Hearst-Argyle TV Takes Political Hit, Gets Modest Boost

Hearst-Argyle Television Inc. got stung in its second-quarter earnings, sinking 32% to $17 million. The drop was partly the result of lower political advertising revenues in the period.

For the quarter ending June 30, the station group's political advertising was at $3 million, versus $12.9 million for the same period in 2006. The second quarter showed political ads at $4.9 million. But as the presidential political ad season begins to ramp up, the company says that several of its markets will benefit from improved political spending in the third and fourth quarter.

Other advertising business also got hit; in particular, automotive advertising declined 13%. There were declines among furniture/housewares, financial-services and fast-foods marketers. The company, however, reports increases in telecommunications, attractions, pharmaceuticals and movies.

Overall, revenues were at $193.0 million--up 2.4% from second-quarter 2006.

As with other station groups, H-A saw continued growth in digital revenue. The company had increases of 48% in digital-media revenues and 35% in retransmission consent fees. Still, both revenue sources are small parts of H-A's total revenue picture.

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Of the $778 million in revenue the company expects by the end of 2007, $24 million will come from digital ad revenues, and $20 million from cable operators in the form of retransmission fees.

Evaluating Hearst stations' rating performance, David Barrett, president and CEO, noted in the company's release: "All 18 Hearst-Argyle stations that receive metered market data from Nielsen over-indexed their respective networks' prime-time ratings in May for ABC, NBC, CBS, CW and MN. Web traffic continues to grow at our station sites, and our strategy of serving our local viewers on-air, online and on-demand is on target."

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