Gray Television reported a first-quarter loss as it recorded charges around the studio facilities it is building in Georgia.
Gray had a $44 million net loss in the quarter, or 48 cents a share, compared to net income of $49 million, or 52 cents a share, a year ago.
During the first quarter of 2023, Gray’s production segment recorded $35 million in unanticipated operating charges, the company said. The charges included $18 million to resolve litigation related to the Atlanta Assembly project, and $17 million of allowance for credit losses related to the bankruptcy filing of Diamond Sports Group.
Gray said that it expects to complete construction of its studio this summer. At that point, the company said, it will pause work “while we evaluate opportunities to maximize the long-term value of this unique real-estate investment.”
Revenue fell 3% to $801 million. The company said that revenue was up 47% compared to 2021, the last non-election year.
Core ad revenue, minus political advertising, was down 2% to $357 million.
“We attribute these solid results to real-world confidence among advertisers and businesses in local markets who rely at least in part on our high-quality television stations to reach local audiences,” Gray said.
“Looking ahead, we anticipate that our television stations will maintain advertising and retransmission revenues at a level generally flat to somewhat ahead of revenues in recent years due to our strong position in local markets,” the company said.
Gray said it “took several steps in the first quarter to manage its leverage and ensure its access to ample liquidity should the macroeconomic circumstances become more challenging the rest of the year.”
Gray offered investors guidance that second-quarter revenue would be between $784 million and $802 million. The company said it expected core revenue to be up in the low single digits. It expects to take in $5 million to $6 million in political advertising.
“We believe our investments in Atlanta Assembly will provide some diversification from our broadcasting segment with new exposure to the growing film and television production industry in Georgia,” Gray said.
