Sharp declines at Fisher


Fisher Communications reports that Q1 revenues were down 27% for television and 29% for radio. The company’s annual meeting took place yesterday, with shareholders approving a move to elect all directors annually.

The Fisher board of directors had opposed the proposal from FrontFour Capital Group LLC to change from electing directors to staggered three-year terms to having all directors stand for election every year (once all current terms have run their course). As it happens, the person presenting the proposal at the annual meeting was David Lorber, a Co-Founder and Portfolio Manager of FrontFour, who was elected to the board yesterday under a deal previously cut to avoid a proxy fight with Fisher’s biggest shareholder, the GAMCO investment funds managed by Mario Gabelli. The vote announced at the meeting showed that the measure passed, although not overwhelmingly. In opposing the measure, Fisher’s board of directors had maintained that having staggered board elections helped to insulate the company from any attempts to influence the journalistic integrity of its news operations.

Along with Lorber, Paul A. Bible and incumbent director Deborah L. Bevier were elected to three-year terms on the board at Fisher.

Having struck the deal on board seats, GAMCO did not send a representative to formally present its controversial proposal to require a shareholder vote on any Fisher acquisition over $25 million. Thus, the proposal died without a vote. The Fisher board had vehemently opposed that move to micromanage the company’s business.

Q1 operating results reported yesterday showed TV revenues down 27% to $20.3 million, with the decline attributed to lower local, national and political revenues. However, retransmission consent payments were up 39%. Also, revenues gained 0.6% for the company’s Univision affiliates. Broadcast cash flow plunged 96% to $252,000 from $6.7 million a year ago as a 5.9% decline in operating expenses failed to cover the sharp drop in revenues.

Radio revenues fell 29% to $4.9 million. However, expenses were down even more, primarily due to no longer having to pay for Seattle Mariners broadcast rights, which moved to another company after the end of the past Major League Baseball season. Thus, the loss from operations in the radio division fell to $7,000 in Q1 from a loss of $373,000 a year ago.

Including Fisher Plaza results, total Fisher Communications revenues declined 25% to $28.5 million. Instead of the $1.3 million in income from operations reported a year earlier, the company reported a loss from operations of $5.4 million.

RBR/TVBR observation:
Tough times continue, but yesterday’s meeting was free of any repeat of the clash between company management and some major shareholders seen a year ago. The recent agreement with Mario Gabelli to elect two directors with backing by his GAMCO investment funds apparently has everyone now reading from the same page.