Amid a slower period for film and television production in Georgia and general macroeconomic uncertainty, Assembly Studios owner Gray Media is optimistic.
Gray’s 19-stage Doraville campus is 70% occupied and ripe for beginning the next phase of expansion, executives said during an earnings call Thursday. The company’s revenue from production companies — a segment that includes lease agreements for use of the studio — is up 16% year-over-year in the fourth quarter, ending 2024 at a total of $105 million.
At least four active productions are stationed at Assembly: “Grosse Pointe Garden Society” and “Beyond the Gates,” both of which debuted this month on Gray-owned stations, as well as “The Good Daughter” and “Murdaugh Murders.”
That’s a solid occupancy rate for a Georgia studio these days. After a boom in production in 2021 when Georgia reopened for business amid the COVID-19 pandemic, production in the Peach State plummeted amid a pair of Hollywood strikes and cutbacks by big production companies and streaming services.
Hollywood has also been shifting production overseas, leaving major U.S. production hubs like Georgia with a glut of unused studio space.
“Hollywood, however you want to define that, has had a lot of issues,” Hilton Howell, Gray’s chairman and CEO, said Thursday during the earnings call. “None of those are under our control and none of it was created by our company. The strikes slowed everything in 2024. But, as you can tell, productions continue.”
Noting that two of the productions filming on its stages are also airing on its stations, Howell continued: “I could not be happier than that.”
Though certainly one of the glitziest divisions of the company, Assembly is only one part of Gray’s overall portfolio. The company owns local television stations across 113 markets, a digital marketing agency and three video production companies. In Georgia, it owns Atlanta News First (Channel 46) and stations in Albany, Augusta and Savannah. It is also the largest Telemundo affiliate group.
Gray ended 2024 with about $3.64 billion in revenue, up 11% year-over-year. But it was slightly lower than 2022, which was $3.68 billion. Gray shares were up about 1% Thursday on the news. But Gray’s stock is down nearly a third in the past year.
Over the past five years, linear television station owners have had to weather a fast-changing media landscape marred by a decline in traditional television viewership and changes in advertising spending. They’re challenges faced by multiplatform behemoths like Warner Bros. Discovery and station owners like Gray and Tegna Inc. As audiences erode, so do their revenues.
Credit: arvin.temkar@ajc.com
Credit: arvin.temkar@ajc.com
Gray launched Assembly Studios in a bid to diversify. The $500 million campus carries about a $90 million annual operating cost.
But Gray and other media companies are banking on a relaxed regulatory environment under President Donald Trump.
Howell said Gray is seeing encouraging signs from Washington on what he called the “long overdue” easing of regulatory constraints within the broadcast industry. He is referring to a rule under the Federal Communications Commission that prohibits station groups from owning more than two stations ranked in the top four within the same local market and limits their total reach across all U.S. households to 39%.
Last quarter, several broadcasting companies, Gray included, expressed hopes that the Trump administration would loosen and modernize the restrictions as the industry battles with tech companies and other media giants for consumers’ attention.
The FCC has yet to address modernizing the rule. But in a chapter he authored in Project 2025, the FCC’s new chairman, Brendan Carr, said the commission should focus its efforts on “creating a market-friendly regulatory environment that fosters innovation and competition.”
In the fourth quarter, Gray reported revenues of about $1 billion, up about 21% year-over-year, a figure that includes revenues from advertising, retransmission and its production companies, among other line items. The quarterly increase is partly driven by a massive spike in political advertising revenue, which was up nearly eightfold year-over-year.
Gray’s core advertising revenue, however, is a different story. The company reported an 8% decrease year-over-year, which is partly because of what’s known as political displacement. Some commercial advertisers are hesitant to advertise during the election, given the tone of some of the political campaigns, Gray’s President and co-CEO Pat LaPlatney said during the earnings call.
Credit: PAUL BEEZLEY_
Credit: PAUL BEEZLEY_
The company is predicting its advertising will decline further in the first quarter of 2025, partly because of economic uncertainty related to potential Trump policy changes. The hesitancy is most evident in its customers in automobile advertising, Howell said.
Gray executives said the company is hearing that dealers and manufacturers are pausing or reducing their advertising campaigns to evaluate how tariffs levied and threatened by Trump and continued high interest rates may impact near-term demand for new and used cars.
Howell also briefly mentioned expansion plans for the 135-acre Assembly development, though wouldn’t detail specifics. The inspiration, he said, is The Battery Atlanta next to Truist Park in Cobb County.
The company has had to delay expanding because “the market wasn’t right,” Howell said. Banks weren’t lending. But the world changed in November, he continued.
“There’s a lot of animal spirits that we’re seeing out there,” Howell said. “We’re very bullish about opportunities and partnerships going forward.”
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