During this conference call, Urban One will be sharing with you certain projections or other forward-looking statements regarding future events or its future performance. Urban One cautions you that certain factors, including risks and uncertainties referred to in the 10-Ks, 10-Qs, and other reports it periodically files with the Securities and Exchange Commission, could cause the company's actual results to differ materially from those indicated by its projections or forward-looking statements. This call will present information as of November 3rd, 2022. Please note that Urban One disclaims any duty to update any forward-looking statements made in the presentation. In this call, Urban One may also discuss some non-GAAP financial measures in talking about its performance. These measures will be reconciled to GAAP either during the course of this call or in the company's press release, which can be found on its website at www.urban1.com.
A replay of this conference call will be available from 12:00 P.M. Eastern time today until 11:59 P.M., November 6th, 2022. Callers may access the replay by calling 866-207-1041. International callers may dial direct 402-970-0847. The replay access code is 1399699. Access to live audio and a replay of the conference will also be available on Urban One's corporate website at www.urban1.com. The replay will be made available on the website for seven days after the call. No other recordings or copies of this call are authorized or may be relied upon. I'll now turn the call over to Alfred C. Liggins III, Chief Executive Officer of Urban One, who is joined by Peter D. Thompson, Chief Financial Officer. Thank you.
Thank you very much, operator. Also joining me are Jody Drewer, who's the Chief Financial Officer for TV One, our General Counsel, Kristopher Simpson, and our Chief Administrative Officer, Karen Wishart. Thank you for joining, folks. You've gotten our press release for our third quarter results. Very happy with the quarter. Almost 9% net revenue growth, increase of adjusted EBITDA, in the face of increasing headwinds. We thought this was a very solid performance. Even more importantly, our Q4 pacings continue to be strong, particularly relative to some of the other reports that we've seen, you know, coming from, you know, folks that have already reported. Our radio business, you know, including political, is going, you know, very well into Q4.
Politically, what we've done in 2018, we're expecting double-digit revenue growth in the radio segment. We are experiencing very, very robust growth in our digital segment this year that's also continuing from Q3 and into Q4. With that, we are going to update our full year guidance. I think that we originally had it at $145 million-$150 million, and then we're gonna do probably better than the top end of that range at $150 million. It's, you know, it's probably impossible to not update it now that we, you know, have about two months left in the year. You know, we, you know, we feel pretty comfortable that our full year EBITDA will end up in the mid-$160s million this year.
There are a number of things that happen in the fourth quarter, bonus accruals, true up for TV One programming amortization that will affect that. Even net of all that, we feel you know that it's safe that we'll be in the mid-$160s million. We had a great robust upfront for TV One and CLEO TV. Again, our radio pacings are doing better than many of our other brethren. I think that we owe that to continued demand for our target audience and the you know move towards more diversity and inclusion in the advertising sector.
We've had a long history, decades of building a brand that, you know, is serving the African-American community, and, you know, that brand recognition is really, you know, proving to be, you know, very fruitful during this time period. An update on the Richmond casino. It's if you've been following in the press, it's a battle. It will be a battle in the upcoming General Assembly session, starting in January, as to whether the casino opportunity stays in Richmond, you know, where we, you know, have been the chosen developer, or if it moves to Petersburg. Petersburg has announced that, they're, you know, working with The Cordish Companies, which was the runner-up in the Richmond process.
The legislature, you know, is tricky, and it'll be highly political. I don't really have a good answer as to ultimately what happens. My position on the casino opportunity has been muted in previous conference calls. I'd like, you know, investors to really think of that, you know, as something that, you know, could be, you know, a positive, obviously if it happens, but speculative, because, you know, again, it's gonna be all about politics and not about where the best place for this casino resort operation to go. We continue to fight the good fight. We're most focused on the continued trajectory of the business, and we're continuing to delever.
We've been buying back our bonds in the open market, which is actually great. When we first put this facility in place, you know, we were gonna have to pay, you know, 103 in order to take out bonds before the first call date. Now, with pretty much everything in the market trading at a discount, it creates an advantageous, you know, delevering opportunity for the company since we're sitting on a fair amount of cash, and we've been taking advantage of that. With that, I'm gonna turn it over to Peter so he can go through the numbers in more detail, and then we'll come back for Q&A.
Thank you, Alfred. The third quarter was another strong quarter for us, with both consolidated net revenue and adjusted EBITDA up year-over-year, and also significantly above pre-pandemic levels. Consolidated adjusted EBITDA was $44.3 million for the quarter, up from $42.7 million in 2021 and up from $38.7 million in pre-pandemic 2019. Net revenue was up by 8.9% year-over-year for the quarter at approximately $121.4 million. Net revenue for the radio segment increased by 4.8% year-over-year and on a same station basis by 1.4%. According to Miller Kaplan, our locals advertising sales were down 1.7% against a market that was down 2.1%.
Our national ad sales were up 19.7% against a market that was up 0.8%. That was helped by our corporate sales effort and the continuing demand for our target audience. While we outperformed the spot markets, particularly in national sales, we lagged the market in the NTR category as a result of disappointing performances on events in Atlanta and Raleigh, and that also impacted margins overall at the radio division. Midterm election spending started in Q3 in earnest, and we booked $2.7 million in net political ad revenue, of which $1.8 million was at Radio, compared to $711,000 last year. That meant that government and public was our biggest advertising category for the quarter, up 6.7%. Healthcare was up 35.5%.
Auto was up strongly, 57.3%, and telecommunications was up, 14.5% year-over-year. While services, entertainment, retail, financial, food and beverage, and travel and transportation were all down in the quarter. Fourth quarter revenue, radio division is currently pacing up approximately 26.5%, including political, and about 10.9% excluding political. $5.6 million of net political ad revenue is on the books for fourth quarter, bringing the annual total to approximately $9.5 million, which is above the $6.6 million net that we did in 2018. On a same station basis, fourth quarter is pacing up 0.1%, excluding political, with national pacing up 4.1% and local pacing down 2.8%.
Net revenue for Reach Media was $10.1 million in the third quarter, up 1.3% over prior year, and adjusted EBITDA was $3.7 million, up by 0.9% for the quarter. Fourth quarter ad sales are holding steady. However, we don't have a cruise event in the fourth quarter this year, and that event generated approximately $7 million in revenue and $400,000 in profit for fourth quarter last year, which is not returning this year, but we will have a cruise in 2023. Net revenues for our digital segment increased by 40.1%, to $21 million. The direct sales team continued to build on the momentum that began in the first half of 2022.
The sharp revenue growth was really a result of the continued demand from advertisers to spend with Black-owned and certified diversity publishers, also midterm political revenue, as well as brands remaining committed to drive deeper engagement and reach with Black audiences. Adjusted EBITDA increased for the quarter by $2.2 million, up 40.7%. Demand continues to be strong, and fourth-quarter digital revenue is expected to exceed our Q3 number. We recognized approximately $50.8 million of revenue from our cable television segment during the quarter, an increase of 4%. Cable TV advertising revenue was up 16.7% with a favorable rate volume impact of $3.4 million, driven by higher average unit rates. $0.4 million of free video on demand. A $1 million-dollar increase for CLEO TV.
There's $1.3 million unfavorable audience deficiency unit burn-off. Cable TV affiliate revenue was down by 7.6%, with favorable rate increases of $1.2 million, offset by $2.2 million of net churn and $1 million of increased launch support. Cable subscribers for TV One, as measured by Nielsen, finished the third quarter at 43.6 million, compared to 45 million at the end of Q2, and CLEO TV had 41.3 million Nielsen subs. We recorded approximately $2.1 million cost method income for our investment in the MGM National Harbor property for the quarter, the same as last year. Operating expenses excluding depreciation, amortization, impairments, and stock-based compensation increased to approximately $80.5 million in Q3, compared to $74.6 million in Q3 of 2021.
Employee compensation increased by approximately $1.9 million. Revenue variable expenses increased by $2.4 million. Travel, entertainment, and office expenses increased by $525,000, and outside services, including contract talent and consulting fees, increased by $1.2 million. Marketing, promotional, and event spending increased by $3.3 million. However, our corporate development costs decreased by $2.1 million, and cable TV content amortization decreased by $1.1 million. About $1 million of increased expense for the Indianapolis radio acquisition is included in these totals. Radio operating expenses were up 9%. The Indianapolis cluster added $1 million of that increase. Event expenses were up in Cleveland and Raleigh.
Expenses relating to the revenue increase, such as sales, commissions, and bonuses, were up as well, and there were some increases in outside services and employee compensation and benefits. Reach operating expenses were up by 2%. Talent costs drove the increase, but expenses remained mostly flat otherwise at Reach. Operating expenses in the digital segment were up 39.7%, driven predominantly by variable expenses related to traffic acquisition, sales, and integrated marketing. Cable TV expenses were up 4.8% year- over- year. Content amortization expense was down $1.1 million, while employee compensation benefits were up by $855,000. Sales and marketing spend was up by $1.4 million.
Operating expenses in the corporate and elimination segment were down by $1.5 million due to a $2.1 million decrease in corporate development costs relating to the Richmond casino venture last year. Employee compensation and recruiting fees increased slightly. For the third quarter, consolidated broadcast and digital operating income was approximately $50.8 million, an increase of 3.5%. During the quarter, the company repurchased $25 million of its 2028 notes at an average price of approximately 91.1% par, resulting in a net gain on retirement of debt of approximately $1.8 million.
An additional $18,271,000 of the 2028 notes were repurchased in the fourth quarter at an average price of approximately 85.75%, bringing total gross debt to a balance of $756.7 million, down from $825 million at the start of the year. Interest expense decreased to approximately $15.3 million for the third quarter. Company made cash interest payments of approximately $29.9 million in the quarter, including the accrued interest on the retired notes. The next semiannual debt service payment is due in Q1 2023. A non-cash impairment charge of $14.5 million was recorded for our Atlanta, Charlotte, Dallas, Houston, Philadelphia, Raleigh, and Richmond radio market broadcasting licenses.
That was really triggered by the overall market performance in these markets rather than our specific Radio One performance. The provision for income taxes was approximately $3.4 million for the quarter, and the company paid cash tax income taxes in the amount of $247,000. Net income was approximately $4.2 million or $0.09 per share, compared to $13.9 million or $0.27 per share for the third quarter of 2021. Capital expenditures were approximately $1.4 million.
Company repurchased 100,803 shares of Class D common stock in the amount of $439,000 and executed a stock vest tax repurchase of 325,872 shares of Class D common stock in the amount of $1.4 million. As of September 30th, 2022, total gross debt was $775 million. Our ending unrestricted cash balance was $105.1 million, resulting in net debt of approximately $669.9 million, which we compared to $166.3 million of LTM reported adjusted EBITDA for a total net leverage ratio of 4.03x. Pro forma for the Indianapolis acquisition, total net leverage was 3.97x.
With that, I'll hand back to Alfred.
Thank you, Peter. Operator, could you open the lines up for questions?
Yes. Thank you. Ladies and gentlemen, if you wish to ask a question, please press one then zero. Again, if you do wish to ask a question, please press one then zero at this time. Our first question comes from Ben Briggs with StoneX Financial Inc. Please go ahead.
Good morning, guys. Thank you for taking the questions.
Sure.
Yes. Congrats on the quarter. It looks like a great quarter. Congrats on the buybacks. I just wanna make sure I heard you guys right. You bought back another net $2 million of debt in the fourth quarter so far, you said?
Yeah. $18.7 million, call it, Ben.
Okay. Perfect. Thank you. Are there plans to continue this? Is there additional authorization that you need to do any more buybacks? How are you thinking about that going forward?
We actually that $18.7 million is an odd number. That's we had an additional $25 million authorization. There's almost a $7 million balance, you know, on that. You know, we're looking to be opportunistic and, you know what I mean, I you know I think that, you know, paying down debt's a good thing. You'll continue to see us, you know, be opportunistic and prudent, so you know. You there?
Yeah. I'm sorry. It cut out for just a second. So I heard. Yep.
Go ahead. There's like $7 million left, you know, seven-ish, you know, left on the last $25 million authorization. You know, we'll get through that, and then we'll see where we sit. You know, obviously, wanna get a feel for, you know, what the economy's doing, you know, et cetera, you know. Paying down debt's a good thing and, you know, we'll continue to look at being prudent in how we utilize our cash.
Ben, sorry, I misspoke. $18.27 million, not $18.7 million. Alfred's $7 million is close to the mark.
$18.2 million. Okay. You've got about $8 million, call it $8 million of authorization left.
Yeah.
What is the process of getting authorization to buy back more look like? Is it a quick enough process that it allows you to be opportunistic if there's an off mark that makes sense?
Yes. It's super quick. You know, we just, you know, basically reach out and communicate with our board and, you know, and they respond.
Mm-hmm.
You know? Generally getting a board to approve paying down debt is not that difficult.
Right. It certainly seems that way from your history of buying back debt.
Yeah.
Look, moving on from the debt for a second. I know that there's a formula where you can put back the MGM National Harbor investment back to MGM.
Yeah.
What does that formula look like right now? What does that look like right now and what, you know, it.
It, it-
Theoretically, if we put back today, how much is it worth?
It's 7x their EBITDAR. There's a slight adjustment to what their EBITDAR is to what our definition is, you know, and it.
Okay.
You know, it equates, you know, to several millions of dollars on the EBITDAR number. Nothing to get, you know, crazy about. I mean, look, it's worth over $100 million, right? Last year, their EBITDAR, you know, I think our number that we would get paid on is like $236 million of EBITDAR. They, this is no secret, but 'cause they report their revenues, but they've been continuing to gain market share here in Maryland this year. They're gonna do, you know, over $800 million of gaming revenue. I suspect that EBITDAR is gonna go up, you know, from last year.
You know, we've got a window in the first quarter of every year to put our interest at 7x whatever you know the previous year's ultimate reported adjusted EBITDAR is. You know, we'll see what it looks like and make a decision. You know, but it's worth over $100 million.
Okay. Got it. It's a window in the first quarter, you're saying. It's not something you can just do at any time.
Yeah.
Okay.
Yeah.
Okay.
It's not any time you want.
Okay. Got it. Obviously this first quarter, once you see their annual results, there'll be internal discussions, and that'll be the time that you guys make a decision. Are you leaning?
We haven't thought about that. I mean, we're sitting, you know, it's like, you know, we're sitting on cash now, so if we wanna, you know, pay down debt, we just use the cash on our balance sheet, right? You know, so.
Right.
The question is if we were to put it, you know, what are we gonna do with that cash? Are we gonna pay down more debt? Are we gonna put it into an investment?
Yeah, yeah.
You know, so we don't know yet, but there's no pressing reason to have to monetize it today. Good that we didn't, 'cause you know, it's you know, EBITDAR has been growing, so.
Okay. Okay, that's helpful. Thank you. Kinda moving on, it was good to hear that the radio pacings seem like they're well up. I think you said in fourth quarter they're pacing up 26% if you're inclusive of political. It sounds like you lost a few subs though, at the TV One network. You're down to 43.6 million, you said, versus 45 million. Do you have any clarity sort of mid-fourth quarter right now where that sub number stands? Does it continue to bleed subs or has it stabilized?
Yeah. I mean, look, you know, I wouldn't want to give a mid-quarter estimate of what we think churn is gonna be. I mean.
November Nielsen numbers came out and we actually gained over 200,000 subs.
Yeah.
Oh, okay, great.
Look, you know, it's probably the biggest debate in media right now is, you know, what is the trajectory of the pay TV ecosystem, right? You know, I don't know. You know, is it stabilizing? Is it increasing? You know, it's definitely a big debate. You know, we feel, you know, good about the TV business given that we've gotten more subs, you know, launched for our new service, CLEO TV. You know, we've re-upped, you know, many of our affiliate agreements. Advertisers still, you know, have, you know, a robust appetite for video, you know, programming and advertising. Although we are seeing a softening in ad demand in our TV space.
You know, I mean, I think Paramount you know has released earnings and you know said the same thing. NBCU, Comcast before that, the same thing. You know, we're experiencing it. We're going to I think be affected less because of our target demo and the commitment to our audience and diversity inclusion. You know, we feel good about that. You know, make no mistake, you're in a you know macroeconomic headwind that's affecting national television advertising.
Okay. All right. Well, these questions have been very helpful. Like I said, I appreciate the time, and I'll hand it back off to somebody else.
Appreciate it. Operator, next question.
Thank you. Our next question comes from Aaron Watts with Deutsche Bank. Please go ahead.
Hi, guys. Thanks for having me on. Maybe a follow-up on that last answer. Just curious what you're hearing or seeing within the radio business in terms of any advertiser reactions or concerns related to the macro headwinds to close out this year or roll into 2023. Sounds like you're feeling a little bit of it on the TV side. Alfred, maybe just a little more on the radio side, what you're seeing out there.
Yeah. Definitely seeing radio slow down in national. However, we're offsetting that. We've got our own corporate sales, you know, team, and it's large and robust, and they're really leaning into this ad demand that we have for our space. We're outperforming, you know. We're way outperforming on a national level than any of our other competitors, right? You know. What does that mean for next year? I mean, I just described to you what fourth quarter is gonna look like. Our results in radio versus everybody else's results are gonna be night and day, right? How does that play out for next year? We're going through budgets right now, you know, and so, you know, I don't know yet.
If I had to bet, I think that we've got some things that are gonna continue to bolster us. You know, our Indianapolis acquisition I think is gonna be a great deal for us, you know, in the radio space. We're already starting to figure out, you know, how we're gonna control costs. We've got some things that are rolling over, like leases, where we're gonna be able to reduce real estate footprint. We're gonna have a killer year this year, so, you know, are we gonna be able to match that next year? You know, the answer is probably not, but quite frankly, I didn't think that going into this year, I didn't think we're gonna do as well as we ended up doing this year.
I can't handicap what the recession impact is gonna be on us at this point in time. You know, I would say it's gonna be less than it is gonna be on others, you know, for sure. We've got our, you know, we didn't have our Tom Joyner Cruise this year. We're gonna have it next year. It's already 80% sold out. We're about to announce, and we haven't announced any talent lineup. We're about to announce talent lineup soon, and it's really, really big. We think that that's gonna push us to sell it out before the end of the year, you know.
This is the first time I've gone into a recession where I wasn't nervous about the impact or stress it was gonna put on us as a company. That's got a lot to do with where we've gotten our leverage level to and our prospects.
Yeah, I was gonna say it must be nice sitting in that position. I know you've gone through the ups and downs a couple times before, and it seems like you are in a better position this time around for sure. Do you think, Alfred, that for maybe some of your peers that aren't as well-positioned this time going in, there's some additional nervousness and stress on their part that there could be some opportunity for you with regards to maybe investments or M&A, where you could take advantage of that to grow your platform further?
Yeah. I mean, I think that, you know, that could happen. We've been super disciplined on stuff that, you know, we've been buying. One of the problems that you have right now is that, I don't know if it's a problem. If you're a buyer, it's actually good. If you're a seller, it's not great. You know, multiples have come in quite a bit, particularly, you know, in the media space, right? They're bringing multiples down, you know, on a quarterly basis for even the big diversified, you know, media companies. You know, a lot of the stuff in radio is kinda trading, you know, low 5s to 6x, right?
You've gotta get a seller, you know, that wants to be reasonable in this kind of multiple, you know, valuation environment. By the same token, we've gotta be able to justify any acquisition, you know, with that kind of terminal multiple, right, 'cause that's where we're trading at now. You know, that's the historical, you know, conundrum of the bid-ask between a buyer and a seller. You know, you know, is there a nexus where, you know, there's a meeting of the minds and something can happen? You know, I don't know, maybe probably, right? You know, we keep looking at stuff, but, you know, if we don't get to that nexus, we're gonna be happy just paying down debt and, you know, continuing to, you know, grow the existing platform.
We are absolutely gonna be looking to see if we can take advantage of the environment, you know. That's you know that's kinda how we think about it.
Okay. All right. Appreciate the time, as always.
Yep. Thank you.
We do have a follow-up from Ben Briggs with StoneX Financial Inc. Please go ahead.
Hey, guys, just one quick follow-up here. I just noticed something. With, you know, a very strong, I think by any measure, first three quarters of the year, your guidance. The last that I have written down here for the year for 2022 is $145 million-$150 million. At the high end of that.
Yeah.
Oh, at $150 million, that would imply only $16 million of EBITDA in the fourth quarter, which obviously doesn't sound right.
Yeah.
You.
You must have missed the first five minutes of the call. We updated guidance to mid-$160s million for this year.
Oh, okay. I did miss the first five minutes of the call, so that's exactly what it is.
Yeah. That was in the introduction that I gave, so you know, sorry that I hadn't, I haven't read it, but.
Nope.
Yeah, when you think about it and you look at it and you're modeling it out, you should expect the fourth quarter to look quite like fourth quarter last year overall, right? Sequentially, it's gonna be down on Q2 and Q3 for various good reasons, which Alfred kind of went into in the first five minutes. Yeah, that would bring you out mid-$160s million.
We figured that we needed to update guidance because somebody was gonna do the math that you just did and go, "What are you guys talking about?"
All right. All right, well, thank you very much for the clarification.
Yeah, no worry. Sorry about that.
No, no problem.
If there are any additional questions, please press one then zero at this time. We have a question from Bradd Kern with Atalaya. Please go ahead.
Hi, thanks for taking my question. What I wanted to ask is how sustainable do you think this, the updated guidance is? How much of an uplift there is do you think is from political and you know, can we think about that as a, as a sort of a sticky base, or would you expect, you know, how much regression would you expect in it following you?
Yeah. There's probably about, you know, $12 billion of total political across the platform. Almost, you know, probably $10 billion of that is in radio. Next year, that's gonna go away. It's not gonna go to zero, right? You know, but it's gonna, you know, go down substantially. You've got that headwind. You've got the headwind of a looming recession, you know. We've got our Indianapolis acquisition. Digital as a category, you know, has been robust, right? You know, I was having a conversation with the Chief Investment Officer from one of the top three advertising holding companies, and they're still projecting revenue growth next year for digital advertising, even though they're projecting, yeah, down for traditional advertising. We've got a pretty robust digital platform.
You know, no, I wouldn't say that. You know, you can look at the mid-$160s million as kinda like the sticky baseline, 'cause if you just take off political and then throw something in there for, you know, a recession, you know, you're gonna go backwards, right? But Indianapolis is gonna be a meaningful contributor, you know, to our EBITDA next year, probably an additional $4 million-$5 million. We've got other stuff that is coming into play. The Tom Joyner Cruise I just mentioned. That could be another almost a couple million dollars of EBITDA. We're kinda working through all of that now, you know.
Look, TV companies go up and down, you know, every other year based on political ad demands, yeah, and I, you know, I think, you know, at least internally, we're starting to view our business in a similar fashion, 'cause it's a double-digit revenue swing for us now.
I think that's really helpful.
In 2020, did we do almost $20 million of political?
Yeah. No, it was $18 million and change.
Yeah. No. It's a real number, right? You know. We're not gonna have that next year, you know. Look, don't be surprised if our EBITDA next year ends up, you know, being less than it is this year. Again, you know, it's, you know. Don't know. I mean, you know, I'm probably not gonna budget flat, right? I got one guy looking at me, you know, saying, "Well, that's not what you told me."
Okay. Within digital, just to kinda double-click on that, so what kind of growth is sustainable there and what's the nature of that? I mean, is that website, basically website advertising or.
Yeah.
Within apps, what does that look like?
I mean, look, we sell. Our digital business is primarily display and more and more video. I don't know off the top of my head, but I think, you know, our revenue's probably, what, 25% digital video, you know, right now. We've streaming, audio streaming is a growing category in our digital business. We've just seen, you know, we've just seen a real explosion of demand against the digital category. This was a business that before, in 2019 was, you know, probably low $30s million of revenue, you know, low to mid-$30s million, you know, and it's probably gonna be closer to, you know, high $70s million, closer to $80 million this year.
Wow. That's, I mean, do you think you're taking share from just more people listening? Are you taking share from radio or, you know, are people choosing between Spotify and your channel?
It's increased demand and it's, you know. Well, first of all, you know, the share of, I mean, the amount of money that we're doing is, you know, a pimple on an elephant's butt in, you know, in comparison to the entire digital revenue ecosystem, which includes Meta and Google and Spotify, you know. There's no, you know, Miller Kaplan for digital, right? Like, you know, where we can sit and figure out what our digital share is. But even if there was, we probably wouldn't even register, right? You know? I can't tell you. The only thing I can tell you is that national advertisers, A, are putting more money into digital, B, they are now recognizing the contextual value of targeted digital media and diverse-owned platforms.
As their increased interest in diverse audiences and diverse ownership, you know, has evolved, you know, we started Interactive One in 2008, so we've been pounding the, you know, the urban digital message for a very long time. I think I said it earlier, you know, as well, that brand building, you know, has helped us. Plus, we've got the largest urban or African American targeted digital audience in the, yeah, as it relates to Comscore, among all the competitors, right? You know, so-
Mm-hmm.
That's what's happening.
That's a great segue into my next question. I'm sorry.
Go ahead. No, I said that's what's happening.
Okay. And that's a great segue into my next question, which is, you know, on the diversity and inclusion initiatives, can you speak to what the nature of those commitments from advertisers look like? Are they kind of year to year? Have they committed a certain dollar amount? You know, how much visibility do you have on those commitments? And second of all, you know, are you able to quantify for the advertisers what the, you know, are the economics pretty similar to maybe just like a, you know, a typical pop station? Are they different? I mean, how are the advertisers thinking about it? Is it more for them the same economics, better? Is it a marketing expense for them in terms of the diversity and equity inclusion initiatives?
Those are my two questions on that front.
I mean, as they've increased their, you know. Look, Procter & Gamble and McDonald's and General Motors, these are all entities that have said that they're gonna, and I don't have the exact numbers off the top of my head, but they're gonna grow their spend with, you know, Black-owned media or, you know, from 2% to 4% over the next two years. You know, they've made multiyear spend target commitments. They actually haven't come in and given us a two or a three-year contract, you know, that hardwires that. There are some conversations going about multiple about contracts for multiple years, you know, that we're working on now. I can tell you that rates have gone up because with ad demand, rates go up.
Rates for our audience in comparison to what advertisers have historically paid for general market, you know, audiences were already low, right? I think when you match us up in comparison, we're not—they're not paying an outsized premium to reach at least our particular audience, you know, at Urban One. I think there are some diverse-owned platforms that really don't have a lot of audience, or some have no audience that are now getting money, you know. The CPMs there are probably through the roof, you know, or not even calculable because, you know, there's, you know, I know some platforms that are getting real money, they aren't even rated, right? You know, but they're getting money now.
We've always been rated. We've always, you know, had a decent sized audience. Even when, you know, if we get a 40% rate increase, you know, we're not more expensive than, you know, just, you know, Warner Bros. Discovery networks. You know, we're probably still at a, you know, significant discount to what advertisers pay for those networks.
Got it. That's very helpful color . Thank you.
Thank you.
Hello?
If there are any additional questions, please press one then zero at this time. We have a question from George Michaels with Barclays. Please go ahead.
Hi. First of all, you know, wanted to congratulate you guys on another great quarter. Just quickly, is there any thought to doing any additional equity buybacks, or can you talk about that? Thank you.
We've been discussing it. I think our focus has been on bonds. You know, we've been talking about it internally. Don't know. We haven't landed anywhere just yet. You know, we always like, you know, we used to have over 100 million shares outstanding, and now we got 48, you know, million. We like to do it opportunistically and, you know, it's been good. I mean, we've generally bought, you know, at the right time. Our last big purchase was, I think last quarter ago, you know, when we bought, like, 4.5 million shares, you know, back, and I think the average price was, like, in the low $5s.
The stock proceeded to trade down after that, so wasn't feeling great a week after doing, you know, that trade. Ultimately kinda felt good about where the company was going and the opportunity to buy that many shares back in one fell swoop was a good opportunity. The fact of the matter is the volume is not huge on this stock, so even if we go in, you know, when the stock is depressed, you can't, you know, you won't be able to buy a ton of it. We're assessing our options now.
I don't know exactly where we're gonna land, but I think we kinda wanna get through budgets, you know, see how we feel about it. If an opportunity to take a sizable block came up, I think we would look at that because it just doesn't happen, you know, that often. The other thing that we've been watching, but I kind of feel good about it, you know, now, is that our EBITDA has been increasing, our debt's been coming down, you know, but the stock's kinda been just hanging in there. That's because multiples have been, you know, well, coming in, right.
What I feel good about now is I kinda think where the company's trading at now, probably low fives, you know, not including, you know, the value of MGM. I kinda feel like that should feel like a floor, you know, for this business. When I look at, you know, the low water mark in the cable space, which is AMC, which trades at about 5x . You look at what newspapers, you know, have historically, you know, trade at, which I think, you know, we have a much better business, you know, than that. Even the radio guys. iHeart's trading at almost 7x , I think. Cumulus is trading at about 6x .
I think if our company's trading in the low 5x, you know, EBITDA, you know, that's a pretty safe entry point, you know? You know, given that, if you were to buy back stock and keep paying down debt at the same time, you know, it's probably a pretty good trade. You know, what I don't know, and again, we're going through budgets right now, is, you know, where do I think we're gonna end up next year and how does that factor into it? We're long-term shareholders. The family's the largest shareholder, yeah, out there. We're believers in it and we, you know, we generally like to own more of the company than less over time.
We wanna, you know, we wanna do it right. You know, you don't like the stories you see. You know, a bunch of them of people who believe, and they buy, you know, at the high and then, you know, the stock takes a valuation adjustment and, you know, they just burnt through a lot of money. We don't really wanna, you know, we don't wanna see that happen to us. I don't feel like the valuation of where we're at now, you know, there's very much risk in that at all.
Thank you.
Yeah.
If there are any additional questions, please press one then zero at this time. There are no further questions.
Thank you, operator. Thank you, everyone. We'll talk to you offline if you have any additional questions, and we'll see you next quarter.
Thank you. Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Event Conferencing service. You may now disconnect.