Auto Advertising Rebound In Low Gear At LIN

While other station groups are reporting first-quarter growth in auto ad revenue ranging from the respectable to the robust, LIN Media today said the key category experienced a drop of 2% on a same-station basis.

The weakness in the category, which accounts for about a quarter of the group’s spot revenue, contributed to an overall 2.4% decline in core spot on a same-station basis, said Scott Blumenthal., EVP of television, during this morning’s conference call with securities analysts.

Domestic auto spending was flat, foreign was up 9% and local dealer advertising decreased by 15% compared to the first quarter of 2012, he said.

“Our markets 50-100 were impacted the most by the decline in auto,” he said.

“It is no coincidence that many of those markets are facing ongoing economic challenges. We also concluded that our Fox stations were impacted the most as declines in their primetime ratings slowed down demand for advertising.”

Not counting recent acquisitions, LIN has at least six Fox stations in smaller markets and eight overall.

Results in other spot categories were mixed, he said. “Retail, media communications and the financial services experienced gains, while restaurant, services, medical, education, paid programming and entertainment declined year-over-year.”

Asked to elaborate on the auto troubles, LIN CEO Vince Sadusky said: “The regional money and the factory money was up. But what was down quite a bit was the local dealership dollars where we take a nice share of that typically.”

Sadusky said that LIN relies more heavily on the local sales and the economy in many of the mid-size markets LIN serves is “still a little spotty.”

Sadusky also said the revenue comparisons to the prior year are “more difficult than normal.”

“[I]f you recall, we had a year [2012] that was just record setting … across the board in all revenue categories,” he said. Even core was up, despite the political displacement.

In a note to clients, Wells Fargo analyst Marci Ryvicker said LIN’s peers were not experiencing the same “drag” on revenue. Gray recently reported a 12% increase in auto for the first quarter, while Nexstar said its auto was up “a single digit.”