The decrease to $451 million is caused mostly by political. Factoring that out results in a revenue increase of 3% driven by a 33% gain in retrans money.
Tribune Media on Wednesday afternoon reported third quarter earnings results that included Television and Entertainment Segment revenue that fell 4% to $450.5 million; excluding political advertising and real estate revenues, consolidated operating revenues increased 3%.
- Total Television and Entertainment net advertising revenues (which include political and digital revenues) fell 11%, to $295.1 million.
- Retransmission revenues increased 33% to $104.6 million.
- Carriage fee revenues increased 7% to $30.9 million.
- Cash distributions from TV Food Network were $17.1 million.
- FCC spectrum auction proceeds of $185 million were received by the company in the third quarter of 2017, with remaining related proceeds of $5 million expected in the fourth quarter of 2017.
- CareerBuilder sale closed on July 31, and the company received cash of $158 million while retaining an approximate 7% ownership interest on a fully diluted basis.
(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 loss was $1.4 million for the third quarter of 2017 compared to operating profit of $46 million for the third quarter of 2016, a decrease of $47.4 million. The decrease was primarily due to increased programming expense of $49.6 million, primarily due to an $80 million impairment charge for the syndicated programs Elementary and Person of Interest at WGN America, compared to a $37 million impairment charge for Elementary in the third quarter of 2016. The remaining increase in programming expense was due to $7 million of higher network affiliate fees.
Television and Entertainment adjusted EBITDA was $135.1 million for the third quarter of 2017 compared to $146.8 million in the third quarter of 2016, a decrease of $11.7 million, or 8%, primarily due to lower advertising revenues, as described above.
Television and Entertainment broadcast cash flow was $129.7 million for the third quarter of 2017 compared to $120.3 million in the third quarter of 2016, an increase of $9.4 million, or 8%.
The company as a whole reported consolidated operating revenues of $450.5 million compared to $470 million in the third quarter of 2016, representing a decrease of $19.5 million, or 4%. The decrease was primarily driven by lower core advertising and political advertising, as well as a decrease in real estate revenues due to the loss of revenues from real estate properties sold in 2016 and 2017. These declines were partially offset by increases in retransmission and carriage fee revenues.
Consolidated operating loss was $23.7 million for the third quarter of 2017 compared to operating profit of $234.2 million for the third quarter of 2016, representing a decrease of $257.9 million. The decrease was primarily attributable to $213.2 million of gains recorded on the sales of real estate in the third quarter of 2016, as well as an operating loss at Television and Entertainment primarily due to a $43 million increase in impairment charges in the third quarter of 2017 compared to the third quarter of 2016.
Peter Kern, Tribune Media’s CEO, said: “Tribune Media’s performance in the third quarter of 2017 reflects the company’s ability to continue to deliver solid results despite the impact of broader industry headwinds around core advertising and MVPD subscriber erosion. Strong growth in retransmission revenues and ongoing expense management enabled us to maintain flat Adjusted EBITDA margins year over year in the quarter.
“Our operating results this quarter were negatively impacted by higher program impairment charges at WGN America as we continue to reorient the programming strategy and position the business for significant EBITDA growth, and on a comparable basis the third quarter of 2016 included more than $200 million in real estate gains.
“Most importantly, broadcast cash flow from our Television & Entertainment segment was up in the quarter despite the impact of Hurricanes Harvey and Irma in two of our markets, demonstrating the soundness of our core business as we continue to make progress toward closing our merger with Sinclair.”
Read the company’s report here.