Friday, March 13, 2009

Who Says There Is No Good News?

Good News
for LIN TV

How about some good news for a change? LIN TV (NYSE-TVL) reported a gain in 2008 when compared to 2007. Net revenues were up 1-percent. Hey! A gain is good, even 1-percent. LIN TV is the parent company for KXAN TV (NBC), KNVA TV (CW), and KXAM TV (NBC in the Hill Country), plus their web sites.

Net revenues increased 1percent to $399.8 million, compared to $395.9 million in 2007. Political advertising last year made a big difference. Political revenues were $47 million, compared to $6.1 million in 2007. The Company achieved a 40 percent increase in political revenues over the 2004 presidential election cycle, according to a LIN news release.

Internet revenues greatly increased as well. Multi-platform communications a LIN emphasis. Digital revenues, including Internet advertising revenues and retransmission consent fees, increased 95 percent to $29.1 million, compared to $14.9 million in 2007, the release says.

Overall, political advertising made the difference. Local television advertising sales were down 11 percent. And performance fell further in the fourth quarter. LIN says, however, it kept its operating expenses under control.

“We are operating in a severe recessive economy and the financial distress on automakers, as well as the significant declines in consumer and business spending, are negatively impacting television advertising sales,” said Vincent L. Sadusky, Executive Officer. “In response, we have taken significant actions to improve our efficiency, as well as our balance sheet. Our plans to adjust our cost structure, re-engineer workflow throughout our TV stations, and execute an aggressive program to reduce our debt should positively impact our operating performance and financial condition.”

“Our leading news stations are focused on maximizing multi-platform advertising spending, new business development and digital revenue growth," Sadusky continues. “Digital revenues continue to differentiate our company and were a major factor in our ability to increase net revenues by 1percent in 2008. Compared to our peers, LIN TV delivered one of our industry’s strongest results.

“Despite the negative outlook on the economy, we remain positive. We are confident in the fundamentals of the TV broadcast business and our ability to expand digitally. We expect to operate a very healthy and cost efficient business now and well into the future," Sadusky says.

You may have wondered if LIN’s absence from Time-Warner cable during October, 2008 hurt their bottom line. No. Not really. “Following the expiration of the Company’s contract with Time Warner Cable, Inc., 15 of LIN TV’s stations were removed from Time Warner systems in 11 markets for nearly one month in the fourth quarter of 2008. Despite this disruption in carriage, 56 percent of LIN TV stations gained audience share with adults 18-49 and 25-54 in the Morning News day part time period, the fastest-growing time of the day in terms of viewers and advertising revenue, compared to the same time period in 2007. The Nielsen data also showed that the Company’s stations outperformed the national networks in the category of household share by an average of 30 percent. For the year ended December 31, 2008, LIN TV operated the #1 or #2 local news station in 81percent of its markets. On average LIN TV’s stations grew 25% across all local news day parts in
Household Ratings year-to-year,” LIN says.

These days, good news in the communications industry is hard to find. Even a 1 percent revenue improvement year to year is worth reporting.

© Jim McNabb, 2009

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