Report: Local TV Recovery Sustains in Q2

Local television should see revenue growth in the high teens and low 20s for the second quarter, forecasts a new report from RBC Capital Markets. RBC is bullish on broadcast in general for the second quarter, compared to the same quarter a year ago.

"Network TV scatter pricing finished stronger than we might have expected and global box office was generally in-line, while local TV pacings remained in the high-teens to low-20s for most of 2Q10 according to our channel checks," read its "Media & Entertainment: To Earnings Infinity and Beyond" report. "Despite skepticism about the advertising economy and consumer entertainment market holding up given the global macro backdrop, we don't think 2Q10 results will demonstrate any real loss in momentum."

The auto advertising stations are so reliant on has slowed down, reports RBC Capital Markets, but "broader category recovery has kicked in."

Among the station groups RBC sees reporting 20% ad revenue growth in the second quarter are Sinclair and Univision.

Groups typically reported in the teens and low 20s in the first quarter.

RBC says the retrans battlefield, mostly quiet since a high-profile row between Cablevision and WABC New York in March, will heat up in the third quarter, with Time Warner Cable and Disney the major combatants. "Things have been relatively quiet (versus the Disney/Cablevision or Fox/Time Warner Cable battles that we saw in 1Q10)," it reads. "We think it's a quiet before the storm in 3Q10, when Disney's carriage agreements with Time Warner Cable for both ABC O&O's and ESPN expire."

RBC suspects the retrans leverage is with ABC/Disney with college football season starting up in that quarter.

"Of potentially major consequence for the industry is whether or not Time Warner Cable is able to secure a commitment for Disney's participation in TV Everywhere as part of those discussions," the report continues. "Given the lack of structural clarity with respect to TV Everywhere, we think it's still something of a long shot."

Michael Malone

Michael Malone, senior content producer at B+C/Multichannel News, covers network programming, including entertainment, news and sports on broadcast, cable and streaming; and local broadcast television. He hosts the podcasts Busted Pilot, about what’s new in television, and Series Business, a chat with the creator of a new program, and writes the column “The Watchman.” He joined B+C in 2005. His journalism has also appeared in The New York Times, The Philadelphia Inquirer, Playboy and New York magazine.