Gray TV Sees ‘Gargantuan Year’ In Political Ads

Gray Television Chairman-CEO Hilton Howell was upbeat, to say the least, when describing the outlook for political ad spending this year. And while Gray is officially sticking with its official guidance of $575 million, Howell was even more exuberant in off-the-cuff remarks during the company’s quarterly conference call Friday morning.

“I think it’s going to be a gargantuan year in this mid-year election. I think it will likely rival, if not exceed, any previous presidential election,” the CEO said.

Howell later clarified that beating the 2020 presidential year record of $652 million is “aspirational,” and not reflected in Gray’s financial projections.

Kevin Latek, chief legal and development officer at Gray, noted that the target of $575 million is already 25% ahead of 2020 after excluding the spending for the presidential race and two Senate runoffs in Georgia, which won’t exist this year.

Latek had earlier spelled out just how much political demand is up this year.

“During the first two quarters of 2020, on a combined historical basis, our television stations sold $79 million in political ads. The political feat in 2020 was fueled by presidential primary spending in Iowa, New Hampshire, South Carolina, Nevada and Super Tuesday states — all places where Gray has a big presence. Number two, the primary spending in late 2019 and early 2020 was supercharged by the supposedly irreplaceable spending by candidates Mike Bloomberg and Tom Steyer. As impressive as that $79 million was for the first half of 2020 was, we expect to blow well past that figure for the first half of 2022,” Latek said.

Building from $26 million in political spending for the first quarter, Gray is expecting $65 million to $70 million this quarter, to take the first half total to a range of $91 million to $96 million.

Gray COO Bob Smith noted that there was already some displacement of regular advertisers by political spots in the first quarter. Meanwhile, though, Gray has added more local news programs in many markets, effective April 1, as three syndicated shows came to an end. Local news is the most desired location for most political advertisers.

Pat LaPlatney, president and co-CEO, noted that Gray is continuing to focus on adding new local advertisers, with a run rate of $9 million to $10 million in new local direct business being added each month. And Gray has been introducing its sales training throughout the newly acquired Meredith stations as it did previously with the former Quincy Media stations.

“Although the automotive category is struggling, other categories are growing. In fact, the health category is pacing just slight behind auto. While that is good news and bad news to some degree, it’s a clear victory for in-house health and political sales teams, and our core stations have done outstanding work in developing this category. Our new travel and tourism team is also making meaningful contributions to our sales efforts,” said LaPlatney. He added that the gambling, home improvement and legal categories also continue to grow.

“The services group — comprising financial, legal and health — is continuing to post strong results, accounting for approximately 29% of our core revenue in Q1,” he added.