After Sinclair Broadcast Group reported that Q3 revenues were down only 9.1%, Television Group COO Steve Marks provided analysts with some detail on the improving ad market for TV. Auto is less bad and a few categories are even up.
With Q3 revenues almost $10 million better than what Sinclair had originally projected, Marks pointed to a number of reasons for the good news. “The improvement came from the extension of ‘Cash for Clunkers,’ political issue money for health care and state-related issues, particularly in Ohio – and a general strengthening as the quarter progressed,” Marks told analysts.
“Including political, local time sales for third quarter were down 13.9% and national was down 26.7%. While a handful of categories were up year-to-year, such as grocery, breakfast foods, Internet, medical, travel and restaurants, many categories were down by smaller declines, such as oil, pharmacy, fast food, home products, retail and telecommunications, to name a few. The automotive category was down 31%, much lower that the mid-40-percents that had been running, and services were down 11%,” Marks said in detailing Q3.
For Q4, Sinclair is comping against $25.6 million in political advertising in 2008, with only $3 million expected this year, so the company is expecting total revenues to be down 11-12.8% from last year’s $164.4 million.
“Visibility has improved somewhat,” Marks told analysts, which he said was an indicator of increasing demand. As for categories expected to be up year-over-year in Q4, Marks named medical, Internet, grocery, travel, breakfast food, soft drinks, pharmacy and toys. “Although the growth is minimal, this is a positive indicator that perhaps the worst is behind us,” he said.
As for auto, Marks said the category should only be down by a high teens percentage in Q4. More of the pickup in automotive was reported to be at the national level, although local dealers are also returning to ad spending.