"It wasn't great, but it wasn't bad," said President Bob Prather as he reported Q2 results for Gray Television. Revenues were down 2% to 79.8 million, at the low end of what the company had promised Wall Street, due primarily to political advertising dropping 44% to 2.6 million. Gray had one more station this year than a year ago, but pro forma revenues were also down 2%, with local up 2%, national down 6% and political down 43%. Prather told analysts that his GMs are mostly optimistic about Q3 and the company is hoping that early primaries will yield political revenues in Q4. Gray's official guidance for Q3 is that local non-political advertising should be up 7-10%. Combined with the lack of political and continued softness in national, the company is looking for revenues to be down 6-8%.
Gray completed a refinancing of its senior credit facility in Q2 – March 19th to be exact – and Prather was happy about the timing, given the current tightening in the credit markets. "It's clearly a different world than it was a month ago. I think it'll be interesting to see after Labor Day how people's attitudes are and how much shakeout is still going on from all this sub-prime stuff and Bear Sterns' problems in that area which have probably been in the forefront. I think valuations are clearly less than they were a month ago," the CEO told analysts.