Sinclair Broadcast Group reported that Q2 revenues shot up 19.3% to $158.7 million. And while comps are getting tougher in the second half of the year, the company is still looking at double digit growth in Q3.
Automotive, in particular, continues to soar in Q3. “Last year we had the big ‘Cash for Clunkers’ out there, and that drove quite a bit of sales last year at this time. Even with that given, we’re just crushing the numbers,” said Sinclair Television Group COO Steve Marks in the company’s quarterly conference call with analysts. The company is now projecting that automotive advertising will be up approximately 47% in Q3, despite going up against the Cash for clunkers comp.
“Third quarter is turning out to be a very exciting quarter for us,” said Marks, which he emphasized speaks to the strength of the core business for Sinclair’s TV stations. The company is expecting Q3 revenues to be up by a percentage in the high teens to low 20s. “For the first time in a very long time, the third quarter’s net broadcast revenues, excluding political, are on pace to approximate second quarter’s core business. Second quarter is typically one of our strongest quarters in any given year. So for third quarter to perform at this competitive level is an important data point on the strength of the business. In addition, third quarter is expected to outperform third quarter 2008 on a both including and excluding political basis,” he said.
Sinclair is including approximately $9.5 million in political advertising in its Q3 guidance, compared to only $1.9 million a year ago and $7.7 million in Q3 2006, the last non-presidential election year. “As we head into the height of the political season we expect to benefit from heated gubernatorial races in Maryland, Ohio and Florida, and heated senate races in Iowa, Ohio, North Carolina, Missouri and Illinois, and contested house races in Baltimore, Pittsburgh and Las Vegas. While it’s still too early to call the fourth quarter’s political, we do expect that we will more than keep pace with the fourth quarter of 2006’s $21 million of political, implying that we will exceed $36 million in political this year. How high this number gets will really depend on how much issue money in the 60 days leading up to the election, since that is the window opened by the Supreme Court in their recent relaxation of campaign finance spending laws,” Marks explained.
Looking back, the 19.3% increase in Q2 revenues to $158.7 million produced a 47.4% improvement in broadcast cash flow to $70.6 million.
For Q2, local broadcast revenues were up 16.6%, or 16.3% excluding political. National was up 27.7%, or 19.5% excluding political.
RBR-TVBR observation: Happy days are here again. An interesting side note from the conference call was that while national is leading the recovery, local is accelerating. Steve Marks pointed to some of Sinclair’s CW and MyNetworkTV affiliates, which don’t get much national business, as being among the current pacing leaders for the company.