• by Wayne Friedman , May 24, 2011

Advertising revenue for TV stations slowed down considerably in the first quarter of this year. But much of this was expected.

Fifteen publicly owned U.S. media companies reported revenue growth of 1.2% in the first quarter of 2011 to $1.15 billion compared with Q1 in 2010, according to New York City-based media investment company M.C. Alcamo.

Much of this softness comes as predicted, given this is an "off-year" -- no Olympic programming and less political advertising money fueling station coffers. Years ago, revenue growth zoomed throughout 2010 -- up 20%, and more for many TV station groups.

For the first quarter, "the industry had a respectable revenue growth rate," says Michael Alcamo, president of M.C. Alcamo.

By way of comparison, revenue growth grew 15.3% for broadcasters in the first quarter of 2010 over the same period in 2009. The fourth quarter of 2010 rocketed up 27.1% over the fourth quarter of 2009.

Good news for stations and other media companies is that their cash flow has remained fairly robust. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) slipped just a bit to 31.2% from 33.9%. Sinclair Broadcast Group continued to have the biggest margins among all media companies: 42.2% in the first quarter.

"People expect more profit weakness in the first quarter after a strong political year," says Alcamo. "Also, the first quarter is weakest for retail."

Alcamo says the seven pure-play broadcasters (Belo Corp., Lin Television, Sinclair Broadcast Group, Fisher Communications Group, Nexstar Broadcasting Co, Entravision Communications, and Gray Television) showed first-quarter revenue growth of 2.2% to $645 million.

Eight other "integrated" media groups -- those with magazine, newspaper, radio and other media platforms -- were virtually flat (a 0.1% decline) to $508 million. Those eight include: McGraw-Hill Cos., Media General, Gannett Co., Journal Communications, Saga Communications, E.W. Scripps, and the Washington Post.

Some of the biggest individual revenue gainers included: McGraw-Hill's broadcast group, a revenue improvement of 10.2%; Fisher Communications, up 7.3%; and Sinclair added 7.2%.

More good news for TV stations: TV advertising categories remained steady for the first quarter of this year, says Alcamo. Also benefiting media companies is the growth of "issue political advertising," which is evolving into a year-long ad category. "Issue advertising is going to be part landscape," he says. "It won't be as cyclical."