Pilot Group LP, the sole shareholder of Barrington Broadcasting, injected $16 million of new capital into the TV group owner last month. Meanwhile, Barrington reports that Q4 net revenues increased 7.2%, or 4.3% on a same station basis. Like so many others, Barrington has been cutting costs, although CEO Jim Yager notes that not a minute of local news has been dropped.
As Barrington reported its Q4 and full year 2008 results to bondholders, it also announced that Pilot Group, the private investment vehicle of Bob Pittman, made an equity contribution of $16 million to the TV company on February 20th.
That money has been put to good use. Under terms of an amendment to its senior credit agreement, signed on February 5th, Barrington can use up to $13 million of that cash infusion to buy back some of its 10.5% senior subordinated notes due 2014. In the current depressed marketplace, Barrington has been able to buy back some of those notes at deep discounts. It has thus far spent $3.5 million to repurchase $28.2 million face value of notes.
Barrington reported that Q4 net revenues grew 7.2% to $32.5 million, a 4.3% gain excluding two recently added stations. On a same station basis, local direct sales were down 7.3%. Local/regional agency business decreased 20.2% and national revenues dropped 22.5%. Of course, the gain for the quarter came from $8.2 million in political revenues. Broadcast cash flow (BCF) increased 17% to $12.4 million, or 13.2% same station.
2008 net revenues rose 6.1% to $119.4 million, or 4% same station. BCF was up 1.5% to $40.5 million, or 10.9% same station.
“As we have mentioned n previous calls, our primary operating objective at all of our stations is to grow truly local revenues and monetize our Internet initiatives,” Yager told analysts. “In addition, we continue to take steps to improve our operating efficiencies at all of our stations through cost reductions – and we are aggressively pursuing joint sales and shared services agreements in some of our markets,” he added. Barrington recently announced just such a deal with Granite Broadcasting in Syracuse and Peoria.
Over the past 15 months Barrington has reduced employee headcount by 25.6%, even after hiring 49 new sales people since Thanksgiving. As part of the company’s cost-cutting measures, Yager said employees are taking one unpaid day off per month. He noted that “almost all” of the company’s union and contract employees have volunteered to be included in that effort, even though they don’t have to.
RBR/TVBR observation: When money gets tight, it’s nice to know that your financial backer has cash on hand. Not only that, but to know that the backer understands and believes in the television business, as Bob Pittman does.