Gray 2Q Rev Flat; Retrans Offsets Spot Drop

Gray Television pro forma revenue for the second quarter inched up just $2 million over the first quarter of last year to $502 million, with a big gain in retransmission consent revenue offsetting declines in spot advertising, particularly political.

The pro forma financials, released this morning, reflects divestitures and acquisitions that the company has made since the start of 2017, most notably its merger with Raycom Media, which closed in January.

Highlights of the report:

• Local advertising revenue (including internet/digital/mobile) decreased $4 million, or 2%, to $226 million.
• National advertising revenue decreased $5 million, or 8%, to $56 million.
• Political advertising revenue decreased $26 million, or 84%, to $5 million.
• Retransmission consent revenue increased $37 million, or 23%, to $201 million.
• Production company revenue was unchanged at $9 million.
• Other revenue decreased $1 million, or 8%, to $11 million.

“The decreases in local and national advertising revenue were consistent with our guidance yet, on a relative basis showed improvement from the results of our first quarter 2019 compared to 2018,” the company said.

“Political advertising revenue decreased consistent with 2019 being an “off-year” in the two-year political advertising cycle, yet it significantly exceeded our guidance for the second quarter of 2019 due to apparently stronger and more widespread demand from political ad buyers across our larger portfolio of stations than we had anticipated.

“Retransmission consent revenue continued to grow, reflecting the increasing rate environment. Retransmission revenue for the quarter was below our guidance range due to issues with the incorporation of the 2019 Acquisitions into our forecasting models.

“Our subscriber count remained stable and within our modeled range for the second quarter.”