• by Wayne Friedman , Staff Writer, July 30, 2024

TV stations' reliance on so-called core advertising continues to drift lower -- and that's a good thing, according to analysts. 

Growing -- or at least stable -- revenue gains in other areas. Retransmission revenues, political advertising revenues, as well as new business such as ad-sales operations for new CTV platforms, national and local are helping to form new revenue formulas. 

For example, Guggenheim Securities says, the biggest U.S. TV station owner -- Nexstar Media Group -- remains the leading company for local TV station groups because of these new shifts.

It says retransmission revenues are now estimated to be around 55% of the company’s average revenue in 2024-25. Political advertising remains a significant factor -- looking to bring in $654 million this year.

All this continues to yield an improved and manageable dependence on core advertising, which Guggenheim projects to be around 29% of its total revenue share in 2024. This is far down from the share of around 80% that the company had in 2008-09.

In the ever-growing world of streaming and connected TV, local TV stations still offer up value -- especially when it comes to local news content, now looked at as premium, live content that can command higher ad pricing. 

In the last two decades, while new digital-first local video news operations have been around for some time, local TV station groups have maintained strength -- mostly driven by big political dollars.

Meanwhile, social media continues to have strong influence when it comes to local advertising. The political ad category still has its downside for TV stations however, where the major ad dollars only roll in every other year -- Presidential-year and mid-term-year elections.

Industry estimates show political advertising revenues going to TV stations this year will rise 15% or so to around $4.5 billion to $5.0 billion.

Overall, S&P Global says, TV station industry revenue is projected to rise  8.3% to $40.04 billion from $36.96 billion in 2023. This includes gross national/local spot advertising, digital and retransmission fees.

Total spot ad revenue, excluding digital, is expected to grow 15.4% with a boost from political to $21.57 billion.

And core TV advertising? That is around $18 billion, with estimates to drift lower to $17 billion by 2028. 

What is making up the slack when political isn’t around?

The hope would be that digital ad revenues sold by TV stations would make gains.

That has not happened. Against powerful digital media platforms -- social media, in particular, Google and Facebook --  that will continue to be a tough task.