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Tribune Earnings Hit By Higher Programming Costs, Advertising Softness

Tribune Media’s second quarter earnings report underscores the importance of growing retransmission consent revenues to broadcast groups at a time when advertising remains soft.

Tribune’s revenue was boosted by a big jump in retrans coin as well as $160 million in proceeds from the sale of its share of the Classified Ventures online advertising service to Gannett Co.

Revenue in Tribune’s broadcast unit climbed 5% from the year-ago quarter to $425.8 million. Retrans revenue alone spiked 78% to $57.1 million, while advertising revenue declined 2.2% to $336.6 million. Political advertising increased to $6.5 million for the quarter but that was more than offset by a $15.6 million year-over-year decline in core advertising.

Even with the retrans windfall, earnings for the broadcast group fell 6% to $140.5 million as WGN America saw programming expenses jump $24.5 million in connection with the launch of original drama series “Salem.”

Tribune Media CEO Peter Liguori said he was “pleased” with the company’s accomplishments in the second quarter, which include the spinoff of its newspaper division into the standalone Tribune Publishing arm.

“The premiere of WGN America’s original series, ‘Salem,’ exceeded our expectations and we have renewed it for a second season,” Liguori said. “While the core advertising market experienced headwinds in the first half of the year, we continue to be encouraged by the strength of our new broadcast scale, as evidenced in our year-over-year retransmission fee increases, and feel positive about the opportunities presented by the political advertising landscape in the second half of 2014.”

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