08.05.2009 04:00 PM
Sinclair Reports Time Sales Dip in 2Q

HUNT VALLEY, MD.: Sinclair Broadcast Group said today that time sales fell $1 million between the first and second quarters, a reversal of the typical trend.

“In a normal economic environment, we would typically generate some of our highest advertising revenues for the year in the second quarter,” said Sinclair chief David Smith. “However, this was not the case this year. Second-quarter time sales of $109.8 million were about $1 million lower than the first quarter, an indication that Sinclair continues to be adversely affected by the economic recession.”

Sinclair (NASDAQ: SBGI) nonetheless continues to outperform the rest of the industry, Smith said. However, the company’s double-digit revenue decline is currently the 2Q industry standard.

Net broadcast revenues were $133 million for the three months ending June 30; down nearly 19 percent from last year’s $163.7 million. Operating income was $25.8 million versus $43.3 million last year. Diluted earnings per common share were 4 cents versus 13 cents a year ago.

Political revenues were down significantly, from $3.6 million last year to $700,000 during the most recent quarter. Retrans was up, generating $23.6 million versus $18.7 million last year. Including political, local ad revenues were down 21 percent; national fell 31.4 percent. Sans political, local declined 20.1 percent; national, 29.1 percent.

Services, SBGI’s largest ad category representing nearly 17 percent of time sales, fell 11.5 percent. Automotive, typically the largest ad category, was No. 2 in the quarter, comprising nearly 15 percent of times sales. It was down 46 percent.

More TVB coverage of Sinclair:
August 3, 2009: Sinclair’s LMA Partner Gets Extension
Cunningham Broadcasting, a management partner of Sinclair Broadcast Group, received an extension on its $33.5 million loan due July 31. The company now has until Oct. 30, providing it makes $200,000 principal payments on each of its term loans on the first business day of August, September and October.

July 14, 2009: Analyst Deems Sinclair Bankruptcy ‘Remote’” “To be blunt, we think management is posturing,” Wachovia’s Marci Ryvicker said. “We believe that management is painting the most dire scenario in a public forum as part of its negotiations with convert holders. There are still 10 months before these converts can be put to the company.”

July 14, 2009: “Sinclair Positions for Bankruptcy
Sinclair Broadcasting group may have to file for bankruptcy if it can’t renegotiate the terms of some of its debt. In a filing with the Securities and Exchange Commission dated July 10, the company said it had $488.5 million due over the next 18 months.

June 19, 2009: Standard & Poor’s Cuts Sinclair
“We believe that sluggish TV advertising in a nonelection, recession year will cause Sinclair’s EBITDA to decline further and leverage to continue to rise,” wrote Deborah Kinzer, an S&P credit analyst. “The negative rating outlook reflects our concerns about the company's deteriorating credit metrics and its ability to refinance potential upcoming puts.” 

 



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