Analysts Anticipate Diverging Increase in TV Revenues
BIA Financial expects TV revenues to hit a 10-year high this year, while JP Morgan analysts were more modest in their predictions.
BIA said political ads would drive an 11 percent increase over 2007 totals. JP Morgan analysts John Blackledge and Aaron Chew set their expectations at 4 percent.
“We expect national spot and local spot to grow 12.5 percent and 2.5 percent respectively,” they wrote jointly in their outlook note.
The duo said political TV spending could hit the $2 billion mark this year, up 38 percent from 2006, “with the majority of those dollars allocated to broadcast TV.”
According to BIA,’07 lagged behind the previous year, down $500 million from the $22.7 billion tallied in 2006.
The Chantilly, Va., media analysis and research firm predicted that stations in Florida, Pennsylvania, Ohio, Virginia South Carolina, Maine, Iowa, Wisconsin, Colorado, Nevada and Southern California would fare particularly well, with revenues increasing as much as 12 percent.
BIA issued the prognostications in its quarterly Investing In Television Market Report
. Mark Fratrick, vice president at BIA said, “The national and statewide elections will reinforce the strength of the local television market,” because it’s the only medium that could “provide mass audiences in an increasingly fragmented marketplace.”
BIA also described 2007 station sales as “relatively small,” although the numbers exceeded 2006. A total of 294 TV stations sold for around $4.6 billion last year, compared to 202 stations selling for $18.1 billion the year before. Station sales in ’07 were led by Oak Hill Capital Partners’ purchased of eight News Corp.-owned stations in Cleveland, Denver, St. Louis, Kansas City and Milwaukee for $1.1 billion. The next largest transaction was the sale of three Eastern Seaboard stations by Lincoln Financial Media to Raycom for $583 million.
Fratrick said the deals represent immediate strategic objectives rather than long-term strategies.
“This pattern is expected to remain in 2008,” he said.