The old political saw, "all politics is local," could be recast as, "all politics is local ad dollars."
Thanks to political spending, Sinclair Broadcast Group was able to record a 1.8% increase in net broadcast revenues to $164 million in the third quarter vs. 3Q 2003. Without the 2003-2004 boost in political spending from $1.3 million to $8 million, local ad revenue was down .8% as it was, but without political spending, it would have been down 2.3%. National ad revenues, which were up 5.6%, would have been down 3.6%.
Sinclair cited a number of factors for the drop in nonpolitical ad revenue, including declines in key ad categories automotive, fast food, retail and beer & wine. It also said eight of its 62 stations were impacted by the hurricanes.
Sinclair said that all its affiliate stations (taking each as a group), increased revenues, with the exceptions of WB and UPN, whose shortfalls were attributed to weak network performances.
Sinclair paid $26.7 million in the quarter for syndicated programming. Its debt stands at $1.692 billion
For the first nine months, net broadcast revenue was $502.4 million, up 2.8%.
Looking ahead, Sinclair said it expected the auto category to remain weak, and wasn't looking for much boost from either the Fox or WB network lineups. On the upside, it talked of the record political spending in the fourth quarter and the ratings improvements at ABC (the-ratings challenged network has launched big hits so far in dramas Lost and Desperate Housewives).
As a result, the company is looking for a 4.6%-4.9% boost in net broadcast revenue in the fourth quarter, thanks primarily to a projected increase in political spending from $2.1 million in 4Q 2003 to an expected $21 million in 4Q 2004.
Sinclair took the opportunity of its quarterly financials release to thank the advertisers, investors and viewers who "stood with Sinclair and did not rush to pre-judge our news special."
Sinclair was at the center of a firestorm of criticism, including at least one major advertiser pull-out, over an anti-Kerry documentary that the L.A. Times reported it planned to run. Sinclair maintained it was only considering running portions of the show, and eventually aired a documentary that included some of the piece and some opposing views.