Gray TV Revenue Soars 48% in 4Q

Gray Television Inc. today announced that financial results for the three months ended Dec. 31, 2010, included revenue of $114.6 million, a 48% increase from $77.5 million in the same period of 2009, reflecting increases in political, local, and Internet advertising revenue, retransmission consent revenue and consulting revenue while national advertising revenue and production and other revenue decreased.

Local and Internet advertising revenue increased due to increased spending by advertisers in an improving economic environment.

National advertising revenue decreased due to large purchases of advertising time by political advertisers, which reduced advertising time available for other customers. Political advertising revenue increased due to increased advertising from political candidates and special interest groups in advance of elections in November 2010. Retransmission revenue increased due to the improved terms of Gray’s retransmission contracts compared to those in effect during the three-month period ended Dec. 31, 2009.

Gray continued to earn consulting revenue from its agreement with Young Broadcasting Inc. Consulting revenue from this agreement includes a fixed base component and an incentive component that is based upon Young’s actual results. Gray earned base consulting revenue of $600,000 for the three-month periods ended December 31, 2010 and 2009, respectively. Pursuant to the terms of this agreement, Gray recorded $5.3 million of incentive consulting revenue for the three-month period ended Dec. 31, 2010. Gray was not eligible for an incentive consulting fee in the three-month period ended Dec. 31, 2009. This agreement became effective on Aug. 10, 2009 and expires on Dec. 31, 2012.

The principal components of Gray’s revenue were:

• Local advertising revenue increased $2.4 million, or 5%, to $49.5 million.
• National advertising revenue decreased $0.2 million, or 2%, to $15.6 million.
• Internet advertising revenue increased $0.7 million, or 21%, to $3.9 million.
• Political advertising revenue increased $28.2 million, or 569%, to $33.1 million.
• Retransmission consent revenue increased $1.1 million, or 29%, to $4.8 million.
• Production and other revenue decreased $300,000, or 14%, to $1.6 million.
• Consulting revenue from our agreement with Young increased $5.3 million, or 963%, to $5.8 million.

Gray’s five largest advertising revenue categories by customer type, excluding political advertising, demonstrated the following changes during the quarter compared to the year-earlier quarter: automotive increased 3%; restaurants decreased 11%; medical increased 2%; communications increased 16% and department stores increased 20%.

Read the company’s report here.