Note 3 - Acquisitions

3 Months Ended

Mar. 31, 2026

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

3.	Acquisitions

WBBJ

On January 1, 2026, we acquired all of the non-license assets of WBBJ-TV (ABC/CBS) in Jackson, Tennessee market (DMA 175) (“WBBJ”) from Bahakel Communications, Ltd. On February 13, 2026, we acquired all of the WBBJ license assets. Total consideration for the acquisition of WBBJ was $25 million, plus approximately $2 million in net working capital adjustments expected to be paid during the second quarter of 2026. This acquisition price includes $15 million which was paid in 2025.

Allen Media Group - Three Markets

On March 27, 2026, we acquired all of the assets of WTVA (ABC/NBC) in Columbus-Tupelo, Mississippi (DMA 135), WTHI (CBS/FOX) in Terre Haute, Indiana (DMA 160), and WLFI (CBS) in West Lafayette, Indiana (DMA 189) (collectively, “Allen 3”) from Allen Media Group, Inc. (“AMG”) for a total consideration of $56 million.

The following table summarizes the provisional allocation of the assets acquired for the WBBJ and Allen 3 acquisitions (in millions):

	WBBJ		Allen 3
Accounts receivable	$	2	$	-
Property and equipment		4		6
Broadcast licenses		16		43
Goodwill		2		7
Other intangible assets		3		-
	$	27	$	56

The primary areas of the purchase price allocations that are not yet finalized for the WBBJ and Allen 3 acquisitions relate to the valuation of certain tangible and intangible assets, and goodwill, which represents the excess of the purchase price over the fair value of the net tangible and other intangible assets acquired. We expect to obtain the information necessary to finalize the fair value of assets acquired during the measurement period, not to exceed one year from the respective acquisition dates. Changes to the preliminary estimate of the fair value during the measurement period will be recorded as adjustments to those assets and liabilities with a corresponding adjustment to goodwill in the period they occur.

Accounts receivable are recorded at their fair value representing the amount we expect to collect. Expected uncollectible balances are not material. Property and equipment and other intangible assets are being depreciated and amortized consistent with our accounting policies in the Annual Report on Form 10-K for the year ended December 31, 2025. Broadcast licenses are indefinite lived intangibles.

Goodwill represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, as well as future synergies that we expect to generate from each acquisition. Goodwill will be deductible by us for income tax purposes.

Pro forma results of operations have not been presented because the acquisitions were not deemed significant as of their respective acquisition dates both individually and in aggregate. Transaction costs incurred associated with these acquisitions were not material.

2026 Pending Acquisitions

We entered into separate agreements involving television station acquisitions and divestitures with The E.W. Scripps Company (“Scripps”), and Sagamore Hill Broadcasting, Inc. (“SGH”). In addition, we entered into agreements to acquire stations in seven additional markets (collectively, “Allen 7”) from AMG, which closed on May 1, 2026, and stations in three additional markets from Block Communications, Inc. (“BCI”), which closed on May 6, 2026. See Note 14, “Subsequent Events” for additional information regarding the Allen 7 and BCI transactions.

We believe each of these transactions furthers our commitment to pursuing strategic transactions in a prudent manner. The parties to these remaining transactions that remain pending are currently working to secure the required regulatory approvals, including certain waivers, and other customary approvals; however, we can provide no assurance that we will receive the necessary regulatory approvals, or that the transactions will close on the timelines currently contemplated, or at all. We expect to fund the closing of these acquisitions with cash on hand and/or borrowings under our revolving credit facility.

As of March 31, 2026, the stations to be acquired and divested under each agreement are as follows:

DMA	Market	Station to be Acquired	Station to be Divested

Scripps (Non-Cash Swap):

113	Lansing, MI	WSYM (FOX)
124	Lafayette, LA	KATC (ABC)
89	Colorado Springs, CO		KKTV (CBS)
186	Grand Junction, CO		KKCO (NBC/ABC)
188	Twin Falls, ID		KMVT (CBS/FOX)

SGH (Purchase Price of $2 million):

126	Columbus, GA	WLTZ (NBC)
140	Lubbock, TX	KJTV (FOX)

BCI (Purchase Price of $80 million)(closed on May 6, 2026):

48	Louisville, KY	WDRB (FOX), WBKI (CW)
90	Champaign/Decatur, IL	WAND (NBC)
190	Lima, OH	WLIO (NBC/FOX)

Allen 7 (Purchase Price of $115 million)(closed on May 1, 2026):

73	Huntsville, AL	WAAY (ABC)
92	Paducah, KY - Cape Girardeau, MO - Harrisburg, IL	WSIL (ABC)
109	Evansville, IN	WEVV (CBS/FOX)
108	Ft. Wayne, IN	WFFT (FOX)
127	Montgomery, AL	WCOV (FOX), WIYE (IND)
124	Lafayette, LA	KADN (FOX), KLAF (NBC)
137	Rockford, IL	WREX (NBC)

See Note 14, “Subsequent Events” for additional information regarding the Allen 7 and BCI transactions.

GRAY MEDIA, INC 10-Q