Tribune Hoping News, Sports Pay Off In 2016

Tribune Media doesn’t break out its earnings for its TV station group, choosing to fold them in with those of its basic cable network, WGN America, and radio station WGN-AM Chicago. But on an earnings call with analysts this morning following release of 4Q and full year earnings, CEO Peter Liguori provided a little insight into what’s going on at the stations.

Group-wide, Tribune added 80 hour of local news per week in 2015 and now produces more than 80,000 hours a year, he said.

“While this expansion will level off in 2016, our investment in local news helped drive advertising revenue share increases in seven of our Top 10 markets along with very significant gains in New York, Chicago and Los Angeles.”

Live sports is another key to the group’s broadcast strategy, Liguori said, noting that the group has picked up Yankees baseball in New York and renewed the Mets in New York and the Cubs in Chicago.

“The success of those teams last year is enabling us to realize substantial gains in CPMs this season,” he said.

A bright spot in 2016 is political, which the company earlier forecast would be $200 million, 20% higher than in 2012. “So far, in the first quarter, we are noticing a very, very robust political pace,” Liguori said.

Overall, the company reported the Television and Entertainment sector generated $464 million in the fourth quarter of 2015, compared to $480.2 million in the fourth quarter of 2014, a decrease of $16.2 million, or 3.4%.

The decline was caused by a $46.5 million decrease in net political advertising revenues, the company said.

The decline was partially offset by a $15.9 million, or 27%, increase in retransmission consent revenue, an $8.3 million, or 58%, increase in carriage fee revenue related to higher rates for WGN America distribution and an $8.1 million, or 2.6%, increase in core advertising revenues.

There was no mention on the call about Tribune’s stalled affiliate renewal negotiations with the CW. The current 10-year deal is set to expire in August.

Tribune is the key CW affiliate. It airs the network in 13 markets, including six of the top 10 — New York, Los Angeles, Chicago, Dallas, Washington and Houston.

Tribune executives steadfastly refused to discuss their intentions regarding the FCC incentive auction this spring. The FCC is using the auction to buy spectrum from broadcasters and then sell it to wireless carriers.

They cast no light on their early-morning announcement that they and the board were looking to “unlock value” in the company assets through, as Liguori put it, “strategic partnerships, programming alliances, evaluating return of capital initiatives and assessing the sale or separation of select lines of business or assets.”

Liguori spent a lot of time on the call discussing WGN America, particularly its original programming initiatives.Although Manhattan was disappointing, Outsiders is doing well and hopes are high for Underground, Liguori said.

He said Tribune is taking “a mindful approach” to its originals, taking its slow, trying to build on success.

But it was some off-network programming on WGNA that caused Tribune to take a write down of $74 million. WGNA bought Person of Interest and Elementary at “extremely attractive prices” in 2013. “But the cable syndication market has changed,” Liguori said. “The audience for this kind of programming is smaller than it was and these shows have simply not performed the way we hoped. “

“Still, POI and Elementary are good shows that we have faith in. Their audience is building. We are up about 30% among 25-54s this year compared to their debut last fall.

“As an accounting matter, however, they had to be written down.”