Broadcast television showing stability


Moody'sAs per usual in an odd-numbered year, broadcast television will suffer revenue declines due to the lack of Olympic and political revenue, but core advertising categories are expected to register modest improvement – and the business as a whole has earned a stable rating from Moody’s Investors Service.

“Advertising income from core sectors such as automotive, retail and services will go up by 1%-3% this year, but overall broadcasters’ advertising revenue will decline by 5%-7% in the absence of advertising related to the US presidential race and the Summer Olympics,” says VP/Senior Analyst Carl Salas.

Salas said that projections over the next 12-18 months are in line with the stable rating.

Television is still trying to get back to peak revenue levels registered in 2006, a prospect made all the more difficult by increased competition from cable and new media.

Salas noted that one thing that is benefitting television groups is increased retransmission income. However, the benefits are blunted for network affiliates who now must share the wealth with those networks.

Salas says that increased M&A activity which took place in 2012 should continue in 2013. “An estimated $2.9 billion windfall from political advertising has given many broadcasters debt capacity to pursue acquisitions,” Salas says, “while it has also allowed them to fund special distributions or increase quarterly dividends.”

Still, Salas struck the sour note of increased competition, and specifically mentioned existing Hispanic stations which will face newfound competition from MundoFox.

RBR-TVBR observation: We’ve said it before and we’ll say it again: When television groups issue their comps, they should be for the corresponding quarter going back two years, not one. Q1 2013 will have a lot more in common with Q1 2011 and 2012; and of course, the real differences will show up during Q3 and Q4. Sure, mention the one year comps – but the two year comps are the ones that really mean something.