Political advertising spend and leasing activity at Assembly Studios is up for Atlanta-headquartered broadcasting company Gray Television, which reported its second quarter earnings this week.
Gray ended the quarter with total revenue of $826 million, which is up about 2% year-over-year. This figure includes revenues from advertising, retransmission and its production companies.
Its core advertising revenue was $373 million, down 1.5% year-over-year. But its political advertising revenue was up significantly, ending at $47 million, up from $12 million in the previous year. It also surpassed the $29 million of political ad spending recorded in the second quarter of 2020, the previous presidential election year.
Gray, which owns Third Rail Studios and the recently-completed Assembly Studios in Doraville, also reported that it’s lining up film and television productions now that the risk of a major Hollywood strike has been averted. Last week, the Hollywood crafts and Teamsters unions ratified new three-year contracts with major studios, less than a month after the behind-the-scenes crews’ unions ratified their own new contract.
Last week, the company signed its first long-term studio lease for multiple stages at Assembly that aren’t occupied by its anchor tenant, NBCUniversal, Gray CEO Hilton Howell said during its earnings call. The studio will use the facilities to support a TV drama that will air on one of the big four broadcast networks next year.
Howell didn’t specify the network during the call, but said its stations are affiliates of the network, making it either Disney, Paramount or Fox.
“It’s unbelievable how quickly things turned,” Howell said, referring to production picking up after the ratifications.
Hilton expects all of its studios to be leased in the near future.
Gray is one of several companies reliant on broadcasting revenue that are grappling with rapid changes to the television industry. Viewership of traditional broadcast and cable television is dropping as consumers continue to “cut the cord” and switch to Internet-based streaming services. Partly due to this, advertising spend on traditional TV is falling.
But a bright spot for broadcasting companies this year is advertising spending for both the 2024 Summer Olympics and the forthcoming election.
Gray competitor Tegna expects its total company revenue in the third quarter to increase 9% to 12% year-over-year due to both factors, Chief Financial Officer Julie Heskett said Wednesday during the company’s earnings call.
Another competitor, Nexstar Media Group, recorded a 2.3% increase in net revenue year-over-year in the second quarter, which its President and Chief Operations Officer Michael Biard said during its Thursday earnings call as due in part to political advertising.
During Gray’s call, President Pat LaPlatney said the company can’t predict where total political revenue will end up this year, given the “unprecedented nature” of this year’s presidential race. But he said the company anticipates strong political ad revenues for the full year.
Gray owns local television stations across 113 markets. In Georgia, it owns stations in Albany, Atlanta, Augusta and Savannah. It is also the largest Telemundo affiliate group.
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