Lower local, national and political ad dollars leads to the segment’s drop from $31 million in last year’s period to $23 million this year.
Radio and TV station owner Fisher Communications Inc. today reported financial results for the second quarter ended June 30 that included television segment revenue of $22.7 million, a 26% decrease from the $30.9 million generated in the comparable period of 2008.
Fisher attributed the decline to lower local, national, and political advertising revenue at a majority of its stations. Key advertising categories continued to experience significant declines from the second quarter of 2008, including automotive (down 58%), retail (down 25%), and professional services (down 26%).
TV broadcast cash flow (BCF) was $1.1 million, compared with $9.1 million in the same period of 2008, a decrease of 87%. The decrease in BCF was solely attributable to revenue declines.
During the second quarter, the television segment recorded $247,000 of political revenue, compared to $2.2 million during the same period last year, a decrease of 89%. Fisher recorded $791,000 in total retransmission consent revenue in the second quarter, an increase of 6% from the second quarter of 2008.
This amount excludes approximately $1 million in retransmission fees for the second quarter (and another $1 million for the first quarter) attributable to certain retransmission consent agreements for which the key financial terms were finalized but which were not executed until the third quarter of 2009.
Over the past three quarters, the company executed final agreements or reached agreements in principle on key financial terms for new retransmission agreements with most of its distribution partners, whose prior retrans agreements with the company expired in December 2008. Fisher and several of its cable distribution partners had not executed final agreements at June 30, 2009, even though key financial terms, including fees from January 1, 2009 forward, had been finalized. Accordingly, the Company’s second quarter financial results do not include approximately $2 million of cable retransmission fees attributable to those contracts for the period from Jan, 1, 2009, to June 30, 2009. In July 2009, the agreements were fully executed. Therefore, the company will record the retransmission fees attributable to the first six months of 2009 for those contracts as revenue in the third quarter of 2009.
On June 10, 2009, Fisher and Dish Network executed a new multi-year retransmission agreement. As part of the agreement, the company agreed to release all prior legal claims against Dish. The company’s retrans fees under the new Dish agreement began accruing as of the date of execution.
Fisher President-CEO Colleen B. Brown said: “Our financial performance continues to be affected by the overall weakness in the economy and its impact on our clients’ advertising budgets. While we expect that our advertising and business partners will remain cautious until the economic recovery begins, we believe we are seeing signs that the worst may be behind us, including an improvement in TV ad pacing. It is too early to make definitive predictions, but these are positive indications that we will be closely monitoring for the remainder of the year.
“We are pleased to have completed our key cable retransmission agreements, gaining some recognition for the value of our stations, and to have settled our dispute with DISH Network. In this challenging economic environment, we continue to seek new opportunities to drive incremental revenue by expanding our broadcast to broadband strategy. We also remain focused on improving our operational performance and effectively managing our cost structure.”
The company as a whole reported revenue for the second quarter of 2009 was $32.0 million, compared to revenue of $45.7 million in the second quarter of 2008, a decrease of $13.7 million, or 30%. The Company anticipated a significant portion of the decline, given that 2009 is an off-political year and the Company did not renew its Seattle Mariners broadcast contract in 2008.
Loss from operations was $2.1 million for the quarter, compared with a loss from operations of $3.5 million during the same period in 2008. The improvement was due primarily to a 31% decrease in total operating costs from the second quarter of 2008, which offset the 30% decline in revenue.