Tegna Weighs Bids As It Reports Record Results

Execs keep mum on acquisition offers while waxing optimistic about the company’s revenue potential going forward.

After reporting record results for the third quarter, Tegna executives say growth is continuing in the current quarter for all major ad categories except auto. And Tegna President-CEO Dave Lougee is gung-ho on predicting that the company’s local stations footprint will bring in record political dollars next year. But there’s one major topic he’s not discussing.

“As we stated in our press release on Sept. 21, we have received — and the board has been actively considering — acquisition proposals. We are carefully evaluating these proposals against our standalone prospects. Meanwhile, and importantly, our team remains sharply focused on the continued day-to-day execution of our business and strategy, as evidenced by the strong quarter we have just reported. As I’m sure you will understand, that is all we will say at this time, so we won’t be taking questions on this topic,” Lougee told analysts in Tegna’s quarterly conference call Thursday morning following release of its third quarter results.

Advertising and Marketing services (AMS) revenues rose 12% pro forma for the third quarter compared to pre-COVID 2019, and Lougee noted proudly that the gain was still 7% excluding the impact of the Olympics. Other growing ad categories are more than making up for the supply-chain-impacted auto category.

“Sports betting is now our seventh-largest category and rising, growing more than 200% over the third quarter of last year. And we expect its growth to further diversify our AMS revenue. Online sports betting didn’t exist as recently as three years ago, but it has since expanded rapidly. We now have legalized online betting in 20 states that we reach. Three more are going to be added in the coming months in our footprint, with Maryland, New York and Louisiana coming on line in the coming months,” Lougee noted.

“All categories were up double digits over last year, with the exception of automotive advertising,” EVP-CFO Victoria Harker told analysts in her review of the third quarter.

“The strength of AMS above 2019 was broad-based, including services, healthcare, home improvement, sports betting, insurance, banking and finance, packaged goods, and educational categories,” she said.


“Beyond this, the advertising market continued to strengthen. The fourth quarter AMS is also pacing significantly ahead of last year, with all categories up again, except auto, year-over-year. More notably, compared to the fourth quarter of 2019, AMS is up as well,” Harker said.

Just how big is next year’s political haul going to be? In his discussion with analysts, Lougee said this year’s $50 million in political spending (versus $31 million pro forma in 2017) wasn’t driven just by the Virginia governor’s race, but a bunch of “local stuff,” such as ballot issues and local races.

“It used to be, you compared mid-terms to mid-terms and presidential to presidential. That’s still the case, but you know, we’re not going to be surprised if the amount of spending in the ecosystem next year is not that far south of 2020. Now, what that’ll be for us is a function of footprint,” Lougee said. Some races become more or less competitive as the election process goes on.

The CEO had earlier listed the expected hot Senate races as they stand today: Arizona, Georgia, Florida, North Caroline, Ohio, Pennsylvania, New Hampshire, and Wisconsin.

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