A month and a half into the second quarter, major TV station groups are witnessing sharp advertising declines of around 35% to 40% so far due to COVID-19, according to recent earnings calls with analysts.
On Thursday, Meredith Corp. said that through April, its local TV stations' “non-political advertising and National Media Group digital advertising revenues [was] down approximately 40%.”
“We do not know when the advertising environment will return to normal or what the new normal will bring,” said Tom Harty, president/chief executive officer of Meredith Corp., adding: “We have adapted swiftly, focusing on what we can control and emphasizing our strengths.”
Harty said this advertising drop was more severe and more rapid than the financial recession in 2008. By way of comparison, during that period, initial local TV advertising at Meredith was down 30% with national digital advertising 24% lower.
At the same time as the current ad declines, Meredith says, there has been sharp growth in viewing with its local TV news, with early evening newscasts up 35%, and late evening newscasts 10% higher. Many local TV stations also report higher local news viewing.
Nexstar Media Group -- the largest U.S. TV station group -- confirmed the same advertising results. “I would say our experience is not materially different than some of our peers,” says Tom Carter, the company’s executive vp/chief financial officer.
Perry Sook, chairman/president/CEO of Nexstar, said: “We've also had a number of folks that have canceled advertising out of the second quarter and pushed it into third quarter and in some cases with increased budgets... We are braced for a pretty sobering second quarter.”
Another major group, Sinclair Broadcast Group, says core advertising guidance for its second quarter shows an estimated 32% to 39% decline, beginning in the last weeks of March.
“In our legacy businesses, we did see attrition from some advertisers very late in the quarter, which caused our core advertising to come in lower than expected,” says Chris Ripley, president and CEO of Sinclair Broadcast Group.
Sinclair’s core advertising at its TV stations was not that healthy before COVID-19. In the first quarter, total advertising was up, largely due to strong political advertising. But taking political advertising out of the picture, core advertising was down 1%.
Like other TV station groups, Sinclair benefited from much higher viewership for its newscasts.
Ripley said: “Perhaps the biggest effect of COVID-19 during the quarter was the surge in viewership we experienced across our local news and digital sites.... No other media is as critical to keeping the public aware and informed than local television broadcasting.”