Gray Media (GTN) 18th Annual Sports & Media Symposium summary

Recent performance and strategic direction

• Expanded through multiple tuck-in acquisitions, fully integrated without external financing, focusing on in-market synergies and operational efficiencies.

• Maintains a disciplined M&A approach, prioritizing top-rated stations and multi-station markets for better economics.

• Regulatory cap is not a near-term constraint; current reach is 37% of U.S. TV households, well below the effective cap with UHF discount.

• Leverage reduction is a priority, with a long-term target of 4x, supported by recent refinancing and political cycle cash flows.

• Political advertising is a major revenue driver, with strong positioning in key markets and quarter-by-quarter guidance due to variability.

Advertising, retransmission, and operational trends

• Core advertising is experiencing mid-single digit declines, with consumer categories weak but gambling showing strength.

• Local advertising is more resilient than national, with half of ad sales from locally produced news.

• FIFA World Cup and strong Fox/Telemundo affiliate presence expected to provide a tailwind in mid-2024.

• Political ad crowd-out anticipated in late 2024, but inventory management aims to balance all advertiser needs.

• Retransmission contracts have been renegotiated, providing 18 months of stability and expected net retrans growth despite recent blackouts.

Capital allocation, technology, and growth opportunities

• Political cash flow will primarily support debt reduction, with continued modest dividend and necessary CapEx to maintain station leadership.

• AI and automation are being deployed for content repurposing, ad targeting, and productivity gains in journalism and sales.

• Assembly Atlanta, a $630 million mixed-use studio project, is now complete; future monetization will focus on partnerships and land sales.

• Local sports rights expansion is ongoing, with a focus on profitable deals and leveraging broadcast reach for teams.

• Key risks include potential recession while leveraged; key strengths are top-ranked stations and stabilized retrans revenue.