LIN Chairman Says Affils May Be Better Off Indie

Feb 15, 2006  •  Post A Comment

LIN TV Chairman Gary Chapman said Wednesday it isn’t certain whether his WB and UPN affiliates will seize the opportunity to be converted to CW affiliates, noting that there may be greater revenue opportunities if those stations become independent.

“The truth of the matter is that these networks ceased operations because it was not a viable business plan,” Mr. Chapman said during a conference call to discuss fourth-quarter results. “The WB lost money. UPN lost money. Neither one of them had great ratings success. Yet they occupied over 10 hours of prime time on our television stations, giving us only a minute and 20 seconds of inventory.”

That might lead Mr. Chapman to “investigate other opportunities,” including taking the seven UPN and WB stations that LIN owns independent.

Mr. Chapman pointed out that 1.5 percent of LIN’s total revenue comes from the prime-time lineups of its WB and UPN affiliates, and that the stations overall account for 9 percent of total revenue.

“Maybe there’s another model we want to go with in the future,” Mr. Chapman said.

Also Wednesday, LIN said that it swung to a loss of $27.8 million in the fourth quarter, compared with a year-earlier profit of $62.2 million, hurt by station acquisitions and several charges related to the retirement of debt.

Revenue rose 3 percent to $111.5 million, driven by the contribution of UPN affiliates in Indianapolis and Columbus, Ohio.

For the year, LIN reported a loss of $24.2 million, compared with a year-earlier profit of $93 million. Revenue for the year was $380.4 million, versus $376.7 million a year ago.

The loss was attributed to a series of factors, most notably the company’s acquisition of five stations from Emmis Communications. Other factors included a $14.4 million pre-tax loss related to the termination of debt and accounting charges of $33.4 million.

The revenue results reflected a $12 million decline in political advertising revenue, which more than offset increases in local and national advertising.