Rather than between $649 million and $663 million as it projected in early August, the station group now says total revenue will come in around $638 million as expected political revenue dips from the projected $58 million-$68 million to just $46 million, due in large part to low spending by the Trump campaign.
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Sinclair Cuts 3Q Guidance Due To Political
Sinclair Broadcast Group today reduced its revenue forecast for the third quarter due to weaker-than-expected political advertising sales.
Rather than between $649 million and $663 million as it projected in early August, the station group now says total revenue will come in around $638 million as expected political revenue dips from $58 million-$68 million to just $46 million.
“While our third quarter political advertising estimate is being revised down, our third quarter core advertising revenue estimate of a low single-digit percentage increase versus the same period last year remains unchanged at this time,” Sinclair CFO Chris Ripley said in a statement.
Sinclair’s stock took a big hit on the news. At 3 p.m., it was down nearly 10% to $26.
Sinclair apparently dragged some other broadcasting stocks down with it. Shortly after 3. p.m., Scripps was off 8.25%; Tegna had fallen 3.68%; Gray was down 9.19% and Nexstar was off 4.27%. The losses came as the broader market enjoyed a modest gain.
Ripley attributed the political shortfall to the lack of significant spending by Trump.
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“Additionally, our estimate is impacted by two other events, notably, a historically large political advertiser announced they were going to direct their funds to organizing voters rather than towards campaign funding,” he said.
“Secondly, in Ohio, a key state for us and what was to be one of the most expensive Senate races in Ohio history, political spending has dropped drastically as recent polls reflect a widening margin between the Senatorial candidates. “
Recent polling in Ohio shows incumbent Republican Rob Portland pulling away from Democratic challenger Ted Strickland.
Wells Fargo analyst Marci Ryvicker, in a note to investors, said the Sinclair news confirms that presidential spending is coming in lighter than expected and will “likely impact all broadcasters to some extent.”
Ryvicker said that Scripps, Media General, Tegna and Gray also have “significant exposure” in Ohio. “We again point to [Nexstar] (which has no exposure to Ohio) as the most likely broadcaster to maintain its political expectations.”
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