Analyst: ‘TV Stations Are All Over The Map’

Marci Ryvicker, Wells Fargo Securities
Marci Ryvicker, Wells Fargo Securities

Blame it on Rio.

Core advertising at television stations, as well as automotive dollars, are “too skewed” by the Games of the XXXI Olympiad, taking place in Brazil.

That’s according to Wells Fargo Securities Senior Analyst Marci Ryvicker.

Looking at the Q2 results of companies such as Gray Television, Nexstar Broadcast Group and the E.W. Scripps Company, Ryvicker says Gray was great—and Nexstar and Scripps were not.

The Olympics are a factor, and so are the political ads seen across the U.S. for primary elections this month and the November presidential election.

“Auto might just be pulled forward to avoid the typical displacement,” Ryvicker says.

She reduced her estimates for political dollars for every broadcast TV company she tracks, with Scripps impacted the most and Nexstar the least. Why? A lack of spending from Republican presidential candidate Donald Trump.

On a positive note, Olympic advertising is coming in “well above expectations,” and expenses were “generally better across the board.”

In fact, overall advertising “isn’t that bad” for the three companies and for Charter Communications, which is wrapping up its M&A with Time Warner Cable.

What is bad are trends showing cable networks showing “the greatest deceleration” in ad dollars, with broadcast TV flat. Comcast and Time Warner Inc. were “misses,” and Ryvicker questions if there’s something more than just the Olympics at play.

“In general, the broadcast network adverting numbers were not good—everyone but 21st Century Fox missed [their targets],” she says. “But … we are not seeing much deceleration, especially compared to the cable networks.”