Gray Media Expects Political Ad Windfall From Competitive Democrats
Gray Media executives said in a Q3 earnings call Friday that the recent Democratic electoral wins will increase broadcasters' political ad revenue and that the company is waiting on the outcomes of FCC proceedings on ownership rules and pending Gray transactions to provide a clearer picture of the options for mergers and acquisitions. “Things are changing faster than I've ever, ever seen it, and for the first time in the history of our business, we are really operating in the wild, wild West,” said co-CEO Hilton Howell. “No one knows what the rules actually are.”
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Gray reported total quarterly revenue of $749 million, a 21% decrease from the same quarter in 2024.
Howell said the company isn’t in “deep negotiation” on a large merger, but it could be interested in larger transactions. During Sinclair Broadcast’s earnings call last week, CEO Chris Ripley suggested that the broadcast industry could consolidate into the combined Nexstar/Tegna and a similarly sized competitor. Gray, the second-largest station group behind Nexstar, won’t “run” from the chance to get bigger “at the right price," Howell said. However, not expanding is also on the table. “There's a lot of big opportunities to grow, but unlike perhaps some of our competitors, I don't believe, and my management team unanimously does not believe, that Gray actually has to do anything,” he said. “I mean that -- we're just fine where we are.”
The FCC taking action on Gray’s pending transactions to purchase stations from Allen Media, Block, Sagamore Hill and Scripps would help provide insight on the scope of dealmaking opportunities available, said Chief Legal and Development Officer Kevin Latek. “Closing these transactions will give us some real intel on where the new regulatory restrictions will be.”
Gray co-CEO Pat LaPlatney said that in Q3, the company saw decreased revenue from automotive advertising, but ads for legal and financial services were “bright spots.” The removal of the company's ABC stations from YouTube TV due to Google’s carriage dispute with Disney is also frustrating, LaPlatney said. “Obviously, we prefer to have a voice in the [virtual MVPD] negotiations for our stations.” He added that he can't predict how the dispute will shake out, but both companies have huge footprints, and a resolution would be the best thing for consumers.
In addition, Latek said political fundraising for Democratic Party candidates is “going to change in a material way” after last week’s election results.
“Regardless of where people come out on [politics]," Howell said, "what I love is a great fight out there, and I think the Democrats can raise a ton of money, and I know the Republicans are going to be able to do the same thing.” He predicted that political spending in the 2026 midterms will be “gargantuan.”