As the first month of January nears its conclusion, broadcast station owner and Assembly Atlanta owner Gray Television is offering a brighter picture to analysts and investors on its Q4 2023 earnings while revealing that it wishes to refinance its senior credit facilities.
There’s more: Hundreds of millions of dollars in proceeds from the sale of Broadcast Music, Inc., before taxes, are expected to be added to Gray’s bank accounts before the end of 2024.
January 30 began with Gray launching a process through which it expects to amend certain terms of its $1.19 billion term loan and $500 million revolving credit facility due 2026.
Specifically, Gray seeks to extend the maturity of its $1.19 billion term loan from January 2026 to July 2029. Concurrently, Gray desires to lengthen its $500 million revolving credit facility from January 2026 to December 2027.
“We cannot provide any assurance about the timing, terms, or interest rate associated with the planned financing, or that the financing transactions will be completed,” Gray said in a pre-market announcement.
Further details were not immediately available, ahead of a Securities and Exchange Commission filing expected on Tuesday. However, a company source tells RBR+TVBR that, as the senior credit facility refinancing plan involves bank debt and not bonds, the interest rates are floating, rather than fixed.
BETTER END TO BUMPY BACK-HALF
Ask anyone in the broadcast radio industry how the latter part of 2023 fared, revenue-wise, and you’ll likely hear a grunt or see a grimace. It wasn’t pretty. However, broadcast television brethren didn’t have it so bad, and now Gray Television is offering improved Q4 guidance ahead of the upcoming release of its fiscal report for the final three months of 2023.
“While Gray is continuing the process of finalizing its financial results for the fourth quarter of 2023, Gray provides the following updates to its guidance on its estimated results of operations representing the most current information and estimates available to Gray as of the date of this release,” the company explained.
The prior guidance was released on November 8, 2023. While the high end of Gray’s operating revenue estimates remains unchanged, the low end is better by 1%.
As shown above, the broadcasting revenue, less agency commissions, window has narrowed and is forecast to come in at between $830 million-$835 million.
At the same time, a narrowing of expenses is being seen.
Gray also noted on January 30 that as of the end of 2023 it currently expects to report some $21 million of cash on hand and total debt of $6.21 billion, excluding unamortized deferred financing costs and premium. The total leverage ration is to be at 5.6x-5.65x as of December 31, 2023.
Additionally, a pre-tax non-cash impairment charge of $21 million for “certain investments made prior to calendar year 2023” is anticipated.
MUSICAL MONEY
Lastly, Gray on Tuesday shared that it expects to receive approximately $110 million in pre-tax cash proceeds upon the closing of the sale of radio and TV music licensing firm BMI to a shareholder group led by New Mountain Capital LLC.
The transaction, which awaits regulatory approval, was announced in late November after weeks of rumors that a deal was imminent.
What hasn’t been widely reported since then is that Gray has equity ownership in BMI. In fact, Gray says this began “decades ago” and has increased through various acquisitions of other broadcast stations and companies over the years.
The BMI sale is currently expected to close by the end of the first quarter 2024.
Gray intends to use the proceeds for general corporate purposes, which may include the repayment of debt.
Gray Television’s Q4 2023 earnings call is scheduled for February 23.
