Outdoor Registers Mixed Results: Ads Dip, But Bookings Now Up

While there are no discussions suggesting an imminent deal, the end game for the Outdoor Channel appears to be an acquisition. That's not surprising, considering it's one of the few independent cable networks in an increasingly consolidated business.

CEO Roger Werner said there have been inquiries since he joined the company in 2006, although there are no current conversations along those lines. For the time being, Outdoor Channel is focused on operations, but a purchase down the line is possible with so many companies seeking content.

"I think longer-term, the scarcity value of assets like Outdoor Channel will bring [the network] closer to the front end of the radar screen," Werner said on an earnings call Wednesday.

Still, he said the network needs to continue to build out its multimedia offerings, expand distribution, boost cash flow and enlarge its content library to raise its profile for potential buyers.

"We'll continue to do the blocking and tackling we need to do to get there -- to make the business more attractive and more valuable," Werner said. "But I can't guarantee that it's one thing or even a small number of things that's going to guarantee a transaction in any kind of time frame."

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Werner has experience engineering lucrative acquisitions before, having developed what are now the Speed and Versus networks and benefiting from their respective sales.

Nielsen data has the network in 35.9 million homes, up from 30 million in March of last year.

In the meantime, the company may be looking for partners to help operate the Skycam business that's a part of Winnercomm, which parent Outdoor Channel Holdings bought last year. The camera system that moves on a cable above playing fields is used by sports broadcasters at events such as the Super Bowl and Final Four.

"We look at that as something that is potentially very scalable, but we'll probably do that with other partners, and so have begun some discussions about who those partners might be," Werner said.

Winnercomm's sales and production operations will continue to be integrated into Outdoor Channel's core business.

The channel appeared to withstand recessionary conditions reasonably well over the final three months of 2009, with ad dollars dropping 4.2% to $9.5 million compared to the same period the year before. For all of 2009, ad dollars fell 6.1% to $34.3 million.

"We believe this is a reasonably respectable performance when compared to our peers and the media industry overall," Werner said.

So far this year, ad bookings -- commitments, but not dollars spent yet -- are 10% to 15% ahead of where they stood at the same time last year. Actual ad dollars for the first two months are up 6% to 7%, Werner said.

"It's still early in the recovery process, but based on the pacing data, we're optimistic that we'll return to ad sales revenue growth in 2010," Werner said. (In 2008, ad sales rose 25.4%.)

Last month, Greg Harrigan, who has been with the company since 2002, was promoted to executive vice president of ad sales.

Total company revenues for 2009, stripping out the acquisition of Winnercomm, fell slightly to $53.2 million. The company posted a loss of $285,000.

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