LIN executives and analyst say auto is picking up


Wells Fargo Securities analyst Marci Ryvicker has been checking around and found indications that automotive advertising is improving. That was also confirmed by LIN Media CEO Vince Sadusky and CFO Rich Schmaeling as she heard them speak at a Deutsche Bank investor conference.

“From our checks, it sounds like auto came back as expected – late September/early October and is more of a Q4 event versus Q3.  This is already incorporated in our second half earnings estimates for most broadcast groups under coverage,” Ryvicker said in a note to clients.

Looking to the future, Ryvicker said the tone was very positive from the LIN execs, particularly for 2012. “There are several catalysts that could drive local TV growth in 2012 – the following were named: 1) Auto – given new car launches as well as the Japanese’ return to normal production levels post tsunami; 2) Political – next year should be huge regardless of the economic environment; 3) Retrans – the disparity between sub fees and ratings among broadcast and cable remains significant and the MSOs recognize that this is a fee that needs to be paid; 4) Reverse comp – while a cash outflow, it should solidify investment in better programming as well as long term relationships with the networks,” she wrote.

Still, she is somewhat cautious about ad trends. “Broadcast TV is somewhat of a leading indicator, and there has been some pause given the economic environment. However, there are no signs of anything that was experienced in 2008/2009.  To us, we think the most descriptive comments were: ‘it is most prudent to provide a conservative description of the core given the economy’ and ‘we have seen nothing dramatic in any particular quarter.’  It sounds like it has been a little slower than TVL would have liked, but that there has been nothing drastic outside of the tsunami-related event,” Ryvicker concluded.

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