No star, but better
Olympics, elections should help local stations revive after 2001
By Steve McClellan -- Broadcasting & Cable, 1/13/2002 7:00:00 PM
Olympics and elections aside, 2002 isn't going to be a stellar year for local broadcasters. Still, just about everybody is glad that 2001 is behind them. '02 may not be a banner year, but the consensus is, it won't be as bad as the one just ended.
Most of the big publicly traded station groups reported ad-sales declines throughout last year. And just when the local business was starting to show a few signs that the start of a recovery might be near, the terrorist attacks occurred, obliterating any and all such signs. Morgan Stanley estimates that the local TV business (local and national spot combined) was down 10% in 2001 to slightly more than $22.5 billion.
National spot advertising has been local TV's problem child for a couple years now, and Sanford Bernstein estimates that it dropped 19% in 2001, while local spot was down 4%.
Neither Morgan Stanley nor Sanford Bernstein is particularly bullish about this year. Indeed, Bernstein's Tom Wolzien wrote in a recent report that "local ad problems are expected to continue declines into a second year." His estimates for '02: a 6.4% drop for local spot and a 2% drop for national spot.
To the extent that stations do show revenue growth this year, it's probably going to come from political spending and, for NBC affiliates, next month's Winter Olympics in Salt Lake City.
Although political advertising will be a windfall, few believe 2002's total will reach the record-breaking $606 million generated in 2000. Belo Executive Vice President of Media Operations Jack Sander predicts that political dollars "will be at least as good as '98," when his company's total was $30 million. But that's well below the $50 million Belo achieved in 2000.
It's a similar story for Hearst-Argyle Television, which raked in $60 million in political-ad spending in 2000. Company President David Barrett says next year's political money will be "significant to say the least, but I doubt it will reach $60 million."
While national spot remains a critical piece of business for most stations in the top 75 markets, many stations see local spot as the big growth area.
Indeed, both LIN Television and Belo say local sales will account for 60% of their business, up from 50% just a few years ago. Same story for the Sinclair Broadcast Group: Executive Vice President David Amy says local sales have climbed from about 52% in 1999 to 57% currently.
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