Firms work to offset local TV station woes

Belo, Meredith, Sinclair, Nexstar execs hit UBS

NEW YORK -- If you're a publicly-traded owner of local TV stations and meeting investors at a major media conference in New York City, then what do you do? You accentuate the positive.

That's just what the executives of Meredith Corp., Belo Corp., Nexstar Broadcasting and Sinclair Broadcast Group Inc. did this week at the UBS Global Media and Communications Conference in Midtown Manhattan. There's no getting around the troubles in local TV, and most of the execs didn't even try.

Belo president and CEO Dunia Shive said Tuesday that most of the recent performance by pure-play TV companies like Belo were due to investor unease about the economy as well as concerns about the downturn in auto advertising.

But there were few of the concerns about the long-term health of local TV expressed by, say, NBC Uni chief Jeff Zucker when he spoke at UBS on Monday. Where Zucker said NBC Uni's 10 local affiliates were going to have to change drastically or else face disaster, there was none of that from the other execs.

"Everybody at our company knows this is not business as usual," Belo's Shive said.

Shive said that Belo executives were continuing to work on cost reduction and debt paydown. She said Belo had frozen open positions, instituted a wage freeze and reduced staff by about 5% compared with a year ago.

But she looked forward to February, where Belo would have four NBC affiliates carrying the Super Bowl compared to one Fox affiliate in 2008. Then there's the 2010 Winter Olympics in Vancouver, which will be on the NBC affiliates and Belo is particularly well positioned because of having several stations in the Pacific Northwest.

Several of the companies spoke of retransmission consent fees. Nexstar Broadcasting said that its $20 million a year in retrans consent was going to double within the next year or two. Nexstar has about $300 million in mostly ad-supported revenue from its 50 TV stations in 29 markets.

But the big dog in the retrans business is Baltimore-based Sinclair, which will take in $72 million of that in 2008.

"It's a very significant number. We're still in the early stages of retrans negotiations," Sinclair executive vp David Amy
said. "We certainly expect to see that number grow going into the future." Sinclair is negotiating agreements with Dish and DirecTV, Verizon, AT&T and other smaller players.

No one expected the political advertising windfall of this year to carry into next year. But Amy said that Sinclair pulled in $41 million in political revenue this year, a record level well above the low $30 millions that Sinclair had seen in recent presidential election years.

"It was nice to see given the economic climate," Amy said.

On Monday, Meredith Corp. -- which owns TV stations as well as a host of magazines -- sounded upbeat about its licensing, online and video marketing businesses as well as what executives called strong cash flow and a conservative balance sheet.

"We believe this will allow us much flexibility as we work through this next six to 12 months in a difficult environment," Meredith CFO Joseph Ceryanec said.