Tribune 3Q TV-Entertainment Rev Grows 7%

Tribune Media today reported third quarter 2016 results that included Television and Entertainment Segment revenue of $459.1 million compared to $429.7 million in the third quarter of 2015, an increase of $29.4 million, or 7%.

The company said the increase was driven by a $25.7 million increase in net political advertising revenue, an increase in retransmission consent revenue of $8.8 million, or 13%, and an increase in carriage fee revenue of $9.4 million, or 48%, partially offset by a decrease in core advertising revenue (comprised of local and national advertising, excluding political and digital) of $18.1 million, or 6%.

The company said its core advertising (excluding political) was “negatively impacted by the 2016 Summer Olympics, which negatively impacted advertising revenues for stations other than NBC affiliates, displacement from political advertising, and the blackout from our programming agreement dispute with Dish Network.”

Television and Entertainment operating profit for the third quarter of 2016 was $46.2 million compared to $64.1 million in the third quarter of 2015, a decrease of $17.9 million, or 28%. The decline was primarily due to higher programming expenses resulting from a $37 million program impairment charge for the syndicated program Elementary at WGN America, as well as higher severance expense related to significant position eliminations as part of ongoing cost reduction initiatives, partially offset by an increase in revenue.

Television and Entertainment Adjusted EBITDA for the third quarter of 2016 was $146.8 million compared to $122.5 million in the third quarter of 2015, an increase of $24.2 million, or 20%, primarily due to higher revenues. For the nine months ended September 30, 2016, Television and Entertainment operating profit was $188.5 million as compared to $190.5 million for the nine months ended September 30, 2015, a decrease of $2.0 million, or 1%. Television and Entertainment Adjusted EBITDA was $404.4 million as compared to $361.8 million for the nine months ended September 30, 2015, an increase of $42.7 million, or 12%.

Digital and Data segment revenues were $49.1 million compared to $46.6 million in the third quarter of 2015, an increase of $2.5 million, or 5%. The increase was primarily due to higher video revenues and was partially offset by declines in music revenue.

Digital and Data operating loss for the third quarter of 2016 was $11.6 million compared to an operating loss of $6.2 million in the third quarter of 2015. Digital and Data Adjusted EBITDA was $2.9 million in the third quarter of 2016 compared to $6.4 million in the third quarter of 2015, a decrease of $3.6 million, primarily due to higher compensation expense related to new foreign offices and new leadership roles and higher costs for product development.

Peter Liguori, Tribune Media’s president-CEO, said: “Our financial results in the third quarter demonstrate the strength and resiliency of our media operations. “For the quarter, we grew revenues by 6 percent and consolidated Adjusted EBITDA by 16 percent year-over-year, due primarily to higher political and digital advertising revenues and increases in retransmission consent and carriage fee revenues. Our results would have been even better but for the Trump campaign’s substantially lower than expected spend on television advertising and the fact that our station portfolio does not benefit from Olympic advertising because we have only two relatively small NBC affiliates.

“Adjusting for the significant impact of core dollars shifting into the Olympics, we estimate that core advertising remained essentially flat in the quarter, consistent with the first half of 2016. Similarly, despite lower overall political spending in the market versus 2012, we significantly increased our political advertising market share, and at this time we estimate that our full-year gross political advertising revenue will be about $161 million, or 97% of our record 2012 total.

“We achieved several important goals this quarter. We renewed the affiliate agreement for roughly half of our Fox television stations on mutually beneficial terms.  We struck a favorable retransmission consent and carriage agreement with Dish Network.  And we closed several real estate transactions generating $473 million in net pretax proceeds. During the year, we took aggressive steps to identify additional efficiencies in our cost structure, including recent initiatives that we expect to generate $18 million to $20 million in expense savings on an annualized basis going forward, and we expect to continue our cost reduction initiatives into 2017. However, given the unique market dynamics which have impacted the second half of the year, we are revising our full year financial guidance for 2016.”

The company as a whole reported consolidated operating revenue of $518.1 million compared to $488.6 million in the third quarter of 2015, representing an increase of $29.5 million, or 6%. The increase was primarily driven by higher political advertising, retransmission consent, carriage fee and digital advertising revenues and an increase in Digital and Data revenues, partially offset by a decrease in real estate revenues as a result of the sales of certain properties in 2016.

Consolidated operating profit was $222.4 million compared to $38.8 million for the third quarter of 2015, representing an increase of $183.6 million. The increase was primarily attributable to gains recorded on the sales of certain real estate properties, partially offset by lower Television and Entertainment operating profit primarily due to a $37 million program impairment charge and higher severance expense, higher operating losses for Digital and Data and higher corporate costs.

Read the company’s report here.