Gray Television 1Q Revenue Down 3%

Gray Television this morning announced that total revenue for the first quarter of 2023 came in at $801 million, a decrease of 3% from 1Q 2022.

That revenue total comprised:

• Core advertising revenue (excluding political) was $357 million, down 2%. In the first quarter of 2023, Gray earned approximately $6 million of net revenue from the broadcast of the Super Bowl on its 27 Fox affiliates compared to an aggregate of $13 million of net revenue relating to the broadcast of the Winter Olympics and the Super Bowl on its 56 NBC affils during the first quarter of 2022. Adjusting for the effect of these marquee sporting events, core advertising revenue was essentially unchanged from the first quarter of 2023.
• Political advertising revenue of $8 million, down 69%.
• Retransmission consent revenue of $395 million, up 1%

• Production companies revenue of $22 million, down 3%.
• Other of $19 million, down 5%.

Broadcast cash flow was $186 million, a decrease of 31%.

The company said: Today “we announced financial results for the first quarter ended March 31, 2023, reflecting our total revenue of $801 million, that was above our revenue guidance and total operating expenses (before depreciation, amortization and loss on disposal of assets) of $640 million, which, after excluding $35 million of production segment operating charges as discussed below, was near the low end of our expense guidance for the quarter. Gray took several steps in the first quarter to manage its leverage and ensure its access to ample liquidity should macroeconomic circumstances become more challenging the rest of this year.

“Overall, our businesses have started 2023 in a strong position. The first quarter of 2023 produced record results, including $801 million in total revenue, an increase of $257 million or 47% compared to 2021, our most recent non-political year. Our first quarter results benefited from continued strong advertiser demand for our local content and continued improvement in retransmission revenues. We attribute these solid results to real-world confidence among advertisers and businesses in local markets who rely at least in part on our high-quality television stations to reach local audiences.

“During the first quarter of 2023, our production segment recorded $35 million in unanticipated operating charges. These charges included $18 million to resolve litigation related to our Atlanta Assembly project, which removed potential restrictions over future development opportunities at the site, related to that litigation, and $17 million of allowance for credit losses related to the bankruptcy filing of Diamond Sports Group, LLC.

“Looking ahead, we anticipate that our television stations will maintain advertising and retransmission revenues at a level generally flat to somewhat ahead of revenues in recent years due to our strong position in local markets.

“Meanwhile, we believe our investments in Atlanta Assembly will provide some diversification from our broadcasting segment with new exposure to the growing film and television production industry in Georgia. In the first quarter, we received $26 million in cash proceeds from a quasi-governmental authority. At various times through the remainder of the year, we anticipate receiving additional funds of approximately $98 million in cash from a quasi-governmental authority and/or certain land sales. We currently anticipate that construction on the Assembly Studios portion of Assembly Atlanta and much of the infrastructure for the entire project will be completed in the summer of 2023. Soon thereafter, we expect that the new facilities will begin ramping up revenue from both long-term and short-term leases of soundstages and related facilities to various content producers. Upon the completion of the Assembly Studios construction, we intend to pause all future construction projects at Atlanta Assembly while we evaluate opportunities to maximize the long-term value of this unique real estate investment.”

Read the company’s report here.

Also Friday morning, Gray authorized a quarterly cash dividend of $0.08 per share of its common stock and Class A common stock. The dividend is payable on June 30 to shareholders of record at the close of business on June 15.