Local advertising is down 14%, national falls 21% and political plunges 67%, while retrans revenue increased 463%.
Gray Television Inc. today announced results from operations for the three-month period ended March 31. Total net revenue decreased $9.6 million, or 14%, to $61.4 million due primarily to increased retransmission revenue offset by decreased local, national and political advertising revenues.
Retransmission revenue increased due to negotiating higher revenues as Gray’s retransmission contracts were renewed.
Internet advertising revenues were generally consistent with the Internet revenues for the first quarter of the prior year while website traffic continued to increase.
Local and national advertising revenue decreased due to reduced spending by advertisers in the current economic recession. Net advertising revenue associated with the broadcast of the 2009 Super Bowl on the company’s 10 NBC affiliates approximated $750,000 which is an increase from the approximate $130,000 of Super Bowl revenues earned in 2008 on Gray’s then six Fox affiliated channels.
Political advertising revenues decreased due to reduced advertising from political candidates during the “off year” of the two-year political advertising cycle.
- Local advertising revenue decreased $6.4 million, or 14%, to $39.3 million.
- National advertising revenue decreased $3.4 million, or 21%, to $12.9 million.
- Internet advertising revenue decreased 2%, to $2.6 million.
- Political advertising revenues decreased $2.1 million, or 67%, to $1.0 million.
- Retransmission revenue increased $3.0 million, or 463%, to $3.6 million.
- Production and other revenue decreased $0.6 million, or 24%, to $1.8 million.
Broadcast expenses (before depreciation, amortization and gain on disposal of assets) decreased $4.4 million, or 9%, to $45.7 million. This decrease was primarily due to reduced payroll costs resulting from a reduction in the number of employees. It also had reduced non-payroll expenses resulting from efforts to control costs.
Corporate and administrative expenses (before depreciation, amortization and gain on disposal of assets) increased $0.5 million, or 14%, to $4.0 million due primarily to increased legal expenses, relocation expenses and non-cash stock-based compensation. The increase in legal fees reflects approximately $330,000 of expenses relating to finalizing certain retransmission consent contracts in 2009. We incurred $350,000 in expenses related to our relocation in 2009 of several general managers due to routine turnover. We recorded non-cash stock-based compensation expense during the three-month periods ended March 31, 2009 and 2008 of $353,000 and $294,000, respectively.
We have continued to expand our Internet initiatives in each of its markets. Its focus has been to expand local content to attract traffic to its websites.
The company attributed the increase in website traffic to increased posting of local content and to increased public awareness of the sites as the result of Gray’s on-air promotion.