National TV Ad Projection: Slight Decline, Media Stocks Up

Although media sector stock prices have recently had a strong performance, first-quarter national TV ad revenue is expected to witness a slight decline.


MoffettNathanson Research projects a 1.4% fall in national TV advertising for the period, with broadcast networks sinking 2.8% and cable networks slipping 0.2%.

“Only a few years ago, these types of declines would cause investor angst,” writer Michael Nathanson, senior research analyst. “Not anymore.”

He points to a strong stock market performance for media companies, around 20% higher since the presidential election. He also credits expected lower corporate taxes, deregulation and other factors -- including the rise of virtual multichannel video programming services.

The Fox broadcast network is projected to be up 49.7% (largely attributable to airing the Super Bowl), while NBC (including its TV stations) will move 2.8% lower; ABC will be down 3%; and CBS will lose 24.5% (the network had the Super Bowl in 2016).

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Scripps Networks Interactive will be the strongest cable network group -- up 6%; 21st Century Fox will go 4.7% higher, while Walt Disney will add 1.5%; Time Warner and Discovery Communications will each have a 1% gain; Viacom will be down 4%; AMC Networks will lose 5%; and NBCUniversal also will give up 5%.

All this comes on top of a weak 8% decline in broadcast and cable prime-time 18-49 ratings in the period. A year ago, it was down 11% (up against an unfavorable period of the 2014 Winter Olympics).

Affiliate fees and retrans revenues remain a brighter spot for media companies -- not including subscription video-on-demand revenues.

MoffettNathanson expects a first-quarter 7.4% rise for the industry -- with core U.S. basic cable network affiliate fees 6% higher. This cable revenue growth will be a slight bump up from the fourth-quarter 2016’s 5% number.

Growth rates on retrans revenues continue to outpace cable network affiliate fees -- 20.3% to 6.1%.

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