Room to raise the ceiling: management says its own prices, rates, or terms sit below what the market would currently bea
The model's full reasoning — Q3 2022 call → NOWe need answer YES/NO. Need analyze transcript. Management conveys undercharging and closing gap? Let's inspect. Transcript: Sinclair broadcast. Key topics: political revenue, core advertising, retransmission. Chris Ripley discusses growth initiatives, investment portfolio. Lucy discusses financials. Rob discusses ad categories. Question asks: Does management convey company currently charging LESS for what it sells than market would bear — prices/rates/fees/terms below value, and already begun closing gap while customers stay? Look for management's own claim about pricing gap. There is discussion of retransmission negotiations with ABC. Chris Ripley: "we had when we gave our last guidance, the 3-year CAGR of low to mid-single digits, that we by and large already knew what the economic outcome was going to be for ABC. So that was baked in there. And what we've learned from that interaction and the ones leading up to it is that there has been a shift in terms of negotiating position vis-à-vis the networks as they focused elsewhere on streaming, and they have moved some of their content around and changed the exclusivity provisions and also just given the magnitude of dollars that we already pay in terms of reverse retrans. So we saw a significant reduction in the growth rates for reverse retrans to be more reflective of the value we bring, the value they bring and what the current subscriber environment is. So we were very pleased with the outcome at ABC. And we actually think their commitment to the network has actually been growing recently. They put more NFL product on ABC after the last NFL deal. And they have secured their other major sports properties. As far as we know, there are no plans to reduce any sort of prime time programming that's been rumored on other networks. And so we think they're great partners for us. And they were — we thought the negotiation reflected the synergistic relationship we had with them, but also reflected the market dynamics and the gives and takes between the two parties." This is about reverse retransmission fees paid to networks, not company's own prices. It says reduction in growth rates for reverse retrans (costs) to be more reflective of value. Not about charging less to customers.
| Ticker | Company | Call | Date | Call grade |
|---|---|---|---|---|
| MEC | Mayville Engineering Company, Inc. | Q3 2022 | 2022-11-05 | B+ |
| CAG | Conagra Brands, Inc. | Q2 2017 | 2016-12-22 | C+ |
| SOHO | Sotherly Hotels Inc. | Q3 2016 | 2016-11-08 | D |
| RCL | Royal Caribbean Cruises Ltd. | Q1 2016 | 2016-04-29 | C+ |
| HPP | Hudson Pacific Properties, Inc. | Q4 2015 | 2016-02-25 | C |
HPP · Q4 2015 → YESThe question is: Does management convey that the company is currently charging LESS for what it sells than the market would presently bear — that its own prices, rates, fees, or terms sit meaningfully...YES The transcript shows management explicitly describing a gap between its current charges and what the market now supports, then confirming that the company is already closing it through mark-to-market resets and higher new/renewal rents. Victor Coleman states that the company has “rolled out 80% plus mark to market” on recent leases 2.5 years old, and that cash rent spreads on 1.6 million square feet executed since the acquisition were “north of 30%” with “20%, 25% mark-to-market for 2016 and 2017.
MEC · Q3 2022 → YESThe question is: Does management convey that the company is currently charging LESS for what it sells than the market would presently bear — that its own prices sit meaningfully below the value custom...YES Management explicitly states that they have taken pricing actions in 2022 and have "more room for margin expansion through continued value pricing even beyond the pricing actions taken during 2022." This conveys that their current prices sit below what the market would support, and they are actively beginning to close that gap with further value pricing.
SOHO · Q3 2016 → YESThe question is: Does management convey that the company is currently charging LESS for what it sells than the market would presently bear — that its own prices, rates, fees, or terms sit meaningfully...YES The transcript shows management explicitly identifying a rate gap at the Laurel hotel (and similar situations at other properties) where current charges sit below the competitive set/market, while describing active steps already underway to close that gap through continued ramp-up and occupancy/rate improvements.