Sinclair Broadcast Group alerted investors Tuesday before the stock market opened that it reduced its revenue forecast for the third quarter, which it blamed on lower-than-anticipated political ads and weakness in other categories.
Sinclair blamed the soft station revenue in presidential-race ad spending on a shift by candidates to more national TV buys. As reported, basic-cable networks, particularly news and information networks, are booking large gains in political ads in comparison to 2004.
The soft advertising is spreading to the automotive to fast-food categories, as well, the Baltimore-based broadcaster said.
Sinclair expects its TV-station revenue to be flat with last year’s $149.4 million, versus earlier forecasts of $152.5 million-$15.4 million, which, at the high end, would have been a 3.4% rise.
The company’s announcement said, “As compared to the company's prior guidance, of the approximate $3 million-$5 million estimated shortfall, $1.7 million is attributable to lower-than-previously-expected political spending as a result of the candidates shifting their advertising buys from the local spot market to the networks. The remaining shortfall is primarily attributable to advertising cancellations by the automobile sector, both at the manufacturing and dealer levels, as well as the fast-food sector.”
Sinclair said other factors are a cutback from telecommunications products and, “in general, local advertisers were able to purchase commercial spots at the last moment during the [2008 Beijing Olympic Games] that we were expecting to air on non-NBC stations.”
The Television Bureau of Advertising (TVB) issued a downbeat forecast for TV stations' ad revenue earlier this month.