LIN TV’s Q3 down 18%; digital up 28%


LIN TV Corp. reported Q3 net revenues decreased 18% to $81.4 million, compared to $98.8 million in Q3 2008. Digital revenues, which include Internet ad revenues and retransmission consent fees, increased 28% to $10.4 million, compared to $8.1 million in Q3 2008.

General operating expenses decreased 9% to $60.9 million, compared to $66.8 million in the third quarter of 2008. Operating income was $13.8 million, compared to operating income of $24.5 million Q3 2008.

Loss from continuing operations was $0.9 million, including a special item of $1.2 million after-tax, compared to income from continuing operations of $10.2 million in Q3 2008. Net loss per diluted share was $0.02, compared to net income per diluted share of $0.20 in Q3 2008.

LIN TV President and CEO Vincent Sadusky said results partially reflected the odd-year decline in political revenues, which were $3M in Q3 2009, vs. $11.4 million in Q3 2008. However, he noted that according to the TVB’s October 2009 Group Time Sales Survey, LIN continues to outperform key industry sales averages in all key metrics, including national, local, core and internet advertising.

“Despite achieving better results than the previous two quarters, the recession is still adding significant pressure on revenues. The good news is advertising demand improved sequentially in Q3, with revenue increases in the government, home improvement and grocery food items categories. For the first time all year, core revenue, which excludes political, is currently pacing ahead of last year for both October and November.”

Part of LIN’s strategy is to add more local programming, for more local ad dollars. In Q3, they added 200 more hours and launched shows in Norfolk and Grand Rapids. Said Sadusky: “Local programming allows us to leverage our existing production teams and on-air talent, while limiting our exposure to long-term syndicated programming contracts. It also allows us to be more creative and go beyond selling :30 and :60 spots, and is supported by our advertisers.”

As a result of business development initiatives, including more local programming, LIN added 300 new advertisers in the Quarter.

On 10/2, the company completed the acquisition of Red McCombs Media, LP, an online advertising and media services company based in Austin, Texas. The acquisition provides the Company with a national interactive footprint and significantly expands the Company’s multi-platform offerings by providing national online advertising and enhanced services, including targeted display, rich media, video advertising, custom-built vertical channels, search engine marketing, search engine optimization, and mobile marketing.

Q3 special item: During the quarter, LIN recorded an impairment charge of $2.0 million, or $1.2 million after-tax, relating to an accrued loan to the Company’s joint venture with NBC Universal, which has experienced depressed cash flows during this economic downturn. The charge relates to a write down of amounts the company expects to advance to the joint venture during Q4 2009 and through Q1 2010 under a shortfall funding agreement with NBC Universal.

Q3 Highlights:
• Core local and national ad sales combined, which excludes political ad sales, decreased 16% to $75.6 million in Q3, compared to $90.3 million for the same period in 2008, reflecting the continued impact of the economic downturn nationally and across all of the company’s markets.
• 15 of the company’s “Big-4” network affiliate stations ranked #1 or #2 from sign-on/sign-off during the July 2009 ratings period in households.
• 13 of the Company’s “Big-4” network affiliate stations grew audience across all local news dayparts in household ratings year-to-year during the July 2009 ratings period.
• Seven television stations ranked #1 in household ratings for all weekday newscasts (morning, early evening and late news): WOOD-TV; WAVY-TV; WIVB-TV; WANE-TV; WWLP-TV; WTHI-TV; and WLFI-TV.
• Retransmission consent fees increased 36% in Q3 2009, compared to the same period in 2008.
• The company delivered its largest audience to-date across all of its websites in the quarter, including a combined 184.2 million total user actions, an increase of 37% compared to the same period last year. Time spent on site increased 77% and unique visitors increased 25% compared to the same period last year.
• LIN delivered 32 million video views with an average duration of more than 2 minutes.
• 75% of the company’s station websites rank #1 for time spent on site in the local market compared to its broadcast media competitors.
• Mobile impressions increased 54% to 28.7 million in Q3 2009 compared to the Q2 2009. Also during Q3 2009, the company was the first broadcaster in its local markets to launch BlackBerry smartphone applications. Since the launch, LIN  has generated over 60 million impressions and 160,000 application downloads.

Looking ahead
Based on current sales order pacings, the market decline for both local and national ad spending and reduced political advertising this year, LIN expects that Q4 2009 net revenues will decrease in the range of 8.8% to 14.6% (or $9.2 million to $15.2 million), compared to net revenues of $104.2 million for Q4 2008. Q4 2008 revenues included $20.7 million of net political advertising. For FY, they expect that 2009 net revenues will decrease in the range of 16.6% to 18.1% (or $66.4 million to $72.4 million) compared to reported net revenues of $399.8 million in 2008.