Journal laments weak economy

Q1 revenues were down 6.2% to $134.3 million at Journal Communications, with CEO Steven Smith noting that the company’s TV stations in Las Vegas, Ft. Myers/Naples and Tucson were particularly hard hit by the soft local real estate sector. Radio revenues fell 6.8%, but Smith is looking for some improvement in Q2. TV revenues were off 3.4% in Q1. Smith says the company is managing expenses in a difficult environment, but still investing in new digital products and growing NTR for both radio and TV.

Smith declared that the pending acquisition of the CW affiliate in Tucson, where Journal Broadcast Group already owns the ABC affiliate and four radio stations, will “increase our hyper-local focus in Tucson.”
Q1 broadcasting revenues were down 4.6% to $49.3 million, with operating earnings down 28.6% to $7.1 million.

TV revenues were off 3.4% to $32.4 million and operating earnings dropped 40.9% to $3.6 million. One bright spot was political/issue advertising, which was $1.7 million, compared to only $500,000 a year ago. Like other TV groups, Journal is expecting a surge in political ad revenues later this year.

Radio revenues were down 6.8% to $16.9 million, with most of the decline in local advertising. Smith cited a change in Milwaukee where a sports affiliation deal which had been built on ad inventory was changed to a fee per game. Excluding that, he said radio revenues were down 3% for the quarter. Smith is expecting radio to do better in Q2, since the company will be selling ads on Milwaukee Brewers games.

Publishing revenues dropped 8.6% to $60.7 million in Q1, with “continued weakness across all advertising categories.”

For Q2, Journal Communications is projecting that publishing revenues will be down again. “Both radio and television revenues are expected to be down modestly,” the company said.

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