Sinclair Broadcast Group reported net broadcast revenues of $133 million for the second quarter, an 18.8% drop from the same quarter last year. The company's broadcast revenue for the first six months of the year was down 18.6% over the comparable period a year ago.
Local advertising revenues were off 21% in the quarter and national down 31.4%. Political revenue was $0.7 million and retransmission consent revenue was $23.6 million-up from $18.7 million in the same quarter a year ago.
Sinclair President/CEO David Smith said he believed advertising-based businesses would not "begin to recover until the second half of 2010."
The broadcaster held a conference call in mid-July during which it said bankruptcy protection was a consideration, especially if Cunningham Broadcasting, with which Sinclair is closely aligned, were to default on a $33.5 million loan that was due July 31. Cunningham's lenders extended the date to October 30 late last week.
Cunningham's fate is still an issue for Sinclair. "Cunningham and its lenders continue to seek a resolution to satisfy the debt maturity," said Smith. "This resolution may have a financial impact on Sinclair."
Smith said Sinclair is typically strong in the second quarter, but that was not the case this year. "Second quarter time sales of $109.8 million were about $1 million lower than the first quarter, an indication that Sinclair continues to be adversely affected by the economic recession," he said. "Despite this, we still outperformed the industry, based on third party data, a sign that our sales force continues to aggressively work accounts. On the expense side, we have been working with our station management to find areas where we can cut costs and create efficiencies for the longer-term."
Sinclair expects third quarter broadcast revenue to be down 15.7% from the same quarter last year.