Even though political advertising is not as hot as expected, Media General reported that Q3 TV revenues shot up 18%, while newspaper revenues were down 7.6%. Look for TV to be up even more in Q4, while the company is looking for newspaper revenues to be down again, though not as much.
Driven by the TV side, Q3 revenues were up 3.3% to $163.2 million. The 18% gain in TV revenues to $75 million, included $9.7 million in political advertising, up from only $1.5 million a year ago. Even so, CEO Marshall Morton said political was below expectations, due to less spending than anticipated for issue advertising. Local ad revenues rose 4.1% to $1.2 million and national was up 12.2% to $22.3 million. Retransmission consent fees were also a growth area, up 14.1% to $4.8 million.
On the publishing side, the only up category was the printing and distribution business, gaining 9.4% to $3.3 million. Classified was hardest hit, down 11.4% to $18.1 million. Circulation was off 8% to $16.2 million. Local advertising was off 7.8% to $33.9 million and national declined 2.4% to $5.6 million. So, total print revenues fell 7.6% to $77.7 million.
Digital media revenues were a growth area, but with an 11.5% gain the still-small segment had total revenues of only $2.6 million.
Looking ahead to the current quarter, Media General is expecting revenues to grow 6-8%. “Broadcast, of course, is the real bright spot for fourth quarter,” Morton told analysts. “Broadcast revenues are expected to increase approximately 24-26% for the fourth quarter. This revenue growth reflects significant political revenues, which are expected to be $19-21 million. We expect to generate a total of $38 million in political revenues for the full year – less than our earlier expectation of as much as $42 million…In broadcast we’re also experiencing a broad firming of our underlying business. Three categories are particularly strong. Automotive is the big highlight. In practically every market we’re seeing an increase in this category driven by most every brand. Locally we’re seeing increased spending from new players and also from the ones who returned earlier in this year. We expect automotive to increase next year, but believe the percentage increase will moderate from this year. Telecommunications is also up – and it’s coming from increases in existing advertisers and new products. We expect telecommunications to continue to be a healthy category. Retail is the third category where we expect strong growth. Retailers are making a strong sales and advertising push in the fourth quarter to help improve their overall results for the full year. As 2011 unfolds we expect to see a return to the normal seasonal spending patterns of the retail industry,” the CEO said.
Digital media is also expected to grow in Q4, with revenues gaining 9-11%. Publishing, meanwhile, is expected to see revenues for Q4 down 5-7% from a year earlier.