Ad downturn hits Turner nets


The ad market is getting harsh Turner Broadcasting System, with the cable networks suffering a sharp drop drop in ad sales.

In revealing its second quarter results, AOL Time Warner disclosed that ad sales from its TV networks dropped 8% during the three months ended June 30. The company didn't isolate the cable networks, but did note that sales at broadcast network WB actually rose. That means sales for TBS, TNT, CNN and other divsions as a whole dropped more than 8%.

Now, higher license fees from cable systems offset that, particularly at ad-free Home Box Office, so the entire network division's revenues increased 2% and cash flow rose 14%. But the ad slide was big.

"The cable networks are probably seeing advertising declines for the first year in history," said Sanford Bernstein & Co. media analyst Tom Wolzien. "It's not a good sign for everyone else."

AOL's cable systems show no signs of struggle, with sales rising 14% and cash flow increasing 13%. AOL executives are sticking by their of $40 billion in revenues for the full year. - John M. Higgins