Gray Sees Retrans Revenue Increase In '14
With retransmission consent agreements covering about two million of the subscribers in Gray Television’s broadcast service areas coming up for renewal by year’s end, Gray is expecting major growth in retransmission consent revenues in 2014, a Gray TV executive said during the company’s 4th quarter earnings call with analysts today.
“Certainly we have strong expectations for a significant increase in retrans as we get into ’14,” said Jim Ryan, Gray senior VP and CFO, during the conference call.
The forecast for additional growth comes on top of the record retransmission consent revenues of $33.8 million the company reported for the year ending Dec. 31, 2012,, up 67% from the previous year.
During the conference call, company executives did not identify which multichannel service providers are parties to the expiring deals, which come up for renewal on Oct. 31 and Dec. 31. But in a follow-up call, Bob Prather, Gray president and COO, told TVNewsCheck that one was a five-year deal with a large cable MSO while the other was for a satellite TV service.
During the conference call, Ryan said the agreement that comes up on Oct. 31 is a “very old” one. “So we’re obviously looking forward to our chance to reprice it to market,” he said.
Also during the call, Prather said that the company’s affiliation deal with ABC expires at the end of this year, while its deal with CBS comes up at the end of 2014. He said the company’s NBC deal ends in 2015.
Prather also said he hoped the performance of the company’s TV stations would give it leverage to cut reverse comp deals with the networks that will allow its net retransmission consent revenues to grow over time.
“I think it’s very important for us at Gray Television that we really pound home to the networks how important we are to them,” Prather said. “We’re an important source of eyeballs for them.”
Prather told TVNewsCheck that Gray is currently paying about $7 million in annual reverse comp to the Big Four networks.
Prather also said that Gray is likely to be more focused on paying down debt than acquiring new TV stations for the immediate future. “It would have to be a very compelling deal” to attract Gray’s interest, Prather said.
Earlier today, Gray Television announced results from operations that included record fourth quarter revenue of $126.6 million, topping the previous quarter record of $114.6 million set in 2010. Full year revenue in 2012 was also a record--$404.8 million. The previous full-year record was $346.1 million set in 2010.