Gabelli Multimedia Trust Reinforces Maintenance of $0.88 Per Share Annual Distribution Will Commence Monthly Distributions in May 2025

Rhea-AI Summary

Gabelli Multimedia Trust (NYSE: GGT) has announced a transition from quarterly to monthly distributions starting May 2025, while maintaining its annual distribution rate of $0.88 per share. The new distribution schedule will provide:

- $0.07 per share for each of the first two months of each quarter
- $0.08 per share for the third month of each quarter

The Fund has declared two upcoming distributions:
- $0.14 per share (covering April and May) payable on May 22, 2025
- $0.08 per share payable on June 23, 2025

The Fund will no longer rely on SEC exemptive relief for its distribution policy and intends to distribute investment company taxable income monthly and realized net long-term capital gains annually. The Board maintains flexibility to modify the distribution policy based on market conditions and Fund performance.

Positive

• Maintained stable annual distribution rate of $0.88 per share
• Increased payment frequency from quarterly to monthly, improving shareholder cash flow

Negative

• 100% of 2025 distributions currently deemed from paid-in capital, not from earnings
• Distributions may include return of capital, reducing shareholder cost basis

Insights

Financial Analyst

Gabelli Multimedia Trust's shift from quarterly to monthly distributions represents a structural change in payment frequency rather than an increase in actual shareholder returns. The fund maintains its $0.88 per share annual distribution rate, simply dividing it into monthly payments ($0.07 for the first two months of each quarter and $0.08 for the third).

The most significant revelation is that based on current accounting records, 100% of the 2025 distributions appear to be sourced from paid-in capital rather than from investment income or capital gains. This effectively means shareholders are receiving a return of their own investment capital rather than actual earnings generated by the fund's portfolio.

While monthly distributions may appeal to income-focused investors seeking more regular cash flow, this change doesn't fundamentally alter the fund's economic value proposition. The transition away from the SEC exemptive order that previously allowed more frequent distribution of long-term capital gains suggests potential limitations in the fund's ability to generate sustainable income from its investment activities.

Investors should carefully distinguish between distributions representing actual investment returns versus return of capital, as the latter reduces their cost basis without reflecting true investment performance. This distribution policy appears designed primarily to provide consistent cash flow rather than to distribute actual portfolio gains or income.

RYE, N.Y., April 09, 2025 (GLOBE NEWSWIRE) -- The Board of Directors of The Gabelli Multimedia Trust Inc. (NYSE: GGT) (the “Fund”) has determined to begin monthly distributions to the common stock shareholders of the Fund. These distributions will provide cash flow to common stock shareholders each month.

Under its monthly distribution policy, the Fund will continue to pay a $0.22 per share quarterly distribution, with $0.07 per share paid for each of the first two months of the quarter and $0.08 per share paid in the third month of each quarter.

In light of the above policy, the Fund has declared a $0.14 per share cash distribution (covering the months of April and May) payable on May 22, 2025 to common stock shareholders of record on May 15, 2025, and a $0.08 per share cash distribution payable on June 23, 2025 to common stock shareholders of record on June 13, 2025. The distributions reflect an annualized distribution of $0.88 per share.

The Fund previously paid quarterly distributions in accordance with a “managed distribution policy” adopted pursuant to an exemptive order granted to the Fund by the Securities and Exchange Commission, which permitted the Fund to distribute long-term capital gains more frequently than the limits provided in the Investment Company Act and the rules and regulations thereunder. The Fund no longer intends to rely on this exemptive relief to maintain a managed distribution policy in connection with its monthly distributions.

The Fund currently intends to make monthly cash distributions of all or a portion of its investment company taxable income (which includes ordinary income and realized net short term capital gains) to common shareholders. The Fund also intends to make annual distributions of its realized net long term capital gains, if any. The Fund, however, may make more than one capital gain distribution to avoid paying U.S. federal excise tax. A portion of each distribution may be a return of capital. Various factors will affect the level of the Fund’s income. To permit the Fund to maintain more stable distributions, the Fund may from time to time distribute more or less than the entire amount of income earned in a particular period. The Fund’s distribution policy may be modified from time to time by the Board as it deems appropriate, including in light of market and economic conditions and the Fund’s current, expected and historical earnings and investment performance. Because the Fund’s monthly distributions are subject to modification by the Board at any time and the Fund’s income will fluctuate, there can be no assurance that the Fund will pay distributions at a particular rate or frequency.

If the Fund does not generate sufficient earnings (dividends and interest income, less expenses, and net realized capital gain) equal to or in excess of the aggregate distributions paid by the Fund in a given year, then the amount distributed in excess of the Fund’s earnings would be deemed a return of capital. Since this would be considered a return of a portion of a shareholder’s original investment, it is generally not taxable and would be treated as a reduction in the shareholder’s cost basis. Shareholders who receive the payment of a distribution consisting of a return of capital may be under the impression that they are receiving net profits when they are not. Shareholders should not assume that the source of a distribution from the Fund is net profit. The distribution rate should not be considered the dividend yield or total return on an investment in the Fund.

Based on the accounting records of the Fund currently available, each of the distributions paid to common shareholders in 2025 would be deemed 100% from paid-in capital on a book basis. This does not represent information for tax reporting purposes. The estimated components of each distribution are updated and provided to shareholders of record in a notice accompanying the distribution and are available on our website (www.gabelli.com). The final determination of the sources of all distributions in 2025 will be made after year end and can vary from the estimates. Shareholders should not draw any conclusions about the Fund’s investment performance from the amount of the current distribution. All individual shareholders with taxable accounts will receive written notification regarding the components and tax treatment for all 2025 distributions in early 2026 via Form 1099-DIV.

Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. For more information regarding the Fund’s distribution policy and other information about the Fund, call:

Carter Austin
(914) 921-5475

About The Gabelli Multimedia Trust
The Gabelli Multimedia Trust Inc. is a non-diversified, closed-end management investment company with $166 million in total net assets whose primary investment objective is long-term growth of capital. The Fund is managed by Gabelli Funds, LLC, a subsidiary of GAMCO Investors, Inc. (OTCQX: GAMI).

NYSE: GGT
CUSIP – 36239Q109

Investor Relations Contact:
Carter Austin
(914) 921-5475
caustin@gabelli.com

FAQ

What is the new distribution schedule for Gabelli Multimedia Trust (GGT) starting May 2025?

GGT will pay $0.07 per share for the first two months of each quarter and $0.08 for the third month, maintaining the annual rate of $0.88 per share.

When will GGT's first monthly distributions be paid in 2025?

$0.14 will be paid on May 22, 2025 (for April/May), and $0.08 on June 23, 2025.

How are GGT's 2025 distributions classified for tax purposes?

Based on current accounting records, 100% of 2025 distributions are deemed from paid-in capital on a book basis.

What types of income will GGT distribute through its monthly payments?

GGT will distribute investment company taxable income (ordinary income and realized short-term capital gains) monthly, with long-term capital gains distributed annually.