Gray TV CEO: Industry United On Virtual MVPD Negotiations

The current impasse between Paramount Global and the CBS Affiliates board over Fubo TV carriage rates has gotten attention in the current round of Wall Street conference calls. Gray Television has a large portfolio of CBS stations — and they are among those off the Fubo streaming platform because Gray has rejected the terms that Paramount negotiated with the streamer for local stations.

“No other company has a right to negotiate on behalf of my company without our consent,” said Gray Chairman-CEO Hilton Howell. “I have no intention of negotiating in public, or criticizing anyone anywhere. The negotiations in the past had been agreed to, so they were handled that way. The affiliate groups feel that times change and I will refer you to our friend Chris Ripley, who in his earnings call set out Sinclair’s position — and I personally endorse his comments,” Howell added.

“We consented to where it has been. We will not be consenting going forward,” Howell said.

Within the record 2022 results that Gray reported this morning, political advertising for the non-presidential election year came in $515 million. That topped the company’s guidance in the previous quarterly conference call of $495 million-$505 million.

Noting that the last election was a little more than 100 days ago, Kevin Latek, chief legal and development officer, indicated that Gray is already gearing up for a big presidential election cycle.

“The first presidential primary debate has already been scheduled. It’s going to be this August in Milwaukee. So we’re not making any projections on presidential primary money, but Republican primaries will be held in Iowa — where we have a huge presence — New Hampshire — where we have a very strong station — Nevada — we own stations in both markets —and South Carolina — we have very strong markets. That campaign begins officially this August,” Latek said.

“Turning to Q1 2023 guidance, we believe our revenue guidance demonstrates the company is off to a good start in ’23, especially when you consider that it’s an off year in the political cycle and we are facing — we anticipate about $6 million from the broadcast of the Super Bowl on our 27 Fox channels — but that’s compared to an aggregate of $13 million of net revenue related to the broadcast of the Winter Olympics and the Super Bowl on our 56 NBC channels in Q1 ’22. That’s a $7 million non-recurring event for core revenue,” said CFO Jim Ryan.

Gray is telling investors to expect total core revenue of $350 million-$360 million and retrans of $387 million-$393 million. Political is expected to be only $2million-$3 million this quarter.

“We’re seeing a lot of good things in our local markets. A ton of new business development — those are local direct accounts that are coming onto TV — we’ve had a lot of success with that. We’re also seeing automotive coming back in a lot of markets. General Motors is pretty strong. Nissan is strong. Legal continues to do well,” said COO Bob Smith in the Q&A session with analysts.

“We recently saw sports gambling get approved in Ohio, so our Ohio markets are seeing a lot of pretty big buys here in the first quarter and continuing into the second quarter. We’re optimistic that North Carolina will pass gambling in time for the football season. Overall, despite the headwinds, despite all of the chatter, if you will, there’s a lot of good things happening in our local markets right now,” Smith said.