• by David Goetzl , May 8, 2007

A bumbling spot market in the auto category continues to plague local station groups, with two mid-tier operators reporting significant declines in the first quarter. Gray Television--with 36 stations--said the category dropped 5%, compared to the same period a year ago, while Young Broadcasting, whose flagship is the MyNetworkTV San Francisco affiliate, saw a drop of as much as 17%.

Vincent Young, CEO of the eponymous group, said auto dollars began a descent starting in July 2006 and "just about went away" over the third quarter. That pattern has continued.

Less worrisome for the groups was the expected decline in the recently completed quarter in political advertising, since it's an "off year" on the federal-election level. However, both companies are optimistic that the run of early presidential primaries next year will fill their coffers starting this fall. Young described it as a "tsunami of revenue."

Executives at both companies made their comments in conference calls to announce their first-quarter results.

At Gray, revenues dropped 1.7% to $69.7 million, stripping out a recently acquired station. Young saw revenues decline 3.2% to $47 million. At Young, the company said it is focusing on a "hyper-local" strategy to combat declines in national spot dollars, including the auto business.

CEO Young also expressed optimism that the fortunes of the struggling MyNetworkTV will turn around. (The company has a lot riding on that venture, given its Bay Area link.) He applauded the new executive team and its experimentation with an array of new programming formats and pursuit of a signature show.

"They just need one to build on, and they have the right attitude--that they're open to try just about anything," Young said. "We've seen some pretty wild stuff they're throwing out there." Included in that mix are an Elton John concert, sensational documentary-style offerings and a new mixed martial arts fight league.

Gray CEO Bob Prather said the financial and insurance categories joined auto in the soft area, but telecommunications and entertainment continue to be strong.