Fox Super Bowl fuels Q1 gains for Sinclair


Executives at Sinclair Broadcast Group see cause for caution in the immediate future, but during the first quarter of 2011, the group’s Fox-heavy station portfolio put Super Bowl revenues in its coffers, far outweighing a relatively modest loss in political income.

Net broadcast revenues were up 5.4% to $155.9M, compared to $147.9M in Q1 2010. The Super Bowl was good for $6.2M in income, blowing the $100K in Super Bowl cash earned in 2010 out of the water. As is par for the course in an odd-numbered year, political was down, dropping from $1.5M in Q1 2010 to $600K this time.
If the Super Bowl and political are taken out of the equation, Sinclair said it still managed a 1.9% gain in revenues, mainly thanks to its performance in the local category.

Sinclair came to agreement with two major MVPDs on retransmission consent – Comcast and Cox. The major contracts on the table for 2011 were said to involve the satellite services.

“We continue to see growth in our core business, both in the first quarter and in our second quarter expectations,” commented David Smith, President and CEO of Sinclair. “We are also seeing continued advertising growth in the auto category, although our outlook provides for some slowing due to new car production disruptions as a result of the Japanese crisis. We believe that once the auto parts and supply issues are addressed, manufacturers and dealers will increase their advertising in order to announce restocked inventories and to compete for their share of any pent up consumer demand.”

Advertising categories that led the charge in the first quarter were automotive (up 22.7%), schools, pharmaceuticals, and furniture. The biggest losers were restaurants, home products, grocery, paid programming and religious programming.

International events and continuing tough comps in a non-political year are producing a cautious attitude toward the immediate future at Sinclair, but the company still expects to grow. It’s looking at a Q2 revenue gain in the 0.3%-1.6% zone. It would be a 2.2%-3.5% range if political is taken out.

“We remain confident in the strength of our core business for the full year 2011,” commented David Amy, EVP and CFO. “Our cautious net broadcast revenue guidance for the second quarter reflects factors beyond our control, including the Japanese crisis and political upheaval in the Middle East and northern Africa, which are creating supply chain issues and accelerated oil prices.”

On TV station trading, Sinclair has been sitting on the sidelines during the period of time when equity buyers were driving up prices. Since that trend is on the wane, Amy said the company is starting to take an interest in opportunities to add properties to its portfolio.

Sinclair owns or has business relationships with 58 stations in 35 markets.