Gray Television (GTN) Withdraws Guidance for Net Political Advertising Revenue
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Gray Television, Inc. (NYSE: GTN) today withdrew its guidance for net political advertising revenue for the three-month period ending September 30, 2016 ("third quarter") and for the three-month period ending December 31, 2016 ("fourth quarter").
Net revenue, excluding political revenue, appears likely to meet the previously issued guidance for the third quarter of 2016.
While political revenue remains significant, Gray stations are receiving political advertising orders later than usual and current orders generally are being placed with only a few days advance notice before broadcast. The Trump campaign and/or allied PAC's have purchased advertising time in some Gray markets, and it has expressed interest in placing advertising in up to 9 states involving up to 17 Gray markets. At this time, however, the campaign's future spending is currently impossible to predict. The Clinton campaign and allied PAC's are currently active and/or are expressing interest in placing advertising in up to 6 states involving up to 7 Gray markets. Recent polling between Clinton and Trump appear to have tightened and could lead to increased ad spending by the respective campaigns and related PAC's. Nevertheless, there can be no assurance that increased spending will materialize given the very unusual nature of this year's late presidential campaign season.
Separately, Gray stations are currently seeing somewhat more competitive statewide races in Missouri, Indiana and North Carolina than previously predicted. On the other hand, Senate races in Ohio and Colorado have not led to the robust advertising spending as was widely anticipated. Furthermore, some historically large political advertisers have very recently indicated that they may direct funds to organizing voters and other campaign activities rather than advertising.
In light of the current limited visibility on actual political spending, as well as recent developments in the political advertising market, at this time, we cannot predict with sufficient accuracy the levels of political revenue that Gray expects to record in the third quarter and fourth quarter of this year. Consequently, Gray withdraws previously issued political revenue guidance for the third quarter and full year 2016.
If and when circumstances permit, Gray will provide an appropriate update to the market.
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