While many other TV groups saw revenues rise in Q1 of 2010, ACME Communications, with its portfolio of five CW and one MyNetworkTV affiliates, saw revenues go the other way. Its Q1 revenues from continuing operations were down 6% to $6.1 million.
The company said revenues were down 7% for its stations, while revenues rose 5% for “The Daily Buzz” syndicated morning show. Broadcasting cash flow was a negative $355,000, which the company noted was a slight improvement from the negative $374,000 in Q1 2009.
“While we are disappointed to have lost revenue share in the first quarter of 2010 compared to a year earlier, we are heartened that non-political revenues in our markets actually increased year-over-year in the first quarter 2010 – the first time we’ve seen a rebounding market in eight quarters. This bodes well for the industry’s outlook for the balance of this year and we believe – coupled with a significant amount of political spending expected in the fall, will translate into better revenues ahead for ACME’s stations. Our recently announced LIN deal, which goes into effect tomorrow [July 1], was an important and significant strategic step in moving our group to positive cash flow as we continue to seek ways to maximize profitability at out stations and seek viable exit routes for our investors,” said President Doug Gealey in a statement. Effective July 1, he will be CEO as well, with Jamie Kellner continuing with only the Chairman title.
Asked in the company’s conference call with investors (there’s no indication that ACME has any analyst coverage these days) when ACME might return to positive cash flow due to the LIN, CFO Tom Allen said it could come later this year. Many of the cost savings will be immediate as LIN takes over most functions for ACME stations in three markets, he noted.
The top priority for ACME continues to be selling its stations and exiting the business. Asked whether the transaction market is improving, Kellner said the company’s recent deals with LIN and Fisher Communications had convinced the industry that ACME was serious about getting deals done and had sparked new interest from potential buyers.
While ACME is keeping the long-range financial terms of its deals secret, Gealey assured investors that ACME shareholders will share in any gain in value under the LIN deal. LIN has only a three month window to buy the stations at a fixed price – and thereafter the contract provides for a sale transaction to be at market value. As for the Fisher deal, he noted that Fisher has an option to buy 50% of “The Daily Buzz.”
Having been delayed by the negotiations of the LIN contract, ACME is now trying to get back on schedule with its quarterly reporting. The report for Q4 and full year 2009 was issued just nine days before the also delayed Q1 report, although that one did get out a few hours before Q2 ended. As for Q2 expectations, revenues are expected to be down slightly from a year earlier.