Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Lee Westerfield – BMO Capital.
Lee Westerfield – BMO Capital
Ed, clearly we're seeing unprecedented times in the advertising environment and these are very difficult things to budget for. What I want to ask is this, you recognized any highlighted in your comments that you have a step-down in your debt covenants at the end of I believe it is March 31 next year and then another in the future. You've already set the stage with some cost reduction programs.
What I want to ask are really two questions, number one Evan if you can help me and the audience understand what the cost reduction comparatively would look like if just carried straight forward from the fourth quarter into the first quarter how that compares with the first quarter of 2008 so we can model out at least as far as March 31 on a cost basis assuming no further actions than you already planned for the fourth quarter this year.
The second question really relates to this upcoming reason of renewals in your block programming and what we, I know at this stage about a month and a half in advance of the process, but what we might anticipate in terms of block programming looking into that stable revenue stream as it gets renewed in late this year?
Edward Atsinger
Let me deal with the block program. Evan can address your question regarding the pro forming back the fourth quarter reductions that you're talking about. That may be a bit complicated and, Lee I don't know Evan can decide, but we my have to get back to you with a more comprehensive answer on that.
We have noticed and we've commented on this in our past couple of calls some weakness on I would say maybe a half dozen of the block programmers that are among the 35 or 40 national ministries that we deal with pretty consistently, about a half dozen that began to have some difficulties. I think some of them were fairly unique to these organizations. For example, in one case the speaker and the leader of the organization died. In another case the speaker had died four years ago and the program carried on fairly well for a while but then there began to be some fallout.
There were other unique circumstances that were uniquely associated with I'm going to say four or five of these organizations. The 2% decline that we've experienced can be largely attributed to those organizations and that pattern actually began two or three maybe four quarters ago at least two or three. The renewals, it's still an early timing for those but so far their going reasonably well. I think in this environment will be unlikely that we will look for much in the way of increases but the goal will be to maintain so the block doesn't decline and I think that based upon what we know about the principal partners that we have they all seem to be in pretty good shape.
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