Gray TV Q3 Revenue Down 20%

Forecasting almost $16 mil in retrans for year

By Michael Malone -- Broadcasting & Cable, 11/9/2009 10:30:58 AM

Gray Television reported third quarter revenue of $66.4 million, a 20% decrease from the $82.6 million it posted in last year's third quarter. Local advertising was down 11%, national advertising was down 27% and internet advertising was "relatively stable," said Gray, at $2.9 million for the quarter.
"Our stations and the television broadcast industry as a whole continued to deal with the challenges of the current economic recession and increased competition from internet advertising through the nine-month period ended Sept. 30, 2009," said Gray in a statement. "We remain committed to operating our stations in a manner that generates maximum revenue while minimizing operating expenses during these difficult times."
One positive for Gray is its pact to manage a group of the Young Broadcasting stations. Effective Aug.10, 2009, the agreement spells $2.2 million annually for Gray.
Another plus is retransmission consent revenue, which increased 466% to $4.3 million for the quarter. "Earlier this year we renegotiated many of our cable distribution contracts, which has resulted in increased retransmission consent revenue through the nine-month period ended Sept. 30, 2009," said Gray.
Gray trimmed its broadcast expenses 8% in the quarter, thanks primarily to a "reduction in compensation expense" of $5.8 million.
Gray forecasts fourth quarter broadcast operating revenue to be down 25-26%. "The current national economic recession has severely impacted our short-term revenue generation and has made revenue forecasting more difficult than in prior periods," the company said.
The Atlanta-based broadcaster does see the trend of retrans gains continuing. "We anticipate that our retransmission consent revenues during the fourth quarter of 2009 will increase approximately $2.9 million, to a total of approximately $3.7 million," the company said, "reflecting the successful retransmission negotiations concluded in December 2008."
Gray expects approximately $15.7 million in retrans revenue for the full 2008.