TV pacings down sharply for Meredith


Political is still providing a cushion, but otherwise Meredith Corporation reports that the percentage drop for TV pacings in the current quarter is in the high 20s, with the key automotive category down far more. TV revenues for fiscal Q1 (July-September) dropped $5 million to $70 million, with Meredith’s publishing division also down for the quarter.
What’s Meredith doing about the tough ad environment? CEO Steve Lacy told Wall Street analysts about a couple of new initiatives that are bringing new business to the company’s TV stations.

“We implemented our successful Job Connections program across our station group. Job Connections takes advantage of the power and reach of our local stations and websites to help local businesses recruit new employees. Better Health is a new multi-platform sales program launched this month in our Hartford, Nashville, Portland and Atlanta markets. The program combines health content from our trusted publishing brands with Internet and spot advertising, cornerstone features and weekly segments on our ‘Better’ television show. Healthcare providers in our local markets purchase exclusive rights and serve as the featured experts on  the Better Health program,” Lacy explained.

Meanwhile, the Meredith TV group has experienced ongoing weakness in traditional business.

“Ongoing industry-wide weakness in core television advertising categories – including automotive, professional services, restaurants, furnishings and retail – impacted Broadcasting performance in the quarter. Combined advertising revenues in these categories declined nearly 20%. Political advertising helped offset some of this weakness. First quarter net political advertising revenues were $6 million, as expected, compared to $1 million in the year-ago quarter. Unlike many peers, we did not benefit significantly from the summer Olympics. Our lone NBC station in Nashville generated $1 million in Olympic-related advertising revenues,” Lacy told analysts.

Operating profits for the TV division declined to $11 million from $14 million a eyar ago. Revenues fell to $70 million from $75 million and EBITDA was down $3 million to $17 million.

Publishing revenues fell to $300 million from $330 million and operating profits fell to $33 million from $55 million.

For the entire company, fiscal Q1 profits were 41 cents per share, compared to 68 cents a year ago.

In fiscal Q2, going on now, “broadcasting non-political advertising pacings are currently down in the high 20s, compared to the 6% growth in the second quarter of fiscal 2008. We expect approximately $15 million in political advertising revenues at our television stations in the second fiscal quarter, in-line with expectations,” Lacy said.

If that 20%+ decline sounds bad, Meredith reports that the automotive category is down about 40%.

Paul Karpowicz, President of the Meredith Broadcasting Group, noted a strong pullback in the auto sector after the White House announced a financial crisis and bailout plan in September, with the pullback even extending to import car brands. But he told analysts the biggest wave of ad cancellations seems to have subsided. At the local level, some car dealers have even shut their doors. But he noted that where, say a local Chevy dealer has gone out of business, another Chevy dealer may now be increasing advertising to expand their market share.