Company: GHC
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0000104889-25-000022
Chunk: 203

Company: Graham Holdings Co
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1A
Chunk 203
---
 subscribers who “cut the cord” and move to internet-based subscription streaming services may not generate the same revenues as GMG receives under its existing 

33

retransmission consent agreements, because, as discussed above, the per-subscriber fees paid to network-affiliated stations under the distribution agreements that apply to vMVPDs may be less than the fees paid by traditional MVPDs under GMG’s retransmission consent agreements.

At the same time, GMG’s network affiliation agreements typically require payments to the networks with which GMG stations are affiliated in the form of “reverse retransmission consent fees,” which require GMG to share a specified portion of its retransmission consent revenues with the respective networks. As reverse retransmission consent fee payments required to be paid to the networks escalate, GMG potentially could retain smaller shares of revenues generated by its retransmission consent agreements. The reverse retransmission consent fee obligations are sometimes structured as annual flat fees. In those cases, as the number of subscribers to traditional MVPD platforms decreases, GMG bears the costs and risks of declining retransmission consent revenues. 

As the national networks have launched and continue to market and invest in their direct-to-consumer platforms, an increasing amount of network programming, including valuable sports programming, that was once available exclusively on an in-market network-affiliated station is now being made available on ad-supported or subscription services such as Paramount+ (CBS) and Peacock (NBC), either exclusively or simultaneously with its over-the-air broadcast. Disney has announced it is planning to launch new direct-to-consumer sports programming service ESPN Flagship in 2025. The diminishing program exclusivity provided by network affiliation could decrease local broadcasters’ leverage in retransmission consent negotiations with MVPDs. This paradigm could create a growing imbalance for GMG, as “reverse retrans” payments to the networks increase at the same time network-affiliated stations’ exclusivity–and with it, the revenues generated by retransmission consent agreements–continues to decline.

Taken together, these factors together could adversely affect GMG’s revenues and operating results.

Risks Related to the Company’s Manufacturing Businesses

•    Failure to Recruit and Retain Production Staff Needed to Meet Customer Demand Could Have a Material Adverse Effect on the Company’s Manufacturing Businesses.

The Company’s manufacturing operations have experienced in recent years a highly competitive market for production labor. While the market has improved, competitiveness in the industrial sector for experienced skilled workers will continue, which may limit its ability to meet customer demand. If