Meredith: Retrans Deals Increase Revs, Breakout Health Magazine Wanted

Stephen Lacy

Meredith CEO Stephen Lacy said recent deals with cable operators have its station group positioned for notable growth in retransmission consent dollars over the next several years. In the company's magazine segment, however, a gap remains in the health arena that could have it looking for an acquisition.

The retrans figure was at $8 million last year and set to jump to $20 million in 2010 -- then rise incrementally. Lacy recently said that retrans dollars nearly doubled in the July-September period for its 12 stations versus the same period a year ago.

With Meredith's sprawling female-targeted magazine portfolio, Lacy said the company could benefit from a linchpin along the lines of Prevention or Time Inc.'s Health.

"What we could use is an anchor brand in women's health and well-being," he said at a Citi investor event.

The company "generates a lot of advertising" from marketers in the health sector, but has no title as dominant as Better Homes and Gardens or Parents in their respective shelter and parenthood categories. Meredith is focusing on paying down debt "to give ourselves some head room" to buy assets, he said. "I don't know if it's 12 or 18 months downstream, [but] there will be some very good properties that will become available."

Even as TV retrans money grows, providing another revenue stream, 90% of Meredith's revenues comes from ad sales. Meredith -- with 12 stations including Atlanta and Phoenix -- has inked new retrans deals with the seven major cable operators in the markets it serves.

While Lacy touted the agreements, if other station groups are able to wring needle-moving increases in the space to establish a precedent over the next several years, Meredith may be on the sidelines and left out of the lucre.

Lacy said that over the last year, advertisers felt comfortable waiting until the "11th hour" to book ad time, taking the approach "that the longer you waited, the better the deal was." But now with some political-issue advertising and auto dollars increasing, earlier deals are being inked.

Last year, in the month of December, the company "experienced just dramatic cancellations." As a result, Lacy is hesitant to offer visibility for performance in the current quarter.

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