Gray Television(GTN) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $1 billion, an increase of 21% from Q4 2023 [12] - Net income attributable to common stockholders was$ 156 million in Q4 2024, compared to a net loss of $22 million in Q4 2023 [13] - Adjusted EBITDA was$ 402 million in Q4 2024, an increase of 86% from Q4 2023, primarily due to political advertising revenue [13] - Total principal debt was reduced by $520 million during 2024, exceeding the$ 500 million goal [14] Business Line Data and Key Metrics Changes - Political advertising revenue in Q4 2024 was $250 million, which displaced a significant amount of core advertising revenue [22] - Core advertising revenue showed hesitancy in Q4 2024, particularly among automobile advertising customers due to economic uncertainty [24] Market Data and Key Metrics Changes - Core advertising revenue for Q1 2025 is expected to decline by 7% to 8% compared to Q1 2024, influenced by political and economic uncertainty [25] - The company anticipates improvement in core advertising revenue pacing in Q2 2025 [44] Company Strategy and Development Direction - The company is focusing on enhancing local content offerings and expanding its sports broadcasting capabilities, including a deal to air Atlanta Braves games [15][16] - There is optimism regarding potential deregulation that could benefit local broadcasters and improve competitive positioning against tech giants [19][20] - The company is exploring partnerships for further development at Assembly Studios without significant capital expenditure [18][64] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing improvements in local sports broadcasting and potential regulatory changes that could benefit the company [19][20] - The company is preparing for the next political cycle in 2026, expecting significant cash flow from political advertising [34] Other Important Information - The company declared a quarterly common dividend of$ 0.08 per share, which is a small cash outflow [36] - The company is experiencing a decline in traditional MVPD subscribers but sees signs of improvement in subscriber retention rates [38] Q&A Session Summary Question: Can core ads move to growth on a full-year basis? - Management is encouraged by second-quarter pacing and believes core ads can grow, particularly as challenges in certain categories show improvement [44] Question: What factors are influencing expenses in Q1? - Approximately 2/3 to 75% of cost efficiencies are expected to flow through in Q1, with efforts to keep expense growth below inflation [48][49] Question: What is the total cost for the Assembly Atlanta project? - The total cost for the project is roughly $500 million [74] Question: How does the company view M&A opportunities with potential deregulation? - The company is open to smart deals and swaps, particularly if deregulation occurs, which could enhance local news content [86][120] Question: How is the company budgeting subscriber declines for this year? - The company expects the rate of subscriber declines to slow but is not projecting a material increase or decrease [91] Question: What are the expectations for network-affiliate relationships with deregulation? - The company is focused on relaxing market rules and improving network-affiliate relationships, particularly with virtual MVPDs [126]