Gray Television said it reached a long-term agreement with Comcast’s NBCUniversal to lease and operate the studio facilities at Assembly Atlanta, the production facility Gray has been planning to build.
Assembly Atlanta is a 135-acre complex on the former site of a General Motors assembly plant in Doraville, Georgia. Assembly Studios features soundstages, production offices, warehouses, studio bungalows, event space and a parking deck.
NBCU will manage the studio and production facilities at Assembly Studios, including Third Rail Studios, which is adjacent to the Assembly Studios complex (and is where Netflix’s Ozark was filmed). Third Rail Studios opened in 2016 and was acquired by Gray in 2021.
Gray expects that 1,200 people will be employed building Assembly Studios, which should be completed in the second half of 2023. Gray’s Swirl films, NBCU and third-party tenants are expected to be able to start producing movies and TV series by the end of 2023. When fully operational, 4,000 people will be employed at the facility.
Gray updated its capital expenditure guidance related to Assembly Atlanta to a range of $130 million to $140 million in 2022, with approximately $80 million to $90 million of additional capital spending related to Assembly Atlanta in 2023.
Wells Fargo securities analyst Steven Cahall noted that Gray paid about $80 million for the Assembly Atlanta site and said he estimated that Gray’s production company revenue would be about $83 million this year.
“At the end of the day, Gray TV is about free-cash-flow generation stemming from political ad revenues, core and net retrans,” noted Cahall. “A major site production deal with NBCU means there could be meaningful alternative revenue streams down the road and/or asset value that's underappreciated. For 2022 we're still focused on the traditional earnings streams and like both Gray and TV broadcast overall for the equity value creation from deleveraging after the midterm political cycle.” ■
