• by Wayne Friedman , August 3, 2006

Two more TV station groups reported weak ad revenue--primarily due to a drop in the big automotive advertising category. Sinclair Broadcast Group and Granite Broadcasting took a hit in second-quarter financials. Sinclair showed virtually flat revenue compared to the second quarter of a year ago, and Granite is only up 1 percent versus a year ago.

Granite's network compensation deals fell substantially, too. Eliminate this factor, however, and ad revenue was up 2.8 percent, the company says--with categories such as insurance, political, and telecommunications higher versus 2005. But Granite's three big advertisers--automotive, fast-food restaurants, and paid programming--were collectively down 7 percent. Overall, these three categories make up 37 percent of Granite's total ad take.

For Granite, net revenue increased 0.8 percent to $26.9 million in the second quarter. Granite also had decreases in national non-political ad revenue.

Sinclair said local ad revenue was up 3.6 percent, but national ad revenues were off almost 10 percent. Take out political spending, and the numbers get worse. Local revenue was up 3.2 percent, while national ad revenue was down 11.2 percent. Local ad revenue accounts for 64 percent of all advertising.

On the upside, Sinclair reports that the quarter's revenue was helped by increases in ad spending by telecommunications, retail, schools, and restaurant categories. But that was offset by softness in the automotive, fast food, travel/leisure, Internet, paid programming, and entertainment categories. Automotive, which represents 24 percent of Sinclair's revenues, was down 3 percent in the quarter.

Sinclair's quarterly revenue rose less than 1 percent to $185.1 million from $183.6 million last year, missing Wall Street's $186.1 million estimate.