Television is the “biggest Chicken Little business,” Gray Television’s new CEO, Hilton Howell Jr., proclaimed, recalling how many times he’d heard over the years that the sky was falling. He asserted confidence in the TV business and declared Gray the best operator in the country. Gray reported net Q3 revenues up 12%, due to political and online boosts. And while Q4 non-political advertising is pacing down, Gray says it continues to outperform the industry.
Howell took the helm from his father-in-law, J. Mack Robinson, in August. But his relationship with the company goes back even further than his marriage. The Howell family was an investor in Gray’s predecessor company from the 1950s, before he was born, so the new CEO said he grew up listening to dinner table talk about television – and how each new technology or recession was threatening to kill the broadcasting business. But he insists that the long-term outlook for television is still bright and noted that his family has never sold a single share of Gray. Unlike Robinson, Howell said he plans to be on each quarterly conference call, although he’ll still keep the operating management at the forefront.
There was a lot of talk about family on the call. President and COO Bob Prather began his remarks by quoting the grandfather of an unnamed friend as saying, “Son, when business is good it’ll get bad, and when it’s bad it’ll get good.” So, Prather said, “I’m looking at this as bad is gonna get good.” Gray continues to outperform the overall television industry and Prather was upbeat on retransmission consent negotiations, with about 60% of Gray’s cable household coverage up for new contracts at the end of this year.
In Q3, net revenues rose 12% to $82.6 million. The gains came in political, up 801% to $13.1 million, and Internet, up 18% to $3.0 million. Local dropped 3% to $46.3 million and national 9% to $17.5 million, although both declines were less than for the overall TV industry.
Q4 political is in now, totaling $26.5 million, taking Gray to $47.6 million for all of 2008. Prather said the lesson from this election is that campaigns have become more focused – directing their ad buys to specific markets rather than just battleground states. Thus his Florida Panhandle stations did not get as much spending as expected as the campaign money focused on Florida markets seen as having more potential swing voters.
For Q4, local is currently pacing down 3.5% and national 6-7%. Including political, Gray is projecting that the quarter will be up 7-13%.