LIN TV says Q3 revenues should be up 3.5-6.2%, all due to political and digital ad growth. Gains in those areas also helped counter a 7% decrease in core ad sales in Q2, bringing the quarter in with a gain of 2% in revenues. Cost controls increased that to a 5% increase in broadcast cash flow. Like some other groups, LIN took a major write-down in the quarter for the value of its FCC licenses and goodwill. “Right now we are faced with the reality of a weak economy and a volatile stock price and we expect the economic pressures to continue into 2009,” said CEO Vincent Sadusky.
With the Olympics beginning Friday on five of its 29 stations, analysts wanted to know how Olympic ad sales were going. “Our Olympic sales have done very well in the third quarter. The same as they’ve done in previous years, but rates are a bit lower as the economy is tough right now,” said Sr. VP of Operations Scott Blumenthal.
“We actually started to feel the effects of the current economic downturn in the second quarter of last year – and the macro factors of unprecedented gasoline costs, the soaring price of oil, the housing slump, credit crisis and unemployment has led to more advertisers reducing their expenditures over this annual time period. At first, we saw the effects on national revenues, but now local has been impacted for two consecutive quarters, and as a result almost every advertising category is down,” Sadusky told analysts. He noted that most forecasters do not expect an upturn until mid to late 2009. “Despite the negative outlook, we remain positive. We are confident in the fundamentals of the television broadcast business…and the ability to expand digitally,” he assured investors.
Q2 revenues were up 2% to $103.7 million. Local was off 5% and national 11%, while digital revenues (Internet and retrans) doubled to $6.7 million and political advertising increased to $8.1 million from $1 million a year ago. Broadcast cash flow gained 5% to $39.5 million. The non-cash impairment charge of $297 million resulted in a net loss for the quarter of $216 million.