Meredith Awaits Late Political Windfall In Georgia

While Meredith Corp. reported this morning that TV group political revenues for its fiscal first quarter ended Sept. 30 broke records, coming in 43% ahead of 2018, it’s not over yet. In his conference call with Wall Street analysts this morning, President-CEO Tom Harty noted that the company is awaiting still more political advertising from at least one Senate runoff election in Georgia. The Peach Tree State had already been one of the biggest contributors to this year’s political windfall.

“Nearly half of the first half [political] revenues came from the Senate race in Arizona. We also benefitted from strong spending in Georgia and Missouri,” noted CFO Jason Frierott. Political advertising was so heavy during the quarter that crowd-out was responsible for eight to 10 percentage points of the 26% decline in core advertising, while the COVID-19 pandemic was blamed for $20 million-$25 million of core coming up short at $56.8 million.

One analyst on the call was concerned that Meredith Local Media seemed to be pacing below its TV peers on core advertising, but Local Media Group President Patrick McCreery was quick to respond.

“I think our political is materially above our peers, and so I think our crowd-out number is larger than our peers. Our footprint is aligned to have taken a larger chunk of political this year. Historically, we take about 10% of presidential money — and that goes back since I joined the company 20 years ago. This cycle we’re taking about 24% of our total revenues in presidential money. That provided for a larger than normal displacement,” McCreery explained.

“Since our last earnings update in August, advertising trends have continued to improve,” Harty told the analysts and investors. That, he said, is the case across the company’s magazines, digital properties and television stations.

Looking at the current fiscal second quarter, assuming no new twists from COVID, Harty is expecting advertising for the national [magazine-related] digital properties to be up in the mid- to high-teens, while print will be down in the mid-teens. That means that digital ad revenues will exceed print revenues for the National Media Group for the first time ever.

“We expect Local Media Group non-political spot advertising revenues down in the mid- to high-teems, with continuing impact from crowd-out. Political spot advertising in expected to be in the $90 million range, with runoff election dollars incremental to that,” the CEO said of the TV group.