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Study: Local TV Profitability Way Up in 2010 - Broadcasting & Cable

Study: Local TV Profitability Way Up in 2010

CBS affiliates show big news profits, while Fox stations do not
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Over 57% of station managers said their TV news operations showed a profit in 2010, according to a new RTDNA/Hofstra study, up nearly 10% from those that said news was profitable in 2009. The past year of course saw rampant political spending, while 2009 was mired in a recession that hit stations especially hard.

News represents an average of 46.8% of responding stations' overall revenue, reports the study.

Stations in markets 51-100 showed the largest profit from news (69.7% reported being in the black), compared to markets 1-25 (55.8%) and 26-50 (61%). Markets 101 and up showed the smallest profit from news operations.

RTDNA/Hofstra polled stations in the fourth quarter of last year, with 1,360 TV stations responding.

Hofstra's Bob Papper authored the study.

Regarding affiliations and news profits, CBS affiliates were best in class with 50% of their revenue coming from news, trailed closely by NBC (49.6%). ABC affiliates showed an average of 44.9% of profit coming from news, while Fox affiliated stations were well off the pace at 33.2%.

Papper said the affiliate discrepancy may come from CBS's longtime strength in prime. "It may simply be the network delivering more eyeballs in primetime," he says. "A lot of potential viewers see the promos for the station's newscasts."

While NBC's primetime has not been strong, NBC affiliates' high profitability in news last year may have been driven by the NBC O&Os' profitability-first strategy under parent GE.
A plurality of stations (43.2%) kept their 2010 news budgets the same last year, while 26.9% increased costs and 23.9% cut.

The study said that over 26,500 people work in local TV news, up 2.9% from the previous year, but down 1,295 bodies from the peak year in 2007.
Fully 745 stations produce local news, which airs on 968 U.S. stations.

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