• by Paul Gough , March 11, 2003

Local TV ad revenues are already feeling the effects of a possible war with Iraq.

Executives from a handful of station groups at Monday’s Kagan TV conference in New York said that advertisers were holding back on TV ads. Katz Television Group, with about 340 stations nationwide, expected a 10% increase in Q1 ad revenues. Katz President Jim Beloyianis said that after a strong January, pacings ended negative in February and March’s pacings went negative last week. Brian Lilly, co-owner of Lilly Broadcasting, said his stations in Pennsylvania and New York have also seen pacings fall off for the first quarter.

Lilly said the uncertainties around the war were clearly shaking what is a strong, underlying foundation of business. Beloyianis said he expects that advertising will come around after the war’s resolution. For instance, he said, Q2 pacings are up 25% over the same period last year but said revenues might be impacted by a longer-term war. He said that the first half of the year was originally expected to have a double-digit increase with a flat second half (owing to almost no election ads in an off-year) but projections are now that things will be flat.

Randy Bongarten of Emmis Communication’s TV Division, said Emmis’ 16 stations have been having a good year, led by a 15% increase in local advertising. He said local and national advertising were expected to be “very strong” in Q2. He cautioned that a prolonged war might dampen advertising.

In the national market, CBS TV EVP David F. Poltrack said the effects of a war have already been factored into plans. Scatter pricing remained strong, up 35%-50% of upfront pricing. “There’s just not enough inventory available,” Poltrack said. Few advertisers exercised their options in the months following the upfront. Poltrack said only about 2%-3% of advertisers exercised options, compared to the norm of 10%-20%.