What’s Driving Meredith Corp.’s Local TV Revenue?


Meredith Corp. had a pretty monumental fiscal Q3. Since reporting its fiscal Q2 results on Jan. 31, 2018, the Des Moines-based company known for its female-targeted media brands closed on its purchase of Time Inc.; announced that it is exploring the sale of its equity investment in Viant and the sale of such venerable publications as TIMESports Illustrated, Fortune and Money; and expects to achieve more than $500 million in annual cost savings in the first full two years of operations.

With all of this activity, what is the current state of health at Meredith’s Local Media Group, which includes 17 television stations? “Other revenues” are driving revenue growth.

What else could these be but “retransmission consent fees?”

Overall revenue for Meredith climbed to $648.8 million, from $425.4 million, in fiscal Q3, as the company’s transformation put a dent in its net income.

For fiscal Q3, Meredith as a whole recorded a net loss of $110.1 million ($2.74 per share), compared to net income of $39.8 million (89 cents) in the year-ago period.

But, when adjusted for one-time gains and costs, earnings came to 74 cents per share as total adjusted EBITDA climbed to $110.7 million, from $83.3 million.

For the Local Media arm, non-political advertising — the traditional No. 1 source of revenue — fell to $79 million from $84.5 million.

Factor in $2.1 million in political dollars seen in fiscal Q3, up from $1.7 million, and advertising dollars still come in behind retransmission fees as the No. 1 source of income for Meredith’s local broadcast TV stations.

In fiscal Q3, these “other revenues” jumped to $88.9 million, from $55.9 million.

Yet, Local Media operating profit was down to $38.9 million, from $41.2 million. Total Local Media revenue climbed, however, to $170.2 million from $142.1 million.

Meredith Corp. does not specifically define its “other revenues” but notes that retransmission fees are a large part of this.

The overall net revenue of $648.9 million missed the Wall Street consensus of $745.1 million, the Wall Street Journal reports.

Investors were nonplussed, as MDP shares climbed 65 cents to $51.90 in Thursday’s trading.

Meredith shares in the last week have been trading at 52-week lows, down from $72.25 seen in mid-December 2017.

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