Net Revenue Down 1.8% At Young
Cost Reduction Measures at Stations Soften Blow of Weakening Economy.
By Michael Malone -- Broadcasting & Cable, 5/6/2008 7:56:00 AM
Young Broadcasting reported a 41% boost in operating income for the first quarter ($1.8 million, up from $1.3 million), compared to the same quarter a year ago. The improvement reflects the company’s dramatic cost reduction measures at its stations. Despite what Young termed “a challenging advertising environment coupled with a weakening economy,” net revenue for the quarter slipped a modest 1.8%, from $35.6 million a year ago to $35 million for the first quarter of 2008.
Political revenue for the quarter totaled $1.8 million. Corporate expenses were flat for the quarter while operating expenses were $29.6 million, a decrease of 3.8% compared to last year.
"Our results for the quarter were superior to other companies in broadcasting,” boasted Young Broadcasting chairman Vincent Young. “We believe the company's financial performance is turning the corner based on our stringent cost reduction and revenue enhancement programs."
Young announced a cost streamlining program in February that saw layoffs at several of Young’s 10 TV stations. The plan will save the company some $15 million on an annualized basis, the company says, and “the positive impact of the plan will be felt in the last nine months of the year.”
Indeed, Chairman Young was bullish on the remainder of 2008. "We anticipate benefiting from increased political revenue later this year and retransmission fees in future periods,” he said. “Political revenue is already contributing significantly to our bottom line and we are still only in the primary portion of the presidential race. Our cable retransmission negotiations are proceeding in a direction which also makes us optimistic about our company's future."
Young hired Moelis & Company in January to help unload KRON San Francisco at some point in the first quarter, but KRON remains on the Young books.
