Tribune Media posted a $15.2 million loss in the first quarter, driven by lower advertising sales at its stations and higher programming costs at cabler WGN America. The broadcaster’s financial results come two days after it announced a $3.9 billion sale to Sinclair Broadcast Group, a deal that promises to create a broadcasting colossus with more than 200 stations in more than 100 markets.
Tribune Media’s revenue was down 6% to $439.9 million for the quarter. The operating loss compared to a $30 million profit in the year-ago quarter.
Tribune said the big drop in political advertising year-over-year took a bit in its earnings, as did the higher volume of original series airing on WGN America. Sinclair executives were quick to say that WGN America will be out of the high-end scripted programming business after the acquisition closes. Tribune executives have already started pruning the cabler’s push into scripted by canceling drama series “Outsiders” earlier this year after two seasons.
Tribune interim CEO Peter Kern said one problem with the push into scripted series for WGN America under the previous management regime was a lack of audience flow from those shows to the rest of the lineup dominated by off-network acquisitions.
Kern said the goal for WGN America’s programming skate is to “put an originals slate together that is somewhat more efficient and carries audience from the rest of our dayparts… on a much more profitable basis,” he told investors during a conference call on Wednesday. “That is the direction we are going with the network.”
Political advertising on Tribune’s 42 TV stations dropped to $2 million, from $15 million in the year-ago period.
Overall, Tribune stations saw a $17.7 million drop in core advertising revenue and a $13.7 million decrease in net political advertising revenue. Those declines were enough to overshadow a more than $10 million year-over-year hike in retransmission consent revenue.
Another contributor to Tribune’s red ink was the year-over-year drop in real estate sale revenue. Tribune has been on a mission to streamline the business and sell off non-core assets as it prepared the company for sale. Tribune initiated a strategic review in February 2015.
A bright spot for Tribune was a $111.5 million distribution from its 31% stake in Food Network, which Tribune executives described as one of the biggest dividends ever from its interest in the Scripps Interactive Networks cabler.