Company says that revenue for the station group was down 3% compared to 3Q 2005, while operating expenses rose 3% due to increase in broadcast rights and stock-based compensation. CEO Dennis FitzSimons says the fourth quarter is off to a better start.
With expenses up and revenue down at the Tribune TV station in the third quarter, operating profit and cash flow had no place to go but down, too. And they did.
Reporting its third quarter earnings this morning, the troubled Tribune Co. said that operating profit at its TV arm fell 18% compared to the same period last year, while cash flow dropped 15%.
According to the company, revenue at the stations was down 3% overall, although half the stations reported revenue gains and the Fox affiliates were up 6%. Strong political spending lifted revenue at KTLA Los Angeles into the “low single digits,” it said.
TV expenses were up 3% due to a $6 million increase in unspecified programming costs and $1 million in stock-based compensation.
With Tribune’s extensive newspapers holdings experiencing the same tough ad market as its TV group, Tribune Co.’s overall earnings picture was also dismal. Consolidated operating revenue dipped 3% year-over-year in the third quarter, while operating cash flow and profit fell 14% and 17%, respectively.
Publishing’s third-quarter operating revenue was 2%, while its cash flow declined 13% and operating profit plunged 17%.
In a conference call with securities analysts this morning, Tribune Co. CEO Dennis FitzSimons said he should have happier news from the TV station group at the end of the fourth quarter.
“TV is picking up slightly right now,” he said. “Political advertising is strong, well ahead of the $25 million we saw in 2004. We’ve also benefited from the baseball playoffs at our Fox affiliates in Grand Rapids [Mich.] and Sacramento [Calif.] and the success of the Mets and Cardinals bodes well for our New York and St. Louis TV stations in 2007.”
FitzSimons also cited the “promising start” of The CW at Tribune affiliates in New York, Los Angles and Chicago. “Next Top Model is beating all competitors in the target demo of women, 18 to 34,” he said. “In addition, the strong lead-in from The CW has helped improved the competitive position of our late newscasts.”
Under pressure from Wall Street and the Chandler family, a principal shareholder, Tribune has promised to come up with a restructuring plan by year’s end. That plan is expected to include a sell-off of more assets.
FitzSimons said that the company has already shed $420 million in assets, including three TV stations; a California printing plant, Time Warner stock and a company plane.
The company has closed on the sale of WATL Atlanta to Gannett, but the sales of stations in Albany, N.Y., and Boston are still awaiting FCC approval.
Tribune Broadcasting owns and operates 25 major-market television stations, 16 of which are affiliates of The CW