LIN Television reported that automotive advertising, while down 1% for all of 2007, increased 5% for the company in Q4. In the company’s quarterly conference call with Wall Street analysts, Scott Blumenthal, Executive VP/Television, said auto is a bit sluggish in Q1, but he sees opportunities in 2008 because General Motors has let local dealer groups take control of regional ad spending. In his view, that should boost spending on dominant local stations such as the news-intensive LIN stations. Blumenthal told analysts that the 5% auto ad growth in Q4 is indicative of what to expect for 2008, although much of that growth will come in the back half of the year.
While the auto sector was described as "sluggish" for Q1, LIN is predicting an up quarter. The company’s guidance to investors was that revenues are pacing up 2-4%.
On another issue, CEO Vince Sadusky had an interesting response when one analyst asked whether reverse network compensation might be a future trend. "I don’t think you’ll see reverse compensation in the way you saw reverse compensation with the Granite deal years ago [in San Francisco with NBC], but I think what you will see is networks increasingly asking their affiliate groups, including them in the decisions around significant landmark programming – like the sports contracts, for example, and essentially putting it back to the stations and saying, hey guys, if you want the NFL, or incremental NFL games, this is a pretty pricey thing for the network, we’d like you guys to help us out with that. And that may not be even in the form of cash compensation. It may be, or it may be in the form of incremental avails, available inventory in the program. I think that’s likely the way it will go, I don’t believe it will go the way of paying cash for affiliating with a network, especially for the television stations that are extremely well-run and continually way over-index the network’s national ratings," Sadusky said.
