Lin TV Corp. reached 16 new retransmission consent agreements with cable operators for both its analog and HD channels in the fourth quarter of 2007, helping boost retransmission consent fees 164 percent compared to the same quarter last year, the company reported.
Combined Internet and retrans revenues nearly doubled in 2007 to $14.9 million but still make up just a small portion of the company’s overall financial picture. But the company has plans for still greater compensation for premium content such as NFL games.
Overall for the year, Lin reported, net revenue declined 6 percent to $395.6 million as political revenues dropped from $58.1 million in 2006 to just $6.1 million in 2007. Core (nonpolitical) advertising revenues increased 3 percent for the year.
Lin income was boosted by $25.8 million profit on the sale of 700 MHz licenses.
The company also launched more than 20 new Web sites during the fourth quarter.
“We finished 2007 with great momentum; fourth quarter core advertising sales, which excludes political, increased 5 percent and digital revenues grew an impressive 131 percent,” said President and CEO Vincent L. Sadusky. “In addition, we reduced our general operating expenses 6 percent and our cash interest expense decreased by 19 percent, reflecting the $120.1 million pay-down of our debt in 2007 and our favorable debt structure. These achievements position us strongly for 2008 when we should benefit from increased advertiser demand for our highly-rated stations and the continued growth in our digital revenues.”
General operating expenses for the year decreased 5 percent, or $13.1 million, to $277.7 million, primarily due to savings in the areas of personnel, benefits, and promotion costs, and to the 2006 severance costs related to the retirement of the former CEO Gary R. Chapman.
According to Nielsen, Lin stations ranked No. 1 or No. 2 for weekdays sign-on to sign-off in 76 percent of its markets and the stations outperform their national networks in the category of “household share” by an average of 65 percent.
Lin expects that first quarter 2008 net revenues will increase in the range of 2 to 4 percent (or $1.7 million to $3.7 million), compared to reported net revenues of $91.8 million for the first quarter of 2007.
Lin also expects that its station expenses will increase at a similar rate ($1.0 million to $2.4 million) for the first quarter of 2008, primarily related growth of the company’s Internet initiatives, variable sales costs related to higher political revenues and higher news costs for political coverage.
