L.A. TV revs ebb; radio tide high

Los Angeles’ seven VHF TV broadcasters continued to feel the pinch of the Southland’s lingering recession at the halfway mark of 1993, while the market’s radio stations saw a decent revenue increase after two years of little or no growth.

The TV stations collectively took in about $ 525 million during the first six months of the year, down roughly 3% from the $ 541 million raked in during the same period in 1992. But total radio advertising revenue rose 5.5% to $ 216 million from the $ 204 million earned during the first six months of ’92, according to figures compiled by George Nadel Rivin, an analyst for the accounting firm of Miller, Kaplan, Arase & Co.

Despite the mixed bag of economic news, local broadcasters and analysts expressed confidence the worst may be over. L.A. was the last market to go into the recession and most expect it to be the last one out.

Trimming payrolls

After decades of unprecedented growth, TV and radio ad revenues went flat in Los Angeles during the fourth quarter of 1990, then headed south a year ago. The decline in revenue led many stations to trim their payrolls.

“I’m hopeful the decline has ceased and we now can be level for awhile,” said KNBC-TV general manager Reed Manville.

Manville, who is looking toward at least another year of flat revenues, expressed hope the L.A. market will follow the pattern set in the rest of the country. He noted the NBC O&O in New York, which went through a similar cycle, is now experiencing double-digit growth rates.

The past six months hasn’t been so bad for KABC-TV, which collected the biggest piece of the revenue pie.

In a surprise, however, indie KTLA grabbed second place–thanks largely to the addition of the Dodgers–followed by KNBC, KTTV, KCBS, KCOP and KCAL.

Political spending also proved to be a significant factor with record sums doled out in the L.A. mayoral campaign.

In fact, the city race came within $ 1.2 million of matching the total $ 5.7 million collected by L.A. TV stations in last year’s general presidential and senatorial campaign.

The general election campaign spending would have been higher, but both George Bush and Bill Clinton wrote off the state after it became apparent the Democrat would win here (Daily Variety, Nov. 4, 1992).

L.A. radio stations, meanwhile, have seen four straight quarters of continued improved results.

During the first six months of this year, local business jumped 4% from the previous year and national advertising leaped 10%.

June proved to be spectacular, with the market posting its best month in two years. Total revenues vaulted 12%, with national spending up 18% and local business rising 9% (local advertising accounts for about 80% of the total revenue).

The figures signal that “the slowdown of the early ’90s is pretty much behind the market,” Rivin said. “Confidence is coming back at the advertiser level. They’re willing to make a greater investment in radio.”

Cost difference

He attributed the discrepancy between TV and radio revenues to the difference in advertising costs for the two media. A smaller dollar expenditure is required for radio, and it is easier for an advertiser to put a spot on radio than TV, he said.

Additionally, Rivin emphasized that “radio has been very stable in maintaining listening levels,” while TV is faced with declining network shares and increased competition.

The L.A. radio market is also benefiting from increased traffic congestion–in other words, as the speed drops, the “forced listening” time increases, he said.

The relative health of the market was demonstrated by Infinity Broadcasting’s recent record-breaking $ 110 million purchase of oldies station KRTH-FM, according to Rivin.

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