A combination of increased political advertising and renewed retransmission consent agreements drove significant year-over-year broadcast/digital revenue gains for the now nearly pure-play television company.
The company’s results are full of information on what are now discontinued operations, which refers to the vast majority of its former newspaper holdings, now in the hands of Berkshire Hathaway. Incidentally, MG is benefitting from new financing from BH, including a $400M term loan and a $45M revolver.
President/CEO Marshall N. Morton said, “We are very pleased with our new focus as a TV broadcaster. Our year-over-year operating improvement was driven by a 17.1% increase in Broadcast revenues. Strong Political revenues were generated by the presidential campaigns, Super PACs, the Massachusetts Senate race, and congressional primaries in Virginia and South Carolina. Core time sales, excluding Political revenues, increased 3.9% overall, mostly driven by higher automotive category spending. Retransmission fees increased 80% as a result of contract renewals that reflected competitive market rates. Media General’s stations are by and large the number one or two station in their markets. Top-rated newscasts attract Political advertising and our stations have done an excellent job capitalizing on the event-driven revenue opportunities of this year.”
The company’s political increase has been aided by company policy. Morton said MG has been adding news programming at its stations in anticipation of the election year, in large part because it is a favored program category for political advertisers and increases the company’s stockpile of relevant inventory.
MG issued the following boilerplate on its broadcast results:
“Total Broadcast and Digital revenues in the second quarter increased 17.3% to $84.1 million, from $71.7 million last year. Local time sales increased 4.4% to $47 million, from $45 million last year. National time sales increased 2.9% to $23.4 million, from $22.7 million last year. The largest broadcast advertising category, automotive, increased 26.5%. Other key categories delivering increases were financial, grocery, travel, home improvement, professional services and medical. Categories that declined included department stores, furniture, telecommunications and restaurants.
“Political revenues were $7.5 million, compared with $600,000 last year. Cable and satellite retransmission fees increased 80% to $9.6 million, from $5.4 million last year.
“Broadcast websites generated $2.5 million in advertising revenues, up 18.6% from last year. Local advertising revenues grew 26%, driven by sales initiatives and new services, including mobile advertising. Total web audience growth continued, including robust activity from mobile devices. Unique visitors to websites from mobile devices nearly quadrupled in the second quarter, while unique visitors were even with last year from desktops.”