Tribune Media Swings to Second-Quarter Loss
The company, led by CEO Peter Liguori, posted higher carriage and retransmission fees and ad revenue, but content spending increased.
Tribune Media, the entertainment company that was created by last year's split of the Tribune Co., on Thursday reported a second-quarter loss even though it benefited from higher retransmission consent and carriage fees.
The company, led by CEO Peter Liguori, posted a second-quarter loss from continuing operations of $3.3 million, or 4 cents per share, including a pre-tax charge of $37 million for the extinguishment of debt. The loss compared with a year-ago profit of $82.9 million.
Operating profit decreased 39 percent to $19.8 million and adjusted earnings before interest, taxes, depreciation and amortization fell 29 percent. The company cited three other factors as drags on the bottom line: a previously announced change in the timing of the amortization of programming expense for original programming at WGN America, planned production funding for co-owned original programming for WGN America and "implementation costs for improved technology applications and the establishment of new shared services operations."
Investments in co-owned original series include spending on the likes of Manhattan, Underground and Outsiders. "These investments in scripted original programming give the company upside revenue potential through increased carriage fees and participation in the sale of domestic and international rights for these shows, including rights to stream the shows via video services," Tribune said.
Quarterly revenue rose 6 percent to $501.5 million. Wall Street had, on average, expected earnings of $29.1 million on revenue of $503 million.
Television and entertainment revenue was up 4 percent "driven by higher advertising revenues and increased carriage and retransmission fees." Ad revenue rose 1.4 percent or 2.3 percent when excluding political ads.
Said Liguori: "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 topline growth. Today's results reinforce our confidence that our strategy is the right one to drive long-term value for our shareholders."
He added: "Our Television and Entertainment segment experienced revenue growth in all key areas and the outlook remains 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. 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 [pay TV] partners, advertisers and audience."
Tribune Media consists of 42 owned or operated TV stations; national entertainment network WGN America, which has had success with such originals as Salem; Tribune Studios; Tribune Digital Ventures; WGN Radio; real estate properties and strategic investments. The other company created by the Tribune split is Tribune Publishing, which operates the Los Angeles Times, Chicago Tribune, Orlando Sentinel and other newspapers, as well as local news services.