DEF: Gray Media Navigates Macro Headwinds, Reports 2025 Net Loss

Gray Media, Inc. announces its 2026 Annual Meeting agenda, highlighting 2025 operational strengths and strategic debt management despite a net loss.

Summary

• The Annual Meeting of Shareholders will be held on May 6, 2026, to elect ten directors, approve executive compensation on an advisory basis, and ratify RSM US LLP as the independent registered public accounting firm for 2026.
• Despite a challenging macroeconomic environment, Gray Media reported a net loss of $85 million in 2025, a significant decline from a $375 million profit in 2024.
• The company completed significant capital markets activity in 2025, including upsizing and extending its revolving credit facility to $750 million and issuing new senior secured notes, extending debt maturities to December 2028.
• Broadcasting expenses were reduced by approximately 3% year-over-year, and network affiliation fees decreased by approximately 5% year-over-year.
• The annual non-equity incentive compensation program paid out at 143% of target for named executive officers (NEOs) in recognition of strong financial and operational performance.
• Long-term incentive awards for 2023 performance-based restricted stock vested at 135% of target for eligible NEOs.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a mixed filing. While operational achievements, strategic debt management, and strong incentive payouts are positive, the reported net loss for 2025 is a significant concern, offsetting some of the strong performance in other areas.

Positives

• Strengthened balance sheet and continued to return capital to shareholders through quarterly dividends in 2025.
• Successfully upsizing and extending the revolving credit facility to $750 million and issuing new senior secured notes, pushing next material debt maturities to December 2028.
• Reduced broadcasting expenses by approximately 3% year-over-year and network affiliation fees by approximately 5% year-over-year.
• Renewed ABC, CBS, FOX, and NBC network affiliation agreements across virtually all markets, reinforcing network relationships.
• Expanded and launched new content initiatives, including enhancing Local News Live and expanding InvestigateTV+ to over 70% of U.S. markets daily.
• Received ten national Murrow Awards for excellence in journalism in 2025, a record for Gray in a single year and the most wins by any broadcast television group.
• Successfully executed historic sports initiatives, expanding professional and collegiate sports programming.
• Annual non-equity incentive compensation program paid out at 143% of target for NEOs, reflecting strong overall performance.
• 2023 performance-based long-term restricted stock awards vested at 135% of target for eligible NEOs.
• Maintains robust corporate governance practices, including independent directors, stock ownership guidelines, anti-hedging policy, insider trading policy, and a NYSE-compliant clawback policy.

Negatives

• Reported a net income loss of $85 million in 2025, a significant decrease from a $375 million profit in 2024.
• Broadcast Cash Flow decreased to $725 million in 2025 from $752 million in 2024.
• Revenues (net of political advertising and acquired stations) achieved 94% of target, falling short of the set goal.
• Broadcast cash flow (net of political advertising revenue and completed acquisitions) achieved 87% of target, also below the set goal.
• Six Section 16(a) reports for executive officers and directors were filed late due to inadvertent administrative oversight.

Risks

• Continued challenging macroeconomic environment for broadcasters.
• Uncertainty and rapid evolution within the broadcast industry, impacting long-term goal setting.
• Potential for excise tax imposed by Section 4999 of the Internal Revenue Code on change-in-control benefits.

Future Outlook

Next material debt maturities are not expected until December 2028, strategically positioning the company to capitalize on the upcoming 2026 and 2028 political cycles. Strategic and deleveraging acquisitions are anticipated to close in the first half of 2026, subject to customary conditions and regulatory approvals. The Board expects to continue holding advisory say-on-pay votes every three years, with the next one scheduled for the 2029 Annual Meeting.

Management Comments

• Our Company continued to perform well, made significant progress financially as well as operationally, and further strengthened our balance sheet while continuing to return capital to our shareholders through quarterly dividends.
• The Compensation Committee's philosophy and decisions during 2025 continued to be driven by the objectives of motivating our executive officers and recognizing them for their unwavering efforts and leadership.
• In light of the macroeconomic challenges facing the broadcast television industry, each of the NEOs had requested that their base salary not be increased for 2025 over the levels for 2024.
• Gray believes it is both a mission and responsibility to serve its local communities by providing accurate, timely, and 37% of US television households, Gray recognizes the responsibility that comes with its impact.
• The Company does not take lightly its commitment to ensure the accuracy and integrity of its news coverage and programs.
• Gray's leadership believes the substantial skills, experience and industry knowledge of its employees and its training programs benefit its operations and performance.

Industry Context

StockSavvy.ai notes that Gray Media operates within a challenging macroeconomic environment for broadcasters, yet has demonstrated resilience through strategic financial management and operational efficiency. The focus on local news, expanded digital offerings, and sports programming aligns with broader industry trends of content diversification and audience engagement to counter traditional broadcast revenue pressures. The proactive refinancing of debt and strategic acquisitions indicate a forward-looking approach to strengthen market position and financial stability in a consolidating media landscape.

Comparison to Industry Standards

• Gray's television stations comprise the largest portfolio of top-rated local news stations in the country, with 77 markets having the top-rated station and 97 markets with the first and/or second highest rated station (Nielsen, 2025).
• The company operates the largest Telemundo Affiliate group, covering 47 markets (Nielsen, 2025).
• Gray received ten national Murrow Awards for excellence in journalism in 2025, a record for the company and the most wins by any broadcast television group that year.
• The executive compensation peer group includes major media and broadcasting companies such as AMC Networks Inc., iHeartMedia, Inc., SiriusXM Holdings Inc., The E.W. Scripps Company, The New York Times Company, News Corporation, Fox Corporation, Nexstar Media Group, Inc., Lionsgate Studios Corp., USA Today Co., Inc., Sinclair, Inc., IAC Inc., and TEGNA, Inc.
• The Pay Versus Performance (PVP) Peer Group used for total shareholder return comparison is the New York Stock Exchange Television Broadcasting Stations Index.

Corporate Governance

Related Party Transactions

• The company leases its principal offices from 4370 Peachtree LLC, which is jointly owned by Mrs. Robin R. Howell (a director and wife of CEO Hilton H. Howell, Jr.) and her sister-in-law. Hilton H. Howell, Jr. and Robin R. Howell also hold officer, director, and/or shareholder positions in Delta Life Insurance Co., which previously leased the space. Annual rent was approximately $1.4 million in 2025, increasing to approximately $1.6 million in 2026.
• In 2025, the company paid approximately $2.1 million in premiums to Bankers Fidelity Life Insurance Company for a life and health insurance plan. Bankers is a subsidiary of Atlantic American Corporation, a greater than 5% shareholder, which is controlled by Harriett J. Robinson (mother-in-law of Mr. Howell), and Mr. Howell serves as its chairman, president, and CEO.
• Hilton H. Howell III, son of Mr. and Mrs. Howell, is employed as a Senior Director of Business Development at Gray Local Media, a subsidiary, and earned $259,914 in 2025. His compensation is consistent with company practices for similar roles, and his parents did not participate in his compensation decisions.

Stakeholder Impact

• **Shareholders**: Directly impacted by the company's financial performance (net loss in 2025), strategic debt management, and capital return policies (quarterly dividends). The annual meeting proposals, including director elections and executive compensation, require shareholder participation.
• **Employees**: Benefit from the 401(k) Savings Plan (with company matching contributions), the frozen Retirement Plan (for eligible long-term employees), and various training, skills development, leadership, and internship opportunities.
• **Customers (Viewers)**: Benefit from the company's commitment to journalistic integrity, accurate and timely news coverage, expanded content initiatives (Local News Live, InvestigateTV+), and increased professional and collegiate sports programming.
• **Communities**: Positively impacted by Gray's social responsibility initiatives, including sponsoring local food banks, education programs, and local relief organizations, and the company's focus on local news and community events.
• **Creditors**: Affected by the company's proactive debt management strategies, including refinancing and extending maturities, which enhances financial flexibility and stability.

Next Steps

• Shareholders will vote on the election of ten directors at the Annual Meeting on May 6, 2026.
• Shareholders will cast a non-binding advisory vote on the compensation of named executive officers at the Annual Meeting.
• Shareholders will vote on the ratification of RSM US LLP as the independent registered public accounting firm for 2026.
• The Compensation Committee will review the voting results of the say-on-pay vote and consider them for future executive compensation decisions.
• Strategic and deleveraging acquisitions are expected to close in the first half of 2026, subject to customary closing conditions and regulatory approvals.
• The next advisory vote on the frequency of say-on-pay votes is expected at the 2029 Annual Meeting of Shareholders.
• Shareholder proposals for inclusion in the 2027 Annual Meeting proxy statement must be received by November 26, 2026.
• Other shareholder proposals for presentation at the 2027 Annual Meeting must be noticed by February 9, 2027.
• Shareholders intending to comply with universal proxy rules for director nominations for the 2027 Annual Meeting must provide notice by March 7, 2027.

Key Dates

Recommendation

While Gray Media demonstrated strong operational execution, strategic debt management, and commitment to corporate governance in 2025, the reported net loss of $85 million is a significant concern. The company's ability to reduce expenses and expand content is positive, but the bottom-line performance indicates underlying challenges. The proactive refinancing of debt and upcoming acquisitions offer potential for future improvement, but the current financial results warrant a cautious 'hold' stance until there is clearer evidence of sustained profitability.

Keywords

SEC filing, proxy statement, corporate governance, executive compensation, broadcasting, media, financial performance, risk management, shareholder meeting, director election, auditor ratification, Gray Media