Drop in political ad spending hits earnings
Sinclair Broadcast Group said net profit slipped by $10 million to $23 million last quarter on tough political ad spending comps from the year ago, offset in part by a jump in auto advertising.
Revenue for the large independent Baltimore-based broadcaster, whose 75 stations in 45 markets can be a bell-wether for the industry, eased to $213 million from $226 million.
Political ad revenues of $4.1 million in the fourth quarter of 2011 fell sharply from $26.8 million in the 2010 period when there were some hotly contested elections.
Sinclair’s diverse group of stations covers 26.3% of U.S. television households and is affiliated with all major networks.
CEO David Smith was upbeat for current year. “As we look ahead to 2012, our outlook is for continued ad spending growth by the automotive industry, as well as an increase in political advertising in this presidential election year. In addition, we expect the market for television station transactions to remain active and intend on evaluating potential transactions as they arise,” he said in a statement.
Local network broadcast revenue, which include local time sales, retransmission revenues, and other broadcast revenues, was up 6.6%. National net broadcast revenues, which include national time sales and other national broadcast revenues, were down 31% on lower political.
Excluding political revenues, local net broadcast revenues were up 13.3% and national net broadcast revenues were down 7.4% in the fourth quarter.
Top categories for the quarter were automotive, grocery and medical, while services, media spending, telecommunications, direct response and home products were down the most. Automotive, the largest category, was up 11.9% in the quarter and up 9.7% for the year.