Belo Pacing Up After Election Day Passes

Belo Corp. President-CEO Dunia Shive isn’t putting a number on it, but she told analysts in her quarterly conference call today that core ad pacings are positive following the Nov. 6 election. Of course, Belo is expecting strong gains in 4Q overall, despite having only two of its 15 television markets in presidential swing states.

“When you look at pacings past the political period — so let’s get through that first week in November — our pacings are up. When you look at that November-December post-political period, we are looking at a positive pace,” said Shive.

And while she said it is still too early to talk about specifics about 2013, going up against the huge comps from Olympics-related advertising and political in 2012, she noted that having the Super Bowl on CBS is a positive for Belo’s station portfolio. “We do expect to see growth in our core. We’re not putting a number to it yet. We’re still in the budgeting process today. We expect to see growth in digital. We expect to see growth in retrans. Auto is expected to be a good category, but I think ultimately what happens in the other spot categories in 2013 is going to depend on the strength of the economy overall,” the CEO said of the coming year.

For the fourth quarter, Belo is projecting that total spot revenues will be up 11% to 13% over a year ago. Political revenue, which was only $5.9 million in 4Q of 2011, is expected to be in a range of $29 million to $30 million. That will take the political total for full year 2012 to $58 million to $59 million, up from $55.6 million in 2010, the most recent political year.

“Political came in about where we had expected,” Shive said of the third quarter. “We came in at $17.7 million in terms of political. It came from different places [than expected]. We were a little bit lighter in Missouri. We were a little bit lighter in Seattle. But we saw a little bit stronger spending in the swing states of Virginia and North Carolina.”

In addition to the record political revenues for political in 3Q, Belo also posted record Olympics revenues of $13.4 million. Total revenues rose 16% to $176 million, which also included a 9% gain in “other” revenue, notably retrans and Internet revenues.

One analyst worried that reverse retrans payments to networks are going to reduce retrans margins for Belo, but Shive noted that the company is already paying reverse retrans to ABC and CBS. Belo’s biggest affiliation agreement, with NBC, is being negotiated now, so those reverse retrans payments will kick in next year.

“We also have three of our top 10 MSOs coming due next year for renegotiation,” Shive noted, which, she implied, will increase the retrans total before deduction of network payments.

And while the deals with NBC and the MSOs are yet to be completed, the CEO told analysts that retrans is going to be good for Belo.

“Regardless of what those agreements [with the networks] ultimately call for, it will definitely be a net positive for us in terms of the retrans dollars we take in versus what we pay out. And I think it will still be a very healthy margin. We may have some quarters where a network affiliation agreement comes up with an increase in it that may be greater than a retrans increase in a particular quarter — the increase in the quarter, not the total amount — but in essence we still feel like it’s a net positive, and a nice net positive, going forward,” Shive said.

Belo had some good news for shareholders as it reported its 3Q results. The company already pays a quarterly cash dividend of eight cents, or a total of 32 cents per year. But because of the Belo’s recent success in cash generation, the board of directors has authorized a special dividend payment of 25 cents per share, payable Dec. 21 to shareholders of record on Nov. 30.

The company also announced plans to redeem its 6.75% senior notes a few months early. The $176 million issue of notes comes due in May 2013, but will be cashed out in 4Q.

As of Sept. 30, Belo reported total current assets of $321 million, including $166 million in cash on hand. And that was before the final wave of political ad payments rolled in.