The dip to $466.1 million was due to lower core and political ad dollars but was largely offset by a 26% increase in retrans revenue.
Tribune Media today reported second quarter earnings results that included Television and Entertainment Segment revenue of $466.1 million, down 0.5% from $468.1 million in the second quarter of 2016. The company said the decrease was driven by a $17.2 million decrease in net core advertising revenue and an $8.9 million decrease in net political advertising revenue, and was largely offset by an increase in retransmission revenues of $21.7 million, or 26%, and an increase in carriage fee revenues of $1.5 million, or 5%.
(In May, it was announced that Tribune is being bought by Sinclair Broadcast Group for $43.50 per share, for an aggregate purchase price of approximately $3.9 billion, plus the assumption of approximately $2.7 billion in net debt.) The company announced earlier that because of the pending sale it would not host a conference call regarding today’s results.
Television and Entertainment operating profit was $50.2 million for the second quarter of 2017 compared to $83.3 million a year ago, a decrease of $33.1 million, or 40%. The decrease was primarily due to increased programming expense of $34.3 million, primarily due to $20 million of additional expense related to the shift in programming strategy at WGN America in the second quarter of 2017, which included cancellation costs for Outsiders and Underground and the associated accelerated amortization of the remaining program assets for both shows as well as the write-off of certain other capitalized program development projects. The remaining increase was due to $8 million of higher network affiliate fees and $6 million of higher amortization of license fees primarily related to original programming that aired in the quarter.
Television and Entertainment Adjusted EBITDA was $111.7 million for the second quarter of 2017 compared to $141.7 million in 2Q 2016, a decrease of $30 million, or 21%, primarily due to increased programming expenses, as described above, as well as lower advertising revenues.
“Our financial results for the second quarter reflect our focus on continued expense management and positioning the company for long-term profitable growth,” said Peter Kern, Tribune Media’s CEO. “We saw strong sequential growth in retransmission revenues during the quarter, which helped offset some softness in core advertising at the national level.
“While our overall performance was significantly affected by non-recurring expenses and accelerated amortization related to the shift in programming strategy at WGN America, those changes are now behind us, and we expect a much more profitable 2018 with more original hours than the network has ever carried.
“We continue to aggressively manage expenses across the business; adjusted for the non-recurring costs at WGN America, total consolidated cash expenses were flat despite the continuing increases in network affiliate fees and the increased level of original programming amortization. We also continued monetizing non-core assets, as we sold several real estate properties in the first half of the year, and more recently participated in the sale of CareerBuilder and received a significant portion of our spectrum proceeds.
“Finally, we remain on track to close our previously announced transaction with Sinclair.”
The company as a whole reported consolidated operating revenues of $469.5 million, a 2% decrease. Excluding political advertising and real estate revenues, consolidated operating revenues increased 2%
Consolidated operating profit, which includes the above $20 million of additional expenses at WGN America, was $18.3 million, compared to $56.2 million for the second quarter of 2016
Read the company’s report here.