Broadcast gains can’t match print decline


Tribune Company reports that Broadcasting & Entertainment revenues rose 4% to $409 million in Q2, including a 2% gain in television revenues. Meanwhile, Publishing revenues dropped 11% to $701 million. That gave the entire company a 6% decline in revenues to $1.1 billion, with operating cash flow down 2% to $221 million.

“Since the beginning of the year, we have launched dozens of programs and products that have the potential to make a meaningful impact on our future, and we have made significant progress in aligning our expenses with the realities of an industry in recession. We remain optimistic and are confident in the strength of our brands and the talent within our company,” said CEO Sam Zell. He’ll give bond analysts some time to digest the 14 pages of numbers before conducting a conference call on August 26th.

Broadcasting & Entertainment at Tribune Company includes pretty much everything that’s not related to its daily newspapers. Television revenues were up 2% to $292 million for the quarter, with a gain in market share for most stations credited for producing the improvement. Operating expenses were up 7%, so TV operating cash flow declined 8% to $92 million.

WGN-AM Chicago, the company’s lone radio property, is counted on the Radio/Entertainment line, along with the Chicago Cubs. Revenues were up 11% to $118 million, mostly due to gains by the ball team, including two more home games during the quarter this year. Operating cash flow shot up 19% to $24 million.

“Our publishing results are, for the most part, in line with industry trends,” said Zell. And, as we all know, those are some pretty lousy trends. Publishing revenues dropped 11% to $701 million. Ad revenues were down 15%, with retail off 8%, national 12% and classified a whopping 26%. Even interactive revenues were down for the newspaper division, due to a decrease in classified ad sales. Operating cash flow for the publishing division declined 4% to $114 million.

RBR/TVBR observation: Being private isn’t necessarily easier than being a publicly traded stock company. Zell is battling mightily to turn the massive Tribune operation around while juggling a huge pile of debt. He noted proudly that the company paid down $807 million of its Tranche X credit facility in Q2, mostly from the sale of Newsday and some asset-backed commercial paper. So, he bought some breathing room. The remaining balance of $593 from the Tranche X facility is due in June 2009. Before then, in all likelihood, Tribune will have sold the Cubs and Wrigley Field for more than a billion bucks. And we thought it was tough to balance our checkbook…