Special-Interest Ads Improve Gray TV's 3Q

Interest-group advertising seeking to influence congressional action on health-care reform has proven to be an unexpected boon for Gray Television.

The operator of 36 stations expects a considerable increase in political advertising dollars in the third quarter.

It had projected political revenues to be perhaps $600,000; the figure is now expected to come in as high as $3.1 million.

Gray revised the outlook for its third-quarter performance Thursday. With the political boost, revenues (not including agency commissions) should come in around $66 million -- potentially a $3.5 million improvement over what the company had forecast back in August.

Revenues in this year's July-September period could come in about on par with the third quarter of 2008, stripping out all political advertising, including the huge influx last year.

The Gray station group includes outlets in small- to mid-size markets. Last month, after its stock traded above $1 for 30 straight days, it avoided a delisting threat from the New York Stock Exchange.

In midday trading Thursday, its share price was up slightly to $2.39: above a 52-week low of 16 cents.

The sunnier outlook Gray issued could augur some improvement for the downtrodden local-station business.

Earlier this week, the Sinclair group also revised its guidance for the third quarter upward. It had projected a year-over-year 16% drop in revenues. The decrease is now expected to be a lesser 9%.

Total third-quarter revenue for the group is expected to come in at $136 million. The company said it was also helped by interest-group spending on health-care matters.

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