Gray Renews Its Fox, CBS Affiliations

Gray Television today made two announcements of network affiliation renewals, first with CBS and later with Fox.

This morning it announced a comprehensive, long-term agreement that renews all 26 of Gray’s CBS station affiliation agreements in 22 markets.

The agreement includes early renewals for 26 Gray-owned CBS affiliates: WVLT Knoxville, Tenn.; WKYT-WYMT Lexington, Ky.; KWTX-KBTX Waco, Texas; KKTV Colorado Springs, Colo.; KOLN-KGIN Lincoln, Neb.; WCTV Tallahassee, Fla.;  WRDW Augusta,  Ga.; KVLY  Fargo, N.D..;  WIBW Topeka, Kan.; WSAW Wausau, Wis.; WIFR Rockford, Ill.; KNOE Monroe, La.; WSWG Albany, Ga.; WECP Panama City, Fla.; KXII Sherman, Texas; WTVY Dothan, Ala.; WSVF Harrisonburg, Va.; KALB Alexandria, La.; WCAV Charlottesville, Va.; WIYE Parkersburg, W.Va.; KGWN-KSTF Cheyenne, Wyo.; and KNPL North Platte, Neb.

“Gray has been a key partner for many years, so we are excited to sign this deal, which ensures marketplace continuity for both companies as well as the more than four million CBS households that together we serve nationwide,” said Ray Hopkins, president, television networks distribution, CBS Corp. “A majority of Gray-owned CBS stations are No. 1 in the markets they serve, and we are pleased that in extending this deal, Gray sees the value CBS programming brings to their business.”

“Gray’s stations, management, and employees have enjoyed a deep relationship with CBS that dates back many decades,” said Gray CEO Hilton H. Howell Jr. “We are pleased to extend that relationship today. The new agreement ensures that Gray and CBS will continue to serve our local viewers with high-quality network and local programming, and this agreement allows us to continue to grow and strengthen our relationship with CBS for the foreseeable future.”

Then, Monday afternoon came news of its renewal of all its 10 Fox affiliates.

The stations covered by the new affiliation agreements are KNDX-KXND Bismarck-Minot, N.D.; KXII Sherman, Texas; KEVN-KIVV Rapid City, S.D.; WSVF Harrisonburg, Va.; WBKO Bowling Green, Ky.; WCAV Charlottesville, Va.; WOVA Parkersburg, W.Va.; and KIIT North Platte, Neb.

“Gray looks forward to continuing its successful relationship with Fox,” said Howell. “In addition to the new agreements announced today, we are also proud to have increased the number of Fox affiliated stations in our portfolio from five stations in five markets to 10 stations serving eight markets in just the past four months.”

After news of the CBS renewal broke, Wells Fargo Senior Analyst Marci Ryviker said: “We see a lot of good news in today’s announcement. (1) A five-year term means that [Gray] will be able to re-price its subs again on the retrans side before the CBS agreements expire again in ’19. (2) While the rate is likely higher than what [Gray] would have liked to pay (our sense post the LIN issue in Indy), today’s news removes any overhang related to ”lost affiliations” for [Gray]. (3) We still believe [Gray] will get retrans rates high enough come 2015 to show [year-over-year] net retrans growth (recall that [Gray] is set to renew two-thirds of its sub base come year-end).

“We view this announcement as a positive for [Gray] as the length of its CBS agreement suggests that the company will be able to stay one step ahead of its reverse step-ups and removes investors’ fear of an affiliation loss.”