Gray Media (GTN) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01The 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
2. 02other factors beyond our control
3. 03Uncertain financial and economic conditions may have an adverse impact on our business, results of operations or financial condition
4. 04Our dependence upon a limited number of advertising categories could adversely affect our business
5. 05We intend to continue to evaluate growth opportunities through strategic acquisitions, and there are significant risks associated with an acquisition strategy
6. 06potential changes in the regulatory approval process that may make it materially more expensive, or materially delay our ability, to consummate any proposed acquisitions
7. 07We may fail to realize any benefits and incur unanticipated losses related to any acquisition
8. 08We must purchase television programming in advance of knowing whether a particular show will be popular enough for us to recoup our costs
9. 09We 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
10. 10Our 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
11. 11We may be unable to maintain or increase our digital advertising revenue, which could have a material adverse effect on our business and operating results
12. 12Increased cybersecurity threats, attacks, and cybersecurity incidents impacting our information technology infrastructure or those of our third-party service providers could interfere with our operations, compromise client information and expose us to liability, possibly causing our business and reputation to suffer

Risks Related to Our Indebtedness

1. 13We have substantial debt and have the ability to incur significant additional debt. The principal and interest payment obligations on such debt may restrict our future operations and impair our ability to meet our long-term obligations
2. 14make it more difficult for us to satisfy our financial obligations
3. 15The agreements governing our various debt obligations impose restrictions on our operations and limit our ability to undertake certain corporate actions
4. 16The Existing Indentures and our Senior Credit Agreement 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
5. 17Our variable rate indebtedness subjects us to interest rate risk, which could cause our annual debt service obligations to increase significantly

Other Financial Risks

1. 18As of December 31, 2024, 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 $10.5 billion
2. 19We are a holding company with no material independent assets or operations and we depend on our subsidiaries for cash
3. 20Our 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

Risks Related to the Ownership of Our Equity Securities

1. 21The price and trading volume of our equity securities may be volatile
2. 22operating and stock performance of the companies that investors may consider to be comparable
3. 23We currently pay cash dividends on our common stock and Class A common stock but this is subject to approval by our Board each quarter. To the extent a potential investor ascribes value to a dividend paying stock, the value of our stock may be correspondingly affected
4. 24Anti-takeover provisions contained in our Restated Articles of Incorporation (“Articles”) and our Bylaws, as amended (“Bylaws”), as well as provisions of Georgia law, could impair a takeover attempt
5. 25We have the ability to issue additional preferred stock, which could affect the rights of holders of our common stock and Class A common stock
6. 26Holders of our Class A common stock have the right to 10 votes per share on all matters to be voted on by our stockholders and, consequently, the ability to exert significant influence over us
7. 27Certain stockholders or groups of stockholders have the ability to exert significant influence over us

Risks Related to Regulatory Matters

1. 28Federal broadcasting industry regulations limit our operating flexibility
2. 29The FCC can sanction us for programming broadcast on our stations that it finds to be indecent
3. 30The 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)
4. 31The FCC’s National Television Station Ownership Rule limits the maximum number of households we can reach
5. 32The Company is subject to governmental oversight regarding compliance with antitrust law as well as related civil litigation