Tegna Ad Growth Goes Beyond Political
While Tegna is already benefiting from what’s expected to be a record year for political ad revenues, President-CEO Dave Lougee told Wall Street analysts this morning that other categories are also showing strength in the current first quarter.
“Automotive is up for the first time in a while for us. And that’s driven, in part, by Premion, which has really expanded our advertiser base for auto,” said Lougee. Premion sells OTT advertising on Tegna’s own digital multicast and connected TV properties, as well as those of other broadcasters.
As for other strong categories, Lougee listed media & telecom as being “up nicely,” and travel & tourism “is up a lot.” Medical & dental, banking & finance, and auto after-market are also pacing up.
Retail is “slightly down,” the CEO noted, and the Services category is “about flattish,” due to a couple of large advertisers sitting out right now.
“So we’re pacing up, even adjusted for the Super Bowl,” Lougee told the analysts. Tegna took a hit of about $6 million in Super Bowl revenues, due to the 2019 Big Game being on its strong CBS portfolio, while this year’s was on Fox, where Tegna has few affiliates. “And when you adjust for the Super Bowl, we’re pacing even better.”
With the NFL currently talking with potential bidders for game packages going forward, Lougee isn’t worried about any exit from broadcast TV for other platforms. “I do believe the NFL will stay strongly on broadcast TV. At the end of the day, the erosion of cable subs has more than ever shown the benefit the NFL gets from being on the broadest possible distribution mechanism. While there’s no doubt the digital players will be brought into the negotiations as leverage, we’re highly confident that in the end we’ll end up with a very strong portfolio of NFL games,” said the Tegna CEO.
“There may be some shifts between networks. There may be some changes in the structure. But, given our portfolio of network affiliations, I’ve very confident the NFL will be a big part of our future going forward. Which is a good thing,” Lougee assured analysts and investors.
Even this far out, CFO Victoria Harker is predicting that 2021 will be a strong year following the political bonanza of this year. “We’re very confident in mid-to-high-20s revenue growth in ’21, compared to 2019, driven by our newly renegotiated top-of-market retrans rates, strongly accretive acquisitions and ongoing Premion growth.
“And, with the strength of these drivers, create not only cyclical odd-year growth comparisons — what’s even more remarkable, is this: Given the strength of 2021 projected subscription and AMS [advertising and marketing services] we forecast that these revenues will all but offset 2020 political revenues,” Harker told Wall Street.