Thanks to surging automotive advertising and what looks like
a landmark midterm election season, Gray Television execs had an extra spring
in their step when discussing fourth quarter earnings Thursday (Apr. 8). Bolstered by the revamping Toyota brand, auto manufacturers and dealers
are stepping up their presence on local television, said Gray's bosses.
"Toyota
will probably spend record amounts this year on image and incentive [sale]
ads," says President/COO Robert Prather. "I think we'll see a huge amount from Toyota for even the next
two years."
And with the recent Supreme Court ruling paving the way for
political candidates to spend more on television, Prather said 2010 could be
the best year for political spending the broadcaster has ever witnessed. Vice
Chairman/CEO Hilton H. Howell said the Atlanta-based group is "uniquely
positioned" to grab political spending, with leading stations in hotly
contested markets.
"We have dominant stations and dominant newscasts," he said.
"We always get the lion's share of political dollars, around 50-75% in a given
market."
Gray released its fourth quarter 2009 earnings Apr. 6, with
a delay caused by the group amending its senior credit facility last week to
gain financial flexibility. Gray saw revenuefall 18% in the fourth quarter.
Gray continues to reap rewards, to the tune of $2.2 million
a year, for managing seven of the Young Broadcasting stations. Prather said the
pact would continue regardless of who wins the battle between a coalition of
senior secured creditors and a second group of unsecured creditors being fought
in the courts for control of the Young stations, which entered bankruptcy in
February 2009. Prather acknowledged that the unsecured creditors may oppose the
Gray management deal should they win the battle for control of Young.
"They probably would like to not have the agreement, but we
have a contract," said Prather. "It's legally binding."
The Young deal was good for $600,000 in Gray's fourth
quarter earnings.
With plans to launch more local high def on its stations and
a robust multicasting strategy, the Gray execs are bullish on 2010. "It's
fun to be a broadcaster again," gushed Howell.
