It may be a mid-term election, but Sinclair Broadcast Group reports that political advertising established a new record for the company this year. Sinclair reported that Q3 revenues were up 16.4% and that Q4 is expected to be up even more.
“Political advertising of $9.8 million in the third quarter came in higher than expected and that trend has continued in the fourth quarter where we expect $26.8 million in political revenues,” said CEO David Smith. “For the year, political revenues are expected to be approximately $41.9 million, a record amount for us. This would represent a 34.7% increase over 2006’s $31.1 million in political revenues and a 1.9% increase over the 2008 presidential year’s $41.1 million. Looking ahead to 2011, early indications are that the core business will be stronger than normal non-political years driven by the Super Bowl on the Fox network, of which we have 20 affiliates, and the continued economic recovery. We believe that the core business in 2011 will grow versus 2010,” he added.
Q3 net broadcasting revenues from continuing operations were up 16.4% to $158.8 million. Broadcast cash flow was up 22.2% to $70.1 million.
COO Steve Marks, who heads the TV operations, told analysts that Q3 broadcast revenues, excluding political, were up 10.8%. Local was up 11.9%, or 9.8% excluding political. National gained 30%, or 13.8% excluding political. Automotive was the strongest core category, up 43.9%, with Services up 16.2% as the second best performer of the top 10 categories.
“We are currently seeing growth in core business in every month of fourth quarter compared to last year, despite the crowding-out effects from political and a recovering economy in fourth quarter last year. For the fourth quarter we are forecasting net broadcast revenues to be $181.5 million to $185.5 million, which represents and 18% to 20.6% increase over the same period last year. As compared to the fourth quarter of 2008 this would be a $17-21 million increase, or growth of 10.4% to 12.9%,” Marks told the analysts.