Gray 2Q Spot: Total, -12.1%; Core, +5.1%

Gray Television today reported that second quarter spot revenue fell 12.1% compared to the second quarter of 2012 to $66.7 million, primarily due to expected decreases in political advertising, which plummeted from $13.1 million in the quarter last year to $751,000 this year.

But core spot, which excludes political, rose 5.1%, with both local and national up around that same percentage. Local accounted for 60% of spot revenue.

Overall station revenue, which includes retransmission consent fees and digital, dropped 11% to $84.2 million.

The company’s net income fell from $11 million in last year’s quarter to $5.1 million this year.

In the quarter, the company’s five largest nonpolitical advertising categories on a combined local and national basis by customer type for the second quarter of 2013 demonstrated the following changes in revenue during the second quarter of 2013: automotive increased 9%; medical decreased 1%; restaurant decreased  less than 1%; communications increased 13%; and furniture and appliances increased 5%.

Gray had a consulting agreement with Young Broadcasting that expired on Dec. 31, 2012.  It recorded $600,000 in revenue from this agreement in the second quarter of 2012. It did not record any consulting revenue in the second quarter of 2013. However, subsequent to June 30, 2013, it received $7.1 million in incentive consulting revenue under that agreement for services rendered prior to the agreement’s expiration. It said it will recognize this payment as consulting revenue in the three-month period ending Sept. 30, 2013.

The company’s report, available here, said: “We are pleased with our operating results for the second quarter of 2013. We experienced period-over-period increases in national advertising, local advertising and retransmission consent revenue. Our period-over-period decrease in total revenue was primarily due to the expected decrease in political advertising revenue.

“Our period-over-period decrease in broadcast expenses (excluding depreciation, amortization and gain on disposal of assets) was due primarily to decreases in incentive compensation and national sales commissions. Our period-over-period increase in corporate and administrative expenses (excluding depreciation, amortization and gain on disposal of assets) was due primarily to an increase in stock-based compensation related to the resignation of a former employee.”