earnings calls

Over the last month or so, Dave Seyler and I have been dutifully sitting in on the earnings conference calls of the TV station groups and writing stories about them. However, upon reflection, we feel that we may not have given you a complete picture. At the same time, we realize that you don’t have time to listen to or read all the transcripts. So, as a reader service, we have produced a single composite transcript that seems to cover everything. Read on.

The company sees itself well-positioned for this year’s midterm election campaign spending. It has stations in 19 of 36 governor contests, with eight appearing to be highly competitive; it has 16 of 34 Senate races, with eight competitive; and Tegna’s 33% U.S. footprint suggests it will benefit from some 150 House races.

In spite of that, the groups execs see plenty of positves ahead this year including political advertising, retrans growth and the acquisition by Fox of Thursday Night Football. “Given the fact that Fox has been struggling in scripted primetime shows, putting in football should be a huge plus for the Fox network and for Sinclair in particular because of our huge exposure,” said COO Steven Marks.

Nexstar CEO Perry Sook said that retrans drove its 4Q and full-year financials, surpassing local advertising as the company’s top revenue stream. “We think the value proposition of our local content is equal to, and perhaps greater than, the value contribution from marquee network content,” Sook said.

In its earnings call Tuesday, the NBC-heavy group says this time next year it’s likely to be reporting revenue topping $1 billion, aided by Super Bowl, Olympics plus 20% higher retrans.

Execs say this year will see advertising, direct-to-consumer distribution, retransmission consent/reverse compensation and international licensing each post “incremental growth well in excess of $100 million.”

21st Century Fox Executive Chairman Lachlan Murdoch: “Live sport has never been more important than it is today. This is why we are energized and excited about our recent deal with the NFL to make Fox Sports the official home of Thursday Night Football for the next five years. NFL programming is hands down the most powerful in all of media.”

The brothers who run 21st Century Fox, James and Lachlan Murdoch, seemed to play down the notion that they were seeking to sell parts of their conglomerate during a conference call with analysts on Wednesday. At the same time, said Michael Nathanson, a longtime media analyst, the Murdochs did not offer “an out-and-out no.”

Looking ahead to next year, the pure-play group’s CEO Dave Lougee tells analysts that the 1Q 2018 convergence of both the Super Bowl and the Winter Olympics is something that Tegna has not enjoyed for 12 years. Additionally, political is expected to storm back. He also says that while traditional M&A will be a part of the upcoming FCC ownership dereg, so, he believes, will be station swaps. And the company is ready for both.

It’s 3Q core ad revenue was down 4%, but going forward, the group sees revenue growth with both the Super Bowl and Olympics on its NBC affiliates as well as strong political revenue next year. It’s also bullish on expanding its holdings. “Things have been relatively slow on the M&A front,” said CEO Hilton Howell Jr. “We expect things to pick up rapidly after the FCC comes to a final conclusion on their [ownership] rules.”

When the lack of Olympics is factored in the 3Q calculations, core grew 2%. And Nexstar CEO Perry Sook said fourth quarter sales are pacing in the mid-single digits with strength in most categories.

On its earnings call, CEO Les Moonves is bullish on viewer choice and new subscription models, explaining that CBS makes more money per sub when the cord is cut. “Not only are we not affected as others are by cord-cutting, it has real measurable upside for us. This is what sets CBS apart from the pack.”

Company executives say it’s got a full plate with the Tribune merger, moving to implement ATSC 3.0, signing deals with vMVPDs and a new audience measurement regimen. Also, CEO Christopher Ripley says the company has no interest in hiring Bill O’Reilly.

While the just-reported quarter saw an expected big drop in political money, local core was up 4%, to $88 million, a gain of approximately $3.5 million. According to Chairman-CEO Steve Lacy, growth in core should pick up steam going forward, with gains expected in the mid- to high single-digit range.

And CEO Les Moonves likes not having to rely heavily on advertising. “Ten years ago, it was greater than 70%. We love advertising, but diversifying our revenue leads to more certainty in our earnings,” he told analysts on Monday. It also says an OTT sports streaming service is in the works.

Two fewer championship series games took a toll on revenue, as did lower political dollars, but some of that was mitigated by strong gains in retransmission consent revenue.

The quarter is likely to suffer from a lack of Olympics and lower tech school ad money, but a bright spot is some early political spending and upward trending automotive.

In addition to political shortfalls typical of an odd-numbered year, Tegna will come up short because its many NBC affiliates will not be able to match revenue they garnered in last year’s 3Q when they aired the Olympic Summer Games. Auto advertising also remains problematic. Looking forward, CEO Dave Lougee said that if the FCC eases the ownership limits, Tegna will have ample headroom to expand and could also add to its portfolio in markets where it already has a presence.

After the company reports net loss of 45,000 cable subs in the second quarter, Comcast’s Steve Burke dismissed online streaming services, also known as virtual MVPDs, as immaterial. It’s a “a very tough business,” he said. “We are skeptical that it’s going to be a very large business or profitable business for the people that are in it.”

According to CFO Tom Carter, 1Q revenue that excludes the contributions from the recently acquired Media General stations broke down to: net revenue up 4.5% with local ad revenue up less than 1%, national ad revenue down less than 7%, retrans revenue up 32% and station website revenue up 12%. CEO Perry Sook said ad revenue now accounts for less than half the mega-group’s net revenue.

Like many groups, Tegna is enjoying increased income from retrans, which has been enough to offset the big loss of political advertisers and the more modest decrease in core revenue. EVP-CFO Victoria Harker said the company is on track to record a low-to-mid-single digit revenue gain in 2Q. A bright spot is the growth of OTT retrans fees in line with those paid by traditional MVPDs.

Nexstar CEO Perry Sook told analysts today: “We made an appraisal of Tribune at some point,” he said. “I think you can safely assume since we weren’t announced as the winning bidder yesterday it’s because the price crossed our walking-away threshold.”

How well Scripps does in its second-quarter comps may have as much to do with LeBron James and Kyrie Irving as it does Ford and General Motors, Scripps Brian Lawlor told securties analysts today. Scripps’ WEWS Cleveland holds the broadcast rights to the Cleveland Cavaliers and it enjoyed a windfall last year when Cavs made the NBA finals and won it in seven games. Scripps is hoping for a repeat.

Chairman-CEO Steve Lacy said that the Local Media Group’s core advertising is pacing down low- to mid-single digits. On the plus side, automotive is pacing up, as are food and home, while professional services and fast food restaurants are dragging.

But CFO Jim Ryan says the station groups is “are still remaining generally optimistic as we move through the rest of the year.” National for the year is “probably flattish,” he says, while local increases will be in the low single digits. And EVP Kevin Latek says retrans and net retrans revenue will be better than expected this year.

Outgoing Tribune CEO Peter Liguori didn’t comment on whether the company was in merger talks with the Sinclair. On his last call with analysts and investors he said he was “very bullish” about Tribune’s network affiliates’ getting carried on the virtual MVPDs; acknowledged that its stations’ core spot business was soft in December and January, but said Tribune is “highly encouraged” with the quickening pace of sales and predicted the company would meet its guidance for the year.

“Suffice it to say that we are already in discussions, should the [FCC ownership] rules change, about opportunities that might be available to us,” Nexstar CEO Perry Sook told analysts and investors today.

Tegna Media President Dave Lougee says that negotiations with streaming services like Sony PlayStation Vue and DirecTV Now are progressing smoothly. In today’s call with analysts, he also addresses retrans revenue, possible easing of the TV ownership restrictions, the outlook for core and political advertising, its latest syndicated programming venture and its Premion OTT advertising service. He also says Tegna sold no spectrum in the incentive auction.

Core spot will be flat in the first quarter, say company execs. But momentum is building due to strength in the automotive, communications and home improvement categories and should be positive by the end of the year.

In its call to analysts and investors today, the company said it anticipates a 13%-14% increase in 1Q revenue to $602 million-$606.7 million. It didn’t say where the growth is coming from, but it must be net retrans because political is pegged at just $1.5 million-$2 million and core spot is flat.

The milestone news came from Time Warner chief executive Jeff Bewkes today during an investors call for quarterly earnings. That’s up from about 800,000 U.S. subscribers at the end of 2015.

Senior EVP-CFO Michael J. Cavanaugh: “In 2017, retransmission revenues should reach nearly $1.4 billion,” Cavanaugh stated, “an increase of almost 65% over 2016 as the result of the recent successful renewals of a number of our distribution agreements.”