Tribune’s Liguori: No Comment On Merger

Merger? What merger?

During Tribune’s call with securities analysts this morning following release of fourth quarter earnings, outgoing CEO Peter Liguori avoided comment on whether the company was in merger talks with the Sinclair Broadcast Group, which a Reuters story this morning suggested they were and which has been seen in broadcast circles as the natural next step for Sinclair.

Wells Fargo analyst Marci Ryvicker gave him the opportunity by asking about the station group in terms of the company’s on-going  strategic review and saying “the street is assuming you are more a seller than a buyer.”

Rather than comment on the Reuters story, however, Liguori turned to the M&A boilerplate. “We are always looking at what we do with our portfolio to maximize shareholder value. With or without the strategic review, that is our day-to-day operating thesis…. We are committed to maximizing that value. If and when there are changes to the environment, we will examine them accordingly.”

During the call, Liguori addressed other matters, but was stingy with details.

He said he was “very bullish” about Tribune’s network affiliates’ getting carried on the virtual MVPDs — the likes of DirecTV Now and Sony’s PlayStation Vue.

Based on negotiations to date, he said, “there is little doubt that these OTT services view local stations and local offerings as something they need to compete toe-to-toe with MVPDs.

“Economics will dictate how these negotiations take place,” he said. “When Benjamins or, as I like to put it, Harriet Tubmans rule, everybody figures out how to work together.”

Liguori acknowledged that the stations’ core spot business was soft in December and January. “We are noticing what everybody else is noticing: business is coming in late. It’s much more challenging to get visibility.” He cited auto, telecom and education as underperforming ad categories.

But, he said, the station group is “highly encouraged” with the quickening pace of sales and said that the company should meet its guidance for the year, which has core “up low single digits.”

Liguori said there is no softness in retransmission consent revenue, which reflects the value that MVPDs place on stations’ local news and live sports. Retrans revenue grew 20% in the fourth quarter and 18% in 2016, he said. “We expect this year’s growth in retransmission revenue to surpass the growth we saw in 4Q.”

Revenue from retrans and carriage fees for basic cable network WGN America are becoming a “larger and larger share” of the company’s total revenue — from 12% in 2013 to 24% in 2016.

Tribune announced last month that Liguori was leaving the company and that his last act would be presiding on the conference call. At the outset of the call, he expressed gratitude to the board for the opportunity to run Tribune and to the 6,200 Tribune employees and its advertising clients. He also outlined what he felt were his accomplishments as he led it out of bankruptcy four years ago.

Wrapping up, he addressed the analysts. “I think my contract ended at 9:20 so I’m now exactly 60 seconds over. It’s been a real pleasure working for you all…. I look forward to working with you in the future and I thank you for your time.”