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Gray expects to get $110 million from BMI sale, updates financial guidance

The logo of Gray Television set aside the skyline of Atlanta, where the company is headquartered.
(Logo courtesy Gray Television, Graphic by The Desk)

Gray Television has released updated financial guidance for its fourth quarter of 2023, which includes a revelation that the company expects to earn as much as $110 million in pre-tax cash from the sale of its stake in a performance rights company.

The company, Broadcast Music Inc. (BMI), collects royalties on behalf of artists like Willie Nelson, Dolly Parton, Miley Cyrus, Red Hot Chili Peppers and Linkin Park when their music is broadcast or streamed in the United States. It functions similar to the American Society of Composers, Authors and Publishers (ASCAP), though it operates as a for-profit entity.

Gray took an investment stake in BMI several decades ago, and its ownership stake in the organization has grown in the years since. Last year, BMI was sold to a new shareholder group operated by private equity firm New Mountain Capital.

In addition to the BMI news, Gray said on Tuesday it was seeking approval to restructure around $1.8 billion in debt that is due in 2026. As part of the plan, Gray would push the maturity date for $1.2 billion incorporated in a term loan from 2026 to 2029, while pushing back its $500 million 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,” a spokesperson for the company wrote in a statement filed with the U.S. Securities and Exchange Commission (SEC) on Tuesday.

Gray says it is still finalizing its balance sheet for Q4 2023, but believes the company earned between $830 million and $835 million in broadcast-related revenue during the period. When accounting for its other businesses, Gray says revenue is expected to land somewhere between $860 million and $865 million. Both are 1 percent increases from prior financial guidance issued last year.

The company believes it ended 2023 with a bank balance of $21 million, around $2.66 billion in secured debt and $6.21 billion in total debt, according to documents filed with the SEC this week.

Gray primarily owns local broadcast television stations that reach millions of households across over 110 communities in the United States, to include 80 top-rated stations.

Gray also operates Raycom Sports, PowerNation Studios, Tupelo Media Group, Assembly Atlanta and Third Rail Studios, and hold a majority stake in Swirl Films.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 11 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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