Unexpectedly sluggish spending from political advertisers dragged at the results of local TV broadcaster Gray Television, the company reported this morning. However, Gray rival Nexstar Broadcasting said it bucked the trend that has dragged down Gray and other local TV broadcasters, reporting that its own revenues from political ad spending grew 22.1 percent.
“Our spot inventory management and pricing strategies enabled us to deliver a nearly 10-fold increase in year-over-year political revenue,” Nexstar CEO Perry A. Sook said in a release from the company. “Reflecting our expanded platform and presence in states with high levels of down ballot political spending activity, 2016 third quarter political revenue rose by a robust 40.3% over comparable 2014 third quarter levels and as noted, our 2016 fourth quarter results will include over $50 million of political revenue contributions, marking an end to a different but very successful year for Nexstar on this front.”
Sook’s comments are noteworthy considering Gray and other local TV broadcasters have reported revenues from political advertising below many expectations.
"This year's political election season presented extra-ordinary challenges from the top of the ticket to the bottom, especially after mid-September. These challenges created a 'perfect storm' for our political revenue. Earlier this year, a large number of races were expected to be highly competitive and political fundraising appeared to be highly encouraging through the summer. However, actual spending by candidates, political parties and third-parties fell far short of expectations, especially in Gray's markets,” Gray CEO Hilton Howell said in a release. “The political revenue results and uncertain macro environment make it more likely that Gray will place the highest priority on debt repayment over the next four to five quarters."
Overall, as the AP noted, Gray posted a third-quarter loss of $213,000, a reversal from the company’s performance in the year-ago quarter, and the company notched revenue of $204.5 million in the period. Nexstar, for its part, reported record results of $24.8 million in net income, though the AP noted those results fell short of Wall Street expectations.
Nexstar’s Sook also provided an update on the company’s ongoing effort to acquire Media General. He said the companies have completed all of the steps and satisfied all of the merger agreement conditions necessary. He added that “Nexstar filed a supplement to its waiver request with the FCC requesting prompt approval of its acquisition of Media General, so that upon closing of the acquisition, Nexstar may continue its initiatives across the combined entity.” He said though that the company would need to wait for the FCC to complete that process before the deal could be consummated.
Sook added that the company continues to expect success from the transaction, including continued growth from digital efforts.