Business Context and Reporting Period
Company: Gray Media, Inc. (formerly Gray Television, Inc.)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: Gray Media is the nation's largest owner of top-rated local television stations and digital assets, serving 114 full-power markets reaching approximately 37% of U.S. television households. The company operates 77 markets with the top-rated station and 97 markets with the first or second highest-rated station. Revenue is derived primarily from broadcast and digital advertising and retransmission consent fees.
Key Financial Metrics
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Total Revenue | $3.1 billion | $3.6 billion | $3.3 billion |
| Net (Loss) Income | $(85) million | $375 million | $(76) million |
| Net (Loss) Income Attributable to Common Stockholders | $(137) million | $323 million | $(128) million |
| Operating Income | $392 million | $851 million | $383 million |
| Operating Margin | 12.7% | 23.4% | 11.7% |
| Net Cash Provided by Operating Activities | $289 million | $751 million | $648 million |
| Total Long-Term Debt (Principal) | $5.8 billion | $5.7 billion | N/A |
| Cash and Cash Equivalents | $368 million | $135 million | N/A |
| Revolving Credit Facility Availability | $745 million | $674 million | N/A |
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased 15% to $3.1 billion in 2025 compared to $3.6 billion in 2024. This was primarily driven by a 92% decrease in political advertising revenue ($42 million in 2025 vs. $497 million in 2024) due to 2025 being an "off-year" in the election cycle. Core advertising revenue also declined slightly ($38 million) due to macroeconomic softness and the absence of Olympic Games revenue on NBC affiliates.
- Profitability Shift: The company reported a net loss of $85 million in 2025, a significant reversal from the $375 million net income in 2024. Operating income dropped to $392 million from $851 million.
- Impairment Charges: The company recorded $30 million in impairment charges in 2025 ($28 million for intangible assets related to a network affiliation change and $2 million for a broadcast license), compared to no impairment charges in 2024.
- Debt Refinancing: In 2025, the company issued $1.15 billion in 2032 Notes and $775 million in 2033 Notes to refinance maturing debt, extending maturities beyond the next two political cycles. Interest expense decreased slightly to $474 million despite a higher average interest rate (7.5% vs. 7.2%) due to a lower average debt balance.
- Network Affiliation Change: Effective August 16, 2025, the Atlanta station WANF ceased its CBS affiliation and became an independent station, impacting network affiliation expenses and retransmission revenue.
Guidance, Outlook, and Risks
- Outlook: Management anticipates that cash on hand, operating cash flows, and borrowing capacity will be sufficient to fund debt service, capital expenditures, and dividends for the next twelve months. Capital expenditures for 2026 are expected to be approximately $140 million.
- Strategic Acquisitions: The company has signed agreements to acquire additional stations (including a $25 million acquisition of WBBJ-TV in Jackson, TN, closed in early 2026) and is pursuing other strategic transactions to enter new markets and augment existing operations.
- Key Risks:
- Cyclicality: Revenue is highly sensitive to the election cycle, with political advertising comprising a material portion of revenue in even-numbered years.
- Competition: Intense competition from streaming services, cable networks, and digital platforms for audience and advertising dollars.
- Regulatory: FCC ownership rules and retransmission consent negotiations with MVPDs (cable/satellite providers) pose ongoing regulatory and operational risks.
- Debt Obligations: Substantial debt levels ($5.8 billion) require significant cash flow for interest and principal payments, limiting financial flexibility.
Investor Verification Checklist
- Political Revenue Sensitivity: Verify the impact of the 2026 election cycle on projected revenue, given the 92% drop in political ad revenue in 2025.
- Debt Maturity Profile: Review the specific maturity dates of the new 2032 and 2033 notes and the remaining balance of the Senior Credit Agreement to assess refinancing risks.
- Impairment Methodology: Examine the assumptions used in the $30 million impairment charge, particularly regarding the WANF station's transition to independent status.
- Retransmission Consent Renewals: Monitor upcoming retransmission consent contract expirations and negotiation outcomes with MVPDs, which are a major revenue driver (46% of total revenue).
- Acquisition Integration: Assess the financial impact and integration progress of the pending and recently closed station acquisitions (e.g., WBBJ-TV, Scripps, BCI, AMG deals).