Despite Tough Comparisons, Station Groups Post A Decent Q3

Despite an improving economy, local television station groups are posting flat third quarter revenues. The reason: unfavorable comparisons to 2002's unexpected flood of political advertising.

With nine publicly traded companies reporting data, most posted either flat or slight declines, although a few showed positive year-over-year growth in the third quarter. An analysis by MediaDailyNews of recently released financial data shows that the nine companies booked more than $1.25 billion in revenue in the third quarter, which was down slightly -- $5.36 million - from the $1.25 billion in revenue a year ago. The data doesn't include owned-and-operated stations from the big media conglomerates like News Corp., Viacom and Disney, which doesn't break down the revenues received from its television station portfolio, which are affiliates of networks that are also owned by the conglomerates. It also doesn't include Gray Television, an Atlanta-based company that owns 29 television stations, mostly in the South and Midwest. Gray Television reports earnings today.



Tribune, a multimedia company that includes a number of television stations, showed the most growth. Revenues rose 5 percent to $326.63 million, which included the acquisition of stations in Portland, Ore., and St. Louis. Revenues would have increased 2 percent in the quarter without those stations. Meredith Corp., another station owner that is known primarily for its position in the magazine industry, posted a 3 percent increase in revenues to $66 million. Meredith credited its ability to replace $6.3 million, or 10 percent of its total revenues, in political ad revenues for its strong showing. Without the impact of politicals, broadcast revenues would have grown 13 percent.

Other companies weren't so lucky.

Gannett, which owns 22 stations nationwide, saw their revenues drop 6 percent to $172.3 million on tough comparisons to $21 million in political advertising in the third quarter of 2002. The same held true for LIN TV, a pure-play television operator, which said its revenues dropped 6.6 percent to $85.7 million in the third quarter because political-ad revenues were only $1.1 million compared to $6.4 million a year ago. But excluding politicals, revenues declined less than 1 percent in the quarter.

Belo, another newspaper company that has significant television stations, saw its revenue rise slightly despite only getting $3.6 million in political revenues this year compared to $11.5 million in the third quarter of 2002. Belo's strong categories included automotive, financial services, radio/television and insurance. Department store, movies and health/beauty decreased in the quarter, Belo said.

Young Broadcasting Inc., which owns 11 TV stations and the national rep firm Adam Young Inc., said Monday that its revenues declined 5 percent to $152.5 million in the quarter. It too was impacted significantly by political advertising, said Young Broadcasting Chairman Vincent Young.

Young said Monday that revenues were flat excluding political, with some growth in local accounts and a slight decline in national.

"The whole television broadcast sector is, we believe, bottoming out right now or has bottomed out. As we have talked to our managers across the group and heard what other groups have said, it's clear that the future will show the sort of growth we've had in the past in this business," Young said.

But the television stations are going to have to weather a difficult fourth quarter because 2002 saw heavy political spending in October and early November. Sinclair Broadcasting Group Inc., for instance, said that it expected revenues to be down between 9.7 percent and 10.6 from its 2002 fourth-quarter revenues of $189.4 million. Belo is facing $21.8 million in political advertising comparisons for October, and another $5.9 million in November. LIN TV said that despite current pacings slightly ahead of last year in all but political, it expects a decline of between 9 percent and 14 percent in revenues in the fourth quarter that will end Dec. 31. LIN TV received $13 million in political revenues in the fourth quarter last year.

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