Barrett bullish on '08


With interrelated negatives such as the credit crunch, housing downturn and soft auto sales, CEO Dave Barrett says Hearst-Argyle Television will end 2007 at the low end of its original revenue expectations – perhaps even a bit lower. But he is looking ahead to 2008, with both political and Olympics revenues on tap, although Hearst-Argyle isn’t yet ready to project just how big next year’s gains are going to be.

Although Hearst-Argyle doesn’t give quarterly guidance, only one quarter remains, so the company is focusing in on how the whole year will play out. Back when the year began, Hearst-Argyle management was expecting 2007 revenues to be down 1-4%, due to the lack of most of the record 88 million in political ad buys received in ’06. Now the expectation is that full year revenues will be down 3.7-4.8%, which would put them in a range of 661-656 million, vs. 702.3 million in 2006.

In his discussion with analysts, Barrett noted the impact of weak network ratings on Hearst-Argyle’s NBC affiliates. But he noted that in years past he had been concerned about other weak networks, such as ABC, which is now surging. There was some good news regarding the important auto advertising sector, which Barrett said seemed to be stabilizing for Hearst-Argyle. In fact, it was up modestly for the month of September, and down only a little less than 2% for the quarter.

At this early point, Hearst-Argyle isn’t giving any estimates on 2008, although Barrett is clearly optimistic about heavy political revenues.

TVBR/RBR observation: Network diversity certainly softens the impact of such ratings gyrations as NBC’s move "from first to worst." Hearst-Argyle has 10 NBC stations, but it also has 13 ABC stations, which has been moving the other way in the ratings.

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