Sinclair Revenue Down 5% in Q4 - Broadcasting & Cable

Sinclair Revenue Down 5% in Q4

Core business strong, and growing group will eye more acquisitions
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Sinclair Broadcast Group reported net broadcast revenues from continuing operations of $180.8 million for the fourth quarter, a decrease of 4.9% from the previous year's fourth quarter. Sinclair showed operating income of $63.5 million in the quarter, compared to of $81.5 million in the prior year period.

Political revenues were $4.1 million in the fourth quarter versus $26.8 million in 2010, but core broadcast revenue was up nearly 12% in the quarter.

"We ended 2011 on a strong note," commented David Smith, president and CEO of Sinclair. "As we look ahead to 2012, our outlook is for continued ad spending growth by the automotive industry, as well as an increase in political advertising in this presidential election year. In addition, we expect the market for television station transactions to remain active and intend on evaluating potential transactions as they arise."

Sinclair has been the busiest local broadcast player on the acquisitions front, snaring the Four Points Media and Freedom Communications station groups in recent months.

Sinclair began operating the seven Four Points stations October 1, 2011 through a local marketing agreement (LMA) and closed the acquisition as of January 1, 2012. Sinclair began operating the Freedom stations Dec. 1 pursuant to an LMA and expects to close on them late in the first quarter or early in the second quarter.

Local net broadcast revenues were up 6.6% in the fourth quarter 2011, while national net broadcast revenues were down 31% "as a result of 2010's political election year," said Sinclair.

Sinclair expects first quarter station revenue to be up 20.3%-22.2%. "2012 is off to a good start with both automotive and political advertising spending leading the way," commented David Amy, executive VP and CFO. "With the presidential election this year, we expect to experience another record-breaking year for campaign and issue advertising. Meanwhile, consumer confidence appears to be improving, and with that, we should expect to see growth in ad spending."

The first quarter estimates assume $23.6 million related to the Four Points and Freedom acquisitions, including $2.9 million in Freedom LMA management fees and $6 million of Freedom LMA expense reimbursement.

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