Ad Rebound In High Gear At Tegna

Tegna reported another record quarter of Advertising and Marketing Services (AMS) revenues Monday morning, which includes its Premion OTT/digital ad sales business. Looking ahead, Tegna President-CEO Dave Lougee told Wall Street analysts that the growth is continuing in the current third quarter.

AMS grew 49% in the second quarter over 2020, and was just slightly behind the same quarter of 2019, prior to the COVID pandemic. Excluding the still-lagging auto sector, the quarter would have been up in the mid-single-digits from ’19, Lougee noted.

“Not surprisingly, all categories were up over last year, including auto; services; retail; health care; home improvement; entertainment & gambling; insurance, banking & finance; packaged goods; and education,” EVP-CFO Victoria Harker said in the quarterly conference call.

“Even categories that continued to face some pressure this quarter — including entertainment, travel & tourism — were up substantially compared to the second quarter of last year,” she added.

“As you’d expect, given the emergency from pandemic lockdowns this year, the underlying advertising industry continues to rebound, with AMS third quarter also pacing significantly over last year and all categories, again, up year-over-year,” Harker told the analysts. “When compared to the third quarter of 2019, AMS is up on a pro-forma basis as well, even before the positive impact of the Olympics.”

Overall for the third quarter, Tegna is telling investors to expect total revenues (AMS plus subscription revenues and everything else) to be up in the single digits. Excluding political, the gain would be in the mid-teens.

Asked specifically about the Olympics, Lougee said the pandemic-impacted Summer Games are down from 2016. But he noted that the Olympics no longer carry the importance they did when Tegna’s portfolio was heavily skewed to NBC affiliates. Still, he says, it is a good platform for promotion of other programming. Also, he said the impact of NBCUniversal’s new Peacock streaming service on viewing was “de minimis” this time around, with the future unknown.

Lougee reiterated that core advertising is still rebounding strongly and that is not being held back by concerns related to the Delta variant of COVID-19. “In the last four weeks we’ve written more money on the books than we have in a few years,” he assured Wall Street.

Political advertising hasn’t gone away completely, this year, but, of course, is nowhere near 2020 levels in this off-year election season. “We’ll definitely be ahead of ’17 and likely be ahead of ’19. You know, the [California gubernatorial] recall has not produced a ton of spending,” Lougee noted.

“I think probably the big race, the race that will produce the most spending for us will be the governor of Virginia, which is in November. We have two markets that cover that — Washington, D.C., and the Norfolk, Va., market. It’s going to be a massive battle for the soul of the party, I think. So, if the Republicans get back the governor’s race in Virginia, that would be quite a momentum-creator for them going into next year. The Republican running is a self-funded former CEO of Carlyle, so he’s got money, and [former Democratic governor] Terry McAuliffe’s got money. That’ll probably be our biggest race, when all is said and done,” Lougee concluded.