Political Helps Tribune Overcome Flat Local

Adjusted core advertising results for Tribune during the second quarter of 2016 were flat, President/CEO Peter Liguori told investment analysts during the television group’s 2Q financial results conference. However, political income fueled an overall revenue gain and going forward is expected to eclipse the company’s 2012 results by a wide margin.

The 2012 number to beat is $166 million, according to Liguori — a number he expects to exceed by $34 million to $200 million.

Liguori said $34 million in gross political is also the amount the company banked during the first half of the year, a 22% gain over the total pulled in during the first half of 2012.

In 2012, 17% of the company’s political total came during the first half of the year, and he noted that the political earned so far represents 17% of its stated political target for this year.

He 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. He said that through July 31, cash earned and booked stands at $73 million and that pacing is double the 2012 rate.

Further cementing political guidance is the group’s presence in key battleground states. Liguori singled out Pennsylvania, Ohio, Iowa, North Carolina, Virginia, Colorado, Missouri and Indiana

“The bottom line,” said Liguori, “is that our stations have the audiences that Trump and Clinton need to reach in the states that are most critical to their success.”

Addressing a question on how the battleground states are meeting expectations thus far, Kenny Lazarus, EVP-general counsel and chief strategy officer, said: “There’s always [some] that turn out to be not as strong as you expected and others that turn out to be a lot stronger than you expected.” He said that while it’s too early to tell which is which, he said that in the end they tend to balance one another out.

Core was down 2% for the quarter, but Liguori blamed that in part on a corporate calendar adjustment that resulted in two fewer selling days compared to 2Q 2015. Taking that into account, core advertising income was flat.

Liguori said auto was solid during 2Q, which he defined as “up a percent or two.” On prospects for the category, he added, “This is a local battle, this is local dealer versus local dealer to grab their fair share of market. We’re just incredibly well positioned for that.”

Tribune has been dark on Dish Network since June 12. Liguori said losses related to the impasse were “quite small,” roughly $1 million. “We don’t like losing any revenue, but the situation is manageable.” Negotiations are in progress, he said.

Expanding on the situation, Liguori said: “For us, Dish is a little bit of an odd bird, that we’re a big-market station group. [In] New York, by way of example, Dish is around 8% of the marketplace, L.A., Chicago they’re around 9%.” He said that Tribune has set up fair market goalposts which he hopes will soon lead to a new contract.

Liguori is pleased with the group’s recent affiliation agreement with CW, noting: “We got a very solid deal.”

Tribune credits three original series with the success it is having with its WGN America cable channel. The shows, Underground, Outsiders and Salem, are credited with fueling what Liguori called a “halo effect” which has produced a 33% gain in primetime audience as well as CPM gains of 20% for primetime overall and 30% for the shows specifically.

Liguori echoed the TV executive conventional wisdom on M&A, which is to say that the group may be interested in dealing, but all such plans are on hold until the spectrum auction is completed.