earnings calls

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.”

After reporting a good 4Q 2016, the company says that the upcoming 1Q will be a loss-leader with lower local ad dollars chiefly because the Super Bowl is on Fox rather than CBS like last year. Meredith doesn’t have as many Fox affils.

In his first appearance on a Viacom quarterly earnings call, soon-to-be acting CEO Bob Bakish says he’s optimistic about the company’s “very strong footing” even though it faces “challenges.” He vowed to “accelerate our evolution while building a long-term vision for our future,” even as directors weigh a merger with CBS.

Although political displacement was said to be a factor, the Summer Olympics took the lion’s share of the blame for Tribune’s 6% loss in local core. The company has but two small-market NBC affiliates in its portfolio of 33 markets, and they picked up $4 million, but that represented only about 1% of total Olympic spending.

3Q core advertising was bolstered by flat-to-positive growth in four of its top six categories, said CEO Perry Sook. He added: “Year-to-date … we have well-exceeded our guidance of $100 million in full-year political revenue” ($50 million of that will be attributed to 4Q). Wells Fargo Securities analyst Marci Ryvicker was not only on the same page as Sook regarding the meeting of political guidance, she said the feat was the high note of the quarter for the group.

While the company’s third quarter ad gain was well below guidance due to lower campaign spending, a bright spot cited by SVP Brian Lawlor was that at least it’s not shifting to new media, adding that despite some crowding-out by political, core categories did well during the quarter, with gains registered in all five of its top categories, including a 2.5% gain in automotive.

The station group execs say core advertising results, under the unique circumstances of 3Q 2016, were seen as a plus. COO David Amy: “Despite the political crowd-out and the Olympic effect on our non-NBC stations, our core advertising revenues, which excludes political, were up slightly in the third quarter.”

Fiscal first quarter revenue gains were solely the result of political, which increased $14 million to $16 million, more than making up for a 6% drop ($5.126 million) drop in non-political advertising. That drop in core was largely contained within its four hot political markets, largely due to displacement.

Revenue growth for Comcast’s NBCU was largely driven by the Broadcast Television unit, and the Olympics drove broadcast’s gains. In addition, Senior EVP-CFO Michael J. Cavanaugh cited increased retransmission consent income as an additional positive factor during this morning’s call with analysts.

Disney CEO Bob Iger says the company has bought a $1 billion stake in Major League Baseball’s streaming platform and will use it to launch a new ESPN-branded channel that will not siphon off signature programs or major sports from the cable-based ESPN services. “We view this as a complementary service.”

The broadcast group’s executives say that sales of stations in the upcoming incentive auction could result in a decrease in the company’s national coverage, which is now just under the FCC’s 39% cap. Any income from the auction will “turbo-charge our debt reduction and our leverage reduction,” said CFO Tom Carter: He added: “If we sold spectrum and exited markets … then we would have the opportunity to enter into accretive new market M&A.”

Political income fueled an overall revenue gain in the second quarter and going forward is expected to eclipse the company’s 2012 results by a wide margin. CEO Peter Liguori credited improved ratings performance across the television group and an investment in local news with generating a 2% increase of political share in its markets.

The company’s execs say a number of commission actions recently have been positive for broadcasters. Gray EVP Kevin Latek said he’s anxious for the incentive auction to be over so Gray can return to buying stations.

Fox News may have lost its longtime leader Roger Ailes, but the channel’s brand identity won’t be changing under his replacement. That was the message from Lachlan and James Murdoch, the top executives at Fox News parent 21st Century Fox, who addressed Ailes’ departure during the company’s earnings call on Wednesday.

COO David Amy: “We have been and we are focused on the Hill — Congress and the Senate — and we were successful last year in getting JSA relief, and that’s where we’re spending a lot of our time, surgically going after relief. Specifically our next target is the [FCC national ownership] cap, and if there is change, we think it will be through Congress, it won’t be from the FCC,” Amy said.

The TV group has done well with campaign advertising so far, but says there’s a lot more to come. And CEO Stephen Lacy is ready to jump back into M&A mode once the spectrum auction is completed and the station trading market comes back to life.

The company’s CEO says its retrans revenue has grown over the past five years, but “we still lag the other Big Three broadcasters, based on what we know.” The upshot is that there is plenty of room for growth. We still have some major contracts where retrans is going to take significant step-ups.”

In today’s earnings call, Tegna Media President Dave Lougee and Tegna CEO Gracia Matore were unconcerned about a shortfall in political in the second quarter, saying 3Q and 4Q would be significantly greater than in comparable years with Trump spending ramping up. In addition, core should rebound in the 3Q because of the Olympics airing on Tegna’s NBC affiliates next month. “Olympics are really strong,” Lougee said, noting that sales are up in “high single digits” percentage over the $48 million the group booked from the games in the 2012.

Disney CEO Bob Iger tells analysts that the goal at ABC is to “program the network aggressively but to also support our studio operation aggressively because that is a very, very important — if not integral — component of the value train.” He says he’s encouraged by the company’s OTT progress. In addition, “We see a very robust marketplace and a very strong upfront ahead both for … ABC and ESPN.”

Expenses incurred at WGN America in launching two original shows lowered the profit number, but going forward those won’t be repeated and the shows are doing well, company execs tell investors. And more good news on the horizon is the outlook for political ad revenue at its TV stations, and not just from the presidential race. Said CEO Peter Liguori: “Control of the Senate is going to be a very big issue this fall, and we have TV stations in 21 of the 34 states holding Senate races.”

Broadcast SVP Brian Lawlor: “We did make some conscious decisions about cramping some core advertisers in favor of political [in the first quarter]. We look at it terms of what’s the total revenue we can drive and we have a heck of a quarter, up over 13%, and we’re looking at second quarter in the same way.”

With strong political revenue an important part of its 1Q results, Sinclair execs see much more coming in during the second quarter. And with multiple stations in usually Democratic New York State, Trump may make the presidential race there another strong earner. Sinclair execs also say they are eager to expand their Audience Network advertising offering to include other station groups and create a national footprint.

The broadcast group’s executives say its prospects going forward are bright with political ad revenue continuing to roll in. Retrans remains strong and the assimilation of Media General’s stations is on track to close this year. Speaking generally about the upcoming spectrum auction, CEO Perry Sook said deciding whether to sell could involve such things as clearing space under the FCC national ownership cap.

Tegna Media President Dave Lougee: “Our market footprint is a healthy mutual fund of strong swing states like Ohio, Florida, Colorado, North Carolina, Virginia. Additionally and significantly, a Trump or Cruz nomination on the Republican side will very likely expand the number of U.S. Senate and House seats that will come into play in our markets, and spending for the control of Congress will almost certainly be unprecedented.”

Last year’s expansion of local news and baseball in New York and Chicago has CEO Peter Liguori feeling good about prospects for the station group this year, but there’s no word for analysts on the possible sale of assets, the incentive auction or the stalled negotiations on renewing the CW. The company also felt compelled to register a $74 million write-down on two off-network shows that have underperformed on WGN America, Person of Interest and Elementary.

Execs of the station group that made a lot of M&A news last year see a quieter 2016. Bright spots ahead include political advertising gains, money saved from its decision to take sales representation in-house and bullishness on its relationships with the networks over reverse comp and retrans.

As the station group awaits approval of its merger with Nexstar, it sees dollar signs ahead in the form of political ad revenue. The category has gotten off to a flying start for the company, with Iowa and South Carolina already under its belt and with Super Tuesday on the near horizon. Media General goes into the March 1 event with stations in seven states and 15 in-state markets. Plus, it sees retrans as a major growth category.

An apples-to-apples comparison of quarterly numbers factoring out the stations it added shows net revenue, excluding political, was up 12%; core spot revenue was flat; local spot revenue was up low single digits, retransmission consent income grew 40% and digital was up 10%.

In its conference call to analysts today, the station group’s execs are bullish on political prospects, despite Trump’s tight-fisted campaign. And core ad performance gets praise as well. COO David Amy expects core to rise in the low single digits in the first quarter of this year, even when the $3 million windfall from the Super Bowl on CBS is factored out.

The FCC’s newly approved rules aimed at unlocking the pay-TV set-top box business have been getting a lot of attention. But Dish Network CEO Charlie Ergen said retrans rules, which are currently being considered for revision by the FCC, are more pertinent to consumers.

“Between now and March 22, we have presidential primaries in 31 of our 38 markets. We know we will end up at record levels for the primary season,” said Tegna Media President Dave Lougee. “Between political, net retrans, the Olympics and digital sales growth, Tegna Media will have a record year.”

Current strong demand for TV advertising means the networks should have a bigger and better upfront sales season this spring, according to CBS Chairman Leslie Moonves. “Advertising is as robust as we’ve seen in a long time,” Moonves said Thursday in his comments to Wall Street analysts.

The gains in the standalone online service in the eight months since its launch last year didn’t seem to wow investors. Stifel analyst Benjamin Mogil said the 3.2% gain in HBO subscriber revenue came below the 4.7% Wall Street expected.

The increase in the company’s fiscal second quarter is tied to higher retransmission consent and ad revenue but would have been higher except for lower political and World Series money.

Comcast execs say that there’s a lot of life left in traditional TV advertising, and in the expanded basic pay TV bundle, even in a time of growing cord cutting and shaving. The scatter market is “as strong as it’s been at any time in recent memory,” says NBCU chief Steve Burke. There’s “nothing to worry about” from automakers, usually the biggest buyers, giving him “reasons to be optimistic about the trajectory for the upfront” sales market in the spring.

The failure to acquire Media General has in no way dampened Meredith’s thirst for acquisitions, and that includes “a handful ” of stations that Nexstar will have to spin off to comply with the FCC’s local ownership limits. As part of its breakup arrangement, Meredith gets first dibs on those stations. “We will continue to be aggressively on the outlook,” said Meredith CEO Steve Lacy in regards to the company’s plans for hunt for more stations. Discussing the company’s options, Lacy added, “We have a lot of levers to pull and we intend to pull them.”

Vince Sadusky, Media General’s president-CEO, tells analysts that his board “continues to recommend the transaction” as opposed to Nexstar’s offer. He also says the company plans to participate in the FCC’s spectrum auction, adding: “opening bid prices for some of our markets [are] higher than we had anticipated.”

21st Century Fox CEO James Murdoch on Wednesday touched on the state of the TV business as it relates to on-demand viewing and tipped his hat to the growth of Hulu. During the company’s first-quarter earnings call with investors, Murdoch spoke of the evolution the TV business has undergone, noting the growing emphasis on nonlinear viewing and the emergence of over-the-top services such as Hulu and Netflix.

Les Moonves says retrans/reverse comp will exceed $1 billion next year, ahead of schedule. And while declining to make projections on much else, he said CBS is on target to exceed the $2 billion in retrans/reverse comp originally forecast for 2020.

“We’ve had conversations with many Media General shareholders who support our combination,” Nexstar chief Perry Sook told analysts today.