Tegna Media Third Quarter Revenue Down 2.4% - Broadcasting & Cable

Tegna Media Third Quarter Revenue Down 2.4%

Updated: Core business is up a tick, but decrease reflects 85% drop in political spending from 2014 Q3
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Tegna Media reported third quarter revenue of $406.4 million, a 2.4% decrease from the third quarter of 2014. That decline is attributed to the absence of nearly $40 million of net political spending during the midterm campaigns of Q3 2014. This past quarter’s $6.1 million is an 85% decrease.

Core revenue increased by just over 1% to $254 million. Retrans ($109 million) and digital ($29.4 million) were up 18.6% and 13.1%, respectively, in the third quarter.

Fueled by the Oct. 1, 2014 acquisition of Cars.com, Tegna, Inc. reported a 22% increase in adjusted EBITDA.

Tegna changed its name from Gannett—with its publishing businesses becoming Gannett—on the first day of the quarter.

“Tegna Media revenue continued its strong trajectory despite the absence of approximately $40 million in political spending in the third quarter of 2014 - which speaks to strong growth in retransmission revenue, online revenue and core advertising during the quarter,” said Gracia Martore, president and CEO. “We expect that the momentum we’ve seen this past quarter puts us in a very strong position as we continue to execute Tegna’s more focused strategy going forward. Beyond this, we expect to see even greater impact as the nation’s political races begin to heat up into 2016.”

Tegna also revealed that its board of directors has endorsed a $75 million hike to the company’s share repurchase program to $825 million.

Martore referred to Q3 as a “tough 2014 comparison” when it came to political spending, but said Tegna is well-positioned in key battleground states. According to the company, Tegna Media revenue would have been up 6% had political been excluded. As Q4 2014 saw a record $92 million in political spending, Tegna Media projects a decline in the mid to high single digits.

On the bright side for Tegna, Martore noted the recent retrans consent agreement with Dish Network, as well as its affiliation deal with CBS.

Asked about retrans, Martore said they are in the midst of budgeting and negotiating so it might be premature, but she said they anticipate the increase will be in the 30%-plus range.

Beginning 2016, Tegna will move from using the fiscal year to the calendar, meaning Q4 will be extended by four days.

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