Belo Assesses Katrina Impact at $7.1 Million

Oct 20, 2005  •  Post A Comment

Belo said Thursday that the impact of Hurricane Katrina totaled around $7.1 million, and that it has put off closing its planned $14.5 million acquisition of New Orleans UPN affiliate WUPL-TV until it completes an assessment of the future of the market there.

The company, which already owns New Orleans CBS affiliate WWL-TV, said it expects most of the hurricane’s financial impact to be covered by insurance. But Belo warned that advertising revenue is likely to be off sharply over the next few quarters. In the fourth quarter, for example, the company predicted that revenue at WWL would be between $2 million and $3 million, compared with previous estimates of $11 million. Belo expects that revenue drop to take a slight toll on overall fourth-quarter profit.

Belo officials said they have not begun the process of closing on the purchase of WUPL and aren’t likely to do so until after they determine the long-term prospects for the New Orleans market post-Katrina.

Those updates came as Belo reported a third-quarter profit of $22.1 million, up from $11.2 million a year ago, when Belo booked charges related to a circulation overstatement at its Dallas Morning News newspaper, its discontinuation of a cable news joint venture with Time Warner Cable and staff cuts. Revenue advanced more than 4 percent to $372.3 million.

At the company’s television unit, revenue fell 7 percent, due in part to the impact of Katrina, with a 9 percent decline in spot advertising revenue and a 4 percent drop in local advertising revenue. The company blamed the ad reductions on having booked just $1.5 million in political advertising spending, compared with $22 million in political and Olympics revenue last year.