Tribune Co. saw earnings and revenue hits last year at its broadcasting and publishing units, according to the full-year and fourth quarter financial statements released Friday.
Some of the declines were attributable to the extra week in its 2012 results for both full year and fourth quarter earnings.
But even adjusted for the quirk of the calendar, Tribune saw an earnings slump in the year that it made a bold bet on growing its broadcasting operation with the $2.7 billion acquisition of Local TV, which boosted its station holdings from 23 to 42. Tribune stations, like most other broadcast groups, inevitably faced tough year-to-year comps in 2013 because of the political advertising gusher that flowed in the 2012 election year.
Earnings and revenue were also down on the publishing side, which is preparing for a spinoff into a standalone entity housing eight major market daily newspapers including the Los Angeles Times and Chicago Tribune.
Tribune CEO Peter Liguori acknowledged the weakness in the 2013 results but emphasized that trends in the current quarter and for full-year 2014 are looking up.
“Broadcasting revenue trends during the first three quarters were disappointing,” Liguori said. “However, in the fourth quarter, non-political core advertising revenue stabilized year over year. Our root challenges are definable and addressable and we have taken action. In the publishing business, our operational actions have stabilized profitability and we are confident that we are building a solid foundation for this business’s future.”
Tribune is no longer a public company but it continues to report earnings because its debt is widely held by investors. Liguori took the reins as CEO in January 2013 after the company emerged from a prolonged bankruptcy reorganization.
For the year, Tribune reported revenue of $2.9 billion, down 7.7% from 2012, and earnings of $787 million, down 5.7% from $832 million in 2012 (excluding the $12 million impact of the extra week).
Broadcasting earnings declined to $336 million, on $1 billion in revenue. Tribune attributed the decline to lower advertising revenue and lowered estimates of the value of its barter advertising time in syndicated programming.
Lower ratings at flagship WPIX-TV New York and for Chicago Cubs games on WGN-TV Chicago and weakness at cabler WGN America also dragged down results. On the plus side, the station group saw a $25 million increase in retransmission consent revenue.
The softness in 2013 heightens the pressure on Liguori’s team to deliver this year on its investments in original series to roll out later this year on WGN America — starting April 20 with drama “Salem” (pictured). After swallowing up Local TV, Tribune will surely focus this year on harnessing the station group’s expanded reach to command more advertising dollars and to develop non-traditional revenue sources.
In the publishing unit, earnings held mostly steady at $296 million, compared to $298 million in 2012. But the newspaper group reported an $86 million drop in advertising revenue, offset slightly by $12 million gain in circulation revenue.