Urban One, Inc.

Ladies and gentlemen, thank you for standing by. 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 May 5th, 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.urbanone.com. A replay of this conference call will be available from 12 p.m. Eastern Time, May 5, 2022, until 11.59 p.m. May 9, 2022. Callers may access the replay by calling 866-207-1041 in the U.S. International callers may dial direct area code 402 The replay access code is 744-5259. Access to live audio and a replay of the conference call will also be available on Urban One's corporate website at www.urbanone.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, Chief Executive Officer of Urban One, who is joined by Peter D. Thompson, Chief Financial Officer.

Thank you very much, Operator, and welcome to our first quarter results conference call. Also joining Peter and myself are Christopher Simpson, who is our General Counsel, Karen Wishart, who is our Chief Administrative Officer, and Jody Drewer. He is the CFO of TV One. You saw the press release. Really excited about the extraordinarily strong quarter that we had across all of our business units. Big performance, well in excess of I think what most analysts had predicted. We had guided to mid-teens revenue growth in the radio business, but digital came in very strong, and so did TV One. And so really... Really strong performance from our team across all divisions. Very proud of them. I'm going to hit what I think are kind of like the two highlight areas of conversation. First here, our guidance for the year and also an update on Richmond. Given the strength in Q1, we do feel that we will exceed the top end of our $145 to $150 million of EBITDA guidance for this year. Not sure exactly where it's going to land, but we'll beat that. However, it should be noted that we are seeing less robust pacing going forward, and we're We articulated that in the press release, radios pacing mid-single digits. We're also going to start to lap tougher comps from last year. So even with all of that, we still feel like we're going to exceed the top end of our guidance. But I just want to let people know that there are tougher comps coming, and you are starting to see a moderation increase. in the growth rate, in particular in radio. We don't know where the macroeconomic winds are going to blow, but we should be in good shape by the end of this year, but don't just extrapolate Q1's performance forward for the next three quarters. Moving to Richmond, a question that people get, Um, uh, you know, the question that we get, you know, all the time, what's going on. So let me, um, just, uh, articulate, you know, specifically, um, so everybody knows that, um, yes, you know, we had been moving forward to get a second referendum scheduled. The city council of the city of Richmond voted to, um, uh, to petition the court for a second referendum that was back in January. We then went to the Virginia Lottery to get pre-certification for our second referendum. We got that in April, beginning of April. Actually, I think it was beginning of April. Then we went to the Circuit Court of Richmond and petitioned the court for the second referendum to be scheduled. And they granted that for November of this year. And on the 18th of April, that court order became final and unappealable. So there is a referendum scheduled. However, there are still hurdles. There's still a movement within the General Assembly. to put language in their budget that would attempt to block the second referendum and not let us run again until November of 23. And we are in the process of trying to lobby to get that language taken out. Not sure that we will be successful, but that is one avenue. The other avenue is that the governor also has the opportunity to veto language or amend language in bills, including the budget bill. We believe that we have an extraordinarily strong legal argument that the court order is final and unappealable and that the General Assembly cannot retroactively undo a court order. We've spent a lot of time with lawyers looking at this, but by the way, we're probably the only entity that has looked at this in depth. I do believe that it is now starting to come into focus at the legislature level. Because they still don't have a budget deal yet. They're in the process in the Virginia General Assembly trying to negotiate the budget. But there's a strong chance that this language could be in there. And if it is, we're not able to get it either vetoed out or taken out by the legislatures. legislators, then there's probably going to have to be some sort of adjudication process. Not sure exactly how that's going to work yet, if in fact that happens. We think that if that happens, we've got the stronger argument. We're very optimistic that we're going to be running a second referendum, but I don't want to lead anybody to believe that it is a slam dunk. And quite frankly, it's probably uncharted territory. Probably never before Has there ever been an effort to use budget language to retroactively thwart a final and unappealable court order? So some judge may have to make that decision. That's kind of like the worst case scenario. I don't know how that works out on timing. In the meantime, we're doing everything that we can to continue to convince legislators that we've got the stronger position and they should just back down and let this move forward. We're also going to try to convince the governor's office that this is a legal right that they don't want to take away from the citizens of the city of Richmond, Virginia. The city feels like it has, you know, is compelled to move forward with this referendum from a legal standpoint. They've got a court order that is compelling it to do so. And so that's where we sit. You know, it's a better position than we were in in December of last year, for sure. We keep making progress towards it. And I also want to caution people, and I think everybody knows this, The referendum that we ran last time, we lost it 50.85 to 49.15, so a very close vote. We're focused on what can we do differently to get it over, give it over the finish line should we get the opportunity for sure to run it again. But it's a 50-50 proposition. So not dead by any stretch of the imagination, but not a slam dunk proposition. So that is in detail exactly where we're at today. I can't tell you when we'll have certainty on if we're running for sure or not because it's an iterative process of lobbying the legislature, the governor's office, and then ultimately if there is some sort of judicial procedure, I don't know what the timing is on that either. Okay. With that, I'm going to turn it over to Peter so he can give you the details on the quarter and then we'll come back for Q&A.

Thank you, Alfred. So as Alfred said, the first quarter of 22 finished very strongly with net revenue and adjusted EBITDA up across the board over prior year. Consolidated adjusted EBITDA was $42 million for the quarter, up from $30.2 million in 2021. and up from $27.7 million in pre-pandemic 2019. That revenue is up by 22.9% year-over-year for the quarter at approximately $112.3 million. Net revenue for the radio segment increased 13.3% year-over-year in the first quarter. Local ad sales, excluding political, were up 14.8%, and national ad sales were up 6.9%, excluding political. Most of the major advertising categories were up from last year, with the exception of government and public, which was down 13.7%, and automotive, which was down 14.3%. Food and beverage was down 5.9%. We saw a decrease in government-funded pandemic outreach and political spending was down given the Georgia runoff election that occurred in Q1 of last year. was our biggest ad category, driven by a return of spending by law firms and an increase in spending from tax services. That was up 23.3%. The entertainment category was up 116%. Healthcare, retail, financial, travel, and transportation all saw double-digit increases compared to last year. Telecoms was flat. As Alfred mentioned, the second quarter of 22 is currently pacing up in the mid-single-digit percentage range. Net revenue for Reach Media was $10 million in the first quarter compared to $7.8 million in the prior year. The revenue increase was due to strong demand to reach the African-American audience, which drove improved pricing. The biggest revenue increases were on the Ricky Smiley Morning Show and the D.L. Hughley Show. Adjusted EBITDA in our REACH segment was up by 43% for the quarter. Net revenues for our digital segment increased by 49.6% in first quarter to $15.5 million. Sponsored and branded content were the primary direct sales drivers in Q1, as traditional budgets continued to shift to digital and video. Adjusted EBITDA increased for the quarter by 94%. We recognized approximately $56.4 million of revenue for our cable television segment during the quarter, an increase of 22%. Cable TV advertising revenue was up 46.9% excluding political, with a favorable rate volume impact of $5 million, $700,000 of free video on demand, FBOD, $1.5 million increase for Clio TV advertising, and 1,006,000 favorable ADU burn-off and increased advertising related to U1 honors, Urban 1 honors. Cable TV affiliate revenue was up by 1.9% for the quarter, driven by rate increases and converting some free subs to paying subs, which was partially offset by churn. Cable subscribers for TV1, as measured by Nielsen, finished Q1 at 46.8 million, compared to 49.3 million at the end of Q4. And Clio had 41.8 million Nielsen subscribers. We recorded approximately $2 million of cost method income, less administrative expenses for our investment in the MGM National Harbor property for the quarter, compared to $1.7 million last year and $1.7 million in 2019. Operating expenses, excluding depreciation, amortization, impairments, and stock-based compensation, increased to approximately $73.3 million in Q1, compared to $65.2 million in Q1 of 2021. As a result of the continuing reopening of the economy and increase in revenue, the following operating expenses increased from prior year. Programming content and amortization at our cable television segment increased by $2.2 million, Outside services, including contract, talent, and consultancy fees, increased by $2.1 million. Marketing and promotional spending increased by $2 million. Revenue variable expenses increased by $1.9 million. Employee compensation increased by approximately $933,000. Casino chase costs were down by $1.1 million, but are added back to adjusted EBITDA. Radio operating expenses were up 1.3%, with 90% of the revenue increases falling to adjusted EBITDA. Expenses relating to the revenue increase, such as music licensing fees, sales commissions, and bonuses were up. Successful collection efforts drove a favorable bad debt allowance adjustment. Reach media operating expenses were up by $1 million, against a revenue increase of $2.2 million. Affiliate fees and commissions drove most of the increase. Operating expenses in the digital segment were up by $2.8 million, driven predominantly by variable expenses related to traffic acquisition and sales, and also increased video production costs. Cable TV expenses were up $4.6 million year over year. Programming content expense increased by approximately $2.2 million. Sales and marketing spend at TV One was up by $1.9 million. Operating expenses in the corporate and elimination segment were down, including a favorable year-over-year variance for the Richmond Casino Chase costs of $1.1 million. For the first quarter, consolidated broadcast and digital operating income was approximately $48.4 million, an increase of 33%. Interest expense was approximately $15.9 million for the first quarter, compared to approximately $18 million for the same period in 2021. The company made cash interest payments of approximately $30.6 million in the quarter since semiannual debt service payments are due in Q1 and Q3 of each year. Provision for income taxes was approximately $5.6 million for the quarter. The company paid cash taxes net of refunds in the amount of $2,000. Net income was approximately $16.4 million or 32 cents per share compared to $7,000 or 0 cents per share for the first quarter of 2021. Capital expenditures were approximately $1.6 million. The company executed a stock-fest tax repurchase of 2,649 shares of Class D common stock in the amount of $10,000. As of March 31, 2022, the total gross debt was $825 million. Our ending cash balance was $166.4 million, resulting in a net debt of approximately $659.1 million compared to $162 million of LTM reported adjusted EBITDA for a total net leverage ratio of 4.07 times. And with that, I'll hand back to you.

Thank you, Peter. Again, I want to reiterate that we will exceed the high end of our $145 to $150 million of EBITDA guidance for 2022. We feel comfortable about that number, even if there is a continued economic slowdown. And again, the Richmond update is a work in progress further along than we have been since December, but not all the way there yet, but optimistic. I'd like to open it up for questions.

Absolutely. Ladies and gentlemen, if you do have questions, press 1 then 0 on your touchtone phone. You'll hear an indication you've been placed into the queue and may remove yourself from the queue by repeating the 1 then 0 command. Should you be using a speakerphone, we ask that you please pick up your handset and make certain your phone is unmuted before pressing any button. Our first question will come from the line of Aaron Watts with Deutsche Bank. Go ahead, please.

Hello?

Your line is open. Go ahead, Mr. Watts.

Hi, guys. Thanks for having me on. Alfred, appreciate the color that you gave around the ad environment on the radio side. I just wanted to clarify something. So I know you said that the pacings are moderating And I was curious if they're moderating because the comps are tougher as you move forward through the year or if there's actual softening coming through from concerns.

Yeah, good question. Depends on the segment, right? Digital is moderating... mostly because the pacings were so strong in Q2, 3, and 4 of last year. Radio is moderating, I think, just because of economic slowdown. And so, I mean, look, there's a big difference between mid-teens pacings and mid-singles pacings, right? Uh, I don't know how strong political is going to be. Uh, it could be, you know, it could, it could be gangbusters political. Yeah. Well, look, we know it's going to be an up number, you know, compared to last year, but political is highly dependent upon the nature of the races, close races, runaway races, you know? Um, yeah. So, um, You know, that's yet to be seen. That could be upside there. But, you know, there is absolutely a slowdown of economic activity, particularly on the national level, you know, in the radio business. But, look, you can turn on CNBC and see that, right, you know? And it doesn't mean it's going to be a recession, right? I saw David Rubenstein today on CNBC, and his prediction is, yeah, you're going to have higher wage pressure, higher inputs pressure, but he thinks that growth slows but doesn't push us into recession territory. If interest rates go up and wage and inputs costs go up, earnings are going to slow. And I think you're seeing that in the market where multiples are compressing just across all sectors because of those factors. And it doesn't mean there won't be some breakouts. performances. Hopefully, we can be one of those, but I think that's where we are.

Okay, that's helpful context. One other question I just wanted to ask you was around share within the local marketplace. Do you feel that radio and your stations are maintaining their share or are Maybe you're taking some share versus other local media. I'm curious the dynamics you're seeing right now there, maybe versus outdoor digital.

Yeah. Look, I've got no color on radio's share versus other mediums in the local markets, right, because we just don't get information on how much – of the total local ad pie outdoors taking versus radio versus, uh, versus digital. Um, we can get, you know, our own performance and share against the other radio competitors. We just don't have that information right this second. We're happy to provide it, you know, um, uh, offline just at high level though. Um, our national platforms, you know, um, uh, digital radio, um, uh, National radio, whether it's our syndication business or our regular national business plus our a radio station digital business are outperforming just the traditional spots and dots on the terrestrial radio stations. So if you put those two together, we're doing just fine. Local may be lagging a bit, but I'd have to go in and unpack that market by market. I'm happy to do that for you offline. It'll take a little research.

That's great. Thank you for the time. I appreciate it.

We'll go next to the line of Sudhar Vardarajan with Lord Abbott. Go ahead, please.

Yeah, hi. Thank you for taking my questions. A couple of questions. So first, You know, I just want to go back to your outlook. You know, you've kind of raised your guidance slightly by saying you're going to be, you know, exceed the eye end of your prior guidance. But I just kind of, given what you've done in Q1 around, you know, you're pacing at about 160 million run rate on an annualized basis, and typically Q1, I think, is kind of the weakest quarter. you know, could you kind of, you know, is there anything you're expecting in the back half that, you know, that precludes you from, you know, being more constructive from a guidance perspective? And then second, on on the casino, could you, you know, as you kind of prep for the second referendum, do you expect to see any spike in expenses and how much in, you know?

Yeah. Yeah. So, so, so, um, two good questions. Uh, we specifically chose not to give a new guidance number because, you know, I, you know, I don't know what the economy, you know, what the effect of the economy is going to be, you know? And so, um, I just said we're going to exceed it. You're going to have to sort of make an estimation yourself on how much you think we're going to exceed it by. We don't want to throw a number out there. We throw a number out there and it doesn't happen, people would be disappointed. So I think all we're saying is we're going to beat what we told you last time and You know, and that's kind of how we're thinking about it. I hope that, you know, there isn't, you know, any significant economic slowdown. But I do feel like that there is, you know, absolutely one occurring now. You know, on the casino, you can absolutely expect expenses to go up, you know, if we secure things. The second referendum, we probably spent about $4 million last year on that referendum. I don't see any reason why we would spend less than that. Given we lost last time, we might end up spending more this go-around to try to cover off some constituencies that we didn't put a lot of resources towards last time. And so we haven't developed a budget for the second referendum yet. I think, you know, what we have in our budget right now, you know, is the same amount of money last year. But, Peter, in our guidance, do we have, yeah, have we, you know, do we have a referendum second referendum?

We adjust it out, right? So we give adjust to give it down. We don't include that. So I've got numbers buried in my forecast, but that's. no one's going to see those in adjusted EBIT. They do flow through the expense lines in the press release, but they don't hit the adjusted EBIT.

So when we're giving you our adjusted EBIT style guidance, that's not taking into account the referendum expenses for the second go-round.

Got it. And then I just had one more follow-up since, you know, there is some concern about a slowdown as we get to the end of the year and into next. Could you revisit for us, you know, your leverage targets, you know, assuming that, you know, the political year would be behind and, you know, if 23 is going to be a slowdown year, could you talk about where you should be net of the casinos?

net of the casino?

Assuming the $100 million is spent on the casino as well.

Assuming that the casino project happens and we spend call it $10 million of cash this year on the things we would need to do including not just referendum but including all the other things we would need to do. I still have us below four times at the end of this year. So, you know, high-ish threes.

And that assumes the $100 million goes away for the casino.

Well, then the rest of that will go in Q3 of next year in our projections, right? So you've got the bulk of it being put in in Q3 of next year, we think, at which point I have us. just above four a little above four but not much so that's the impact you know so we get below we get below four and then if we spend 100 million then that toggles us back above four and we stay around four and my projections through the end of next year and then we drop you know below four again in 24 you know mid threes and and then low threes thereafter so that's kind of I mean, look, these are projections, right? Who knows? But that's how we're thinking about it, including Richmond.

Thank you.

You're welcome. Thank you.

And if there are any additional questions, please take this opportunity now to press 1, then 0 on your touchtone phone. We'll go next to the line of Patrick Wang with Voya Investments. Go ahead, please.

Yes. Hi. Thank you. Good morning. Could you talk about TV one? Cause that's over half of your revenue and you'd be deaf. And, uh, so what's the dynamics there for 2022? Uh, since like, uh, doing very well.

Yeah, I TV one is doing very well at a do over a hundred million dollars of you could, uh, what'd we do last year? Yeah. Um, we'll do, uh, over a hundred of, of that one 55. Of that 150, TV1 is going to be sort of, you know, 107, 108. Ratings are hanging in there, you know, doing well. And it's in good shape. I mean, you know, I expect TV1, you know, to stay at $100 million of EBITDA or better for the next four years. You know, I feel pretty comfortable about that. And that's, you know, that's including sort of the degradation of the paid TV ecosystem. What I mean by that, sub-loss is due to, you know, churn and streaming and all that kind of stuff. We still have to figure out, you know, what do we, I mean, you know, like every other cable company, television programmer, you got to figure out how to stake out your position in this new world that will include linear cable and streaming and digital video and fast channels. And I struggle with it. There was a time, I would say in 2019, where a lot of investors loved radio more than they loved cable television. And then the pandemic happened and radio got crushed and cable television did really well because people were inside, they were watching TV, and then you got two revenue streams. With radio, you've got more control of your destiny, you own your distribution. With cable television, you're relying on third parties for distribution. So again, I struggle with how I feel about these two businesses vis-a-vis one another. Both of them are challenged by digital disruption. which is why I'm happy that we're diversified. I think radio has a long tail on it in terms of still being a useful and valuable ad medium over time to advertisers, but you can't deny the fact that advertisers do backflips to buy TV impressions, you know, When they had broadcast television in the networks, as cable came into existence and started to grow, advertisers paid increasingly higher CPMs to reach smaller audiences at the broadcast networks because that's their preferred advertising medium. So having a stake in both areas is, I think, important. I don't believe that... And now the streaming guys are having their challenges, right? Netflix is losing subs, you know. And so, you know, there's going to be some melange of all of these different distribution systems that ultimately, you know, ends up being the status quo.

What's the current sub count for TV1 right now?

I'm sorry?

What's the subscriber count at the quarter end? For TV1.

We gave it for TV1 and Clio, didn't we? Yeah, I just gave you that. Let me just go back in my notes. All right, so $46.8 million for TV1 and $41.8 million Nielsen subs for Clio.

Which is great. We launched Clio, what, two and a half years ago? And now it's got almost as many... subs is TV one Cleo's a free network TV one gets a license fee part of the reason we wanted Cleo to be free is so we could get the distribution up you know quickly and and monetize that so and by the way part of that me being comfortable that's going to stay above a hundred you know you know for the you know next four years is the fact that we've successfully created another network you know at scale and when I say at scale, at a scale large enough to monetize it on a real basis. And that's helping us drive more ad revenue and maintaining EBITDA even in the face of declining pay TV subscribers.

And let me just follow up with a bit of color on the numbers. So Alfred said earlier you can't extrapolate Q1 through the year. So you can't take the 45% ad revenue growth of TV1 and just extrapolate that. But what we're seeing and what we're projecting, obviously, we're commanding higher rates. Demand is strong. So we are seeing and projecting double-digit ad revenue increases for the rest of the year, and indeed for the whole year. And then on the affiliate side, we were up marginally 1.9% in Q1. We're modeling moderate declines for the rest of the year. So you could think about the affiliate revenue as being maybe down low single digits. And so when you combine those, I think you're still gonna hopefully see double digit growth on the top line for TB1 this year when you combine those lines.

Great. Another question is regarding the MGM Harbor stake. Where does it show up on the income statement? Because I don't see an equity investment. That's not consolidated. I assume that EBITDA, whatever that might be, $15 million, it's not in the consolidated EBITDA number.

Yeah, it is, and it comes through as other income in the corporate line. Okay. Yeah, you'll see that in the press release. You see it at the bottom of page three as a reconciling item, but then you'll also see it in the corporate elimination segment under other income net, which is 191. Right.

So the current arrangement with NGMs is still puttable. So what's your current thinking on that stake, or you're happy with the status quo?

Um, it's a good question. Um, we think that that stake it's, it's puttable now at its full multiple value of seven times. So that stakes worth over a hundred million dollars. You know, we only take in about $8 million of income, you know, um, a year on it. So we're only getting whatever our trading multiple is on that $8 million. So we probably think that stake is worth twice what we get value for it. And so, um, Right now, we're going to hold on to it this year. We believe that EBITDA will grow again this year, particularly because this is the first full year of sports betting in the state of Maryland, and their sports book opened. But it's an option. One way to think about us is there's another – 50-plus million dollars of value that isn't captured. Now, I don't think anybody ever does that math. I mean, some people do, right? But the fact of the matter is the only way you really guarantee getting value for that is you monetize it and pay down debt, you know, or you monetize it and buy cash flow with the residual value or something. Yeah, so we're not planning to do anything with it today. We certainly wouldn't put it, you know, the window to put it is passed for this year, so we couldn't put it until the first quarter of next year anyway. Yeah, okay.

Now that the leverage is down to four times, your equity is just another cup of turn leverage. What you're thinking on the cash generating from the business is looking pretty strong, probably in excess of $80 million. Going forward on free cash, though, what's your plan on that free cash? How do you want to expand it beyond the casino chase?

Yeah, I mean, I think I've said on the last conference call, we want to wait and see, you know, what's going to happen with Richmond. You know, we've, you know, we're looking at, you know, some, you know, strategic, you know, M&A opportunities, you know, in Chicago. in the radio business, particularly in some markets that we already exist in. We're being careful and prudent. I like our leverage. Where it's at today, I'd like to get it lower. I think that we would like to ultimately get the company into a place where... we can continue to create value, but we also get ourselves into a return of capital, you know, to, to shareholder, you know, um, position. Yeah. Um, but you got to balance those. I mean, if we win the casino and, you know, it's definitely worth putting a hundred million dollars, you know, in, in, in, into that opportunity, um, and we'll create a lot more value. Um, and, and we look at the same way, you know, for, for MNA opportunities, but ultimately, you know, as, as, the largest shareholder, you want to get the company to a position where you can have leverage low enough where you can return capital. We announced a share buyback last quarter. We haven't executed on it. The share price moved all on its own. We didn't buy anything because when it was high threes or $4, we definitely felt uh, it was, was, was undervalued. Um, um, but by the same token, multiples are compressing. So, uh, I don't know what the market is ultimately going to value media cashflow at, right? Cause we're a mix of radio or cable and we got digital. Um, and so, um, but, but I, I, I am interested in getting to a position, uh, of being able to return capital to shareholders, whether that's through a combination of buybacks and dividends or one or the other. But look, if we have to send $100 million out the door, that's going to change. That's going to stall our leverage profile at where it's at right now. We're not going to – it's going to take us a year to get back down below 4%. if we have to invest $100 million into the Richmond Casino project.

Just a quick follow-up on that Richmond project. Your partner, P2P, just underwent a buyout with a new owner. Has anything changed with the new ownership?

Yeah, well, look, I'm glad you mentioned it because I hadn't mentioned it. Yes, P2E got bought by Churchill Downs. Um, I've spent a lot of time with the Churchill Downs, um, uh, CEO and, you know, and his team. And while P2E was, you know, was a great partner with us, they wanted to do, um, this deal with us and we were successful in winning, you know, the RFP, um, Churchill, uh, is just as excited, if not more excited about partnering, um, with us. Cause you know, I think that they, um, would like to see the Class 3 happen in Richmond because that would be gravy for them, right? Because they agreed to buy it after we lost the referendum, right? And so we didn't get the referendum back on through the courts and stuff until after they had made the announcement. So that would be all gravy and upside. But they're a much bigger company with a much bigger balance sheet and a much bigger brand in the gaming and leisure space. And I think that that will be helpful in a second referendum run in Richmond because it's a different partner, which I think has got more cachet. I hope that matters. And the other thing is that They certainly have more economic resources, so should we need more capital for the Richmond project? They have indicated that they want to participate at a higher level. That's all good. There's nothing bad about Churchill taking over P2E. No, the terms of the deal have not changed, but just like Everything else, the cost of that build out, you know, I know for sure has probably increased by 10%, you know, since we, you know, modeled it out last year. And it would be good to have a capital partner at the table that, you know, can help take up some of that slack.

Great. Thank you so much.

Thank you. If there are any additional questions, please take this opportunity now to press 1, then 0 on your touch-tone phone. Speakers, we have no one else in queue at this time.

Thank you very much, everybody. As always, we're available offline for additional questions, and we'll see you next quarter.

Ladies and gentlemen, that would conclude your conference call for today. Thank you for your participation and for using AT&T Event Teleconferencing. You may now disconnect.