Gray Television 1Q Rev Climbs 17% To $91M

Gray Television total revenue increased $13.1 million, or 17%, to $91.3 million for the first quarter of 2014 compared to the first quarter of 2013.

The increase, the company said, was primarily due to increases in local advertising revenue and retransmission consent revenue, as well as an expected increase in political advertising revenue.

Gray began providing services to one new full-power station (KJCT Grand Junction, Colo.) on Oct. 31, 2013, and began operating additional stations in three new markets on Nov. 1, 2013. These four new stations accounted for approximately $3.4 million of Gray’s total revenue in the 2014 quarter, meaning that its same-station revenue gain was 12.4% compared to the year-ago quarter.

Retransmission consent revenue increased due to increased retransmission consent rates.

Political advertising revenue increased due to 2014 being the “on year” of the two-year election cycle which resulted in increased spending by political candidates, political parties and special interest groups in the first quarter of 2014.

Local advertising revenue continued to increase, Gray said, “primarily due to increased spending in an improving economy.”

Local and national advertising revenue in the first quarter of 2014 benefited from approximately $3.8 million earned from the broadcast of the 2014 Winter Olympic Games on Gray’s 14 NBC affiliated stations. There was no corresponding Olympic Games advertising revenue during the first quarter of 2013. Local and national advertising revenue included the broadcast of the 2014 Super Bowl on Gray’s five Fox affiliates that earned the company approximately $200,000, a decrease of approximately $900,000 compared to the broadcast of the 2013 Super Bowl on Gray’s then 20 CBS affils that earned the company approximately $1.1 million. 

The principal components of Gray’s 1Q revenue were:

• Local advertising revenue increased $4.6 million, or 10%, to $51.0 million.
• Retransmission consent revenue increased $6.4 million, or 66%, to $16.1 million.
• National advertising revenue decreased $0.1 million, or 1%, to  $13.3 million.
• Internet advertising revenue increased $0.3 million, or 6% to $6.0 million.
• Political advertising revenue increased $2.2 million, or 336%, to $2.8 million.
• Other revenue decreased $0.3 million, or 14%, to $2.0 million.

Gray’s five largest local and national advertising categories on a combined local and national basis by customer type, excluding political advertising, demonstrated the following changes during the first quarter of 2014 compared to the first quarter of 2013: automotive increased 11%; medical increased 13%; communications increased 4%; restaurant decreased 21%; and furniture and appliances decreased 3%.

Broadcast expense (before depreciation, amortization and gain or loss on disposal of assets) increased $6.9 million, or 13%, to $60.4 million. This increase was due primarily to increases in non-compensation expense of $5.3 million and compensation expense of $1.6 million. The four new stations accounted for approximately $3 million of broadcast expense in the first quarter of 2014.

Net income totaled $1.27 million, up 46.7% from $870,000 in the same quarter last year.