Analyst: Broadcast TV biz may worsen

Moody's downgrades sector from 'positive' to 'stable'

The credit conditions for the U.S. broadcast TV industry could worsen during the next 12-18 months, Moody's Investors Service said Wednesday in downgrading the sector from "positive" to "stable."

Moody's remains bullish in the near term, though -- at least relative to last year -- predicting revenue growth this year in the mid teens by percentage.

But much of that optimism is based on the November elections, and once political advertising dries up, so will growth in the broadcast TV industry.

"With the loss of political dollars and continuing economic uncertainty, broadcasters could face challenges in maintaining revenue at comparable levels in 2011," Moody's said.

The credit-rating agency also warned that if recent soft trends in employment, consumer confidence and retail sales don't reverse, it "would likely revise the outlook to 'negative' based on the potential for a shift in our view to at least a mid-single digit revenue decline in 2011."

Stocks of companies with broadcast holdings didn't seem to react to Moody's negativity on Wednesday. CBS was up 3% to $13.33; Disney rose 4% to $33.14; Viacom advanced 4% to $36.98; Sinclair Broadcast edged up 2% to $5.61; News Corp. advanced 1% to $13.86; and Time Warner was up 3% to $29.12. Comcast, which is trying to become the parent of NBC Universal, was up fractionally to $17.84.
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