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What changed in GRAY MEDIA, INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of GRAY MEDIA, INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+277 added−275 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-24)

Top changes in GRAY MEDIA, INC's 2023 10-K

277 paragraphs added · 275 removed · 207 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

49 edited+9 added−8 removed69 unchanged
Biggest changeIn accordance with STELAR, the FCC has promulgated rules that: (i) grant DBS providers the right to seek market modifications based on factors similar to those used in the cable industry; (ii) broaden the FCC’s prohibition against joint retransmission negotiations by prohibiting joint retransmission negotiations by any stations in the same DMA not under common control; (iii) prohibit a television station from limiting the ability of an MVPD to carry into its local market television signals that are deemed significantly viewed; and (iv) eliminate the “sweeps prohibition,” which precluded cable operators from deleting or repositioning local commercial television stations during “sweeps” ratings periods. 11 We currently are not a party to any agreements that delegate our authority to negotiate retransmission consent for any of our television stations or that grant us authority to negotiate retransmission consent for any other television station.
Biggest changeAmong other things, MVPDs may designate a buying group to negotiate retransmission consent agreements on their behalf and large stations groups, such as us, are required to negotiate for retransmission consent in good faith with a qualified MVPD buying group. 11 The FCC also has promulgated rules that: (i) grant DBS providers the right to seek market modifications based on factors similar to those used in the cable industry; (ii) broaden the FCC’s prohibition against joint retransmission negotiations by prohibiting joint retransmission negotiations by any stations in the same DMA not under common control; (iii) prohibit a television station from limiting the ability of an MVPD to carry into its local market television signals that are deemed significantly viewed; and (iv) eliminate the “sweeps prohibition,” which precluded cable operators from deleting or repositioning local commercial television stations during “sweeps” ratings periods.
The sizes of advertisers’ budgets, which can be affected by broad economic trends, can affect the broadcast industry in general and the revenues of individual broadcast television stations. Strategy Our success is based on the following strategies: Grow by Leveraging our Diverse National Footprint. We serve a diverse and national footprint of television stations.
The sizes of advertisers’ budgets, which can be affected by broad economic trends, can affect the broadcast industry in general and the revenues of individual broadcast television stations. 4 Strategy Our success is based on the following strategies: Grow by Leveraging our Diverse National Footprint. We serve a diverse and national footprint of television stations.
The revenue and expense associated with these transactions are based on the fair value of the assets or services received. Affiliates of FOX and CW must purchase or produce a greater amount of programming for their non-network time periods, generally resulting in higher programming costs.
The revenue and expense associated with these transactions are based on the fair value of the assets or services received. 7 Affiliates of FOX and CW must purchase or produce a greater amount of programming for their non-network time periods, generally resulting in higher programming costs.
Advertising rates can also be determined in part by the station’s ratings and market share among particular demographic groups that an advertiser may be targeting. 4 Because broadcast stations rely on advertising revenues, they are sensitive to cyclical changes in the economy.
Advertising rates can also be determined in part by the station’s ratings and market share among particular demographic groups that an advertiser may be targeting. Because broadcast stations rely on advertising revenues, they are sensitive to cyclical changes in the economy.
The television station may pay a fixed fee for such programming. 7 We record revenue and expense for trade transactions involving the exchange of tangible goods or services with our customers. The revenue is recorded at the time the advertisement is broadcast and the expense is recorded at the time the goods or services are used.
The television station may pay a fixed fee for such programming. We record revenue and expense for trade transactions involving the exchange of tangible goods or services with our customers. The revenue is recorded at the time the advertisement is broadcast and the expense is recorded at the time the goods or services are used.
Political advertising spending is typically heaviest during the fourth quarter. In addition, the broadcast of the Olympic Games by our NBC-affiliated stations generally leads to increased viewership and revenue during those years. 6 Our broadcast advertising revenue is earned from the sale of advertisements broadcast by our stations.
Political advertising spending is typically heaviest during the fourth quarter. In addition, the broadcast of the Olympic Games by our NBC-affiliated stations generally leads to increased viewership and revenue during those years for our NBC-affiliated stations. 6 Our broadcast advertising revenue is earned from the sale of advertisements broadcast by our stations.
Broadcast stations also compete for exclusive news stories and features. Cable networks and internet service providers compete with local stations for programming. 8 Advertising. Advertising revenues comprise the primary source of revenues for our stations.
Broadcast stations also compete for exclusive news stories and features. Cable networks and internet service providers compete with local stations for programming. Advertising. Advertising revenues comprise the primary source of revenues for our stations.
Although no single customer represented more than 5% of our broadcast advertising revenue for the years ended December 31, 2022, 2021 or 2020, we derived a material portion of our non-political broadcast advertising revenue from advertisers in a limited number of industries, particularly the services sector, comprising financial, legal and medical advertisers, and the automotive industry.
Although no single customer represented more than 5% of our broadcast advertising revenue for the years ended December 31, 2023, 2022 or 2021, we derived a material portion of our non-political broadcast advertising revenue from advertisers in a limited number of industries, particularly the services sector, comprising financial, legal and medical advertisers, and the automotive industry.
Consistent with this strategy, we have completed several acquisition and divestiture transactions, including some that had a material impact on our results of operations, between late 2013 and early 2022. For more information on these transactions, see Note 3 “Acquisitions and Divestitures” of our audited consolidated financial statements included elsewhere herein.
Consistent with this strategy, we have completed several acquisition and divestiture transactions, including some that had a material impact on our results of operations, between late 2013 and early 2023. For more information on these transactions, see Note 3 “Acquisitions and Divestitures” of our audited consolidated financial statements included elsewhere herein.
This note also describes the stations we acquired in each of 2022, 2021 and 2020, which we may also refer to collectively as our “acquisitions,” our “recent acquisitions” or “the acquisitions.” 5 Continue to Monetize Digital Spectrum. In addition to each station’s primary channel, we also broadcast a number of secondary channels.
This note also describes the stations we acquired in each of 2023, 2022 and 2021, which we may also refer to collectively as our “acquisitions,” our “recent acquisitions” or “the acquisitions.” 5 Continue to Monetize Digital Spectrum. In addition to each station’s primary channel, we also broadcast a number of secondary channels.
We are the nation’s largest owner of top-rated local television stations and digital assets in the United States. Our television stations serve 113 television markets that collectively reach approximately 36 percent of US television households. This portfolio includes 79 markets with the top-rated television station and 101 markets with the first and/or second highest rated television station.
We are the nation’s largest owner of top-rated local television stations and digital assets in the United States. Our television stations serve 113 television markets that collectively reach approximately 36 percent of US television households. This portfolio includes 79 markets with the top-rated television station and 102 markets with the first and/or second highest rated television station.
We currently operate in DMAs ranked between 6 and 209. We operate in many markets that we believe have the potential for significant political advertising revenue in periods leading up to elections. We are also diversified across our broadcast programming. Maintain and Grow our Market Leadership Position.
We currently operate in DMAs ranked between 7 and 209. We operate in many markets that we believe have the potential for significant political advertising revenue in periods leading up to elections. We are also diversified across our broadcast programming. Maintain and Grow our Market Leadership Position.
For the years ended December 31, 2022, 2021 and 2020 our total revenue was $3.7 billion, $2.4 billion and $2.4 billion, respectively. 3 Markets and Stations We believe a key driver for our strong market position is our focus on strong local news and information programming.
For the years ended December 31, 2023, 2022 and 2021 our total revenue was $3.3 billion, $3.7 billion and $2.4 billion, respectively. 3 Markets and Stations We believe a key driver for our strong market position is our focus on strong local news and information programming.
Failure to renew any licenses upon the expiration of any license term could have a material adverse effect on our business. Under the Communications Act, the term of a broadcast license is automatically extended pending the FCC’s processing of a renewal application.
Failure to renew any licenses upon the expiration of any license term could have a material adverse effect on our business. Under the Communications Act, the term of a broadcast license is automatically extended pending the FCC’s processing of a timely filed renewal application.
Each DMA is an exclusive geographic area consisting of all counties (and in some cases, portions of counties) in which the home-market commercial television stations receive the greatest percentage of total viewing hours. Television station revenue is derived primarily from local, regional and national advertising revenue (together “Core”) and retransmission consent fees.
Each DMA is an exclusive geographic area consisting of all counties (and in some cases, portions of counties) in which the home-market commercial television stations receive the greatest percentage of total viewing hours. Television station revenue is derived primarily from local, regional and national advertising revenue (together, but excluding political advertising revenue, “Core”) and retransmission consent fees.
We serve as a holding company for our subsidiaries, including subsidiaries that hold station licenses. Therefore, absent a grant of a declaratory ruling, we may be restricted from having more than one-fourth of our stock owned or voted directly or indirectly by non-citizens, foreign governments, representatives of non-citizens or foreign governments, or foreign corporations. Programming and Operations.
We serve as a holding company for our subsidiaries, including subsidiaries that hold station licenses. Therefore, absent a grant of a declaratory ruling, we are restricted from having more than one-fourth of our stock owned or voted directly or indirectly by non-citizens, foreign governments, representatives of non-citizens or foreign governments, or foreign corporations. Programming and Operations.
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 are diversified across our markets and network affiliations. In 2022, our largest market, by revenue, was Phoenix, Arizona, which contributed 5% of our revenue.
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 are diversified across our markets and network affiliations. In 2023 and 2022, our largest market, by revenue, was Phoenix, Arizona, which contributed 4% and 5% of our revenue, respectively.
The rules also limit the aggregate national audience reach of television stations that may be under common ownership, operation and control, or in which a single person or entity may hold an official position or have more than a specified interest or percentage of voting power.
The rules continue to limit the aggregate national audience reach of television stations that may be under common ownership, operation and control, or in which a single person or entity may hold an official position or have more than a specified interest or percentage of voting power.
The services sector has become an increasingly important source of advertising revenue over the past few years. During the years ended December 31, 2022, 2021 and 2020 approximately 28%, 29% and 28%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to the services sector.
The services sector has become an increasingly important source of advertising revenue over the past few years. During the years ended December 31, 2023, 2022 and 2021 approximately 27%, 28% and 29%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to the services sector.
From our largest market in Atlanta, Georgia (DMA 6) to our smallest in North Platte, Nebraska (DMA 209), as tabulated by Nielsen, we inform, educate, entertain and connect each of these communities to their state, the nation and the whole world. Each of our stations have a local studio, tower, sales, technical and administrative personnel dedicated to their community.
From our largest market in Atlanta, Georgia (DMA 7) to our smallest in North Platte, Nebraska (DMA 209), as tabulated by Nielsen, we inform, educate, entertain and connect each of these communities to their state, the nation and the whole world. Nearly all stations have a local studio, tower, sales, technical and administrative personnel dedicated to their community.
The Communications Act restricts the ability of foreign entities or individuals to own or hold interests in broadcast licenses. The Communications Act bars the following from holding broadcast licenses: foreign governments, representatives of foreign governments, non-citizens, representatives of non-citizens, and corporations or partnerships organized under the laws of a foreign nation.
Alien Ownership Restrictions. The Communications Act restricts the ability of foreign entities or individuals to own or hold interests in broadcast licenses. The Communications Act bars the following from holding broadcast licenses: foreign governments, representatives of foreign governments, non-citizens, representatives of non-citizens, and corporations or partnerships organized under the laws of a foreign nation.
Our stations compete for advertising revenues in their respective markets with other television stations, digital platforms including Google and Facebook, local cable and other MVPD systems, as well as local newspapers, radio stations, magazines, outdoor advertising, transit advertising, yellow page directories and direct mail. Federal Regulation of the Television Broadcast Industry General.
Our stations compete for advertising revenues in their respective markets with other television stations, digital platforms including Google and YouTube, Facebook and Instagram, TikTok, local cable and other MVPD systems, as well as local newspapers, radio stations, magazines, outdoor advertising, transit advertising, yellow page directories and direct mail. 8 Federal Regulation of the Television Broadcast Industry General.
However, affiliates of FOX and CW retain a larger portion of their advertising time inventory and the related revenues compared to Big Three affiliates. Competition Television stations compete for audiences, certain programming (including news) and advertisers. Cable network programming is a significant competitor of broadcast television programming.
On the other hand, affiliates of FOX and CW retain a larger portion of their advertising time inventory and the related revenues compared to Big Three affiliates. Competition Television stations compete for audiences, certain programming (including news) and advertisers. Cable network programming is a significant competitor of broadcast television programming.
Although the FCC has yet to adopt any final rules as a result of its 2018 review, in December 2022, the FCC began a new quadrennial review of its ownership rules with the issuance of a Public Notice seeking comments on competition in the local television marketplace, including, among other things: (i) ongoing trends or developments in the media marketplace; (ii) impact of the ownership rules on the American public as consumers of media, including whether adjustments should be made to the rules to account for changes in consumer behavior like the use of streaming services; (iii) the barriers to minority and female ownership of broadcast stations; and (iv) any additional legal or economic factors the FCC should consider beyond its traditional public policy goals of competition, localism, and diversity.
Prior to doing so, in December 2022, the FCC began a new quadrennial review of its ownership rules with the issuance of a Public Notice seeking comments on competition in the local television marketplace, including, among other things: (i) ongoing trends or developments in the media marketplace; (ii) impact of the ownership rules on the American public as consumers of media, including whether adjustments should be made to the rules to account for changes in consumer behavior like the use of streaming services; (iii) the barriers to minority and female ownership of broadcast stations; and (iv) any additional legal or economic factors the FCC should consider beyond its traditional public policy goals of competition, localism, and diversity.
Each network affiliation agreement provides the affiliated station with the right to broadcast all programs transmitted by the affiliated network. Our network affiliation agreements with the Big Four broadcast networks currently expire at various dates through December 2025. Television Industry Background The Federal Communications Commission (“FCC”) grants broadcast licenses to television stations.
Each network affiliation agreement provides the affiliated station with the right to broadcast all programs transmitted by the affiliated network. Our network affiliation agreements with the Big Four broadcast networks currently expire at various dates through January 1, 2026. Television Industry Background The Federal Communications Commission (“FCC”) grants broadcast licenses to television stations.
Further Strengthen our Balance Sheet. During the last several years, we have leveraged our strong cash flow and efficient operating model to grow our diverse national footprint. In 2022, we made principal payments totaling $315 million reducing the balance outstanding under our Senior Credit Facility including both voluntary and required payments.
During the last several years, we have leveraged our strong cash flow and efficient operating model to grow our diverse national footprint. In 2023 and 2022, we made net principal payments totaling $310 million and $315 million reducing the balance outstanding under our Senior Credit Facility including both voluntary and required payments.
In addition to affiliations with ABC, CBS, NBC and FOX, our secondary channels are affiliated with numerous smaller networks and program services including, among others, the CW Network or the CW Plus Network (collectively, “CW”), MY Network, the MeTV Network, Circle, Telemundo, Antenna TV and Cozi. Certain of our secondary digital channels are affiliated with more than one network simultaneously.
In addition to affiliations with ABC, CBS, NBC and FOX, our secondary channels are affiliated with numerous smaller networks and program services including, among others, the CW Network or the CW Plus Network (collectively, “CW”), MY Network, the MeTV Network, Telemundo, THE365, Outlaw, and others. Certain of our secondary digital channels are affiliated with more than one network simultaneously.
During the years ended December 31, 2022, 2021 and 2020 approximately 17%, 17% and 21%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to automotive customers.
During the years ended December 31, 2023, 2022 and 2021 approximately 20%, 17% and 17%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to automotive customers.
According to Nielsen, during 2022, our owned and operated television stations achieved the #1 ranking in overall audience in 79 of our 113 markets. In addition, our stations achieved the #1 and/or #2 ranking in overall audience in 101 of our 113 markets.
According to Nielsen, during 2023, our owned and operated television stations achieved the #1 ranking in overall audience in 79 of our 113 markets. In addition, our stations achieved the #1 and/or #2 ranking in overall audience in 102 of our 113 markets.
We also believe that our local market leadership positions help us in negotiating more beneficial terms in our major network affiliation agreements, which currently expire at various dates through December 2025, and in our syndicated programming agreements.
We also believe that our local market leadership positions help us in negotiating more beneficial terms in our major network affiliation agreements, which currently expire at various dates through January 1, 2026, and in our syndicated programming agreements.
As we strive to deliver high-quality products and services that exceed expectations, we embrace the unique perspectives and experiences of our employees and partners and the communities we serve. We are striving to enhance diversity at every level of our organization, including among our senior leaders.
As we strive to deliver high-quality products and services that exceed expectations, we embrace the unique perspectives and experiences of our employees and partners and the communities we serve. We are striving to enhance diversity at every level of our organization, including among our senior leaders. ● Focusing on a safe and healthy workplace.
For the year ended December 31, 2022, our CBS-affiliated channels accounted for approximately 39% of total revenue; our NBC-affiliated channels accounted for approximately 26% of total revenue; our FOX-affiliated channels accounted for approximately 14% of total revenue; and our ABC-affiliated channels accounted for approximately 11% of total revenue.
For the year ended December 31, 2023, our CBS-affiliated channels accounted for approximately 39% of total revenue; our NBC-affiliated channels accounted for approximately 27% of total revenue; our FOX-affiliated channels accounted for approximately 14% of total revenue; and our ABC-affiliated channels accounted for approximately 11% of total revenue.
The Code is available on our website in the Investor Relations section under the subheading Governance Documents. If any waivers of the Code are granted to an executive officer or director, the waivers will be disclosed in an SEC filing on Form 8-K.
A Code of Ethics (“Code”) applies to all of our directors, executive officers and employees. The Code is available on our website in the Investor Relations section under the subheading Governance Documents. If any waivers of the Code are granted to an executive officer or director, the waivers will be disclosed in an SEC filing on Form 8-K.
We make the following reports filed or furnished, as applicable, with the SEC available, free of charge, on our website under the heading “SEC Filings” as soon as practicable after they are filed with, or furnished to, the SEC: our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and amendments to any of the foregoing. 13 A Code of Ethics (“Code”) applies to all of our directors, executive officers and employees.
We make the following reports filed or furnished, as applicable, with the SEC available, free of charge, on our website under the heading “SEC Filings” as soon as practicable after they are filed with, or furnished to, the SEC: our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and amendments to any of the foregoing.
Over the past several years, the FCC has increased its enforcement efforts regarding broadcast indecency and profanity and the statutory maximum fine for broadcasting indecent material is more than $500,000 per incident. The FCC has sought comment on whether it should modify its indecency policies but has not yet issued a decision in this proceeding.
The FCC also regulates broadcast indecency and profanity and the statutory maximum fine for broadcasting indecent material is nearly $500,000 per incident. The FCC has sought comment on whether it should modify its indecency policies but has not yet issued a decision in this proceeding.
Comments and reply comments in the 2022 quadrennial review will be due in early 2023. 9 Local TV Ownership Rules. The FCC’s current television ownership rules allow one entity to acquire two commercial television stations in a DMA as long as no more than one station is ranked among the top-four stations in the market (the “top-four” prohibition).
The 2022 review remains pending. Local TV Ownership Rules. The FCC’s current television ownership rules allow one entity to acquire two commercial television stations in a DMA as long as no more than one station is ranked among the top-four stations in the market (as noted above, the “top-four” prohibition).
In March 2020, the FCC sought comment on whether it should modernize its methodology for determining whether a television station is significantly viewed in a community outside of its local television market.
The FCC has sought comment on whether it should modify or eliminate the network non-duplication and syndicated exclusivity rules. In March 2020, the FCC sought comment on whether it should modernize its methodology for determining whether a television station is significantly viewed in a community outside of its local television market.
However, the FCC previously requested comment on whether local news service agreements and/or shared services agreements should be considered attributable for purposes of applying the media ownership rules. The DOJ has taken steps under the antitrust laws to block certain transactions involving joint sales or other services agreements.
However, the FCC previously requested comment on whether local news service agreements and/or shared services agreements should be considered attributable for purposes of applying the media ownership rules.
This limit was specified by Congress in 2004. The FCC applies a 50 percent “discount” for ultra-high frequency (“UHF”) stations. In December 2017, the FCC issued an NPRM seeking comment on whether it should modify or eliminate the national cap, including the UHF discount. Comments and reply comments were filed in 2018, and the proceeding remains open. Conclusion.
In December 2017, the FCC issued an NPRM seeking comment on whether it should modify or eliminate the national cap, including the UHF discount. Comments and reply comments were filed in 2018, and the proceeding remains open. Conclusion.
To our knowledge, no officer, director or five percent or greater shareholder currently holds an attributable interest in another television station that is inconsistent with the FCC’s ownership rules and policies or with our ownership of our stations. 10 Alien Ownership Restrictions.
The DOJ has also taken steps under the antitrust laws to block certain transactions involving joint sales or other services agreements. 10 To our knowledge, no officer, director or five percent or greater shareholder currently holds an attributable interest in another television station that is inconsistent with the FCC’s ownership rules and policies or with our ownership of our stations.
The current election cycle commenced on January 1, 2021 and ends on December 31, 2023. During this period, our stations elected retransmission consent and have entered into retransmission consent contracts with virtually all MVPD systems serving their markets.
The current election cycle commenced on January 1, 2024, and ends on December 31, 2026. During this period, our stations elected retransmission consent and have entered into retransmission consent contracts with virtually all MVPD systems serving their markets. Under the Communications Act and FCC regulations, broadcasters and MVPDs are required to negotiate retransmission consent agreements in good faith.
Employees As of February 17, 2023, we had 8,942 full-time employees and 452 part-time employees, of which 517 full-time and 24 part-time employees at 14 stations were represented by various unions. We consider our relations with our employees to be good.
Employees As of February 16, 2024, we had 9,374 full-time employees and 549 part-time employees, of which 527 full-time and 23 part-time employees at 12 stations were represented by various unions. We consider our relations with our employees to be good.
We also broadcast independent and local news/weather channels in some markets. The Big Four networks dominate broadcast television in terms of the amount of viewership that their original programming attracts. The “Big Three” major broadcast networks of CBS, NBC and ABC provide their respective network affiliates with a majority of the programming broadcast each day.
We also broadcast independent and local news/weather channels in some markets on both primary and secondary channels. The Big Four networks dominate broadcast television in terms of the amount of viewership that their original programming attracts.
The FCC’s current ownership rules generally prohibit an entity from acquiring “attributable” interests in two television stations in the same market if both are ranked among the top-four stations in the market. The FCC will consider waiver requests on a case-by-case basis.
Those rules generally prohibit an entity from acquiring “attributable” interests in two television stations in the same market if both are ranked among the top-four stations in the market (the “top-four” prohibition).
In 2021, our largest markets, by revenue, were Cleveland-Akron, Ohio and Charlotte, North Carolina, which each contributed approximately 4% of our revenue. Our top 10 markets by revenue contributed approximately 26% and 23% of our total revenue in the years ended December 31, 2022 and 2021, respectively.
Our top 10 markets by revenue contributed approximately 25% and 26% of our total revenue in the years ended December 31, 2023 and 2022, respectively.
FOX and CW provide their affiliates with a smaller portion of each day’s programming compared to the Big Three networks. The CW Plus Network generally provides programming for the entire broadcast day for CW affiliates in markets smaller than the top 100 DMAs.
The CW Plus Network generally provides programming for the entire broadcast day for CW affiliates in markets smaller than the top 100 DMAs.
Proposals for additional or revised regulations and requirements are pending before, are being considered by, and may in the future be considered by, Congress and federal regulatory agencies from time to time. We cannot predict the effect of any existing or proposed federal legislation, regulations or policies on our business.
The foregoing does not purport to be a complete summary of the Communications Act, other applicable statutes, or the FCC’s rules, regulations or policies. Proposals for additional or revised regulations and requirements are pending before, are being considered by, and may in the future be considered by, Congress and federal regulatory agencies from time to time.
An entity may retain ownership of the second station if it obtains top-four status after it is acquired. Waivers of the top-four prohibition will be considered on a case-by-case basis. National Television Station Ownership Rule. The maximum percentage of US households that a single owner can reach through commonly owned television stations is 39 percent.
An entity may retain ownership of the second station if it obtains top-four status after it is acquired. The FCC will consider waivers of the top-four prohibition on a case-by-case basis. 9 When it resolved the 2018 quadrennial review in December 2023, the FCC adopted two modifications to the top-four prohibition that make it more restrictive.
We believe that our market leadership position provides additional negotiating leverage that enables us to lower, on a relative basis, our syndicated programming costs. We have increased the efficiency of our stations by automating video production and back-office processes. We believe that we will be able to further benefit from cost and operational efficiencies as we continue to grow.
We believe that our market leadership position provides additional negotiating leverage that enables us to lower, on a relative basis, our syndicated programming costs. We are pursuing opportunities to use spectrum more efficiently for content and sales by transitioning our stations to the new transmission standard called NextGen TV. Further Strengthen our Balance Sheet.
Removed
As part of its requirement to review its media ownership rules every four years, in late 2017 the FCC adopted significant changes to its ownership rules, which took effect in February 2018.
Added
The “Big Three” major broadcast networks of CBS, NBC and ABC provide their respective network affiliates with a majority of the programming broadcast each day. FOX and CW provide their affiliates with a smaller portion of each day’s programming compared to the Big Three networks.
Removed
The updated rules were temporarily vacated by a lower appeals court in 2019, but ultimately upheld by the Supreme Court of the United States and reinstated by the FCC in June 2021.
Added
The FCC took until December 2023 to adopt final rules as a result of its 2018 review, at which time it increased restrictions on local television ownership (discussed in more detail below).
Removed
Nevertheless, we cannot predict how the FCC’s restriction on joint negotiation might impact future opportunities. The FCC has sought comment on whether it should modify or eliminate the network non-duplication and syndicated exclusivity rules.
Added
These rule changes will take effect in March 2024. First, the FCC extended the top-four prohibition to low power television (“LPTV”) stations and multicast streams.
Removed
In December 2019, the Satellite Television Community Protection and Promotion Act of 2019 and the Television Viewer Protection Act of 2019 (the “TVPA of 2019”) were signed into law.
Added
As a result of this change, a licensee will be prohibited from acquiring network-affiliated programming of another top-four station in a DMA and then placing that programming on either the multicast stream of a full-power station or a LPTV station in a DMA in which it already owns another top-four rated station.
Removed
Among other things, these acts (i) made permanent the copyright license set out in Section 119 of the Copyright Act; (ii) limited eligibility for use of the Section 119 license to retransmit the signals of network television broadcast stations to unserved households to those satellite operators who provide local-into-local service to all DMAs; and (iii) modified the definition of unserved households to those households located in a “short market” (which, in turn, was defined as a local market in which programming of one or more of the top four networks is not offered on either the primary or multicast stream by any network station in that market).
Added
These additional restrictions will apply to transactions entered into after December 26, 2023. Existing combinations will be grandfathered, but may not be transferred or assigned except in compliance with the new rule.
Removed
The TVPA of 2019 also made permanent the requirement that broadcasters and MVPDs negotiate in good faith and adds a provision that (i) allows MVPDs to designate a buying group to negotiate retransmission consent agreements on their behalf and (ii) requires large stations groups, such as us, to negotiate for retransmission consent in good faith with a qualified MVPD buying group.
Added
Second, the FCC modified its methodology for determining a station’s audience share for purposes of the top-four prohibition (and failing station waiver requests) to (i) consider audience share data over a 12-month period immediately preceding the date the application is filed, (ii) expand the relevant daypart for audience share data significantly, and (iii) require the inclusion of audience share data for all free-to-consumer, non-simulcast multicast streams.
Removed
The rules that the FCC promulgated to implement those provisions of the TVPA of 2019 became effective in July 2020. The foregoing does not purport to be a complete summary of the Communications Act, other applicable statutes, or the FCC’s rules, regulations or policies.
Added
National Television Station Ownership Rule. The maximum percentage of US households that a single owner can reach through commonly owned television stations is 39 percent. This limit was specified by Congress in 2004. The FCC applies a 50 percent “discount” for ultra-high frequency (“UHF”) stations.
Removed
We believe that diversity, equity and inclusion are principles that drive innovation and should guide us as we build our teams. We have been working with professional consulting and training teams to support our diversity, equity, and inclusion efforts since 2019 ● Focusing on a safe and healthy workplace.
Added
We currently are not a party to any agreements that delegate our authority to negotiate retransmission consent for any of our television stations or that grant us authority to negotiate retransmission consent for any other television station. Nevertheless, we cannot predict how the FCC’s restriction on joint negotiation might impact future opportunities.
Added
We cannot predict the effect of any existing or proposed federal legislation, regulations or policies on our business.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

72 edited+17 added−24 removed69 unchanged
Biggest changeThe number of viewers and ratings of our television stations and advertising revenues in general may be impacted by viewers moving to these programming alternatives and alternate media content providers, a process known as “cord cutting” and “cord shaving.” As these programming alternatives continue to drive changes in consumer behavior and other consumption strategies our business and results of operations may be materially affected. 22 Our inability or failure to broadcast popular programs, or otherwise maintain viewership for any reason, including as a result of increases in programming alternatives, or our loss of advertising due to technological changes, could result in a lack of advertisers, or a reduction in the amount advertisers are willing to pay us to advertise, which could have a material adverse effect on our business, financial condition and results of operations.
Biggest changeOur inability or failure to broadcast popular programs, or otherwise maintain viewership for any reason, including as a result of increases in programming alternatives, or our loss of advertising due to technological changes, could result in a lessening of advertisers, or a reduction in the amount advertisers are willing to pay us to advertise, which could have a material adverse effect on our business, financial condition and results of operations.
These covenants place, or will place, restrictions on our ability to, among other things: ● incur additional debt, subject to certain limitations; ● declare or pay dividends, redeem stock or make other distributions to stockholders; ● make investments or acquisitions; ● create liens or use assets as security in other transactions; ● issue guarantees; ● merge or consolidate, or sell, transfer, lease or dispose of substantially all of our assets; ● amend our articles of incorporation or bylaws; ● engage in transactions with affiliates; and ● purchase, sell or transfer certain assets.
These covenants place, or will place, restrictions on our ability to, among other things: ● incur additional debt, subject to certain limitations; ● declare or pay dividends, redeem stock or make other distributions to stockholders; 21 ● make investments or acquisitions; ● create liens or use assets as security in other transactions; ● issue guarantees; ● merge or consolidate, or sell, transfer, lease or dispose of substantially all of our assets; ● amend our articles of incorporation or bylaws; ● engage in transactions with affiliates; and ● purchase, sell or transfer certain assets.
Our results of operations and financial condition could be materially adversely affected if broadcast advertising revenue from the services sector, automotive or certain other industries, such as the medical, restaurant, communications, or furniture and appliances industries, declined. We intend to continue to evaluate growth opportunities through strategic acquisitions, and there are significant risks associated with an acquisition strategy.
Our results of operations and financial condition could be materially adversely affected if broadcast advertising revenue from the services sector, automotive or certain other industries, such as the medical, restaurant, communications, or furniture and appliances industries, declined. 15 We intend to continue to evaluate growth opportunities through strategic acquisitions, and there are significant risks associated with an acquisition strategy.
As a result of their significant stockholdings and positions on the Board of Directors, the Howell-Robinson Family is able to exert significant influence over our policies and management, potentially in a manner which may not be consistent with the interests of our other stockholders. Risks Related to Regulatory Matters Federal broadcasting industry regulations limit our operating flexibility.
As a result of their significant stockholdings and positions on the Board of Directors, the Howell-Robinson Family is able to exert significant influence over our policies and management, potentially in a manner which may not be consistent with the interests of our other stockholders. 25 Risks Related to Regulatory Matters Federal broadcasting industry regulations limit our operating flexibility.
In addition, any future decreases in the discount rate used to determine pension obligations could result in an increase in the valuation of pension obligations, which could affect the reported funding status of our pension plans and future contributions. Risks Related to the Ownership of Our Equity Securities The price and trading volume of our equity securities may be volatile.
In addition, any future decreases in the discount rate used to determine pension obligations could result in an increase in the valuation of pension obligations, which could affect the reported funding status of our pension plans and future contributions. 23 Risks Related to the Ownership of Our Equity Securities The price and trading volume of our equity securities may be volatile.
Over the past several years, the FCC has increased its enforcement efforts regarding broadcast indecency and profanity and the statutory maximum fine for broadcasting indecent material is more than $500,000 per incident, up to a maximum of more than $4 million for a continuing violation.
Over the past several years, the FCC has increased its enforcement efforts regarding broadcast indecency and profanity and the statutory maximum fine for broadcasting indecent material is nearly $500,000 per incident, up to a maximum of more than $4 million for a continuing violation.
Some of the factors that could cause fluctuation in the stock price or trading volume of our equity securities include: ● general market and economic conditions and market trends, including in the television broadcast industry and the financial markets generally; ● the political, economic and social situation in the United States; ● actual or anticipated variations in operating results, including audience share ratings and financial results; ● inability to meet projections in revenue; ● announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, capital commitments or other business developments; ● technological innovations in the television broadcast industry; ● adoption of new accounting standards affecting our industry; ● operations of competitors and the performance of competitors’ common stock; ● litigation or governmental action involving or affecting us or our subsidiaries; ● changes in financial estimates and recommendations by securities analysts; ● recruitment or departure of key personnel; ● purchases or sales of blocks of our common stock; and ● operating and stock performance of the companies that investors may consider to be comparable.
Some of the factors that could cause fluctuation in the stock price or trading volume of our equity securities include: ● general market and economic conditions and market trends, including in the television broadcast industry and the financial markets generally, including levels of key interest rates; ● the political, economic and social situation in the United States; ● actual or anticipated variations in operating results, including audience share ratings and financial results; ● inability to meet projections in revenue; ● announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, capital commitments or other business developments; ● technological innovations in the television broadcast industry; ● adoption of new accounting standards affecting our industry; ● operations of competitors and the performance of competitors’ common stock; ● litigation or governmental action involving or affecting us or our subsidiaries; ● changes in financial estimates and recommendations by securities analysts; ● recruitment or departure of key personnel; ● purchases or sales of blocks of our common stock; and ● operating and stock performance of the companies that investors may consider to be comparable.
Furthermore, our concentration of CBS and/or NBC affiliates makes us particularly sensitive to adverse changes in our business relationship with, and the general success of, CBS and/or NBC.
Our concentration of CBS and/or NBC affiliates makes us particularly sensitive to adverse changes in our business relationship with, and the general success of, CBS and/or NBC.
Although no single customer represented more than 5% of our broadcast advertising revenue for the years ended December 31, 2022 and 2021, we derived a material portion of non-political broadcast advertising revenue from advertisers in a limited number of industries, particularly the services sector, comprising financial, legal and medical advertisers, and the automotive industry.
Although no single customer represented more than 5% of our broadcast advertising revenue for the years ended December 31, 2023 and 2022, we derived a material portion of non-political broadcast advertising revenue from advertisers in a limited number of industries, particularly the services sector, comprising financial, legal and medical advertisers, and the automotive industry.
For the years ended December 31, 2022 and 2021, we derived approximately 14% and 2%, respectively, of our total revenue from political broadcast advertisers. If political broadcast advertising revenues declined, especially in an even-numbered year, our results of operations and financial condition could also be materially adversely affected.
For the years ended December 31, 2023 and 2022, we derived approximately 2% and 14%, respectively, of our total revenue from political broadcast advertisers. If political broadcast advertising revenues declined, especially in an even-numbered year, our results of operations and financial condition could also be materially adversely affected.
In addition, because techniques used in cybersecurity attacks change frequently and may not be recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.
In addition, because techniques used in cybersecurity threats change frequently and may not be recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.
The services sector has become an increasingly important source of advertising revenue over the past few years. During the years ended December 31, 2022, 2021 and 2020 approximately 28%, 29% and 28%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to the services sector.
The services sector has become an increasingly important source of advertising revenue over the past few years. During the years ended December 31, 2023, 2022 and 2021 approximately 27%, 28% and 29%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to the services sector.
For instance, it could: ● require us to dedicate a substantial portion of any cash flow from operations to the payment of interest and principal due under our debt, which would reduce funds available for other business purposes, including capital expenditures, acquisitions and investments; ● place us at a competitive disadvantage compared to some of our competitors that may have less debt and better access to capital resources; ● limit our ability to obtain additional financing to fund acquisitions, working capital and capital expenditures and for other general corporate purposes; and ● make it more difficult for us to satisfy our financial obligations. 14 Our ability to service our significant financial obligations depends on our ability to generate significant cash flow.
For instance, it could: ● require us to dedicate a substantial portion of any cash flow from operations to the payment of interest and principal due under our debt, which would reduce funds available for other business purposes, including capital expenditures, acquisitions and investments; ● place us at a competitive disadvantage compared to some of our competitors that may have less debt and better access to capital resources; ● limit our ability to obtain additional financing to fund acquisitions, working capital and capital expenditures and for other general corporate purposes; and ● make it more difficult for us to satisfy our financial obligations.
New technologies and methods of buying advertising also present an additional competitive challenge, as competitors may offer products and services such as the ability to purchase advertising programmatically or bundled offline and online advertising, aimed at more efficiently capturing advertising spend.
In addition, new technologies and methods of buying advertising present an additional competitive challenge, as competitors may offer products and services such as the ability to purchase advertising programmatically or bundled offline and online advertising, aimed at more efficiently capturing advertising spend.
In December 2017, the FCC issued an NPRM seeking comment on whether it should modify or eliminate the national cap, including the UHF Discount. This rule may constrain our ability to expand through additional station acquisitions.
In December 2017, the FCC issued an NPRM seeking comment on whether it should modify or eliminate the national cap, including the UHF Discount. This proceeding remains pending. This rule may constrain our ability to expand through additional station acquisitions.
Currently we have a $6.5 billion in aggregate principal amount of outstanding indebtedness, excluding intercompany debt and deferred financing costs. Subject to our ability to meet certain borrowing conditions under our Fifth Amended and Restated Credit Agreement (the “Senior Credit Facility”), we have the ability to incur significant additional debt, including secured debt under our $500 million revolving credit facility.
Currently, we have a $6.2 billion in aggregate principal amount of outstanding indebtedness, excluding intercompany debt and deferred financing costs. Subject to our ability to meet certain borrowing conditions under our Fifth Amended and Restated Credit Agreement (the “Senior Credit Facility”), we have the ability to incur significant additional debt, including secured debt under our $625 million revolving credit facility.
As a result of the 10 to 1 voting rights of holders of our Class A common stock, these stockholders are expected to be able to exert significant influence over all matters requiring stockholder approval, including mergers and other material transactions, and may be able to cause or prevent a change in the composition of our Board of Directors or a change in control of our Company that could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of the Company and might ultimately affect the market price of our common stock. 25 Certain stockholders or groups of stockholders have the ability to exert significant influence over us.
As a result of the 10 to 1 voting rights of holders of our Class A common stock, these stockholders are expected to be able to exert significant influence over all matters requiring stockholder approval, including mergers and other material transactions, and may be able to cause or prevent a change in the composition of our Board of Directors or a change in control of our Company that could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of the Company and might ultimately affect the market price of our common stock.
We have funded obligations under our defined benefit pension plans. Notwithstanding that the Gray Pension Plan is frozen with regard to any future benefit accruals, the funded status of our pension plans is dependent upon many factors, including returns on invested assets, the level of certain market interest rates and the discount rate used to determine pension obligations.
Notwithstanding that the Gray Pension Plan is frozen with regard to any future benefit accruals, the funded status of our pension plans is dependent upon many factors, including returns on invested assets, the level of certain market interest rates and the discount rate used to determine pension obligations.
If we cannot enter into affiliation agreements to replace any agreements in advance of their expiration, we would no longer be able to carry the affiliated network’s programming. This loss of programming would require us to seek to obtain replacement programming.
If we cannot enter into affiliation agreements to replace any agreements in advance of their expiration, we would no longer be able to carry the affiliated network’s programming. This loss of programming would require us to create and/or obtain replacement programming.
Our ability to sell advertising time and space depends on, among other things: ● economic conditions in the areas where our stations are located and in the nation as a whole; ● the popularity of the programming offered by our television stations; ● changes in the population demographics in the areas where our stations are located; ● local and national advertising price fluctuations, which can be affected by the availability of programming, the popularity of programming, and the relative supply of and demand for commercial advertising; ● our competitors’ activities, including increased competition from other advertising-based mediums, particularly digital platforms, cable networks, MVPDs and other internet companies; ● the duration and extent of any network preemption of regularly scheduled programming for any reason; ● decisions by advertisers to withdraw or delay planned advertising expenditures for any reason; ● labor disputes or other disruptions at major national advertisers, programming providers or networks; and ● other factors beyond our control.
Our ability to sell advertising time and space depends on, among other things: ● economic conditions in the areas where our stations are located and in the nation as a whole; ● the popularity of the programming offered by our television stations; ● changes in the population demographics in the areas where our stations are located; ● local and national advertising price fluctuations, which can be affected by the availability of programming, the popularity of programming, and the relative supply of and demand for commercial advertising; ● our competitors’ activities, including increased competition from other advertising-based mediums, particularly digital platforms, cable networks, MVPDs and other internet companies; ● the duration and extent of any network preemption of regularly scheduled programming for any reason; ● decisions by advertisers to withdraw or delay planned advertising expenditures for any reason; ● the competitiveness of local, regional, and federal elections and ballot initiatives; ● labor disputes or other disruptions at major national advertisers, programming providers or networks; and ● other factors beyond our control. 14 Our results are also subject to seasonal and cyclical fluctuations.
The terms of the indenture (the “2031 Notes Indenture”) governing our outstanding 5.375% senior notes due 2031 (the “2031 Notes”), the indenture (the “2030 Notes Indenture”) governing our outstanding 4.750% senior notes due 2030 (the “2030 Notes”), the indenture (the “2027 Notes Indenture”) governing our outstanding 7.0% senior notes due 2027 (the “2027 Notes”) and the indenture (the “2026 Notes Indenture”) governing our outstanding 5.875% senior notes due 2026 (the “2026 Notes”) and, together with the 2031 Notes Indenture, the 2030 Notes Indenture and the 2027 Notes Indenture, the “Existing Indentures” or the “Indentures” also permit us to incur additional indebtedness, subject to our ability to meet certain borrowing conditions.
The terms of the indenture (the “2031 Notes Indenture”) governing our outstanding 5.375% senior notes due 2031 (the “2031 Notes”), the indenture (the “2030 Notes Indenture”) governing our outstanding 4.750% senior notes due 2030 (the “2030 Notes”), the indenture (the “2027 Notes Indenture”) governing our outstanding 7.0% senior notes due 2027 (the “2027 Notes”) and the indenture (the “2026 Notes Indenture”) governing our outstanding 5.875% senior notes due 2026 (the “2026 Notes”) and, together with the 2031 Notes Indenture, the 2030 Notes Indenture and the 2027 Notes Indenture, the “Existing Indentures” or the “Indentures” also permit us to incur additional indebtedness, subject to our ability to meet certain borrowing conditions. 20 Our substantial debt may have important consequences.
During the years ended December 31, 2022, 2021 and 2020 approximately 17%, 17% and 21%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to automotive customers.
During the years ended December 31, 2023, 2022 and 2021 approximately 20%, 17% and 17%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to automotive customers.
Our ability to successfully negotiate future retransmission consent agreements may be hindered by potential legislative or regulatory changes to the framework under which these agreements are negotiated. 20 The FCC has taken actions to implement various provisions of the STELAR Reauthorization Act of 2014 affecting the carriage of television stations, including (i) adopting rules that allow for the modification of satellite television markets in order to ensure that satellite operators carry the broadcast stations of most interest to their communities; (ii) tightening its rules on joint retransmission consent negotiations to prohibit joint negotiations by stations in the same market unless those stations are commonly controlled; (iii) prohibiting a television station from limiting the ability of an MVPD to carry into its local market television signals that are deemed significantly viewed; and (iv) eliminating the “sweeps prohibition,” which had precluded cable operators from deleting or repositioning local commercial television stations during “sweeps” ratings periods.
The FCC has taken actions to implement various provisions of the STELAR Reauthorization Act of 2014 affecting the carriage of television stations, including (i) adopting rules that allow for the modification of satellite television markets in order to ensure that satellite operators carry the broadcast stations of most interest to their communities; (ii) tightening its rules on joint retransmission consent negotiations to prohibit joint negotiations by stations in the same market unless those stations are commonly controlled; (iii) prohibiting a television station from limiting the ability of an MVPD to carry into its local market television signals that are deemed significantly viewed; and (iv) eliminating the “sweeps prohibition,” which had precluded cable operators from deleting or repositioning local commercial television stations during “sweeps” ratings periods.
Including the shares of preferred stock issued in the Raycom Merger, our Articles allow our Board of Directors to issue up to 20 million shares of preferred stock and set forth the terms of such preferred stock. The terms of any such preferred stock, if issued, may adversely affect the dividend and liquidation rights of holders of our common stock.
(the “Raycom Merger”), our Articles allow our Board of Directors to issue up to 20 million shares of preferred stock and set forth the terms of such preferred stock. The terms of any such preferred stock, if issued, may materially adversely affect the dividend and liquidation rights of holders of our common stock.
In addition, as we operate in a highly regulated industry, we could be subject to litigation, government investigations and enforcement actions on a variety of matters, the result of which could limit our acquisition strategy. 18 An acquisition strategy involves numerous other risks, including risks associated with: ● identifying suitable acquisition candidates and negotiating definitive purchase agreements on satisfactory terms; ● integrating operations and systems and managing a large and geographically diverse group of stations; ● obtaining financing to complete acquisitions, which financing may not be available to us at times, in amounts, or at rates acceptable to us, if at all, and potentially the related risks associated with increased debt; ● diverting our management’s attention from other business concerns; ● potentially losing key employees; and ● potential changes in the regulatory approval process that may make it materially more expensive, or materially delay our ability, to consummate any proposed acquisitions.
An acquisition strategy involves numerous other risks, including risks associated with: ● identifying suitable acquisition candidates and negotiating definitive purchase agreements on satisfactory terms; ● integrating operations and systems and managing a large and geographically diverse group of stations; ● obtaining financing to complete acquisitions, which financing may not be available to us at times, in amounts, or at rates acceptable to us, if at all, and potentially the related risks associated with increased debt; ● diverting our management’s attention from other business concerns; ● potentially losing key employees; and ● potential changes in the regulatory approval process that may make it materially more expensive, or materially delay our ability, to consummate any proposed acquisitions.
If a particular program is not sufficiently popular among audiences in relation to the cost we pay for such program, we may not be able to sell enough related advertising time for us to recover the costs we pay to broadcast the program.
One of our most significant costs is for the purchase of television programming. If a particular program is not sufficiently popular among audiences in relation to the cost we pay for such program, we may not be able to sell enough related advertising time for us to recover the costs we pay to broadcast the program.
We cannot provide any assurances as to the acceptability by audiences of any of the programs we broadcast. Further, because we compete with other broadcast stations for certain programming, we cannot provide any assurances that we will be able to obtain any desired programming at costs that we believe are reasonable.
Further, because we compete with other broadcast stations for certain programming, we cannot provide any assurances that we will be able to obtain any desired programming at costs that we believe are reasonable.
Other Financial Risks We have, in the past, incurred impairment charges on our goodwill and/or broadcast licenses, and any such future charges may have a material effect on the value of our total assets.
Other Financial Risks We recently have incurred impairment charges on our goodwill, other intangible assets and investments. In prior periods we have incurred impairment charges on our broadcast licenses. Any such future charges may have a material effect on the value of our total assets.
The TVPA of 2019 also made permanent the requirement that broadcasters and MVPDs negotiate in good faith and adds a provision that will (i) allow MVPDs to designate a buying group to negotiate retransmission consent agreements on their behalf and (ii) require large stations groups, including ours, to negotiate in good faith with a qualified MVPD buying group.
The TVPA of 2019 also made permanent the requirement that broadcasters and MVPDs negotiate in good faith and adds a provision that will (i) allow MVPDs to designate a buying group to negotiate retransmission consent agreements on their behalf and (ii) require large stations groups, including ours, to negotiate in good faith with a qualified MVPD buying group. 18 Congress continues to consider various changes to the statutory scheme governing retransmission of broadcast programming.
As of December 31, 2022, the book value of our broadcast licenses was $5.3 billion and the book value of our goodwill was $2.7 billion, in comparison to total assets of $11.2 billion.
As of December 31, 2023, the book value of our broadcast licenses was $5.3 billion and the book value of our goodwill was $2.6 billion, in comparison to total assets of $10.6 billion.
No assurances can be provided that we will be able to renegotiate all of such agreements on favorable terms, on a timely basis, or at all. The failure to renegotiate such agreements could have a material adverse effect on our business and results of operations.
Our current retransmission consent agreements expire at various times over the next several years. No assurances can be provided that we will be able to renegotiate all of such agreements on favorable terms, on a timely basis, or at all. The failure to renegotiate such agreements could have a material adverse effect on our business and results of operations.
In December 2019, Congress adopted the Satellite Television Community Protection and Promotion Act of 2019 and the TVPA of 2019.
In December 2019, Congress adopted the Satellite Television Community Protection and Promotion Act of 2019 and the Television Viewer Protection Act of 2019 (the “TVPA of 2019”).
The FCC’s ownership rules generally prohibit us from acquiring an “attributable interest” in two television stations that are located in the same market unless at least one of the stations is not ranked among the top-four stations in the market (the “top-four” prohibition).
The FCC’s ownership rules generally prohibit us from acquiring an “attributable interest” in two television stations that are located in the same market unless at least one of the stations is not ranked among the top-four stations in the market (the “top-four” prohibition). In December 2023, the FCC adopted two modifications to the top-four prohibition that make it more restrictive.
While we have experienced an incident in the past, and may experience additional incidents in the future, we are not aware of any incident having a material adverse effect on our business, results of operations or financial condition to date. However, there can be no assurance that we will not experience future incidents that may be material.
While we have experienced a cybersecurity incident in the past, and may experience additional cybersecurity incidents in the future, we are not aware of any cybersecurity incident having a material adverse effect on our business, results of operations or financial condition to date.
Any of these factors could reduce our revenues, result in the incurrence of impairment charges, or otherwise cause our costs to escalate relative to revenues. 19 We are highly dependent upon our network affiliations, and our business and results of operations may be materially affected if a network: (i) terminates its affiliation with us; (ii) significantly changes the economic terms and conditions of any future affiliation agreements with us; or (iii) significantly changes the type, quality or quantity of programming provided to us under an affiliation agreement.
We are highly dependent upon our network affiliations, and our business and results of operations may be materially affected if a network: (i) terminates its affiliation with us; (ii) significantly changes the economic terms and conditions of any future affiliation agreements with us; or (iii) significantly changes the type, quality or quantity of programming provided to us under an affiliation agreement.
In years in which there are impending elections for various state and national offices, which primarily occur in even-numbered years, political advertising revenue tends to increase, often significantly, and particularly during presidential election years.
In addition, we typically experience fluctuations in our revenue and broadcast operating income between even-numbered and odd-numbered years. In years in which there are impending elections for various state and national offices, which primarily occur in even-numbered years, political advertising revenue tends to increase, often significantly, and particularly during presidential election years.
Although we have systems and processes in place to protect against risks associated with cyber incidents in the future, depending on the nature of an incident, these protections may not be fully sufficient.
However, there can be no assurance that we will not experience future cybersecurity incidents that may be material. Although we have systems and processes in place to try to protect against risks associated with cybersecurity incidents in the future, depending on the nature of an cybersecurity incident, these protections may not be fully sufficient.
We have the ability to issue additional preferred stock, which could affect the rights of holders of our common stock and Class A common stock.
We have the ability to issue additional preferred stock, which could affect the rights of holders of our common stock and Class A common stock. Including the shares of preferred stock issued in the acquisition of Raycom Media, Inc.
An incident may not be detected until well after it occurs and the severity and potential impact may not be fully known for a substantial period of time after it has been discovered. Industry Risks We operate in a highly competitive environment. Competition occurs on multiple levels (for audiences, programming and advertisers) and is based on a variety of factors.
A cybersecurity incident may not be detected until well after it occurs and the severity and potential impact may not be fully known for a substantial period of time after it has been discovered. 19 Industry Risks We operate in a highly competitive environment.
Hilton H. Howell, Jr., our Executive Chairman and Chief Executive Officer, is the husband of Robin R. Howell, a member of our Board of Directors (collectively with other members of their family, the “Howell-Robinson Family”).
Certain stockholders or groups of stockholders have the ability to exert significant influence over us. Hilton H. Howell, Jr., our Executive Chairman and Chief Executive Officer, is the husband of Robin R. Howell, a member of our Board of Directors (collectively with other members of their family, the “Howell-Robinson Family”).
Such replacement programming may involve higher costs and may not be as attractive to our target audiences, thereby reducing our ability to generate advertising revenue, which could have a material adverse effect on our results of operations.
Such replacement programming may involve higher costs and may not be as attractive to our target audiences, thereby reducing our ability to generate advertising revenue, which could have a material adverse effect on our results of operations. On the other hand, replacement programming may provide additional advertising inventory than that provided to affiliated stations by their networks.
As a result of the seasonality and cyclicality of our revenue and broadcast operating income, and the historically significant increase in our revenue and broadcast operating income during even-numbered years, it has been, and is expected to remain, difficult to engage in period-over-period comparisons of our revenue and results of operations. 17 Continued uncertain financial and economic conditions may have an adverse impact on our business, results of operations or financial condition.
As a result of the seasonality and cyclicality of our revenue and broadcast operating income, and the historically significant increase in our revenue and broadcast operating income during even-numbered years, it has been, and is expected to remain, difficult to engage in period-over-period comparisons of our revenue and results of operations.
Financial and economic conditions continue to be uncertain over the longer term and the continuation or worsening of such conditions could reduce consumer confidence and have an adverse effect on our business, results of operations and/or financial condition. If consumer confidence were to decline, this decline could negatively affect our advertising customers’ businesses and their advertising budgets.
Continued uncertain financial and economic conditions may have an adverse impact on our business, results of operations or financial condition. Financial and economic conditions continue to be uncertain over the longer term and the continuation or worsening of such conditions could reduce consumer confidence and have an adverse effect on our business, results of operations and/or financial condition.
This is partially subject to general economic, financial, competitive, legislative, regulatory, and other factors that are beyond our control.
Our ability to service our significant financial obligations depends on our ability to generate significant cash flow. This is partially subject to general economic, financial, competitive, legislative, regulatory, and other factors that are beyond our control.
Our business depends in large part on the success of our network affiliations. Nearly all of our stations are directly or indirectly affiliated with at least one of the four major broadcast networks pursuant to a separate affiliation agreement.
Our business depends in large part on the success of our network affiliations. One or more stations in each of our operating markets are affiliated with at least one of the four major broadcast networks pursuant to individual affiliation agreements.
We may also replace programs that are performing poorly before we have recaptured any significant portion of the costs we incurred in obtaining such programming or fully expensed the costs for financial reporting purposes.
We may also replace programs that are performing poorly before we have recaptured any significant portion of the costs we incurred in obtaining such programming or fully expensed the costs for financial reporting purposes. Any of these factors could reduce our revenues, result in the incurrence of impairment charges, or otherwise cause our costs to escalate relative to revenues.
Furthermore, if in the future a network limited or removed our ability to retransmit network programming to MVPDs, we may be unable to satisfy certain obligations or criteria for fees under any existing or any future retransmission consent agreements. In either case, such an event could have a material adverse effect on our business and results of operations.
Furthermore, if in the future a network limited or removed our ability to retransmit network programming to MVPDs, we may be unable to satisfy certain obligations or criteria for fees under any existing or any future retransmission consent agreements.
Such use exposes us to potential cyber incidents resulting from deliberate attacks or unintentional events. These incidents could include, but are not limited to, unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, data corruption or operational disruption.
These cybersecurity incidents could include, but are not limited to, unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, data corruption or operational disruption.
The results of these incidents could include, but are not limited to, business interruption, disclosure of nonpublic information, decreased advertising revenues, misstated financial data, liability for stolen assets or information, increased cybersecurity protection costs, litigation, financial consequences and reputational damage adversely affecting customer or investor confidence, any or all of which could adversely affect our business.
If we are subject to a cybersecurity incident, it could result in business interruption, disclosure of nonpublic information, decreased advertising revenues, misstated financial data, liability for stolen assets or information, increased cybersecurity protection costs, litigation or investigations, financial consequences and reputational damage adversely affecting customer or investor confidence, among other things, any or all of which could materially adversely affect our business.
The Existing Indentures and our Senior Credit Facility require us to comply with certain financial ratios or other covenants; our failure to do so would result in a default thereunder, which would have a material adverse effect on us. 15 We are required to comply with certain financial or other covenants under the Existing Indentures and our Senior Credit Facility.
Any of these restrictions and limitations could make it more difficult for us to execute our business strategy. The Existing Indentures and our Senior Credit Facility require us to comply with certain financial ratios or other covenants; our failure to do so would result in a default thereunder, which would have a material adverse effect on us.
This seasonality is primarily attributable to advertisers’ increased expenditures in the spring and in anticipation of holiday season spending in the fourth quarter and an increase in television viewership during these periods. In addition, we typically experience fluctuations in our revenue and broadcast operating income between even-numbered and odd-numbered years.
Seasonal fluctuations typically result in higher revenue and broadcast operating income in the second and fourth quarters rather than in the first and third quarters of each year. This seasonality is primarily attributable to advertisers’ increased expenditures in the spring and in anticipation of holiday season spending in the fourth quarter and an increase in television viewership during these periods.
If we are unable to obtain sufficient funds from our subsidiaries to fund our obligations, our financial condition and ability to meet our obligations may be adversely affected. 23 Our defined benefit pension plan obligations are currently funded, however, if certain factors worsen, we may have to make significant cash payments, which could reduce the cash available for our business.
Our defined benefit pension plan obligations are currently funded, however, if certain factors worsen, we may have to make significant cash payments, which could reduce the cash available for our business. We have funded obligations under our defined benefit pension plans.
Finally, any cost savings that are realized may be offset by losses in revenues from the acquired business, any assets or operations disposed of in connection therewith or otherwise, or charges to earnings in connection with such acquisitions.
Finally, any cost savings that are realized may be offset by losses in revenues from the acquired business, any assets or operations disposed of in connection therewith or otherwise, or charges to earnings in connection with such acquisitions. 16 We must purchase television programming in advance of knowing whether a particular show will be popular enough for us to recoup our costs.
If the rates on which our borrowings are based were to increase from current levels, our debt service obligations on our variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash available to service our other obligations would decrease.
If the rates on which our borrowings are based were to increase from current levels, our debt service obligations on our variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash available to service our other obligations would decrease. 22 To partially mitigate this risk, we have entered into interest rate caps pursuant to an International Swaps and Derivatives Association ("ISDA") Master Agreement with two counterparties.
As a result, we must increase user engagement with our internet sites in order to increase our advertising revenue. Because digital advertising techniques are evolving, if our content, technology and advertisement serving techniques do not evolve to meet the changing needs of advertisers, our advertising revenue could also decline.
Because digital advertising techniques are evolving, if our content, technology and/or advertisement-serving techniques do not evolve to meet the changing needs of advertisers, our advertising revenue could decline. Changes in our business model, advertising inventory or initiatives could also cause a decrease in our digital advertising revenue. We do not have long-term agreements with most of our digital advertisers.
Each affiliation agreement provides the affiliated station with the right to broadcast all programs transmitted by the affiliated network during the term of the related agreement. Our affiliation agreements generally expire at various dates beginning in the third quarter of 2023 through December 2025.
Each affiliation agreement provides the affiliated station with the right to broadcast all programs transmitted by the affiliated network during the term of the related agreement. Our affiliation agreements generally expire at various dates between year-end 2024 and January 1, 2026 (with respect to Big Four networks).
If we are not able to successfully compete in all relevant aspects, our revenues will be materially adversely affected. Television stations compete for audiences, certain programming (including news) and advertisers. Signal coverage and carriage on MVPD systems also materially affect a television station’s competitive position. With respect to audiences, stations compete primarily based on broadcast program popularity.
Competition occurs on multiple levels (for audiences, programming and advertisers) and is based on a variety of factors. If we are not able to successfully compete in all relevant aspects, our revenues will be materially adversely affected. Television stations compete for audiences, certain programming (including news) and advertisers.
Further increases in the advertising share of cable networks and internet video streaming services could materially adversely affect the advertising revenue of our television stations.
Cable networks’ viewership and advertising share have been declining in recent years, while streaming viewership has accelerated and recently surpassed the combined viewership of broadcast and cable-network programming combined. Further increases in the advertising share of cable networks, internet video services, and internet streaming channels and services could materially adversely affect the advertising revenue of our television stations.
We generate a portion of our advertising revenue from the sale of advertisements on our digital sites. Our ability to maintain and increase this advertising revenue is largely dependent upon the number of users actively visiting our internet sites and using our digital apps.
Our ability to maintain and increase this advertising revenue is largely dependent upon the number of users actively visiting the internet sites, digital apps, and platforms and our arrangements that allow us to sell and service such inventory.
In addition, volatile economic conditions could have a negative impact on our industry or the industries of our customers who advertise on our stations, resulting in reduced advertising sales. Furthermore, it may be possible that actions taken by any governmental or regulatory body for the purpose of stabilizing the economy or financial markets will not achieve their intended effect.
Furthermore, it may be possible that actions taken by any governmental or regulatory body for the purpose of stabilizing the economy or financial markets will not achieve their intended effect.
These payments could be or become subject to dividend or other restrictions under applicable laws in the jurisdictions in which our subsidiaries operate. Payments by our subsidiaries are also contingent upon the subsidiaries’ earnings.
Because we are a holding company, we are dependent upon the payment of dividends, distributions, loans or advances to us by our subsidiaries to fund our obligations. These payments could be or become subject to dividend or other restrictions under applicable laws in the jurisdictions in which our subsidiaries operate.
Congress continues to consider various changes to the statutory scheme governing retransmission of broadcast programming. Some of the proposed bills would make it more difficult to negotiate retransmission consent agreements with large MVPDs and would weaken our leverage to seek market-based compensation for our programming.
Some of the proposed bills would make it more difficult to negotiate retransmission consent agreements with large MVPDs and would weaken our leverage to seek market-based compensation for our programming. We cannot predict whether any of these proposals will become law, and, if any do, we cannot determine the effect that any statutory changes would have on our business.
Changes in our business model, advertising inventory or initiatives could also cause a decrease in our internet advertising revenue. 21 We do not have long-term agreements with most of our digital advertisers. Any termination, change or decrease in our relationships with our largest digital advertising clients could have a material adverse effect on our revenue and profitability.
Any termination, change or decrease in our relationships with our largest digital advertising clients could have a material adverse effect on our revenue and profitability. If we do not maintain or increase our digital advertising revenue, our business, results of operations and financial condition could be materially adversely affected.
The breach of any of these covenants or restrictions could result in a default under the Existing Indentures or our Senior Credit Facility.
These covenants could have an adverse effect on us by limiting our ability to take advantage of financing, investment, acquisition or other corporate opportunities. The breach of any of these covenants or restrictions could result in a default under the Existing Indentures or our Senior Credit Facility.
We are also dependent upon our retransmission consent agreements with MVPDs, and we cannot predict the outcome of potential regulatory changes to the retransmission consent regime. We are also dependent, in significant part, on our retransmission consent agreements. Our current retransmission consent agreements expire at various times over the next several years.
In either case, such an event could have a material adverse effect on our business and results of operations. 17 We are also dependent upon our retransmission consent agreements with MVPDs, and we cannot predict the outcome of potential regulatory changes to the retransmission consent regime. We are also dependent, in significant part, on our retransmission consent agreements.
Our ability to comply with these requirements may be affected by events affecting our business, but beyond our control, including prevailing general economic, financial and industry conditions. These covenants could have an adverse effect on us by limiting our ability to take advantage of financing, investment, acquisition or other corporate opportunities.
We are required to comply with certain financial or other covenants under the Existing Indentures and our Senior Credit Facility. Our ability to comply with these requirements may be affected by events affecting our business, but beyond our control, including prevailing general economic, financial and industry conditions.
In December 2022, the FCC launched a new proceeding to consider whether further changes in the media ownership rules are necessary, which remains pending. 26 In November 2022, the FCC issued a forfeiture order finding that Gray’s acquisition of CBS programming from another broadcaster in the Anchorage market for Gray’s station KYES-TV was inconsistent with the local television ownership rule’s “top-four” prohibition given Gray’s ownership of KTUU-TV in the same market (a top-four ranked station) and imposed a fine of $518,283.
Second, the FCC modified its methodology for determining a station’s audience share for purposes of the top-four prohibition (and failing station waiver requests) to (i) consider audience share data over a 12-month period immediately preceding the date the application is filed, (ii) expanding the relevant daypart for audience share data significantly, and (iii) requiring the inclusion of audience share data for all free-to-consumer, non-simulcast multicast streams. 26 In November 2022, the FCC issued a Forfeiture Order finding that Gray’s acquisition of CBS programming from another broadcaster in the Anchorage market for Gray’s station KYES-TV was inconsistent with the local television ownership rule’s “top-four” prohibition given Gray’s ownership of KTUU-TV in the same market (a top-four ranked station) and imposed a fine of $518,283.
Cable-network programming, combined with increased access to cable, satellite TV, and internet video streaming services, has become a significant competitor for broadcast television programming viewers.
Cable-network programming, combined with increased access to cable, satellite TV, internet-delivered multichannel video programming distributors (“vMVPDs”), as well as internet video services (such as YouTube) and internet streaming channels and services including subscription video on demand (“SVOD”) and advertising video on demand (“AVOD”) have become significant competitors for television programming viewers.
We are a holding company with no material independent assets or operations, other than our investments in our subsidiaries. Because we are a holding company, we are dependent upon the payment of dividends, distributions, loans or advances to us by our subsidiaries to fund our obligations.
We are a holding company with no material independent assets or operations and we depend on our subsidiaries for cash. We are a holding company with no material independent assets or operations, other than our investments in our subsidiaries.
We cannot predict whether any of these proposals will become law, and, if any do, we cannot determine the effect that any statutory changes would have on our business. We may be unable to maintain or increase our digital advertising revenue, which could have a material adverse effect on our business and operating results.
We may be unable to maintain or increase our digital advertising revenue, which could have a material adverse effect on our business and operating results. We generate a meaningful portion of our advertising revenue from the sale of advertisements on our digital platforms and through the sale of inventory on digital platforms owned by third parties.
This annual report on Form 10-K also contains and incorporates by reference forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in forward-looking statements as a result of certain factors, including the occurrence of one or more of the following risk factors.
Our actual results could differ materially from those anticipated in forward-looking statements as a result of certain factors, including the occurrence of one or more of the following risk factors. 13 Risks Related to Our Business Operating Risks The success of our business is dependent upon advertising revenues, which are seasonal and cyclical, and also fluctuate as a result of a number of factors, some of which are beyond our control.
The success of our business is dependent upon advertising revenues, which are seasonal and cyclical, and also fluctuate as a result of a number of factors, some of which are beyond our control. Our main source of revenue is the sale of advertising time and space.
Our main source of revenue is the sale of advertising time and space.
Removed
Any of these restrictions and limitations could make it more difficult for us to execute our business strategy.
Added
This annual report on Form 10-K also contains and incorporates by reference forward-looking statements that involve risks and uncertainties.
Removed
In addition, certain of our variable debt uses the London Interbank Offered Rate ("LIBOR") as a benchmark for establishing the interest rate. The U.K. Financial Conduct Authority announced in 2017 that it intends to phase out LIBOR by the end of 2021.
Added
If consumer confidence were to decline, this decline could negatively affect our advertising customers’ businesses and their advertising budgets. In addition, volatile economic conditions could have a negative impact on our industry or the industries of our customers who advertise on our stations, resulting in reduced advertising sales.
Removed
In March 2021, the ICE Benchmark Administration Limited, the administrator of LIBOR, extended the transition dates of certain commonly used LIBOR tenors to June 30, 2023, after which LIBOR reference rates will cease to be provided. Despite this deferral, the LIBOR administrator has advised that no new contracts using U.S. Dollar LIBOR should be entered into after December 31, 2021.
Added
In addition, as we operate in a highly regulated industry, we could be subject to litigation, government investigations and enforcement actions on a variety of matters, the result of which could limit our acquisition strategy.
Removed
It is unknown whether any banks will continue to voluntarily submit rates for the calculation of LIBOR, or whether LIBOR will continue to be published by its administrator based on these submissions, or on any other basis, after June 30, 2023.
Added
Our ability to successfully negotiate future retransmission consent agreements may be hindered by potential legislative or regulatory changes to the framework under which these agreements are negotiated.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe our owned and leased properties are in good condition, and suitable for the conduct of our present business.
Biggest changeWe believe our owned and leased properties are in good condition and suitable for the conduct of our present business. 29
Item 2. PROPERTIES We lease our principal executive offices in a building located at 4370 Peachtree Road, NE, Atlanta, Georgia, 30319. We also own or lease various other offices and technical facilities that support our operations. See “Stations”, in Item 1. of this Form 10-K.
Item 2. PROPERTIES We lease our principal executive offices in a building located at 4370 Peachtree Road, NE, Atlanta, Georgia, 30319. We also own or lease various other offices and technical facilities that support our operations. See “Stations”, in Item 1. Business. of this Form 10-K.
Added
We also own Assembly Atlanta, which is a 135-acre real estate complex centered around the studio industry located in the City of Doraville, Georgia. The Assembly Atlanta development includes the 43-acre Assembly Studios complex. The Assembly Studios portion of our Assembly Atlanta project commenced operations in the third quarter of 2023.
Added
The studio operations are managed under an operating agreement with NBCUniversal Media, LLC (“NBCU”) through which NBCU will lease and operate the new state-of-the-art studio facilities as well as manage our retained studio facilities at Assembly Studios and the adjacent Third Rail Studios.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

6 edited+1 added−2 removed6 unchanged
Biggest changeLatek practiced law in Washington, DC representing television and radio broadcasters and financial institutions in FCC regulatory and transactional matters. He is a member and officer of the CBS Affiliate Board and a past member of the FOX Affiliate Board of Governors. Mr. Latek serves as a board member of Circle. Robert L.
Biggest changeLatek practiced law in Washington, DC representing television and radio broadcasters and financial institutions in FCC regulatory and transactional matters. He is a member and officer of the CBS Affiliate Board and a past member of the FOX Affiliate Board of Governors. Sandra Breland , age 61, has served as our Chief Operating Officer since May 2023.
LaPlatney held various executive positions at The Tube Media Corp., Westwood One, and Raycom Sports. In addition, Mr. LaPlatney serves as a board member of Circle and the National Association of Broadcasters. Previously, Mr. LaPlatney served as Chairman of the NBC Affiliate Board. James C.
LaPlatney held various executive positions at The Tube Media Corp., Westwood One, and Raycom Sports. In addition, Mr. LaPlatney serves as a board member of the National Association of Broadcasters. Previously, Mr. LaPlatney served as Chairman of the NBC Affiliate Board. James C.
Latek , age 52, has served as our Executive Vice President and Chief Legal and Development Officer since February 2016. Prior to that, he served as our Senior Vice President, Business Affairs since July 2013 and as our Vice President for Law and Development from March 2012 to June 2013. Prior to joining Gray, Mr.
Latek , age 53, has served as our Executive Vice President and Chief Legal and Development Officer since February 2016. Prior to that, he served as our Senior Vice President, Business Affairs since July 2013 and as our Vice President for Law and Development from March 2012 to June 2013. Prior to joining Gray, Mr.
Ryan , age 62, has served as our Chief Financial Officer since October 1998 and as Executive Vice President since February 2016. Prior to that, he was our Senior Vice President from September 2002 to January 2016 and our Vice President from October 1998 to August 2002. Kevin P.
Ryan , age 63, has served as our Chief Financial Officer since October 1998 and as Executive Vice President since February 2016. Prior to that, he was our Senior Vice President from September 2002 to January 2016 and our Vice President from October 1998 to August 2002. Kevin P.
Howell, who is a member of our Board of Directors. Previously, Mr. Howell served as a board member of the National Association of Broadcasters and the NBC Affiliate Board. 28 Donald P. LaPlatney , age 63, has served as our President and Co-Chief Executive Officer since January 2, 2019.
Howell, who is a member of our Board of Directors. Previously, Mr. Howell served as a board member of the National Association of Broadcasters and the NBC Affiliate Board. Donald P. LaPlatney , age 64, has served as our President and Co-Chief Executive Officer since January 2, 2019.
Item 4. MINE SAFETY DISCLOSURES Not applicable. INFORMATION ABOUT OUR EXECUTIVE OFFICERS Set forth below is certain information with respect to our executive officers as of February 17, 2023: Hilton H. Howell, Jr. , age 60, has served as our Executive Chairman and Chief Executive Officer since January 2, 2019. Prior to that, Mr.
Item 4. MINE SAFETY DISCLOSURES Not applicable. INFORMATION ABOUT OUR EXECUTIVE OFFICERS Set forth below is certain information with respect to our executive officers as of February 16, 2024: Hilton H. Howell, Jr. , age 61, has served as our Executive Chairman and Chief Executive Officer since January 2, 2019. Prior to that, Mr.
Removed
Smith , age 60, has served as our Chief Operating Officer since January 2019. Prior to that, he served as our Co-Chief Operating Officer from February 2016 to December 2018 and as our Senior Vice President from July 2013 to January 2016.
Added
In early 2019, Ms. Breland joined Gray as a Senior Vice President of Local Media upon Gray’s acquisition of Raycom Media, where she served as a Group Vice President. Ms. Breland has over 30 years of experience in local broadcasting. She is a past member and President of the FOX Affiliate Board of Governors. 30 PART II
Removed
He is a past director of the Wisconsin Broadcaster’s Board, and a member of the Madison Chamber of Commerce and the Rockford Chamber of Commerce. 29 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOur restated articles of incorporation require that our common stock and our Class A common stock receive dividends on a pari passu basis when declared. During 2022 we have paid quarterly cash dividends totaling $0.32 per share on both classes of our common stock.
Biggest changeDuring 2023, we have paid quarterly cash dividends totaling $0.32 per share on both classes of our common stock.
During 2022, we repurchased 2.6 million shares of our common stock at an average price of $18.87 per share, excluding commissions, for a total cost of $50 million, on the open market under the 2022 IRP, after which the 2022 IRP was completed according to its terms.
During 2022, we repurchased 2.6 million shares of our common stock at an average price of $18.87 per share, excluding commissions, for a total cost of $50 million, on the open market under the 2022 IRP, after which the 2022 IRP was completed according to its terms. 33
The graphs assume the investment of $100 in each of our common stock and the Class A common stock, respectively, the NYSE Composite Index and the TV Broadcasting Stations Index on January 1, 2018. Any dividends are assumed to have been reinvested as paid.
The graphs assume the investment of $100 in each of our common stock and the Class A common stock, respectively, the NYSE Composite Index and the TV Broadcasting Stations Index on January 1, 2019. Any dividends are assumed to have been reinvested as paid.
Shares of the Preferred Stock accrue dividends on the face value in (A) cash at a rate of 8% per annum or, (B) at the Company’s option, in-kind at a rate of 8.5% per annum, as declared by our Board of Directors. 30 Stock Performance Graph The following graphs compare the cumulative total return of our common stock and Class A common stock from January 1, 2018 to December 31, 2022, as compared to the stock market total return indexes for (i) The New York Stock Exchange Composite Index (the “NYSE Composite Index”) and (ii) The New York Stock Exchange Television Broadcasting Stations Index (the “TV Broadcasting Stations Index”).
Shares of the Preferred Stock accrue dividends on the face value in (A) cash at a rate of 8% per annum or, (B) at the Company’s option, in-kind at a rate of 8.5% per annum, as declared by our Board of Directors. 31 Stock Performance Graph The following graphs compare the cumulative total return of our common stock and Class A common stock from January 1, 2019 to December 31, 2023, as compared to the stock market total return indexes for (i) The New York Stock Exchange Composite Index (the “NYSE Composite Index”) and (ii) The New York Stock Exchange Television Broadcasting Stations Index (the “TV Broadcasting Stations Index”).
On November 4, 2020, our Board of Directors increased the repurchase authorization under the 2019 Repurchase Authorization by $150 million and extended the authorization to December 31, 2023. On June 3, 2022, under the 2019 Repurchase authorization, we entered into an issuer repurchase plan (the “2022 IRP”), under Rules 10b-18 and 10b5-1 of the Exchange Act.
On November 4, 2020, our Board of Directors increased the repurchase authorization under the 2019 Repurchase Authorization by $150 million and extended the authorization to December 31, 2023, which has now expired. On June 3, 2022, under the 2019 Repurchase authorization, we entered into an issuer repurchase plan (the “2022 IRP”), under Rules 10b-18 and 10b5-1 of the Exchange Act.
During 2022 we paid dividends on our outstanding 650,000 shares of Series A Perpetual Preferred Stock (the “Preferred Stock”).
During 2023, we paid dividends on our outstanding 650,000 shares of Series A Perpetual Preferred Stock (the “Preferred Stock”).
The 2019 Repurchase Authorization superseded all prior repurchase authorizations. The 2019 Repurchase Authorization prohibits the Company from purchasing shares directly from the Company’s officers, directors, or the Gray Television, Inc. Capital Accumulation Plan (the “401k Plan”).
The 2019 Repurchase Authorization superseded all prior repurchase authorizations. The 2019 Repurchase Authorization prohibits the Company from purchasing shares directly from the Company’s officers, directors, or the Gray Television, Inc. Capital Accumulation Plan (the “Gray 401(k) Plan” or the “401k Plan”).
For matters submitted to a shareholder vote, our restated articles of incorporation provide that each share of common stock is entitled to one vote, and each share of Class A common stock is entitled to 10 votes.
For matters submitted to a shareholder vote, our Articles provide that each share of common stock is entitled to one vote, and each share of Class A common stock is entitled to 10 votes. Our Articles require that our common stock and our Class A common stock receive dividends on a pari passu basis when declared.
Class A common stock $ 100 $ 93 $ 139 $ 117 $ 131 $ 79 NYSE Composite Index $ 100 $ 91 $ 114 $ 122 $ 148 $ 134 TV Broadcasting Stations Index $ 100 $ 83 $ 106 $ 93 $ 114 $ 95 Issuer Purchases of Common Stock and Class A Common Stock On November 5, 2019, our Board of Directors authorized the repurchase of up to $150 million of our outstanding common stock and/or our Class A common stock prior to December 31, 2022 (the “2019 Repurchase Authorization”).
Class A common stock $ 100 $ 150 $ 126 $ 141 $ 85 $ 70 NYSE Composite Index $ 100 $ 126 $ 134 $ 162 $ 147 $ 167 TV Broadcasting Stations Index $ 100 $ 128 $ 112 $ 138 $ 115 $ 113 Issuer Purchases of Common Stock and Class A Common Stock On November 5, 2019, our Board of Directors authorized the repurchase of up to $150 million of our outstanding common stock and/or our Class A common stock prior to December 31, 2022 (the “2019 Repurchase Authorization”).
As of 1/1/2018 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 Gray Television, Inc. common stock $ 100 $ 88 $ 128 $ 107 $ 122 $ 69 NYSE Composite Index $ 100 $ 91 $ 114 $ 122 $ 148 $ 134 TV Broadcasting Stations Index $ 100 $ 83 $ 106 $ 93 $ 114 $ 95 31 As of 1/1/2018 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 Gray Television, Inc.
As of 1/1/2019 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Gray Television, Inc. common stock $ 100 $ 145 $ 121 $ 139 $ 79 $ 65 NYSE Composite Index $ 100 $ 126 $ 134 $ 162 $ 147 $ 167 TV Broadcasting Stations Index $ 100 $ 128 $ 112 $ 138 $ 115 $ 113 32 As of 1/1/2019 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Gray Television, Inc.
As of February 17, 2023, we had 85,349,862 outstanding shares of common stock held by 29,947 stockholders and 7,477,241 outstanding shares of Class A common stock held by 400 stockholders.
As of February 16, 2024, we had 88,284,758 outstanding shares of common stock held by 19,894 stockholders and 8,919,401 outstanding shares of Class A common stock held by 447 stockholders.
Removed
As of December 31, 2022, approximately $124 million was available to repurchase shares of our common stock and/or Class A common stock under the 2019 Repurchase Authorization. Future share repurchases would be implemented through purchases made from time to time in either the open market or private transactions in accordance with applicable securities law requirements, including Rule 10b5-1.
Removed
The extent to which we repurchase any of our shares, the number of shares and the timing of any repurchases will depend on general market conditions, regulatory requirements, alternative investment opportunities and other considerations.
Removed
We are not required to repurchase a minimum number of shares, and the repurchase authorizations may be modified, suspended or terminated at any time without prior notice. 32

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

61 edited+35 added−30 removed35 unchanged
Biggest changeDuring 2022, excluding the net impact of the 2021 Acquisitions: ● Political advertising revenue increased by $252 million, resulting primarily from 2022 being the “on-year” of the two-year election cycle; ● Retransmission consent revenue increased by $31 million due to an increase in rates; ● Core advertising revenue decreased by only $11 million, in spite of the large displacement caused by the increase in political advertising revenue; ● Core advertising revenue from the broadcast of the 2022 Super Bowl on our NBC-affiliated stations was approximately $5 million, compared to $6 million that we earned from the broadcast of the 2021 Super Bowl on our CBS-affiliated stations and $8 million of revenue from the broadcast of the Olympic Games on or NBC-affiliated stations; and ● Production company revenue increased by $16 million in 2022 primarily due to the lessening effects of the COVID-19 global pandemic which had affected our customers in prior periods.
Biggest changeDuring 2023: ● Core advertising revenue increased by $18 million, despite core advertising revenue from the broadcast of the 2023 Super Bowl on our 27 FOX-affiliated stations being approximately $6 million, compared to $13 million from the broadcast of the 2022 Super Bowl and the Winter Olympics on our 56 NBC-affiliated stations; ● Retransmission consent revenue increased by $36 million due to an increase in rates, offset, in part, by a decrease in subscribers; ● Political advertising revenue decreased by $436 million, resulting primarily from 2023 being the “off-year” of the two-year election cycle; and ● Production company revenue decreased by $7 million in 2023 primarily due to the net effects on our sports programming business of the contract terminations related to Diamond, partially offset by revenue earned under the sports programming agreements with CW.
This transaction added 17 television stations in 12 local markets to our operations. ● On April 1, 2022, we acquired television station WKTB-TV which is an affiliate of the Telemundo Network for the Atlanta, Georgia market, as well as certain digital media assets, for a combined purchase price of $31 million, using cash on hand (the “Telemundo Atlanta Transaction”).
This transaction added 17 television stations in 12 local markets to our operations; and ● On April 1, 2022, we acquired television station WKTB-TV which is an affiliate of the Telemundo Network affiliate for the Atlanta, Georgia market, as well as certain digital media assets, for a combined purchase price of $31 million, using cash on hand (the “Telemundo Atlanta Transaction”).
Our operating revenues are derived primarily from broadcast and internet advertising, retransmission consent fees and, to a lesser extent, other sources such as production of television and event programming, television commercials, tower rentals and management fees. For the years ended December 31, 2022, 2021 and 2020, we generated revenue of $3.7 billion, $2.4 billion and $2.4 billion, respectively.
Our operating revenues are derived primarily from broadcast and internet advertising, retransmission consent fees and, to a lesser extent, other sources such as production of television and event programming, television commercials, tower rentals and management fees. For the years ended December 31, 2023, 2022 and 2021, we generated revenue of $3.3 billion, $3.7 billion and $2.4 billion, respectively.
Given our assumptions and the specific attributes of the stations we acquired from 2002 through December 31, 2022, we generally ascribe no incremental value to the incumbent network affiliation relationship in each market beyond the cost of negotiating a new agreement with another network and the value of any terms of the affiliation agreement that were more favorable or unfavorable than those generally prevailing in the market.
Given our assumptions and the specific attributes of the stations we acquired from 2002 through December 31, 2023, we generally ascribe no incremental value to the incumbent network affiliation relationship in each market beyond the cost of negotiating a new agreement with another network and the value of any terms of the affiliation agreement that were more favorable or unfavorable than those generally prevailing in the market.
A detailed discussion of 2020 items and year-over-year comparisons between 2021 and 2020 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021.
A detailed discussion of 2021 items and year-over-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7. of our Annual Report on Form 10-K for the year ended December 31, 2022.
For our annual broadcast licenses impairment test in 2022, we concluded that it was more likely than not that all of our broadcast licenses that were evaluated were not impaired based upon our qualitative assessments. We elected to perform a quantitative assessment for our remaining broadcast licenses and concluded that their fair values exceeded their carrying values.
For our annual broadcast licenses impairment test in 2023, we concluded that it was more likely than not that all of our broadcast licenses that were evaluated were not impaired based upon our qualitative assessments. We elected to perform a quantitative assessment for our remaining broadcast licenses and concluded that their fair values exceeded their carrying values.
For our annual goodwill impairment test in 2022, we concluded that it was more likely than not that goodwill was not impaired based upon our qualitative assessments for one of our reporting units. We elected to perform a quantitative assessment for the remainder of our reporting units and concluded that their fair values exceeded their carrying values.
For our annual goodwill impairment test in 2023, we concluded that it was more likely than not that goodwill was not impaired based upon our qualitative assessments for one of our reporting units. We elected to perform a quantitative assessment for the remainder of our reporting units and concluded that their fair values exceeded their carrying values.
We believe that the value of a television station is derived primarily from the attributes of its broadcast license rather than its network affiliation agreement. These attributes have a significant impact on the audience for network programming in a local television market compared to the national viewing patterns of the same network programming.
Valuation of Network Affiliation Agreements. We believe that the value of a television station is derived primarily from the attributes of its broadcast license rather than its network affiliation agreement. These attributes have a significant impact on the audience for network programming in a local television market compared to the national viewing patterns of the same network programming.
Any resulting impairment loss could have a material adverse impact on our consolidated balance sheets, consolidated statements of operations and consolidated statements of cash flows. As of December 31, 2022 and 2021, the recorded value of our broadcast licenses was $5.3 billion at each date.
Any resulting impairment loss could have a material adverse impact on our consolidated balance sheets, consolidated statements of operations and consolidated statements of cash flows. As of December 31, 2023 and 2022, the recorded value of our broadcast licenses was $5.3 billion at each date.
We expect that approximately $226 million of these state net operating loss carryforwards will not be utilized due to section 382 limitations and those that will expire prior to utilization. Recent Accounting Pronouncements. See Note 1 “Description of Business and Summary of Significant Accounting Policies” of our audited consolidated financial statements included elsewhere herein for more information. 44
We expect that approximately $201 million of these state net operating loss carryforwards will not be utilized due to section 382 limitations and those that will expire prior to utilization. Recent Accounting Pronouncements. See Note 1 “Description of Business and Summary of Significant Accounting Policies” of our audited consolidated financial statements included elsewhere herein for more information.
During each of the years ended December 31, 2022 and 2021, we contributed $4 million to the Gray Pension Plan, and we anticipate making a contribution of $4 million to the Gray Pension Plan in 2023.
During each of the years ended December 31, 2023 and 2022, we contributed $4 million to the Gray Pension Plan, and we anticipate making a contribution of $4 million to the Gray Pension Plan in 2024.
Due to certain characteristics of a small number of the stations acquired in 2022 and 2021, we ascribed approximately $14 million and $136 million of the value of those transactions to network affiliations, respectively. Some broadcast companies may use methods to value acquired network affiliations different than those that we use.
Due to certain characteristics of a small number of the stations acquired in 2022, we ascribed approximately $14 million million of the value of those transactions to network affiliations, respectively. Some broadcast companies may use methods to value acquired network affiliations different than those that we use.
In addition, the Company, at its discretion, may make an additional profit-sharing contribution, based on annual Company performance, to those employees who meet certain criteria. For the years ended December 31, 2022 and 2021, our matching contributions to our Capital Accumulation Plan were approximately $17 million and $15 million, respectively.
In addition, the Company, at its discretion, may make an additional profit-sharing contribution, based on annual Company performance, to those employees who meet certain criteria. For the years ended December 31, 2023 and 2022, our matching contributions to our Capital Accumulation Plan were approximately $26 million and $17 million, respectively.
In the performance of our annual broadcast license and reporting unit impairment assessments, we have the option of performing a qualitative assessment to determine if it is more likely than not that the respective asset has been impaired. In 2022, we performed a qualitative assessment for 57 of our broadcast licenses and three of our reporting units.
In the performance of our annual broadcast license and reporting unit impairment assessments, we have the option of performing a qualitative assessment to determine if it is more likely than not that the respective asset has been impaired. In 2023, we performed a qualitative assessment for 59 of our broadcast licenses and three of our reporting units.
This portfolio includes 79 markets with the top-rated television station and 101 markets with the first and/or second highest rated television station. We also own video program companies Raycom Sports, Tupelo Media Group (formerly Tupelo Honey), PowerNation Studios, as well as the studio production facilities Assembly Atlanta and Third Rail Studios.
This portfolio includes 79 markets with the top-rated television station and 102 markets with the first and/or second highest rated television station. We also own video program companies Raycom Sports, Tupelo Media Group, PowerNation Studios, as well as the studio production facilities Assembly Atlanta and Third Rail Studios.
This section of our Annual Report on Form 10-K discusses 2022 and 2021 items and year-over-year comparisons between 2022 and 2021.
This section of our Annual Report on Form 10-K discusses 2023 and 2022 items and year-over-year comparisons between 2023 and 2022.
During the years ended December 31, 2022, 2021 and 2020 approximately 28%, 29% and 28%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to the services sector.
During the years ended December 31, 2023, 2022 and 2021 approximately 27%, 28% and 29%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to the services sector.
For the years ended December 31, 2022 and 2021, we accrued contributions of approximately $9 million and $7 million respectively, as discretionary profit-sharing contributions, each in the form of our common stock. In connection with the Meredith Transaction, on December 1, 2021, we assumed a defined benefit pension plan covering certain legacy Meredith bargaining class employees.
For the years ended December 31, 2023 and 2022, we accrued contributions of approximately $10 million and $9 million respectively, as discretionary profit-sharing contributions, each in the form of our common stock. In connection with the Meredith Transaction, in 2021, we assumed a defined benefit pension plan covering certain legacy Meredith bargaining class employees.
The Securitization Facility permits the SPV to draw up to a total of $300 million, subject to the outstanding amount of the receivables pool and other factors. The Securitization Facility is subject to interest charges, at the one-month Secured Overnight Financing Rate (“SOFR”) plus 100 basis points on the amount of the outstanding facility.
The Securitization Facility permits the SPV to draw up to a total of $300 million, subject to the outstanding amount of the receivables pool and other factors. The Securitization Facility is subject to interest charges, at the one-month SOFR rate plus 100 basis points on the amount of the outstanding facility.
During the years ended December 31, 2022, 2021 and 2020 approximately 17%, 17% and 21%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to automotive customers.
During the years ended December 31, 2023, 2022 and 2021 approximately 20%, 17% and 17%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to automotive customers.
Income Taxes. As of December 31, 2022, we have an aggregate of approximately $344 million of various state operating loss carryforwards, of which we expect that approximately one-third will be utilized.
Income Taxes. As of December 31, 2023, we have an aggregate of approximately $299 million of various state operating loss carryforwards, of which we expect that approximately one-third will be utilized.
We do not expect that these assumptions are likely to change materially in the future. Annual Impairment Testing of Broadcast Licenses and Goodwill. We evaluate broadcast licenses and goodwill for impairment on an annual basis, or more often when certain triggering events occur.
We do not expect that these assumptions are likely to change materially in the future. Annual Impairment Testing of Broadcast Licenses and Goodwill. We evaluate broadcast licenses and goodwill for impairment on an annual basis, or more often when certain triggering events occur. Goodwill is evaluated at the reporting unit level.
The estimated asset returns for this plan, calculated on a mean market value mid-year contributions and benefit payments, were a loss of 12.0% for the year ended December 31, 2022, and a gain of 11.4% for the year ended December 31, 2021. Other significant assumptions relate to inflation, retirement and mortality rates.
The estimated asset returns for this plan, calculated on a mean market value assuming mid-year contributions and benefit payments, were a gain of 13.7% for the year ended December 31, 2023, and a loss of 12.0% for the year ended December 31, 2022. Other significant assumptions relate to inflation, retirement and mortality rates.
Our network affiliation agreements expire at various dates primarily through December 2025. ● Service and other agreements for various non-cancelable contractual agreements for maintenance services and other professional services. 40 ● Non-cancelable contractual obligations for various materials, services and construction costs related to development of our studio production facilities.
Our network affiliation agreements expire at various dates primarily through January 1, 2026. ● Service and other agreements for various non-cancelable contractual agreements for maintenance services and other professional services. ● Non-cancelable contractual obligations for various materials, services and construction costs related to development of our studio production facilities.
Our effective income tax rates differed from the statutory rate due to the following items: Year Ended December 31, 2022 2021 Statutory federal income tax rate 21 % 21 % Current year permanent items 1 % 20 % State and local taxes, net of federal taxes 4 % 5 % Effective income tax expense rate 26 % 46 % We file a consolidated federal income tax return and such state or local tax returns as are required based on our current forecasts.
Our effective income tax rates differed from the statutory rate due to the following items: Year Ended December 31, 2023 2022 Statutory federal income tax rate 21 % 21 % Current year permanent items (13 )% 1 % Restricted stock differences (7 )% 0 % State and local taxes, net of federal taxes 6 % 4 % Effective income tax expense rate 7 % 26 % We file a consolidated federal income tax return and such state or local tax returns as are required based on our current forecasts.
The transaction represented an initial step in the broader development of Assembly Atlanta; ● On September 23, 2021, to facilitate regulatory approvals for the acquisition of the Meredith Local Media Group (“Meredith”), we completed the divestiture of WJRT in the Flint-Saginaw, Michigan market, to Allen for an adjusted purchase price of $72 million in cash, including working capital (the “Flint Divestiture”); ● On November 9, 2021, to fund a portion of the purchase price for Meredith we issued $1.3 billion of our 2031 Notes; ● On December 1, 2021, to fund a portion of the purchase price for Meredith we amended our Senior Credit facility and borrowed $1.5 billion under the 2021 Term Loan; and ● On December 1, 2021, we completed the acquisition of Meredith for $2.8 billion.
Net of divestitures the purchase price was $553 million; ● On September 13, 2021, we completed the acquisition of Third Rail Studios for $27 million; 34 ● On September 23, 2021, to facilitate regulatory approvals for the acquisition of the Meredith Local Media Group (“Meredith”), we completed the divestiture of WJRT in the Flint-Saginaw, Michigan market, to Allen for an adjusted purchase price of $72 million in cash, including working capital (the “Flint Divestiture”); ● On November 9, 2021, to fund a portion of the purchase price for Meredith we issued $1.3 billion of our 2031 Notes; ● On December 1, 2021, to fund a portion of the purchase price for Meredith we amended our Senior Credit facility and borrowed $1.5 billion under the 2021 Term Loan; ● On December 1, 2021, we completed the acquisition of Meredith for $2.8 billion.
Risk Factors” included elsewhere herein. 35 Revenue Set forth below are the principal types of revenue, less agency commissions, and the percentage contribution of each to our total revenue (dollars in millions): Year Ended December 31, 2022 2021 2020 Amount % Amount % Amount % Revenue: Core advertising $ 1,496 41 % $ 1,190 50 % $ 969 40 % Political 515 14 % 44 2 % 430 18 % Retransmission consent 1,496 41 % 1,049 43 % 867 36 % Production companies 93 3 % 73 3 % 61 3 % Other 76 1 % 57 2 % 54 3 % Total $ 3,676 100 % $ 2,413 100 % $ 2,381 100 % Results of Operations Year Ended December 31, 2022 ( “ 2022 ” ) Compared to Year Ended December 31, 2021 ( “ 2021 ” ) Revenue.
Risk Factors” included elsewhere herein. 36 Revenue Set forth below are the principal types of revenue, less agency commissions, and the percentage contribution of each to our total revenue (dollars in millions): Year Ended December 31, 2023 2022 2021 Amount % Amount % Amount % Revenue: Core advertising $ 1,514 46 % $ 1,496 41 % $ 1,190 50 % Political 79 2 % 515 14 % 44 2 % Retransmission consent 1,532 47 % 1,496 41 % 1,049 43 % Production companies 86 3 % 93 3 % 73 3 % Other 70 2 % 76 1 % 57 2 % Total $ 3,281 100 % $ 3,676 100 % $ 2,413 100 % Results of Operations Year Ended December 31, 2023 ( “ 2023 ” ) Compared to Year Ended December 31, 2022 ( “ 2022 ” ) Revenue.
Goodwill is evaluated at the reporting unit level. 41 Our broadcasting operating segment is comprised of a single reporting unit. Each of the distinct businesses within our production companies operating segment represent a reporting unit. Therefore, we evaluate our goodwill for impairment for five reporting units.
Our broadcasting operating segment is comprised of a single reporting unit. Each of the distinct businesses within our production companies operating segment represent a reporting unit. Therefore, as of December 31, 2023, we evaluated our goodwill for impairment for five reporting units.
For more information about these off-balance sheet contractual obligations and commitments please refer to Note 12 “Commitments and Contingencies” of our audited consolidated financial statements included elsewhere herein. Subsequent Events Marquee Transaction. On February 15, 2023, we announced that we have reached agreements with Marquee Broadcasting, Inc.
For more information about these off-balance sheet contractual obligations and commitments please refer to Note 12 “Commitments and Contingencies” of our audited consolidated financial statements included elsewhere herein. 42 Subsequent Events Exchange of television stations . On February 1, 2024, we announced that we have entered into agreements with Marquee Broadcasting, Inc. (“Marquee”) to exchange television stations.
As part of this qualitative assessment, we evaluate the relative impact of factors that are specific to the reporting units as well as industry, regulatory, and macroeconomic factors that could affect the significant inputs used to determine the fair value of the assets.
In 2022, we performed a qualitative assessment for 57 of our broadcast licenses and one of our reporting units. 43 As part of this qualitative assessment, we evaluate the relative impact of factors that are specific to the reporting units as well as industry, regulatory and macroeconomic factors that could affect the significant inputs used to determine the fair value of the assets.
We acquired this property, in part, for the development of studio production facilities, currently in-progress. We refer to this development as “Assembly Atlanta”; 33 ● On August 2, 2021, we completed the acquisition of all the equity interests of Quincy Media, Inc. (“Quincy”). Net of divestitures to facilitate regulatory approvals, this transaction added 10 television stations in eight local markets.
We refer to the total project as “Assembly Atlanta”; ● On August 2, 2021, we completed the acquisition of all the equity interests of Quincy Media, Inc. (“Quincy”). Net of divestitures to facilitate regulatory approvals, this transaction added 10 television stations in eight local markets.
First run programs are programs such as Wheel of Fortune and off network reruns are programs such as The Big Bang Theory. First run programs have not been produced at the time the contract to air such programming is signed, and off network reruns have already been produced.
First run programs have not been produced at the time the contract to air such programming is signed, and off network reruns have already been produced.
There is diversity of practice within the industry, and some broadcast companies have considered such network affiliation intangible assets to have a life ranging from 15 to 40 years depending on the specific assumptions utilized by those broadcast companies. 43 The following table reflects the hypothetical impact of the reassignment of value from broadcast licenses to network affiliations for our historical acquisitions (the first acquisition being in 1994) and the resulting increase in amortization expense assuming a hypothetical 15-year amortization period as of our most recent impairment testing date of December 31, 2022 (in millions, except per share data): Percentage of Total Value Reassigned to Network As Affiliation Agreements Reported 50% 25% Balance Sheet (As of December 31, 2022): Broadcast licenses $ 5,331 $ 2,665 $ 3,998 Other intangible assets, net (including network affiliation agreements) 636 2,392 1,514 Statement of Operations (For the year ended December 31, 2022): Amortization of intangible assets 207 357 282 Operating income 990 840 915 Net income attributable to common stockholders 403 291 347 Per share - basic $ 4.38 $ 3.16 $ 3.77 Per share - diluted $ 4.33 $ 3.13 $ 3.73 For future acquisitions, if any, the valuation of the network affiliations may differ from the values of previous acquisitions due to the different characteristics of each station and the market in which it operates.
There is diversity of practice within the industry, and some broadcast companies have considered such network affiliation intangible assets to have a life ranging from 15 to 40 years depending on the specific assumptions utilized by those broadcast companies. 45 The following table reflects the hypothetical impact of the reassignment of value from broadcast licenses to network affiliations for our historical acquisitions (the first acquisition being in 1994) and the resulting increase in amortization expense assuming a hypothetical 15-year amortization period as of our most recent impairment testing date of December 31, 2023 (in millions, except per share data): Percentage of Total Value Reassigned to Network As Affiliation Agreements Reported 50% 25% Balance Sheet (As of December 31, 2023): Broadcast licenses $ 5,320 $ 2,660 $ 3,990 Other intangible assets, net (including network affiliation agreements) 415 2,017 1,216 Statement of Operations (For the year ended December 31, 2023): Amortization of intangible assets 194 344 269 Operating income 383 233 308 Net loss attributable to common stockholders (128 ) (240 ) (184 ) Per share - basic $ (1.39 ) $ (2.61 ) $ (2.00 ) Per share - diluted $ (1.39 ) $ (2.61 ) $ (2.00 ) For future acquisitions, if any, the valuation of the network affiliations may differ from the values of previous acquisitions due to the different characteristics of each station and the market in which it operates.
The discount rate used for determining benefit obligations as of December 31, 2021 was 2.73%. Our assumptions regarding expected return on plan assets reflects asset allocations, the investment strategy and the views of investment managers, as well as historical experience. In 2022, we use an assumed rate of return of 6.25% for our assets invested in the Gray Pension Plan.
Our assumptions regarding expected return on plan assets reflects asset allocations, the investment strategy and the views of investment managers, as well as historical experience. In 2023, we used an assumed rate of return of 6.25% for our assets invested in the Gray Pension Plan.
The following tables present data that we believe is helpful in evaluating our liquidity and capital resources (dollars in millions): Year Ended December 31, 2022 2021 2020 Net cash provided by operating activities $ 829 $ 300 $ 652 Net cash used in investing activities (503 ) (3,534 ) (211 ) Net cash provided by financing activities (454 ) 2,650 120 Net (decrease) increase in cash $ (128 ) $ (584 ) $ 561 December 31, 2022 2021 Cash $ 61 $ 189 Long-term debt, including current portion, less deferred financing costs $ 6,455 $ 6,755 Series A Perpetual Preferred Stock $ 650 $ 650 Borrowing availability under senior credit facility $ 496 $ 497 Dividend on common stock and Class A common stock.
The following tables present data that we believe is helpful in evaluating our liquidity and capital resources (dollars in millions): Year Ended December 31, 2023 2022 2021 Net cash provided by operating activities $ 648 $ 829 $ 300 Net cash used in investing activities (291 ) (503 ) (3,534 ) Net cash (used in) provided by financing activities (397 ) (454 ) 2,650 Net decrease in cash $ (40 ) $ (128 ) $ (584 ) December 31, 2023 2022 Cash $ 21 $ 61 Long-term debt, including current portion, less deferred financing costs $ 6,160 $ 6,455 Series A Perpetual Preferred Stock $ 650 $ 650 Borrowing availability under senior credit facility $ 494 $ 496 Net Cash Provided By (Used In) Operating, Investing and Financing Activities – 2023 Compared to 2022 Net cash provided by operating activities decreased $181 million to $648 million in 2023 compared to net cash provided by operating activities of $829 million in 2022.
The following table summarizes the “Transaction Related Expenses” incurred in connection with the Acquisitions during the year ended December 31, 2022, 2021 and 2020, by type and by financial statement line item (in millions): Year Ended December 31, 2022 2021 2020 Transaction Related Expenses by type: Legal, consulting and other professional fees $ 6 $ 80 $ 1 Incentive compensation and other severance costs 2 - - Termination of sales representation and other agreements - 1 - Total Transaction Related Expenses $ 8 $ 81 $ 1 Transaction Related Expenses by financial statement line item: Operating expenses before depreciation, amortization and loss (gain) on disposal of assets, net: Broadcasting $ 6 $ 3 $ - Corporate and administrative 2 71 1 Miscellaneous expense - 7 - Total Transaction Related Expenses $ 8 $ 81 $ 1 Due to the significant effect that the 2021 Acquisitions have had on our results of operations, and in order to provide more meaningful period over period comparisons, we present herein certain financial information excluding the impact of the 2021 Acquisitions.
The following table summarizes the “Transaction Related Expenses” incurred in connection with the Acquisitions during the year ended December 31, 2023, 2022 and 2021, by type and by financial statement line item (in millions): Year Ended December 31, 2023 2022 2021 Transaction Related Expenses by type: Legal, consulting and other professional fees $ 1 $ 6 $ 80 Incentive compensation and other severance costs - 2 - Termination of sales representation and other agreements - - 1 Total Transaction Related Expenses $ 1 $ 8 $ 81 Transaction Related Expenses by financial statement line item: Operating expenses before depreciation, amortization and loss (gain) on disposal of assets, net: Broadcasting $ 1 $ 6 $ 3 Corporate and administrative - 2 71 Miscellaneous expense - - 7 Total Transaction Related Expenses $ 1 $ 8 $ 81 Revenues, Operations, Cyclicality and Seasonality.
Broadcast advertising is sold in time increments and is priced primarily on the basis of a program’s popularity among the specific audience an advertiser desires to reach.
Broadcast advertising is sold for placement generally preceding or following a television station’s network programming and within local and syndicated programming. Broadcast advertising is sold in time increments and is priced primarily on the basis of a program’s popularity among the specific audience an advertiser desires to reach.
On February 23, 2023, we, certain of our subsidiaries and a wholly-owned special purpose subsidiary (the “SPV”), entered into a three-year $300 million revolving accounts receivable securitization facility (the “Securitization Facility”) with Wells Fargo Bank, N.A., as administrative agent, for the purpose of providing additional liquidity in order to repay indebtedness under the Senior Credit Facility.
The following are our material expected off balance sheet contractual obligations and commitments as of December 31, 2023: ● Cash interest on long-term debt obligations, including interest expense on long-term debt and required future principal repayments under those obligations. ● Preferred Stock dividends. ● On February 23, 2023, we, certain of our subsidiaries and a wholly-owned special purpose subsidiary (the “SPV”), entered into a three-year $300 million revolving accounts receivable securitization facility (the “Securitization Facility”) with Wells Fargo Bank, N.A., as administrative agent, for the purpose of providing additional liquidity in order to repay indebtedness under the Senior Credit Facility.
During 2022, 2021 and 2020, we completed several transactions that have, collectively, had a significant impact on our financial condition, results of operations and cash flows. We refer to these transactions collectively as the “Acquisitions”. Please see Note 3. “Acquisitions and Divestitures” in our consolidated financial statements contained elsewhere herein for further discussion of the Acquisitions.
Impact of Recent Acquisitions and Divestitures . During 2022 and 2021 we completed several transactions that have, collectively, had a significant impact on our financial condition, results of operations and cash flows. We refer to these transactions collectively as the “Acquisitions”.
We have historically used these approaches in determining the value of our reporting units. We also consider a market multiple approach to corroborate our discounted cash flow analysis.
We have historically used these approaches in determining the value of our reporting units. We also consider a market multiple approach to corroborate our discounted cash flow analysis. We believe that this methodology is consistent with the approach that a strategic market participant would utilize if they were to value our television stations.
These advertisements may be sold as banner advertisements, video advertisements and other types of advertisements or sponsorships. Our broadcast and internet advertising revenues are affected by several factors that we consider to be seasonal in nature. These factors include: ● Spending by political candidates, political parties and special interest groups increases during the even-numbered “on-year” of the two-year election cycle.
These advertisements may be sold as banner advertisements, video advertisements and other types of advertisements or sponsorships. 35 Our broadcast and internet advertising revenues are affected by several factors that we consider to be seasonal in nature.
The impact of the Acquisitions is described in more detail in the following discussion of our operating results. The most significant of the transactions were: ● On April 7, 2021, we acquired land in the Atlanta suburb of Doraville, Georgia for an initial investment of approximately $80 million of cash.
The most significant of the transactions were: ● On April 7, 2021, we acquired land in the Atlanta suburb of Doraville, Georgia for an initial investment of approximately $80 million of cash. We acquired this property, in part, for the development of studio production facilities.
We believe that this methodology is consistent with the approach that a strategic market participant would utilize if they were to value our television stations. 42 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 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.
This political spending typically is heaviest during the fourth quarter of such years; ● Broadcast advertising revenue is generally highest in the second and fourth quarters each year.
These factors include: ● Spending by political candidates, political parties and special interest groups increases during the even-numbered “on-year” of the two-year election cycle. This political spending typically is heaviest during the fourth quarter of such years; ● Broadcast advertising revenue is generally highest in the second and fourth quarters each year.
The increase in cash provided by operating activities was due primarily to the net impact of several factors including: an increase in net income of $365 million; an increase of $117 million in non-cash expenses; and a increase of $47 million due to changes in working capital balances.
The decrease in cash provided by operating activities was primarily due to a decrease in net income of $531 million offset, in part, by an increase in cash provided from changes in working capital of $328 million and an increase in non-cash charges of $22 million.
A discount rate is selected annually to measure the present value of the benefit obligations. In determining the selection of a discount rate, we estimated the timing and amounts of expected future benefit payments and applied a yield curve developed to reflect yields available on high-quality bonds.
In determining the selection of a discount rate, we estimated the timing and amounts of expected future benefit payments and applied a yield curve developed to reflect yields available on high-quality bonds. The yield curve is based on an externally published index specifically designed to meet the criteria of United States Generally Accepted Accounting Principles (“U.S. GAAP”).
Benefits under the Gray Pension Plan are frozen and can no longer increase, and no new participants can be added to the plan. Our funding policy for the Gray Pension Plan is consistent with the funding requirements of existing federal laws and regulations under the Employee Retirement Income Security Act of 1974.
Our funding policy for the Gray Pension Plan is consistent with the funding requirements of existing federal laws and regulations under the Employee Retirement Income Security Act of 1974. A discount rate is selected annually to measure the present value of the benefit obligations.
Corporate and administrative expenses (before depreciation, amortization and gain or loss on disposal of assets) decreased by $55 million, or 35%, to $104 million in 2022 compared to 2021. Primarily as a result of decreased transaction related professional services costs in 2022. We recorded corporate non-cash stock-based amortization expense of $18 million and $12 million in 2022 and 2021, respectively.
Corporate and administrative expenses (before depreciation, amortization, impairment and gain or loss on disposal of assets) increased by $8 million, or 8%, to $112 million in 2023 compared to 2022, primarily as a result of; increases in compensation expense of $4 million, increases in professional services costs of $6 million and decreases in transaction related legal and other professional services of $2 million in 2023.
Broadcasting operating expenses . Broadcasting operating expenses (before depreciation, amortization and gain on disposal of assets) increased $617 million, or 40%, to $2.2 billion for 2022, compared to 2021 , primarily as a result of the television stations acquired in our 2021 Acquisitions.
Broadcasting Expenses . Broadcasting expenses (before depreciation, amortization, impairment and gain on disposal of assets) increased $103 million, or 5%, to $2.3 billion for 2023, compared to 2022 .
We recorded broadcast non-cash stock-based amortization expense of $4 million and $2 million in 2022 and 2021, respectively. Production Company Operating Expenses . Production company operating expenses (before depreciation, amortization and gain on disposal of assets) increased by approximately $21 million in 2022 to $83 million, compared to $62 million 2021.
Production Company Expenses . Production company expenses (before depreciation, amortization, impairment and gain or loss on disposal of assets) increased by approximately $32 million in 2023 to $115 million, compared to $83 million in 2022.
We estimate that these income tax payments, before deducting refunds, will be within a range of $90 million to $110 million in 2023. 37 Liquidity and Capital Resources General.
We estimate that these income tax payments, before deducting refunds, will be within a range of $190 million to $210 million in 2024. Liquidity and Capital Resources Our primary sources of liquidity are cash on hand, cash flows from operations and borrowing capacity under Revolving Credit Facility.
The yield curve is based on an externally published index specifically designed to meet the criteria of United States Generally Accepted Accounting Principles (“U.S. GAAP”). The discount rate selected for determining benefit obligations as of December 31, 2022, was 4.99%, which reflects the results of this yield curve analysis.
The discount rate selected for determining benefit obligations as of December 31, 2023, was 4.79%, which reflects the results of this yield curve analysis. The discount rate used for determining benefit obligations as of December 31, 2022 was 4.99%.
As of December 31, 2022 and 2021, the Meredith Plan had combined plan assets of $14 million and $15 million and combined projected benefit obligations of $11 million and $17 million, respectively.
As of December 31, 2023 and 2022, the Meredith Plan had combined plan assets of $16 million and $14 million, respectively, and combined projected benefit obligations of $11 million, in each year. A net asset of $5 million and $3 million for this plan are recorded in our financial statements as of December 31, 2023 and 2022, respectively.
As of December 31, 2022 and 2021, the recorded value of our goodwill was $2.7 billion and $2.6 billion, respectively. See Note 13 “Goodwill and Intangible Assets” of our audited consolidated financial statements included elsewhere herein, for the results of our annual impairment tests for the years ended December 31, 2022, 2021 and 2020. Valuation of Network Affiliation Agreements.
See Note 13 “Goodwill and Intangible Assets” of our audited consolidated financial statements included elsewhere herein, for the results of our annual impairment tests for the years ended December 31, 2023, 2022 and 2021. 44 During 2023, as a result of the bankruptcy of Diamond Sports Group, LLC (“Diamond”), our production companies segment recorded a non-cash charge of $43 million, for impairment of goodwill and other intangible assets.
Retirement Plan (the “Gray Pension Plan”) ● The Gray Television, Inc. Capital Accumulation Plan (the “Gray 401(k) Plan”) ● Gray Television, Inc. Retirement Plan for Certain Bargaining Class Employees (the “Meredith Plan”) The Gray Pension Plan is a defined benefit pension plan covering certain of our legacy employees.
Retirement Plan for Certain Bargaining Class Employees (the “Meredith Plan”) 40 The Gray Pension Plan is a defined benefit pension plan covering certain of our legacy employees. Benefits under the Gray Pension Plan are frozen and can no longer increase, and no new participants can be added to the plan.
We can give no assurances of the actual proceeds to be received in the future from property sales and incentive payments, nor the timing of any such proceeds. Off-Balance Sheet Arrangements Operating Commitments. We have various commitments for syndicated television programs. We have two types of syndicated television program contracts: first run programs and off network reruns.
We currently expect capital expenditures of approximately $21 million, net of $31 million of certain incentive payments, related to the Assembly Atlanta project. We can give no assurances of the actual proceeds to be received in the future from incentive payments, nor the timing of any such proceeds. 41 Off-Balance Sheet Arrangements Operating Commitments.
The following are our material expected off balance sheet contractual obligations and commitments as of December 31, 2022: ● Cash interest on long-term debt obligations including interest expense on long-term debt and required future principal repayments under those obligations. ● Preferred Stock dividends ● Programming obligations not currently accrued that represent obligations for syndicated television programming whose license period has not yet begun, or the program is not yet available. ● Network affiliation agreements representing the fixed obligations under our current agreements with broadcast networks.
The SPV is also required to pay an upfront fee and a commitment fee in connection with the Securitization Facility. ● Programming obligations not currently accrued that represent obligations for syndicated television programming whose license period has not yet begun, or the program is not yet available. ● Network affiliation agreements representing the fixed obligations under our current agreements with broadcast networks.
Depreciation. Depreciation of property and equipment totaled $129 million and $104 million for 2022 and 2021, respectively. Depreciation expense increased due to the 2021 Acquisitions and to purchases of property and equipment at our existing stations. Amortization of intangible assets. Amortization of intangible assets totaled $207 million and $117 million for 2022 and 2021, respectively.
We recorded corporate non-cash stock-based amortization expense of $15 million and $18 million in 2023 and 2022, respectively. Depreciation. Depreciation of property and equipment totaled $145 million and $129 million for 2023 and 2022, respectively. Depreciation increased primarily due to the addition of depreciable assets. Amortization of intangible assets.
Capital Expenditures We currently expect that our routine capital expenditures will range between approximately $105 million to $115 million during 2023 for broadcasting, production company and corporate purposes. In addition, we currently expect that our net capital expenditures related to the Assembly Atlanta project will range between $70 million and $75 million.
See Note 11 “Retirement Plans” of our audited consolidated financial statements included elsewhere herein for further information concerning these retirement plans. Capital Expenditures We currently expect that our routine capital expenditures will range between approximately $115 million to $120 million during 2024 for broadcasting, production company and corporate purposes.
Excluding the amortization of deferred financing costs, the average interest rate on our Senior Credit Facility increased to 4.4% in 2022, from 2.6% in 2021. Income tax expense. Our effective income tax rate decreased to a net provision of 26% for 2022 from 46% for 2021.
Our effective income tax rate decreased to a net provision of 7% for 2023 from 26% for 2022.
Amortization expense increased due to the 2021 Acquisitions. (Gain) loss on disposal of assets, net. We reported a gain on disposals of assets of $2 million in 2022 and a loss of $42 million in 2021. The gain in 2022 was the result of normal business activity.
Loss (Gain) on Disposals of Assets, Net. We recognized a loss on disposal of assets of $21 million in 2023 compared to a gain on disposal of assets of $2 million in 2022, primarily related to the sale of television station KNIN in the Boise, Idaho market, in which we recognized a loss of $14 million in 2023.
Removed
Impact of the COVID-19 Global Pandemic and Related Government Restrictions on our Markets and Operations. The impact of the COVID-19 global pandemic, measures to prevent its spread, and supply chain and inflation that accompanied the lifting of such measures, continue to affect our businesses in a number of ways.
Added
Please see Note 3 “Acquisitions and Divestitures” in our consolidated financial statements contained elsewhere herein for further discussion of the Acquisitions. The impact of the Acquisitions is described in more detail in the following discussion of our operating results.
Removed
The extent to which the COVID-19 global pandemic impacts our business, financial condition, results of operations and cash flows will depend on numerous evolving factors that we may not be able to accurately predict or assess, including the negative impact it has on global and regional economies and economic activity, changes in advertising customers and consumer behavior, impact of governmental regulations that might be imposed in response to the pandemic; its short and longer-term impact on the levels of consumer confidence; and how economies, supply chains and capital markets recover after the COVID-19 global pandemic subsides.
Added
During 2023 we completed the first phase of this project, known as “Assembly Studios” which has begun operations, and we are evaluating further development opportunities for the remainder of the project. As of December 31, 2023, our total investment, net of amounts received from infrastructure related sales and reimbursements was $549 million.
Removed
The COVID-19 global pandemic’s impact on the capital markets could impact our cost of borrowing. See “ The “ COVID-19 ” global pandemic has had and may continue to have an adverse impact on our business. ” in Part I, Item 1A. “Risk Factors”. Impact of Recent Acquisitions and Divestitures .
Added
Total revenue decreased $395 million, or 11%, to $3.3 billion for 2023 compared to 2022.
Removed
Net of divestitures the purchase price was $553 million; ● On September 13, 2021, we completed the acquisition of Third Rail Studios for $27 million.
Added
During 2023: ● Payroll broadcasting expenses increased by $66 million as a result of; routine increases in compensation costs of $43 million, increases in healthcare costs of $13 million, and increases in company contributions to our defined contribution retirement plan of $10 million. ● Non-payroll broadcasting expenses increased by $37 million primarily due to increases in retransmission expense. ● Broadcast non-cash stock-based compensation expense was $5 million and $4 million in 2023 and 2022, respectively.
Removed
This financial information does not include any adjustments for other events attributable to the 2021 Acquisitions unless otherwise described. 34 Revenues, Operations, Cyclicality and Seasonality. Broadcast advertising is sold for placement generally preceding or following a television station’s network programming and within local and syndicated programming.
Added
Production company operating expenses included $17 million allowance for credit losses related to the bankruptcy of Diamond, a counterparty in contracts with us and $18 million to settle litigation related to the Assembly Atlanta project. 37 Corporate and administrative expenses .
Removed
Total revenue increased approximately $1.3 billion, or 52%, to $3.7 billion for 2022 compared to 2021, primarily as a result of the television stations acquired in our 2021 Acquisitions. Total revenue from the stations acquired in our 2021 Acquisitions increased by $974 million in 2022, compared to 2021.
Added
Amortization of intangible assets totaled $194 million and $207 million for 2023 and 2022, respectively. Amortization decreased primarily due to finite-lived intangible assets becoming fully amortized. Impairment of Goodwill and Other Intangible Assets .
Removed
Broadcast expense from the stations acquired in our 2021 Acquisitions increased by $548 million in 2022, compared to 2021.
Added
Several years ago, our Raycom Sports subsidiary sublicensed certain ACC football and basketball games from ESPN to Fox Sports that were assumed by Diamond upon its acquisition of Fox Sports. In March 2023, Diamond sought bankruptcy protection.
Removed
During 2022, excluding the net impact of the 2021 Acquisitions: ● Payroll broadcasting expenses increased by approximately $32 million in 2022, primarily as a result of routine increases in compensation, severance expenses related to Meredith Acquisition and increases in incentive compensation; and ● Non-payroll broadcast operating expenses increased by approximately $38 million: o Retransmission expense increased by $33 million in 2022 consistent with the increased retransmission consent revenue; o Syndicated film and other broadcasting costs decreased by $7 million; o Promotional expenses increased by $5 million; and 36 o Broadcast transaction related expenses were $6 million in 2022.
Added
On July 7, 2023, the bankruptcy court granted the request of Diamond (supported by us) for the early rejection, and therefore the termination, of the ACC sports rights agreements.
Removed
These increases were primarily due to increases in professional services consistent with increasing business activity consistent with the diminished effects of the COVID-19 global pandemic and costs related to the Assembly Atlanta development. Corporate and administrative expenses .
Added
On July 13, 2023, The CW announced that it had entered into an agreement with Raycom Sports for a similar package of sports rights related to the ACC games that had been included in the now-terminated agreement with Diamond. Concurrently, Raycom Sports and ESPN modified their license agreement to correspond with the terms of The CW sublicense agreement.
Removed
The losses in 2021 were primarily related the divestitures of television stations required in order to comply with regulatory requirements for the 2021 Acquisitions and to asset disposals from the FCC Repack process. Interest expense.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+6 added−1 removed2 unchanged
Biggest changeBased on our floating rate debt outstanding at December 31, 2022, a 100 basis point increase or decrease in market interest rates would have increased or decreased our interest expense and decreased or increased our income before income taxes for the year ended December 31, 2022 by approximately $30 million.
Biggest changeBecause of these interest rate caps, at December 31, 2023, a 100 basis point increase in market interest rates would have increased our interest expense and decreased our income before income taxes by $7 million for the year ended December 31, 2023.
From time to time, we may enter into interest rate swap agreements or interest rate cap agreements to manage interest rate exposure with the following objectives: ● managing current and forecasted interest rate risk while maintaining financial flexibility and solvency; ● proactively managing our cost of capital to ensure that we can effectively manage operations and execute our business strategy, thereby maintaining a competitive advantage and enhancing shareholder value; and ● complying with covenant requirements in our financing agreements.
From time to time, we may enter into interest rate swap agreements or interest rate cap agreements to manage interest rate exposure with the following objectives: ● managing current and forecasted interest rate risk while maintaining financial flexibility and solvency; ● proactively managing our cost of capital to ensure that we can effectively manage operations and execute our business strategy, thereby maintaining a competitive advantage and enhancing shareholder value; and 46 ● complying with covenant requirements in our financing agreements.
Fair value of our long-term debt is based on estimates provided by third-party financial professionals as of the respective dates. 45
Fair value of our long-term debt is based on estimates provided by third-party financial professionals as of the respective dates. 47
As of December 31, 2022, the majority of our outstanding debt bore interest at a fixed interest rate, which reduces our risk of potential increases in interest rates, but would not allow us to benefit from any reduction in market interest rates such as LIBOR or the prime rate.
As of December 31, 2023, the majority of our outstanding debt bore interest at a fixed interest rate, which reduces our risk of potential increases in interest rates, but would not allow us to benefit from any reduction in market interest rates such as SOFR or the prime rate.
At December 31, 2022 and 2021, the recorded amount of our long-term debt, including current portion, was $6.5 billion and $6.8 billion, respectively, and the fair value of our long-term debt, including current portion, was $5.7 billion and $6.9 billion, respectively, as of December 31, 2022 and 2021.
At December 31, 2023 and 2022, the recorded amount of our long-term debt, including current portion, was $6.2 billion and $6.5 billion, respectively, and the fair value of our long-term debt, including current portion, was $5.6 billion and $5.7 billion, respectively, as of December 31, 2023 and 2022.
Also, as of that date, we were not a party to any interest rate swap or cap agreements. See Note 4 “Long-term Debt” of our audited consolidated financial statements included elsewhere herein for more information on our long-term debt and associated interest rates.
See Note 4 “Long-term Debt” of our audited consolidated financial statements included elsewhere herein for more information on our long-term debt and associated interest rates.
Removed
Under the Senior Credit Facility, we pay interest based on a floating interest rate on balances outstanding. We pay a fixed rate of interest on the 2031 Notes, 2030 Notes, 2027 Notes and 2026 Notes.
Added
Under the Senior Credit Facility, we pay interest based on a floating interest rate on balances outstanding. On February 23, 2023, we entered into interest rate caps pursuant to an International Swaps and Derivatives Association ("ISDA") Master Agreement with Wells Fargo Bank, NA and Truist Bank, respectively.
Added
As of December 31, 2023, the caps have a combined fixed notional value of approximately $2.6 billion through the last business day in 2024 and then a reduction in notional value to approximately $2.1 billion until maturity on December 31, 2025.
Added
The agreement effectively limits the annual interest charged on all of our variable rate debt to a maximum one-month SOFR rate of 5 percent, plus the Applicable Margin, as specified in our Senior Credit Facility.
Added
The Company is also required to pay aggregate fees in connection with the agreement of approximately $34 million that is due and payable on December 31, 2025. The ISDA Master Agreement, together with its related schedules, contain customary representations, warranties and covenants.
Added
This hedging agreement was entered into to mitigate the interest rate risk inherent in our variable rate debt and is not for speculative trading purposes.
Added
A 100 basis point decrease in market interest rates would have decreased our interest expense and increased our income before income taxes by $22 million for the year ended December 31, 2023. We pay a fixed rate of interest on the 2031 Notes, 2030 Notes, 2027 Notes and 2026 Notes.

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