• by Paul Gough , August 12, 2003

Two station groups Tuesday said the ad climate is improving in local broadcast TV, in advance of a report to be released soon by the Television Bureau of Advertising.

In second-quarter earnings estimates released Tuesday, Gray Television and Young Broadcasting Inc. both said they were experiencing growth despite tough comparisons with the first half of 2002, which benefited from incremental ad revenues from the Winter Olympics and 2002 political campaigns.

Meanwhile, a Nielsen Monitor-Plus study on first-half advertising spending that was also released Tuesday showed spot TV rose 4% while network TV, syndicated TV and cable dropped.

Deb McDermott, executive vice president/operations at Young Broadcasting Inc., said the local TV industry was seeing a recovery after some softness in the first four months of 2003 because of the war in Iraq. While McDermott wasn't able to discuss Young Broadcasting's specifics, she said the industry has seen a stronger ad market locally than nationally.

"Local business is actually doing pretty well and the general softness is in the national," McDermott said of local TV ad sales overall. She said it wasn't clear why some national-advertising categories - like pharmaceuticals, movies and some automobile - were down but 2002 could have been a stronger-than-average year.

Neither company broke out advertising revenues in its quarterly results released Tuesday. But Gray's local broadcast revenues grew 5% and national broadcast revenues grew 7% in the second quarter compared to the same period a year ago. That's even with Gray taking in $1.3 million less in political advertising revenues compared to the second quarter of 2002. First-half local broadcast revenue was $69.23 million, national broadcast revenue was $33.06 million and the company took in $3.79 million in political revenues.

Gray owns 29 television stations in 25 markets, including Panama City, Fla.; Knoxville, Tenn.; Madison, Wisc.; Omaha, Neb.; and Reno, Nev. Twenty-two of its stations are ranked number-one in overall audience, and Gray also owns four daily newspapers.

Robert Prather, president and chief operating officer of Gray Television, said Tuesday afternoon that the company had seen strong ad sales in the markets and expected to see that continue. He said pacings in the third quarter were running strong.

Young Broadcasting's second-quarter revenues dropped slightly to $53.93 million from $54.45 million the same period a year ago, owing to the strength of 2002's political revenue ($3.4 million) compared to 2003 ($671,000). Taking out political revenue, second-quarter revenue rose 3.4% due to a 13% increase in local and national revenue at its KRON, Young's San Francisco affiliate. Ratings also grew at KRON, the nation's largest independent station; total day ratings grew 17% in May 2003 compared to a year ago. First-half revenues rose slightly from $101.03 million to $101.17 million a year ago. In addition to San Francisco, Young Broadcasting owns 10 stations and a national TV rep firm, Ad Young Inc. Markets include Nashville, Tenn.; Richmond, Va., Knoxville, Tenn.; Albany, N.Y. and Lansing, Mich.

In a statement accompanying the earnings report, Young Broadcasting Chairman Vincent Young said the continued effects of the war and a poor economy were taking their toll on broadcast TV.

"Despite these factors, the performance of our station group as a whole, combined with enhancements we have made in our sales and marketing areas, should position us well for the anticipated economic rebound in the second half of this year," Young said.