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Political Ads, Digital Revenues Boost LIN TV’s Q3 Results

Oct 30, 2008  •  Post A Comment

Despite an 8% decrease during the third quarter in revenue from core advertising categories, LIN TV reported year-to-year increases of 5% in net revenue and 39% in operating income.
Driven by $11.4 million in political advertising and by an 88% increase in digital revenues, net revenues rose to $98.8 million, or 20 cents per share, up from $93.7 million, or 3 cents per share, in third quarter 2007, LIN reported Thursday in a conference call with analysts.
Operating income was $24.5 million compared with $17.7 million a year ago.
The digital revenues, which include transmission consent fees, rose 91% from $4.3 million in third quarter 2007 to $8.1 million in the just-concluded quarter.
Excluding political ad revenue, national ad sales, which represent 29% of total ad sales for the quarter, showed a year-to-year drop of 15%, while core local ad sales dipped by 3%, LIN said.
Automotive advertising, which accounts for 25% of the core ad category, was down 20% year-to-year.
Citing a confidentiality agreement, President-CEO Vince Sadusky declined to give any details about the freshly concluded retransmission deal with Time Warner Cable for carriage of LIN’s analog and digital signals, except to say that LIN was not “unreasonable.” “We received the compensation we set out to receive,” he said.
Fourth-quarter outlook is pessimistic: A 6% to 9% year-to-year decrease in net revenues in spite of the big holidays that usually mean an ad bonanza.
But LIN’s strong stations, some in the election’s battleground states, are on pace to bring in an additional $25 million in gross political advertising for the fourth quarter.
In Albuquerque, N.M., LIN’s CBS-affiiated KRQE-TV and Fox-affiliated KASA-TV exceeded expectations, capturing 42% of all political ad spending, said LIN Executive VP Scott Blumenthal.
“Our leading news stations capitalized on significant political spending in a number of our markets and focused on maximizing digital revenue growth,” Mr. Sadusky said in LIN’s earning release. “Also in the third quarter, we reduced debt by $23 million, further strengthening our balance sheet. We remain focused on our cost-discipline program and initiatives that drive bottom-line growth, including securing retransmission consent fees and building our new-media business.”

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