Journal Bullish On Post-Election Ad Biz

Journal Communications is projecting that its strong 3Q, led by television, will be followed by a strong 4Q, with broadcast revenues (TV and radio combined) up more than 25%. Much of that is due to heavy political advertising, but company officials say TV pacings are looking “pretty good” after the Nov. 6 election.

In Journal’s quarterly conference call today, analyst Ed Atorino of Benchmark Securities asked whether commitments are on the books for advertisers that have been crowded out by political to go back on the air.

“There are,” said Journal President-CFO Andre Fernandez. “Again, it’s too early to say, but I think increasing so, especially now in these last weeks, in some cases there’s a little bit of a frenzy now [by political advertisers] to buy — and buy at the top of the rate card — that is leading some [regular] advertisers to the sidelines, which we hope that after this political [season] is over will return and hopefully will give us a boost in late November and into December. It’s a little too early to tell, but we’re seeing that happen now.”

Fernandez declined to give a number for core pacings, but earlier said “we’re feeling optimistic that the current trends, excluding the political, at least in television will continue.”

Automotive, the most important category for core business, was up 33% for TV in 3Q and up 7% for radio. Excluding retransmission consent revenues, political advertising and Olympics-related advertising on Journal’s NBC stations, television revenue was still up 4.5% in 3Q, Fernandez noted proudly.

With the 2012 election still a few days away, Journal Chairman-CEO Steven Smith told analysts that the company is on track  to beat the 2010 record political/issue advertising tally of $16.7 million.

Total political/issue advertising revenue was $8.9 million in 3Q, Smith said, “driven both by the presidential election as well as significant House and Senate races in Nevada and Wisconsin.”

Top-line and bottom-line gains in 3Q were all due to broadcasting, while newspaper publishing continued to drag on Journal’s results.

Broadcasting revenues were up 25.3% to $58.8 million, while publishing revenues declined 4.1% to $39.2 million. The bright spot for the newspaper side was a 2.3% gain in circulation revenues, to $13.1 million, attributed to subscriptions to the online site of the Milwaukee Journal-Sentinel. Print ad revenues fell 6.1% to $21.1 million. Total revenues for Journal Communications rose 11.4% to 97.8 million.

Operating earnings for broadcast shot up 85.6% to $13 million, while publishing fell 20.8% to $2.2 million. For the entire company 3Q operating earnings were up 67.7% to $13.6%.

Journal closed its purchase of WACY Green Bay, Wis., a MyNetworkTV affiliate, just this week, following a long LMA, and the company expects to close its purchase of WTVF Nashville, a CBS affiliate, in early December. It also closed the purchase of two Tulsa, Okla., radio stations in 3Q.

“The acquisitions in Tulsa, Nashville and Green Bay-Appleton demonstrate our willingness to strategically use our balance sheet to gain scale in broadcasting and provide us with additional opportunities to grow earnings,” Fernandez told Wall Street analysts.