Tribune Media Co. reported a second quarter loss as programming expenses rose and it took a charge for extinguishing debt.
Revenues rose 6% to $501.5 million. Advertising revenues rose 1.4% to $634.3 million.
The company lost $3.3 million, or 4 cents a share, compared to a $109.4 million in net income, or 83 cents a share a year ago. Earnings before interest, taxes, depreciation and amortization were down 29%. Amortization of license fees for original programs Salem and Manhattan at WGN America rose by $24 million, and production costs on Manhattan, Outsiders and Underground were up $11 million.
Revenue for Tribune’s television and entertainment segment grew 4% because of higher advertising revenues and increased carriage and retransmission fees.
The company said that retransmission fees for its TV stations rose 23%. At WGN America, distributors representing 75% of its subscribers have been converted from carrying the channel as a superstation to a cable network, resulting in a 48% increase in carriage fees $43.1 million.
“We are making noticeable progress against our strategy to build Tribune Media for sustainable, long-term, profitable growth. Our strategy is gaining momentum and accelerating top-line growth. Today’s results reinforce our confidence that our strategy is the right one to drive long-term value for our shareholders,” CEO Peter Liguori said.
Liguori said the outlook for TV was positive.
"We continue to post gains in our local station business due to its unique ability to deliver content to our loyal local viewers. Our decision to focus on local news and live sports, especially in major markets, is already paying dividends as we continue to grow advertising market share and generate higher retransmission fees,” he said. “We are also encouraged that WGN America’s conversion to a cable network is ahead of schedule and our investment in high quality original and syndicated content is creating value for our MVPD partners, advertisers and audience.”
The company said that for the full year it will have higher than expected programming expenses for WGN America ($150 million to $160 million, compared to $144 million previously) but said those expenses will not prevent it from achieving the adjusted EBITDA of $480 million to $495 million it has been using as guidance to investors.
For 2016, the company said its outlook is for 30% year-over-year EBITDA growth. For 2016-19, the company expects WGN American and Tribune Studios revenue growth to be greater than 20% annually and for programming expenses to be about 50% of net revenues.