in the third quarter that they reported is generally consistent with what we are now seeing in the subscriber reports that we have received so far this year in the third quarter. If the trends hold for the rest of the third quarter for sub reports that have yet to arrive, we will need to book some modest positive billing adjustments in the fourth quarter reflecting these stabilized sub-levels. Finally, because this is an election year, there have been very few, if any, leading local news stations offered for sale over the last 12 months or so. With the election now largely behind us, we expect some opportunities to arise in the coming months.
We do not have a crystal ball, of course, and we therefore cannot predict for you who, what, when, where, how much, how big future M&A opportunities may be. Yet, as we have done previously, we plan to take a close look at any number one or strong number two-ranked local television station offered for sale regardless of market size, and we will evaluate each such opportunity with a close eye on our balance sheet and market conditions. This is not to suggest that we have not been making any strategic investments or moves in recent months. To the contrary, we've probably never been as busy with evaluating and in many cases, pursuing strategic opportunities as we have been in 2020.
Far, however, each of our completed acquisition or investments has not been material to the company, although I can tell you it often seems that these smaller deals take more time and effort than the big deals require. As Pat mentioned earlier, Gray this year has made strategic investments in Premion, Syncbak, Swirl Films, and World Chase Tag. Each of these investments includes the cash purchase of some equity interest, as well as a new or expanded operational relationship between the target and Gray stations or Gray production companies. We have explored several similar investments this year, yet these four businesses were the only ones so far to offer attractive growth and diversification opportunities for Gray. We have also entered into some immaterial television station transactions this year, including the following transactions over the last roughly 16 weeks. We added a CBS affiliation in one market.
We added a Fox affiliation in another market. We purchased a full power Telemundo affiliate in Honolulu, where we already own the NBC and CBS affiliates. We purchased a full power independent station in Odessa where we own the CBS and The CW affiliates. We purchased an unlicensed asset to the NBC affiliate in Columbus, Georgia, and began a shared services agreement with the licensee. We entered into an agreement to purchase a The CW, MeTV, MyNetworkTV, and Telemundo affiliate stations in Lubbock, Texas, where we already own the NBC affiliate. We also reached an agreement to purchase a non-licensed asset of that market's Fox affiliates, and thereafter begin a shared services agreement with the Fox licensee. We purchased the NBC and CBS stations in the tiny market of Juneau, Alaska, which provided us with our 94th local market and our 20th state capital market.
We are currently working on a few other immaterial deals. While none of these transactions will move the needle for Gray as a whole, they deliver meaningful scale to our stations in these markets, and that will allow us to better serve those communities' viewers and their local businesses. Thank you for your time, and I now turn the call to Jim Ryan.
Thank you, Kevin. Good morning, everyone. I think our earnings release and the 10-Q that will be filed a little later today will provide a great deal of information for all of you. I'm just going to quickly go over some of the highlights. Now, remind everybody that, as of the first quarter this year, all of our reporting has been on an as-reported basis because any acquisitions that we've done have been clearly immaterial to the financial results. We're pleased with the results for Q3. Our total core was down approximately 14%, and that was within the range we had expected. We saw sequential improvement during each month of the quarter. July, core was down 16%. August, core was down 12%. September, core was also down 12%, you have to begin to consider the significant amount of political displacement we began to see in September.
In September, political revenue was $71 million just for the month, compared to a core revenue total of $85 million. Obviously, we dealt with a lot of political displacement, and our total Q3 political revenue of $128 million was dramatically higher than we had anticipated from the last earnings call. To put the Q3 results in perspective, remember that in Q2, our total core was down 30%, with April being down 38%, May down 34%, and June down 17%. Clearly, we are seeing improvement from the lockdown lows of the economy in the second quarter. We increased our cash on hand by $88 million, and we ended the quarter with $467 million of cash on the balance sheet, plus an undrawn revolver of $200 million. Hilton already commented on our very successful $800 million note offering of 4.75% 10-year notes due 2030. We were exceptionally pleased with that.
We used the proceeds for redemption of our 2024 notes, costs of the transaction, and the remaining roughly $250 million of cash is for general corporate purposes, which may include paying down debt or other corporate purposes. Given our strong liquidity position, free cash generation, relatively low leverage, and as we note, debt maturity isn't until 2024, we think we are in a very good, strong position to see the rest of the pandemic through and come out and thrive as the world gets back to normal, hopefully as we move through 2021. Given all the uncertainty around COVID-19, we have withdrawn our full-year previous guidance and are not issuing formal guidance for Q4 2020.
It has been an incredible political advertising year, Hilton's already indicated that our political range of 380- 385 is undoubtedly low at this point, especially with a special Senate runoff election in Georgia. We definitely are going to finish the year with a very strong political number. I also know that you want to know more about Q4. Again, just commenting on trends we're seeing now and not using this as formal guidance. Total core revenue for Q4, we expected to see a decline again in the 10%-15% range, but as we saw in Q2 and Q3, total core appears to be sequentially improving in each month in Q4. October core is decreasing in the low 20% range because of massive political displacement. November is very encouraging. We're seeing mid-single-digit declines in core at the present time.
December core declines are showing high single to low double-digit declines. We believe there's an opportunity for momentum to pick up in December now that we are mostly past the election cycle and late-year buys begin to come in. The month of October alone saw significant political displacement of core revenue. We had $175 million of political revenue just in the month of October, compared to a total core revenue number of $82 million, which would explain why core in October was down in the 20% range. When we started this year, we expected approximately $235 million of political revenue, and we're going to exceed that by at least $150 million. That $150 million of additional political we picked up this year and perhaps a little bit more, means that our political upside nearly offsets our anticipated total decline in core revenue in 2020.
Again, the figures I just gave you are current forecasts and current pacings. It is not to be interpreted as formal guidance, but we are trying to be as transparent as we possibly can with some relatively limited visibility. Q4 broadcast expenses will increase over Q3 2019 in the low to mid-single-digit percentage range, and that reflects almost exclusively an approximate $20 million increase in reverse compensation year-over-year. Our corporate expenses in Q4 are anticipated to approximate our Q3 levels that we reported today, and our production company's expenses will aggregate in the mid-teens to upper teens of millions, given the seasonality of that business, and also given, as Pat commented, that those businesses are coming back and getting increasingly busier as we've cycled through the worst of the lockdowns in the second quarter. A couple of quick liquidity updates. Our original cash interest estimate was $194 million.
We're updating that now to $176 million. We started the year with a CapEx estimate of $80 million. We reduced it as we went through the second quarter, trying to be prudent. Now that the year is finishing much stronger than we anticipated, we're bringing our CapEx estimate for the year back to $80 million. The cash taxes, we now expect to be around $80 million this year, again reflecting our expectations of much improved revenue performance from where we were viewing things in the second quarter. Currently, we anticipate ending the year with between $675 million and $725 million of cash on hand, and depending where final political numbers go, that range could obviously increase a little bit. It's too soon to make predictions for 2021, let alone issue any guidance.
Still, it's our expectation at this point that we will see core revenue continue to improve during 2021 as we lap the declines in 2020 brought on by the pandemic and the political displacement. Our production companies are returning to a full slate of producing sports events. Finally, as Kevin said, between January 1 and midyear 2021, we will also have repriced almost all of our retrans contracts, representing about 66% of our sub base. We would expect gross and net retrans to show significant growth in 2021 as we reprice 66% of our subs. With that, I'll turn the call back to Hilton.
Well, thank you, Jim. 2020 has thrown incredible, unprecedented challenges at all of us, personally, professionally. Nevertheless, our performance this year clearly validates Gray's decades-long commitment to acquiring, investing in, and locally operating the strongest local television stations throughout the country, now in 94 markets. These types of television stations declined less and recovered faster than most other types of media companies. We are confident that Gray Television continues to have an exceptionally bright future ahead. The broadcast business, for all that you have heard, remains an outstanding business. Absent an opportunity for further significant M&A over the next year, deleveraging remains the first priority for Gray. With capital returns in the form of stock buybacks beginning immediately, next in priority.
On our February earnings call before the pandemic hit, I told you that our board believes that we can continue to deleverage the balance sheet and pursue buybacks while at the same time reinstituting a quarterly dividend. Our board has not yet reached a final decision to resume the dividend just yet. I believe that it will soon reach that decision. As noted in that February call, however, the board considers reinstating a dividend when our total leverage ratio, as defined in our senior credit facility, falls below 4.0 x on a trailing eight quarter basis, after netting total cash on hand. Whether our very strong political revenue this year fully compensates for the pandemic impact on our core revenue remains to be seen.
Regardless, when our net leverage falls below 4x, the board will consider whether market conditions then permit us to return to paying our quarterly dividends and at what level we would initiate that dividend. Operator, at this time, we ask that you open up the line for questions.
As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound or hash key. Please stand by while we compile the Q&A roster. Your first question comes from Steven Cahall from Wells Fargo. Please go ahead.
Thanks. That $15 per household in political is pretty outstanding. I was wondering if you could help us think about maybe the split between local versus presidential, as well as the split between candidate versus PAC or Super PAC on that. You mentioned the runoff in Georgia. I was wondering if you're also seeing any expressions of interest from PACs or Super PACs as some of the vote stuff goes to court, and whether we could see a continued long tail if the election process runs out a little longer, and how that's factored into your updated political guidance. Maybe just on net retrans, you talked about the really good visibility you have on 2021 on the growth side, as well as some of the expenses based on the Q4 guidance.
I know that the timing for net retrans sets up this year to be, I think, down a little bit. I was just wondering if you have any expectations at this point for 2021. Thanks.
Let me just begin with political, then I'll ask that Bob Smith comment on it, because he also has a lot of color that I think that you will find interesting. We mentioned $380 million. We know it's going to be north of that. We don't know exactly how high north it will eventually be. We know that we have a runoff between Reverend Warnock on the Democratic side and Senator Kelly Loeffler on the Republican side. That has begun and will culminate on February the 5th. I believe that we will see significant spending there on both sides. Depending upon the count and what states, that we still don't know, exactly where the Senate should turn out. If the balance of the Senate is in place, the amount of money could be exponential.
Georgia, unless I am unfamiliar with what has happened during the course of this conversation, has not yet released its final numbers. As I began this call this morning, our incumbent senator, David Perdue, had north of 50%, and his opponent, Jon Ossoff, was in the 47% area. If, for some reason, Senator Perdue's numbers should drop below 50% when final numbers are out, then Georgia will have two runoffs for its two Senate seats. We have the dominant station in every market, and the highest market share in every market in Georgia except Atlanta and Macon. We're in Augusta, we're in Savannah, we're in Thomasville, Tallahassee, we're in Albany, Georgia, and we're in Columbus, Georgia. Gray, as a company, will benefit from any runoffs through the remainder of the year and into the first five months of 2021.
While I don't want to steal his thunder, our investment in Maine has turned out to be a prolific one. We actually sold probably our largest value 30-second spot this past Sunday during a Patriots game in the six figures, which was the presidential ad money. The Senate spending, the spending at the House, obviously the presidential spending, and then after the passing of Senator Ruth Bader Ginsburg, the issue money spending has been extraordinary in every case and every count. Bob, do you want to follow up on the political with anything you have to say there?
Sure, Hilton. I'd be happy to. You asked a little bit about the breakdown, as how it went with Gray, approximately the presidential race accounted for about 23% of our overall revenue. The House, nationally, about 16%. The Senate, as Hilton just mentioned, was extraordinary. That's roughly a little over 40% of our overall revenue. That's where some of the biggest numbers were in terms of rates and issue money were in those Senate races. As Hilton described what happened in Maine, we saw similar situations in Wisconsin and Iowa as well, and Alaska, for that matter. Really record rates in certain programming areas, record cost per points, and really just robust in a lot of markets and a lot of states.
Yeah. Since you had two questions, Steven, are there any further follow-ups on political before we turn it over to Kevin?
I did address the. Hilton, maybe I should real quickly. He did ask about Georgia. I wanted to say that we are seeing dollars already-
Yep.
In Georgia for the January 5th runoff.
That's great. Yeah. Georgia on my mind, and would love to hear from Kevin on the retrans side. Thanks.
Thank you, Steven.
Hi, Steven. Obviously our growth should have a large step-up next year. We have no guidance on what that is because some of the conversations for those renewals have yet to begin. Some have, obviously, it's hard to predict where those are going to close. On the reverse side, we know what CBS and Fox fees are going to go to because those are fixed fees. We do not know what the other two retrans, reverse comp will be because those are, of course, percentages. The better we do in retrans, the better ABC and NBC will do.
If I don't know the top, I can't tell you what the gross revenue is, I couldn't possibly tell you what the net revenue or the net retrans number would be, or the reverse comp would be. We got to have an input to the formula, which is the gross retrans. We have a lot of work ahead of us next two months or so. After the first of the year, we'll have a bunch of that behind us, we'll have a much better feel. Right now, it would really just be guessing, and we're trying to provide some forecasts that have something anchored in reality. If I were to guess, it would literally be just but a guess, and I don't think that's very helpful.
That sounds good. Thanks, Kevin.
Thank you, Steven. Next question.
Your next question comes from Dan Kurnos from The Benchmark. Please go ahead. Dan Kurnos, your line is open.
Hey, thanks. Good morning. Jim, just maybe on core, you guys are at the much better end of the range on kind of at least initial Q4 pacings, even taking into account the absolutely ludicrous amount of political you booked in October. I'm just wondering if you guys have any thoughts as to, you mentioned a little bit in your prepared remarks, but why you guys are kind of outperforming the peer group even outside of the election?
I think-
We have good combo.
Go ahead, Hilton.
Go ahead, Jim.
No, I think it speaks to what we've said many times in the past. It's the quality of our portfolio and the strength of our local stations. They're the first go-to buy in all of those markets. I think that's helping us during the recovery process from the pandemic. We were very pleased with what we were seeing so far on a pacing basis for November being only down low single digits. December's not surprising being down a little bit, down more right now. December often comes, you get farther into November and early December, you get to, hopefully, a flurry of last-minute buys into the year, which will bring December up a little bit. Again, I think it's back to the strength of the news, strength of the overall station and the community, and that's what gives us the edge.
I'd also add, Dan, it's Pat LaPlatney, that we've invested and implemented a very strong training program for our stations that we've been running now for north of 18 months. I really think that's having an impact. We're arming our sellers with the best tools out there, including Premion. I think that also contributes to the numbers.
Got it. That's helpful. Is there any just generic category color you could give us, Jim, just around sort of what's improving?
Yeah, I'd say across the board, everything is improving on a relative scale. We saw well, September, you got to kind of throw out. October, you definitely have to throw out with the political. That's the story for September and October. July, August, November, in the categories, all of them appear to be improving sequentially. Auto is still down, but much less so than the depths of the second quarter, and going in the right direction, again, each month getting better. We've seen strength in financial. Medical has been strong lately, coming back. Legal, you bundle all of those three categories together under a broad banner of services, and actually that's been holding up pretty well this year. Again, showing improvement as we've gone month after month, so we're encouraged there.
Again, October, you got to just ignore, but in November, it looks like home improvement, the services are all supermarkets even, are all showing positive trends right now and actually showing in the green. Again, automotive, instead of being down, I'd have to go back and look, but I think in April or May, it was down 30%-40%. If it's now November looking like it's somewhere in the low double digits range, I think that's dramatic improvement. As we've talked before, as supplies and inventories continue to catch up, we think that's going to continue to improve. Where there's inventory, the dealers seem to be selling the cars pretty well, and in some places, they still are saying that they'd like to see a little more inventory catch up to them. I think overall, it's an encouraging trend.
Got it. That's really helpful color. Maybe just one last one, if I could sneak one in for Hilton. You were incredibly comprehensive with your overview on shareholder returns and how your use of capital. I know historically you've said things like, we need to get bigger, I know that you've said in absent a transformative M&A transaction, you will be aggressive with returning cash to shareholders. I'm just curious, you have sort of almost unprecedented flexibility, thankfully, because of all of this political with a really strong balance sheet. How much does that pending FCC court case play into how much powder you need to potentially keep dry versus just things that you think could come on the market? Even that notwithstanding, I guess, to borrow a different phrase, do you think you can still walk and chew gum at the same time here?
Dan, well, first let me start at the last. Yes. Can we walk and chew gum at the same time? You dad gum straight we can. One of the reasons that you only hear so far right now about what we are doing is we still remain in a period in the broadcast business of almost unknown lack of clarity. We don't yet know who will be appointing the FCC, and there is, I think, a fundamental difference between the two parties' approach to regulation, and that has an impact on all M&A.
We have never had a situation where the Third Circuit, it should have happened decades ago, but where the Third Circuit has been challenged by the United States Supreme Court and how that will have an effect upon ownership, whether that is just purely within a local individual market or if it should extend something beyond where the cap is. I don't know. I was literally praying on election night that we would just have an answer, one way or another, an answer. We don't yet. When uncertainty reigns, it makes it difficult to make a clear, correct decision. There are all kinds of issues, whether or not the UHF discount remains in place, whether or not 39% cap remains in place, whether or not sort of the prohibition on owning multiple stations in certain markets based upon different sizes. All of that's open.
The one thing that we do know that is certain is that in the midst of the pandemic, cash is king. What I think we have demonstrated to all of you and to Wall Street is that we have a business that we have built up over in excess of 30 years from just a couple of stations, to a $2.5 billion company, that generates massive amounts of free cash flow. We have spent a significant amount of money this year, under $100 million, but approaching $100 million on stock repurchases.
We have done, and Kevin ticked off some of this, spent in the upper hundreds of millions on small deals and non-television station acquisitions that are all accretive across the board. Yet we're going to be in a position to close the year out with, as I said, close to three-quarters of a billion dollars in cash. We are instituting, as we mentioned, a stock repurchase program in two fronts, one based upon 10b5-1. Then from time to time, when we are not in a blackout period, discretionary buybacks. Our board approved all of that yesterday. We're going to continue to look. I will say, and I will speak purely for myself personally, I still believe it is in the best interest of our shareholders to continue to grow this company. There is ample room for Gray to do so.
We are interested in accretive acquisitions to continue to grow our portfolio, even in the face of COVID. That is still a preeminent goal. We will see what is available and what is not. We do think we can do both of these. We're not gonna let our stock price sit down here at these prices. This is ridiculous. I bought millions of dollars of stock in the 20s, personally. We think we're just grossly undervalued, and I think our numbers prove, not just our words, but our numbers, that we've got one of the finest portfolios of stunning TV stations that are being led locally a re dominating their markets, and the free cash flow flowing from them, I think is fantastic. It's just ridiculously large amounts of money, which is a great place to be, Dan. A great place to be. Did I cover that at all?
Yeah, I'd say so, Hilton. That was a very comprehensive answer to that, and I really appreciate your insight there. Thanks very much.
You bet.
Your next question comes from Kyle Evans from Stephens.
Hi. Thanks for taking my questions. Congrats on political, and I like the sound of that cash balance at the end of the year. Kevin, I think you said that CBS was a known expense on the reverse side for retrans. I thought you guys had a renewal with CBS in 2021. Am I wrong on that one?
CBS renews at the end of 2021.
You guys give the cleanest look at gross reverse and net retrans and therefore you should expect obnoxious questions like the one I'm about to ask. What do you think the right steady state net margin is for that revenue segment? If you don't want to answer it, I'll ask it a different way. Should it start with a four or a three?
In all seriousness, our retrans is because our local stations get more viewership than any other channel in their market. Not to be too glib about it, we think retrans should predominantly be our compensation for our local investments, our local programming, our local team. We balance lots of issues when we negotiate network affiliation agreements, as does everybody else. You've heard us say it for years, we're not focused on the margins, we're focused on how many dollars we can put in the bank. We're going to continue to do that. I'm not going to get locked into a headline that says Gray thinks net retrans margins should be X or Y. Frankly, it depends on everything else that's going into a negotiation. How much time do we get for local commercials? How much promotion are we doing?
What else are we getting? What else are we giving? It's a lot of stuff, and the margin is just looking at one part of the elephant, and it's a pretty big elephant. Every network affiliate and network relationship is very deep at many levels. We weigh all of those things at both sides of those negotiations. Again, the rate is just one part of that conversation.
Would you say that the blended average relationship for the big four is the same as it was a few years ago, better or worse, more contentious, not worse?
We haven't had a network renewal negotiation in a while, so I can't really comment on where things may be today versus where they were when we last did them a couple of years ago. Our next negotiation is with CBS at the end of next year. I think you need to ask somebody else.
Okay. Jim, really appreciate the monthly granular detail on core. Glad to hear auto is improving. What's your early read on legalized sports gambling as a category?
Bob, why don't you comment on that?
Yeah. It's actually very promising, and certainly it's become an emerging category. Right now, I think there's legalized gambling in 19 states, and six more have passed it. Half the country will have legalized gambling. What started out as a couple of accounts spending some money in some of our markets where it's legal, is now up to about four or five different gambling firms that we expect all to be on the air in first quarter. We're very optimistic seeing what the growth in that category throughout the year. We think it's going to be just that much better beginning in first quarter and throughout all of 2021. It's probably, without a doubt, one of the more exciting categories for us currently, just because it's moving very quickly. The kind of dollars they spend are pretty significant in our markets.
Great. Thanks for taking my questions.
Your next question comes from Jim Goss from Barrington Research.
Thanks. Hilton, you just provided some indication about still wanting to grow your franchise. Given that you're pretty well covered in your existing traditional Gray types of territories, if you needed to move outside of your traditional markets, what parameters or characteristics would qualify as candidates for consideration? If you grow a little bigger, what sort of things would you be looking for?
Well, Jim, you can look at the pool that's available out there. Gray actually, I know that our reputation is to be in the mid to smaller markets and in dominant position in those respective markets. With the Raycom acquisition, we picked up a lot of much larger markets, and they're doing exceptionally well. We will be looking for i ndividual stations, singles and doubles, and bigger transactions if available. The world is getting smaller. We're on the back end of a typical nine-inning baseball game in terms of consolidation. There's not many players that are left, and in terms of people who are definitionally operators and definitionally acquirers, Gray's one of the few that remain standing and ready and capable to do so.
We will look for portfolios that complement ours in terms of quality, in terms of geography. I don't know if you have noticed, but we find that we very much like to have significant exposure to the states that we do business in. If you look at our portfolio on a geographic basis, Gray will own, in a typical state, not just a market. We will own dadgum near the whole state.
You can run from state to state to state, and some of them win every single market, and some of them we have 80% of the markets and then maybe missing two. That gives us tremendous amount of news gathering capacity. I can't tell you the number of states that Gray hosted the local debates for the senatorial candidate. All of those fits are going to be necessary. We have grown dramatically in terms of new affiliates with Telemundo for the Hispanic market. We will continue to look to grow that, particularly in areas where there's a significant Spanish-speaking population. You can look through the world and can pretty well tell the kind of things that we would be interested in. We're just going to wait and see what opportunities present themselves.
Okay, that's very helpful, actually. One other thing then. Do you have any ATSC 3.0 update in terms of how many stations you plan to have some impact on over the near term, and what type of applications you might be thinking about?
Yeah, it's Pat. I can pitch in on that one. In general, the rollout of ATSC 3.0 is starting in the larger markets and rolling down. I would anticipate, and I don't have hard numbers on this, but I would anticipate that we would have somewhere probably high single-digit stations, number of stations, rolled out over the next 18 months. We're actually doing an experiment where we're outfitting a stick in with ATSC 3.0, so we can do some of our own experimentation and testing on 3.0. Again, I think in terms of the applications for 3.0, revenue-producing applications, it will take some time for those to develop. I think it's largely going to be focused around targeted advertising, getting data and video into automobiles, and perhaps a few other approaches that candidly we may not have thought about yet.
All right. Thank you very much.
As a reminder, to ask a question, press star one. The next question comes from Alan Gould from Loop Capital.
Thank you for taking the question. Kevin, I know the election's not decided, but if it is a Democratic administration and a Democratic FCC, how would you expect that to change the rules for the broadcast industry?
I assume you're talking about ownership rules.
I guess owner Oh, yeah, ownership rules.
Yeah. I guess I don't see too much changing. The FCC adopted a one-to-a-market rule in 1940 before television was licensed. Since 1940, the FCC relaxed and allowed two TV stations to be owned in 1999, the end of Bill Clinton's term. In 2017, Pai allowed some additional consolidation. Two TV stations can be owned in mid-size markets. Those are the only two FCC ownership deregulations that have occurred since 1940 in the TV space. In terms of how do you tighten that, it's almost asking how do you fall off the floor. I don't see what the FCC going to tell us, you can only own zero stations per market. The cap's already one, with the exception of large markets under rules, again, have been around since 1999. I'm hard-pressed to figure out how do you make it worse.
The national ownership cap was, again, a rider that Congress told the FCC to set the cap at 39%. Hard to see the FCC lowering that cap since Congress told them make it 39%. Then we have the wild card of what is the Supreme Court going to do. The Supreme Court is only looking at the local rule. That's newspaper, TV cross-ownership, which does not impact us, and whether you can own two TV stations in mid-size markets. Those are the questions for the Supreme Court. The Supreme Court is not looking at the national ownership cap or UHF discount. It's certainly likely that they can come up with language in there that influences those items.
I don't see a path of the FCC to lower the national cap or lower the number of stations you can own in a local market from one to zero in our markets. In large markets, I just don't see them saying that you can't own two TV stations in the largest markets when you've got 12 different owners, for example. I think the one area that there might be some push around on is the joint sales agreements. The last FCC under Democratic administration moved to make joint sales agreements attributable for ownership purposes, which effectively makes them illegal. Gray has no joint sales agreements, that's not an issue for us.
Is there a chance that-
Bottom line, is there a chance? I'm sorry.
Is there a chance that the 39% cap could actually be raised?
There's always a chance. There's always a chance, right? At some point, folks may realize that broadcasters compete against companies that have no regulation. Facebook typically takes as much money out of a local market as the number one or number two TV station, Google typically takes more money out of a local market than every TV station combined. To say that those guys can do whatever they want with no regulation while we're trying to compete and being stuck with these horrific ownership regulations, maybe that will finally resonate with some folks. We've seen what happens when we continue to apply these outdated rules to little markets. Local news is expensive, and that's why you typically have only one company in a small market that can afford to produce local news. There's just not enough revenue to go around.
Is it possible that we see an FCC under a Democratic administration that recognizes that and relax the ownership cap? I think it's possible. I'm not optimistic. It seems that the rhetoric from Washington is regulate everybody, not necessarily lift regulations on us so we can better compete. It seems the recipe seems to be put more regulations on big tech as opposed to take regulations off of broadcasters so we can better compete with the guys with no regulations. Again, this is all surmising as to what may happen. We don't even know who the FCC chairman or chairwoman will be, or who the fifth commissioner will be. We're almost asking, is it going to rain on May 17th? I don't really know how to predict that.
Okay. Thank you.
Your next question comes from Michael Kupinski from Noble Capital Markets.
Thank you. Thanks for taking the question. As a follow-up to that, Kevin, I know that there's some thought about regulation on the big tech monopolies and so forth. Some big tech companies have said that they plan to allocate money for content. I know that there's some discussions with other media companies about the value of that. Have you had any discussions with some of the big tech companies about providing content for cash payments? Do you think that that is an opportunity at some point for Gray?
Well, to be clear, our content is on every big tech platform, right? Facebook uses Facebook Stories, maybe three years ago, it was Gray Television. It's their case study in how local media can get onto Facebook Stories. We've been live on Fire TV since 2017. We've been on Roku since 2014. It's not like we're not out there on tech platforms. Obviously, we're on all the OTT platforms. Content can be found on Twitter, Facebook, you name it. In terms of compensation, those conversations seem to be, let's just say, fairly limited.
Okay. All right. That's all I had. Thank you.
Yeah, sure.
That was our last question at this time. I will turn the call back over to the presenters.
Well, thank you everyone for joining us for the third quarter earnings release. We look forward to seeing you to bring up all of 2020's results in 2021. Thank you, and we will talk to you soon.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may disconnect.