Local and auto grew in Q4 for Sinclair Broadcast Group


Sinclair Broadcast Group Inc. (SBGI) is a very different TV group now than at the end of Q3 2011, so its Q4 results included adjustments for its recent acquisitions of the Four Points and Freedom stations. The bottom line, though, was that while total revenues were down on a same stations basis, that was largely due to the lack of political advertising – while auto was up double digits and local revenues grew nicely.

“We ended 2011 on a strong note with core broadcast revenues growing, and our largest advertising category, automotive, up almost 12% in the fourth quarter as compared to the same period in 2010,” said CEO David Smith. “As we look ahead to 2012, our outlook is for continued ad spending growth by the automotive industry, as well as an increase in political advertising in this presidential election year.  In addition, we expect the market for television station transactions to remain active and intend on evaluating potential transactions as they arise.”

As noted, political revenues declined in 2011, as broadcasters prepared for expected record spending in 2012. For Sinclair, political revenues in Q4 were $4.1 million, down from $26.8 million in Q4 of 210.

Local net broadcast revenues, which include local time sales, retransmission revenues, and other broadcast revenues, were up 6.6% in Q4, while national net broadcast revenues, which include national time sales and other national broadcast revenues, were down 31.0%. Excluding political revenues, local net broadcast revenues were up 13.3% and national net broadcast revenues were down 7.4% in Q4.

Advertising categories that grew the most in Q4 were automotive, grocery and medical, while services, media spending, telecommunications, direct response and home products were down the most. Automotive, SBGI’s largest category, was up 11.9% in the quarter and up 9.7% for the year.

Net broadcasting revenues from continuing operations were $180.8 million in Q4, down 4.9%. Operating income declined 22% to $63.5 million. SBGI reported net income of $22.7 million, or 28 cents per share for the quarter, down from 33.1 million or 40 cents per share a year earlier.

Looking ahead, SBGI CFO David Amy declared that “2012 is off to a good start with both automotive and political advertising spending leading the way.

“With the upcoming Presidential election this year, we expect to experience another record-breaking year for campaign and issue advertising. Meanwhile, consumer confidence appears to be improving, and with that, we should expect to see growth in ad spending,” said Amy.

SBGI expects Q1 station net broadcast revenues from continuing operations, before barter, to be approximately $187.6 million to $190.6 million, up 20.3% to 22.2% compared to Q1 2011. This assumes approximately $4.0 million in political revenues in the first quarter as compared to $0.6 million in first quarter 2011 and $0.1 million of Super Bowl revenues on its lone NBC station (WTWC-TV Tallahassee, FL) versus $6.2 million in 2011 when it aired on the company’s 20 Fox stations. The 2012 first quarter estimates assume $23.6 million related to the Four Points and Freedom acquisitions, including $2.9 million related to the Freedom LMA management fees and $6.0 million of Freedom LMA expense reimbursement.