10-K: Gray Media Reports 15% Revenue Drop in 2025, Refinances Debt

Gray Media, Inc. reported a 15% decline in total revenue for 2025, primarily due to reduced political advertising and macroeconomic softness, while successfully refinancing significant debt maturities.

Summary

• Total revenue decreased by 15% to $3.1 billion in 2025 from $3.6 billion in 2024.
• A net loss attributable to common stockholders of $137 million was reported in 2025, compared to a net income of $323 million in 2024.
• Political advertising revenue significantly declined by 92% to $42 million in 2025, consistent with it being an off-election year.
• Core advertising revenue decreased by $38 million, impacted by macroeconomic softness in the first half of 2025 and lower Super Bowl advertising revenue.
• Retransmission consent revenue decreased by 4% to $1.429 billion, primarily due to one station ceasing network affiliation and a decrease in subscribers, partially offset by customary rate increases.
• Cash provided by operating activities decreased by $462 million to $289 million in 2025.
• The company successfully refinanced debt in 2025, extending maturities and increasing the Revolving Credit Facility to $750 million.
• Impairment charges of $30 million were recorded in 2025 for broadcast licenses and other intangible assets due to a network affiliation change.
• Gray Media maintains a strong market position, with 77 top-rated television stations and 97 markets with first or second highest-rated stations in 2025.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a challenging year for Gray Media, marked by substantial revenue and profit declines, largely driven by cyclical political advertising and macroeconomic headwinds. While debt refinancing efforts are positive, the overall financial performance and stock underperformance indicate significant operational pressures.

Positives

• Successfully refinanced significant debt maturities in 2025, extending them beyond the next two political cycles and enhancing financial flexibility.
• Increased the Revolving Credit Facility by $70 million to $750 million, extending its term to December 1, 2028.
• Maintained compliance with all required covenants under debt obligations as of December 31, 2025.
• Holds a strong market leadership position as the nation's largest owner of top-rated local television stations, with 77 markets having the #1 station and 97 markets with #1 or #2 rated stations in 2025.
• Completed the sale of its investment in Premion for $21 million cash proceeds, realizing a $7 million gain.
• Acquired WBBJ-TV (ABC/CBS) in Jackson, Tennessee, for $25 million in early 2026, expanding its station portfolio.
• Received $10 million in cash proceeds from the sale of its investment in FreeTV, Inc. in January 2026, with potential for up to $6 million in additional consideration.

Negatives

• Total revenue decreased by $549 million, or 15%, from $3.6 billion in 2024 to $3.1 billion in 2025.
• Reported a net loss attributable to common stockholders of $137 million in 2025, a significant decline from a net income of $323 million in 2024.
• Political advertising revenue plummeted by 92% to $42 million in 2025, compared to $497 million in 2024, due to the off-election year cycle.
• Core advertising revenue decreased by $38 million, primarily due to macroeconomic softness in the first half of 2025 and lower Super Bowl advertising revenue.
• Retransmission consent revenue decreased by $53 million, or 4%, in 2025, attributed to one station ceasing network affiliation and a decrease in subscribers.
• Cash provided by operating activities decreased significantly by $462 million to $289 million in 2025 from $751 million in 2024.
• Incurred impairment charges of $30 million in 2025 related to broadcast licenses and other intangible assets due to a network affiliation change.
• Recorded a loss on early extinguishment of debt of $10 million in 2025.
• Stock performance for both common and Class A common stock significantly underperformed the NYSE Composite Index and the NYSE Television Broadcasting Stations Index from 2020 to 2025.

Risks

• Business success is highly dependent on advertising revenues, which are seasonal, cyclical, and sensitive to economic conditions, programming popularity, and competition from digital platforms.
• Uncertain financial, economic, and political conditions can reduce consumer confidence, negatively affecting advertising budgets and potentially impacting the business, results of operations, or financial condition.
• A material portion of non-political advertising revenue comes from a limited number of industries (services sector, automotive), making the company vulnerable to declines in these sectors.
• Significant risks are associated with the acquisition strategy, including identifying suitable candidates, integrating operations, obtaining financing, diverting management attention, losing key employees, and potential changes in regulatory approval processes.
• The company must purchase television programming in advance without knowing its popularity, potentially leading to unrecouped costs, impairment charges, or escalating costs relative to revenues.
• Highly dependent on network affiliations; termination, adverse changes in economic terms, or changes in programming quality/quantity could materially affect business and results.
• Dependence on retransmission consent agreements carries risks of unfavorable renegotiation terms or regulatory changes that could weaken negotiation leverage or program exclusivity rights.
• Inability to maintain or increase digital advertising revenue due to evolving techniques, changes in business models, third-party cookie deprecation, ad-blocking technologies, and platform policy changes.
• Increased cybersecurity threats, attacks, and incidents could interfere with operations, compromise client information, expose to liability, and damage reputation, despite existing systems and processes.
• Operates in a highly competitive environment for audiences, programming, and advertisers from other television stations, digital platforms, streaming services, and alternate media content providers.
• Substantial debt of $5.8 billion as of December 31, 2025, may restrict future operations, reduce funds for other business purposes, place at a competitive disadvantage, and limit additional financing.
• Debt agreements include covenants imposing significant restrictions on operations and limiting the ability to undertake certain corporate actions (e.g., incurring additional debt, paying dividends, making acquisitions).
• Variable rate indebtedness exposes the company to interest rate risk, which could cause annual debt service obligations to increase significantly.
• Future impairment charges on goodwill, broadcast licenses, other intangible assets, and investments could materially affect total assets.
• As a holding company, Gray Media is dependent on its subsidiaries for cash, which could be subject to dividend or other restrictions.
• Federal broadcasting industry regulations limit operating flexibility, including license renewal, media ownership restrictions (Two-Station Limit, National Cap, Alien Ownership), and indecency rules.
• The company is subject to governmental oversight regarding antitrust law and related civil litigation, including a consolidated class action lawsuit alleging price fixing and unlawful information exchange.

Future Outlook

The company expects capital expenditures of approximately $140 million during 2026, including significant station construction projects and capital expenditures at Assembly Atlanta. No contribution to the Gray Pension Plan is expected in 2026, and matching cash contributions to the Gray 401(k) Plan are estimated to be approximately $25 million for 2026. The company anticipates that cash on hand, future cash expected to be generated from operations, and borrowing capacity will be sufficient to fund debt service, capital expenditures, and acquisition-related obligations for the next twelve months and the foreseeable future.

Management Comments

• Our success is based on the following strategies: Grow by Leveraging our Diverse National Footprint, Maintain and Grow our Market Leadership Position, Continue to Pursue Strategic Growth and Accretive Acquisition Opportunities, Continue to Monetize Digital Spectrum, Continue to Maintain Prudent Cost Management, Further Strengthen our Balance Sheet.
• We believe a key driver for our strong market position is our focus on strong local news and information programming.
• We believe that our market position and our strong local teams have enabled us to maintain more stable revenues compared to many of our peers.
• We believe that our local market leadership positions help us in negotiating more beneficial terms in our major network affiliation agreements... as well as our syndicated programming and local sports programming agreements.
• We intend to maintain our market leadership position through continued prudent investment in our local news and syndicated programs, as well as continued technological advances and workflow improvements.
• We believe we have made reasonable estimates and utilized appropriate assumptions to evaluate whether the fair values of our broadcast licenses and reporting units were less than their carrying values.
• We believe the lawsuits [Local TV Advertising Antitrust Litigation] are without merit and continues to vigorously defend itself against all such claims.

Industry Context

StockSavvy.ai notes that Gray Media's 2025 performance reflects broader industry challenges, particularly the cyclical nature of political advertising and the ongoing shift in audience and advertising spend towards streaming services and digital platforms. The significant decline in political advertising revenue in an off-election year is typical for broadcast companies, but the decrease in core advertising revenue highlights macroeconomic pressures and increased competition from digital giants like Google, YouTube, Facebook, and Instagram. The company's strategic focus on local news and digital offerings, alongside investments in NextGen TV, aligns with industry efforts to adapt to changing consumer behavior and monetize new distribution channels amidst cord-cutting trends. The FCC's ongoing review of media ownership rules and the debate around retransmission consent agreements underscore the regulatory uncertainties impacting the traditional broadcast model.

Comparison to Industry Standards

• Gray Media's stock performance significantly underperformed both the NYSE Composite Index and the NYSE Television Broadcasting Stations Index from December 31, 2020, to December 31, 2025.
• The company's strategy to maintain market leadership through local news and syndicated programs, and invest in technological advances like NextGen TV, is a common approach among traditional broadcasters facing competition from streaming services and digital platforms.
• The decline in retransmission consent revenue due to subscriber decreases is consistent with broader industry trends of "cord-cutting" and "cord-shaving" impacting MVPDs.
• The company's leverage ratios (First Lien, Secured, and Total) are within the maximum permitted incurrence levels, indicating prudent debt management relative to its covenants, which is a key financial health indicator for highly leveraged media companies.
• The FCC's ongoing review of media ownership rules, including the Two-Station Limit and National Television Station Ownership Rule, impacts all major broadcasters, such as Nexstar Media Group, Tegna, and Sinclair Broadcast Group, in their ability to pursue strategic acquisitions and consolidate markets.

Management Changes

Corporate Governance

Legal Proceedings

• The company is a defendant in consolidated putative class action lawsuits (In re Local TV Advertising Litigation) alleging price fixing and unlawful information exchange among advertisement sales teams. These lawsuits stem from a DOJ investigation and settlement involving acquired entities (Raycom and Meredith). The company believes the lawsuits are without merit and is vigorously defending itself.

Related Party Transactions

• Hilton H. Howell, Jr., the Executive Chairman and Chief Executive Officer, is married to Robin R. Howell, a member of the Board of Directors.
• The Howell-Robinson Family, due to their significant stockholdings and positions on the Board, can exert significant influence over the company's policies and management.

Stakeholder Impact

• Shareholders experienced a net loss in 2025 and significant underperformance of stock compared to market indices. Dividends were maintained at $0.32 per share, but future payments are at the Board's discretion and subject to debt covenants. Class A common stockholders retain significant voting influence.
• Employees (9,165 full-time and 417 part-time as of February 20, 2026) are offered competitive wages, healthcare, retirement programs, and training, with relations considered good.
• Advertisers (customers) saw a decline in core advertising revenue due to macroeconomic softness, and the company remains dependent on the services and automotive sectors for a material portion of non-political advertising revenue.
• MVPDs (customers) contributed less retransmission consent revenue due to subscriber declines and a station affiliation change, though customary rate increases provided some offset.
• Creditors benefit from the company's debt refinancing efforts, which extended maturities and maintained covenant compliance. Obligations are secured by substantially all consolidated assets (excluding real estate).
• Communities served by Gray Media's 114 full-power television markets are impacted by the company's continued focus on local news and information programming.

Next Steps

• Secure required regulatory approvals and other customary approvals for pending acquisition and divestiture transactions with Scripps, SGH, BCI, AMG, and Bahakel.
• Complete the closing of pending acquisitions, expected later in 2026.
• Fund the closing of these acquisitions with cash on hand and/or borrowings under the Revolving Credit Facility.
• Make estimated income tax payments between $105 million and $125 million in 2026.
• Fund approximately $140 million in capital expenditures during 2026, including station construction projects and Assembly Atlanta.
• Reduce indebtedness, fund working capital, and make interest and tax payments in 2026.
• Continue to defend against the Local TV Advertising Antitrust Litigation.
• Monitor and adapt to potential changes from the FCC's ongoing review of media ownership rules and the network-affiliate relationship.

Key Dates

Recommendation

Gray Media's 2025 results show a significant decline in revenue and a net loss, primarily driven by the cyclical nature of political advertising and broader macroeconomic challenges impacting core advertising. While the company successfully refinanced its substantial debt, extending maturities and maintaining covenant compliance, and is pursuing strategic acquisitions, the underperformance of its stock relative to industry benchmarks and the ongoing competitive pressures from streaming services suggest a cautious approach. The long-term strategy of local news focus and digital monetization is sound, but the immediate financial headwinds warrant a 'hold' recommendation until clearer signs of revenue stabilization and improved profitability emerge.

Keywords

Television Broadcasting, Media Company, SEC Filing, 10-K, Financial Results, Revenue Decline, Political Advertising, Retransmission Consent, Debt Refinancing, Impairment Charges, Local News, Digital Media, Acquisitions, Corporate Governance, Risk Factors, Cybersecurity, FCC Regulations, Atlanta, Broadcast Licenses, Streaming Services