Gray Media anticipates $60M-$70M Q2 political revenue as it maintains $140M 2026 CapEx plan

Earnings Call Insights: Gray Media (GTN) Q1 2026

MANAGEMENT VIEW

* “Today, we are very pleased to announce solid results for our first quarter of 2026 with core advertising above our previously issued guidance, political revenue at the high end of our guidance range and total revenue at the high end of our guidance even factoring in a recently resolved dispute with one of our MVPDs.” (Executive Chairman & CEO Hilton Howell)
* “As you all hopefully saw by now on Friday, Gray and DISH, resolved the first extended distribution blackout amazingly in our company's history… In the end, we reached a new multiyear agreement that was consistent with our internal expectations.” (Executive Chairman & CEO Howell)
* “Since the beginning of the year, we have successfully negotiated retransmission consent agreement renewals with 3 of our largest traditional MVPDs, representing approximately 39% of our traditional MVPD footprint… We have no further retransmission negotiations for the remainder of 2026.” (Executive Chairman & CEO Howell)
* “We recently completed the acquisition of TV stations in 10 markets from Allen Media Group… we closed on our acquisition of stations in 3 markets from Block Communications… We currently anticipate closing our remaining transactions with E.W. Scripps and Sagamore Hill in the next few weeks.” (Executive Chairman & CEO Howell)
* “As we move into the second quarter, we're seeing some softness in core advertising… the situation in the Middle East and resulting volatility in oil prices is having an effect, causing advertisers to delay their commitments, which limits our visibility.” (President, Co-CEO & Director Patrick LaPlatney)
* “Net retrans revenue was down $4 million in first quarter '26 versus first quarter of '25… We currently expect 2026 net retransmission revenue to be in the same ZIP code as the quarter that just ended, implying low single-digit growth in net retransmission revenue.” (Executive VP & CFO Jeff Gignac)

OUTLOOK

* “We currently anticipate political revenue for Q2 will be in the range of $60 million to $70 million.” (President, Co-CEO & Director LaPlatney) “Our second quarter 2026 guidance is for core ad revenue to be down mid-single digits versus second quarter of '25.” (President, Co-CEO & Director LaPlatney)
* “We are guiding Q2 '26 broadcasting expenses to be down 3% at the midpoint versus the second quarter of 2025.” (Executive VP & CFO Gignac) “Corporate is expected to normalize as we complete the additional transactions.” (Executive VP & CFO Gignac)
* “We're maintaining our $140 million company-wide CapEx estimate for 2026, although we expect that to be back-end weighted as we align the spending with the expected cash inflow from political advertising.” (Executive VP & CFO Gignac) “Our full year tax guide came down by $25 million to a range of $90 million to $110 million.” (Executive VP & CFO Gignac)

FINANCIAL RESULTS

* “Total revenue in the first quarter of 2026 was $768 million… Total operating expenses before depreciation, amortization, impairment and gain or loss on disposal of assets… were $622 million.” (Executive Chairman & CEO Howell)
* “Net loss attributable to common stockholders was $33 million for the first quarter of 2026. Adjusted EBITDA was $154 million in Q1 2026.” (Executive Chairman & CEO Howell)
* “Political advertising revenue was $30 million at the high end of our guidance.” (Executive Chairman & CEO Howell) “Our guide for first quarter '26 was $25 million to $30 million, and our actual results came in at the high end right at $30 million.” (President, Co-CEO & Director LaPlatney)
* “We finished first quarter with over $1 billion in liquidity.” (Executive VP & CFO Gignac) “Our leverage metrics at March 31, 2026, were 2.56x consolidated first lien net leverage ratio, 3.79x consolidated secured net leverage ratio and 5.94x consolidated total net leverage ratio.” (Executive VP & CFO Gignac)

Q&A

* Steven Cahall, Wells Fargo: asked about regulatory pace, state AG risk, and retrans impact and M&A pro forma; Executive VP, Chief Legal & Development Officer Kevin Latek: “our DOJ process pushed our transactions behind the Nexstar transaction and necessitated a very intensive document production… a far more intense DOJ review… than anything we saw”; Executive Chairman & CEO Howell: “we're thinking of inflationary type organic growth in net retrans… But on top of that, there is net retrans that is acquired that will start to flow in on top of that.”
* Daniel Kurnos, The Benchmark Company: asked why net retrans guide improved and how to think about the political season; Executive VP & CFO Gignac: “yes, it is better sub trends, it is us achieving our objectives on market and getting to market rates as we renew contracts”; Executive Chairman & CEO Howell: “It's just going to be extraordinarily strong. What those numbers are going to be? We've learned our lesson. We don't know.”
* Aaron Watts, Deutsche Bank: asked whether an “unprecedented” distributor demand was backed down and the risk of recurrence, plus cost cadence; Executive VP, Chief Legal & Development Officer Latek: “I've never seen a provision like the one that was thrown at us as a nonnegotiable line in the sand… it was bizarre… it clearly was pretty existential for us”; Executive VP & CFO Gignac: “the back half should be… a more normalized inflationary type… we'll have all the acquired station expenses rolling into.”
* Patrick Sholl, Barrington: asked if World Cup creates crowd-out and whether network streaming access affects local viewership; President, Co-CEO & Director LaPlatney: “World Cup is a benefit, net benefit… World Cup is a positive”; LaPlatney: “Yes. Modestly, if any”; Executive Chairman & CEO Howell: “we think it's going to be really, really strong in the Spanish language… it's going to have a big impact on us, we believe.”
* Gengxuan Qiu, Barclays: asked about possible retrans true-up payments and M&A timing assumptions; Executive Chairman & CEO Howell: “everything is factored into the guide”; Howell: “we've factored in our own estimate of when that closes into the guide.”
* Craig Huber, Huber Research Partners: asked about the 39% cap and use of AI; Executive VP, Chief Legal & Development Officer Latek: “we have no idea… Gray is at 25% under the cap”; Unknown Executive: “It's really been a multiplier of sorts for our teams, primarily time saving, increasing productivity on both the sales and the news side.”

SENTIMENT ANALYSIS

* “it clearly was pretty existential for us” and “I've never seen a provision like the one that was thrown at us” indicated a slightly negative, risk-focused analyst line of questioning around retrans and bargaining leverage, with management responses constrained by confidentiality. (Executive VP, Chief Legal & Development Officer Latek)
* Management tone was slightly positive in prepared remarks on execution and cost control, while becoming more guarded in Q&A on retrans terms, using repeated limits such as “We don't comment on specifics.” (Executive VP, Chief Legal & Development Officer Latek)
* Versus the prior quarter, management’s confidence on net retrans direction stayed consistent (“inflationary type” growth language appeared in both calls), while Q1 added a more defensive posture tied to the DISH dispute and regulatory intensity. (Executive Chairman & CEO Howell; Executive VP & CFO Gignac; Executive VP, Chief Legal & Development Officer Latek)

QUARTER-OVER-QUARTER COMPARISON

* Q1 highlighted a newly resolved distribution blackout (“first extended distribution blackout… in our company's history”), a topic not present in the prior quarter’s prepared remarks. (Executive Chairman & CEO Howell)
* Q4 emphasized net retrans stabilization and the return to growth (“returned to growth in the fourth quarter of 2025”), while Q1 emphasized renewed visibility after completing 2026 MVPD renewals (“We have no further retransmission negotiations for the remainder of 2026.”). (Executive Chairman & CEO Howell)
* Q4 framed M&A as pending (“expect to close our other announced transactions in the next several months”), while Q1 shifted to multiple closes already completed and near-term remaining closes (“closed… Allen Media Group… Block Communications… anticipate closing… in the next few weeks”). (Executive Chairman & CEO Howell)

RISKS AND CONCERNS

* “we're seeing some softness in core advertising” and “advertisers… delay their commitments, which limits our visibility” framed demand risk in Q2. (President, Co-CEO & Director LaPlatney)
* “Corporate expenses were above our guidance range due primarily to legal costs associated with completing our M&A regulatory approvals” highlighted transaction-related cost pressure, with mitigation described as “expected to normalize as we complete the additional transactions.” (Executive VP & CFO Gignac)
* “a far more intense DOJ review… after submitting millions of documents at great expense to us” underscored regulatory burden risk, alongside a mitigation view that agencies “really… understand the competitive situation that we face.” (Executive VP, Chief Legal & Development Officer Latek)

FINAL TAKEAWAY

Management described Q1 as a quarter where results came in at the high end of guidance while the company resolved its first extended MVPD blackout, completed multiple station acquisitions, and set Q2 expectations around softer core advertising and a sharp ramp in political revenue. Executives emphasized that most 2026 retrans negotiations are now behind them, with guidance incorporating the DISH dispute’s impact, and they reiterated a focus on cost management, integration of acquired stations, and improving cash flow visibility through political advertising and potential refinancing actions in 2026.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/gtn/earnings/transcripts]

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