After releasing third-quarter earnings, CEO Vince Sadusky tells securities analysts that he would be “interested’ in the Clear Channel stations if that company decides to sell. “We like the assets.” Financing such a large acquisition would be the problem, he says.
Clear Channel Communications hasn’t said it is selling its TV station division as part of its announced restructuring, but if it does put them on the block, it should make a trip to Providence, R.I.
Vince Sadusky, the CEO of Providence-based LIN Television, said he is familiar with the Clear Channel TV stations and is interested in buying them if they become available. “We like the assets,” he told securities analysts on a conference call this morning after releasing the company’s third-quarter earnings.
However, Sadusky also made clear that the Clear Channel group would be a big bite for LIN. “We would need a pretty significant equity infusion to pursue something that large.”
The Clear Channel group generates revenue of about $350 million. By comparison, LIN did $480 million in 2005.
Despite the interest in Clear Channel, Sadusky said LIN was not in an acquisition mode. On the contrary, he told the analysts, 2007 will be a year of belt tightening as the group attempts to offset the anticipated absence of political revenue. “Costs are absolutely a focus,” he said.
Political revenue has been significant this year for LIN as it has for many broadcasters. For the first nine months of 2006, it totaled $22.5 million with $15.4 million coming in the third quarter. Sadusky said he expects to ring up at least $25 million more in the fourth quarter, boosting the total for the year to more than $47.5 million.
With the help of political, LIN posted third-quarter year-over-year net revenue growth of 9% on a pro forma basis—as if stations acquired by LIN in 2005 had been owned for the full year.
According to Sadusky, revenue growth in the quarter was stunted by declines at the Puerto Rico stations and in network compensation. Sadusky noted that LIN has agreed to sell its Puerto Rico operations to InterMedia Partners for $130 million.
LIN’s largest advertising category, automotive, was “relatively flat” in the quarter compared to the same quarter of 2005, with domestic down, and foreign up, he said.
Actual net revenues for the third quarter increased 27% to $115.8 million compared to net revenues of $91 million in the third quarter of 2005, while operating income for the quarter increased 25% to $23.0 million.
LIN told the analysts to expect a year-over-year percentage growth in the fourth quarter in “the mid-teens” as the last of the political spending is booked.