As Media General reported Q3 results which were still down, but sequentially better than Q2, CEO Marshall Morton told Wall Street analysts that the improving trends were continuing. He’s talking more optimistically about Q4 and what’s ahead in 2010.
“As we enter the 4th quarter we’ve seen signs of strengthening in ad spending. While we don’t expect to fully replace the $23.4 million of political revenues we generated in last year’s 4th quarter, we do believe that local and national advertising spending patterns are firming somewhat, especially on the broadcast side. September produced the smallest revenue decline we’ve seen all year, down 12%. In September and so far into October we’ve seen some encouraging signs that the Tampa and Providence markets have stabilized. They were the first to go into recession and we’re feeling cautiously optimistic that they will be the first to emerge from it,” Morton said.
“Looking to next year, we anticipate a lift from an improving economy and the promise of political and Olympics revenues. Our political revenues in 2006, the last non-presidential election year, were $50 million. We expect hotly contested races in several of our markets. These include the gubernatorial elections in Florida, where Governor Christ has decided to run for the Senate, in Rhode Island, Georgia and Alabama, where the governors are all term-limited, and in South Carolina, where we have four stations. Senate races in Ohio and Florida are expected to be close as well. Many of these races will also entail primary contests.”
“Revenues for the 2006 Winter Olympics at our eight NBC stations were $14 million, although we did not own four of them at that time. We aim, of course, to capture that amount again, but it will be a challenge. The four NBC stations we acquired in June of 2006 benefited significantly from NBC Universal’s group arrangements with GM and other corporate sponsors. At the same time, we established a good track record during the 2008 Summer Olympics of attracting new local advertisers, even though we were in a down economy,” he noted.
RBR-TVBR observation: One side-benefit of the recession is that companies have had to take a close look at all spending and eliminate anything that was not essential. A lot of those cuts will be permanent, which should provide added momentum to the eventual recovery. But Morton did have some good news for Media General employees regarding some of the 2009 cuts.
Those employees were required to take a total of 15 unpaid furlough days in 2009 to deal with the dire state of ad sales. That saved the company $9 million. “We hope to enter 2010 with furlough days behind us,” Morton said in his conference call. He also said Media General hopes to restore its 401(k) match as soon as market conditions allow. Foregoing 401(k) matching payments saved the company $10 million in 2009.
