Faced with the loss of $12.1 million in political revenues between the fourth quarter of 2002 and 2003, Young's revenues fell 17 percent in the quarter, from $66.2 million in 2002 to $55.1 million in 2003. Operating income was also much lower, from $14.1 million in the fourth quarter of 2002 to $3.7 million a year later, tagged to sharply lower political revenues in the off year of 2003.
Young owns 11 TV stations, including network affiliates in the Midwest, South, and upstate New York, along with KRON in San Francisco, the country's largest independent station. A subsidiary, Adam Young Inc., is a national TV rep firm.
During a conference call with analysts Tuesday morning, Chief Executive Officer Vincent Young championed the local advertising growth seen throughout the station group. Non-political local ad revenues were up 5.3 percent in the fourth quarter compared to the same period a year ago, and up 6.1 percent for 2003 compared to 2002. National revenues were up 2.3 percent in 2003.
"As we're getting this recovery going, it doesn't start everywhere at once," Young said. "There's an unevenness to this."
In the lackadaisical San Francisco market, Young said KRON's local and national revenues rose 12.2 percent in 2003, outperforming the whole market that grew by only 2.4 percent. KRON's market share was about 11 percent at the end of 2003. The new year's pacings have steadily improved since the turn of the year.
"January was relatively weak, February and March improving, and April looks wonderful from here," he said. Young declined to provide specifics about pacings.
"[San Francisco] is a very, very competitive market. Clearly, with not a lot of growth heretofore, stations are running after dollars as best they can, and yet we keep growing the shares of the dollars that are available," Young said.
In most of Young's markets, each new month is stronger than the previous month. The situation is being helped by a new local advertising initiative that is designed to grow revenues by 10 percent by attracting advertisers who haven't been in TV before.
"We're not going to just wait for national and local to get better," Young said. "We're taking it into our own hands."
In the Midwest, where Young owns stations in Michigan, Iowa, and Wisconsin, there are signs of a recovery. In Albany, local and national ad revenues are up mid-single digits in the quarter. National is weak at Young's stations in Knoxville and Nashville, Tenn. Its station in Lafayette, La. had a soft fourth quarter, but the first-quarter results are up about 20 percent from 2003 so far.
For the full year 2003, net revenues dropped 8 percent to $207.7 million, compared to $225.1 million in 2002. Operating income also fell as a result of political ad comparisons--to $12.6 million in 2003 from $31.4 million in 2002.
"We think it's going to be a strong year, 2004, to begin with," Young said. "We can see the signs of very good revenue, locally and nationally, throughout the group. And each month, as we start out this year, gets stronger."