Stations Broadcast Mixed Q4 Results

It was a tough fourth quarter for broadcast TV stations, although some did better than others.

Compared to the hundreds of millions of dollars in political advertising that stations raked in during the final flurry leading up to the midterm elections of 2002, 2003 was pretty sparse--with only a handful of competitive races nationwide, even with the recall election in California. And that's shown up in the bottom line for a lot of media companies with broadcast TV holdings that have reported previous quarter earnings in the first month of 2004.

Not every publicly traded station owner has released fourth-quarter financial data yet, although during the past several months executives have been saying early and often that the comps wouldn't be pretty. Station groups planned for programs to counter the multi-million dollars they weren't getting from politicals this year, but knew for the most part it wasn't going to be enough. E.W. Scripps, for instance, received $17.3 million in political advertising in the fourth quarter of 2002; it only took in $1.3 million a year later.



Last week, companies that did release earnings pointed out the challenge they faced in the previous quarter.

"The every-other-year effect of political advertising clouds year-to-year comparisons," explained Kevin O'Brien, who runs Meredith Corp.'s broadcast TV unit.

Meredith was able to boost non-political ad revenues 10 percent, but it still wasn't enough to compensate for the $14.1 million in political ads it got in the fourth quarter of 2002. Meredith's broadcast TV revenues were down 9 percent.

Media General's revenues fell 10.7 percent to $77.2 million in the fourth quarter compared to the same period a year ago. It, too, had some success in boosting non-political ad revenue. Local rose 5.7 percent and national was up 4.8 percent, but it was only able to partially offset politicals.

The television stations owned by the Washington Post Co. also got slammed by comparisons to 2002, when they brought in $31.8 million in political ($20 million in the fourth quarter) and another $5 million in Olympic-related spots. Fourth-quarter revenues fell 12 percent to $87.9 million.

Tribune Co., which owns WGN in Chicago and WPIX in New York among others, also had a tremendous fourth quarter in 2002, when revenues were up 22 percent. But it turned in a not-bad fourth quarter in 2003, with revenues up 4.1 percent to $353 million.

Still ahead are other big TV station owners, including Viacom, Walt Disney Co., and Gannett. Gannett, which has substantial TV holdings, reports earnings on Monday.

And in any event, there's little doubt that 2004 will work out better for local television.

First, there's the issue of comparisons. Although the third and fourth quarters of 2002 made comparable quarters in 2003 pale by comparison, the first quarter of 2003 wasn't anything to write home about. Advertising took it on the chin in the first quarter, as uncertainty over a possible war in Iraq and then the outbreak of hostilities chilled media investment until things turned out better than expected.

And then there's what the Television Bureau of Advertising calls the "quadrennial effect," which takes away in odd-numbered years but gives heartily in even-numbered years by a combination of the Olympics and a midterm election (as happened in 2002) or the Olympics and a presidential election (which is what's happening in 2004). Just about everyone's bullish on spot television, from TNS Media Intelligence/CMR's prediction of a 10 percent boost in ad spending to TVB's prediction of an 11 percent gain in spot ad revenues.

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