Local leading improvement for Gray Television


Gray Television reports that its Q4 revenues were down 18% to $77.5 million. But there were some particularly bright spots in the report, with both local advertising and retransmission consent revenues up over the previous year. And Q1 is a very different story indeed.

President Bob Prather won’t be having his quarterly conference call with analysts until Thursday, but there was quite a lot of detail in the announcement that Gray issued on Tuesday. The full year 2009 results were exactly as the company said they would be when it delayed its SEC 10-K filing and announced a deal to rework its senior debt covenants. But we now have the key numbers for the quarter as well.

“While we continue to operate our business in a challenging environment, our actual operating results exceeded our initial forecasts. We have experienced improvements in our core local and national advertising revenue in 2009 and believe we are well positioned to benefit from expected increases in political advertising in 2010,” said the news release from Gray. The company also noted that it renegotiated many of its cable retrans agreements in 2009, which boosted that revenue stream.

Within the $77.5 million of revenues that Gray reported for Q4, local advertising was up 5% to $47.1 million and retrans was up 346% to $3.7 million. Also on the plus side, the company added $600K in new revenues for its management of most of the Young Broadcasting stations. National advertising was down 1% to $15.9 million. Of course, political dropped 82% to $5 million. Production and other revenue declined 10% to $1.9 million. Internet ad revenues were flat at $3.2 million.

With Q1 already in the books, Gray is out with preliminary results that operating revenues were up 14%. The company provided quite a bit of detail:

“Based on preliminary results, we currently believe our first quarter 2010 local revenue, excluding political revenue, will increase from 2009 by approximately 11%. We currently believe our first quarter 2010 national revenue, excluding political revenue, will increase from 2009 by approximately 8%.

We anticipate our first quarter 2010 Internet revenue will increase from 2009 by approximately 15%.

We anticipate our first quarter 2010 political advertising revenue will increase to $2.8 million.

We anticipate that our retransmission consent revenues during the first quarter of 2010 will increase approximately $0.9 million, to a total of approximately $4.5 million, reflecting the successful retransmission negotiations concluded in 2009 and the first quarter of 2010.  

We estimate our consulting revenue will increase to $0.6 million for the first quarter of 2010.”