Revenues down 23% at Belo


The Q2 revenue decline of 23% to $144.8 million was in line with expectations for Belo Corporation. The good news from CEO Dunia Shive is that there was an uptick in ad sales for June that also extended into July.

Within that 23% overall decline, spot revenue, including political, was down 28% for the quarter – 27% for local and 29% for national.

“Looking at third quarter, visibility is limited due to later booking of spot advertising and uncertainty surrounding the timing of automotive spending from GM and Chrysler. However, the combined local and national spot percentage decline in June was better than May, and July will be better than June. Current pacings indicate that the third quarter combined local and national spot percentage decline will improve from second quarter. Excluding spin-off related charges in 2008, full year 2009 combined station and corporate operating costs are expected to be 12 percent lower than 2008, an improvement from previous guidance,” Shive said. In her Q&A with analysts, she clarified that the improvement she spoke of was excluding political. She also noted some improvement in automotive advertising, but said it was from local dealer groups, not the national car makers.

It’s hard to find much good to say about a recession, but Shive told analysts that Belo has been able to bring new local advertisers because of the economic downturn. Those are businesses which is the past couldn’t afford to advertise on TV. With rates down, Belo’s sales force has been able to craft ad campaigns that fit the budgets of those local businesses. And she said Belo will try to keep those new advertisers on TV once the economy improves and rates go back up.

Wall Street analysts are beginning to ask whether the networks are going after a share of retransmission consent payments in affiliation deals. Belo’s affiliation deal for its ABC stations comes up this year, but Shive said negotiations have not yet begun. She said she expects the networks to be interested in retrans money, or reverse comp, but she also noted that affiliates with leading stations in important markets will have some leverage in those negotiations. Belo, by the way, reported $11.4 million of retrans revenue in  Q2, with a total of $41 million for all of 2009.