Political ads send Sinclair local TV profit up 33%
Michelle Clancy | 02-11-2012
Local TV station owner Sinclair Broadcast Group has clocked a 33% growth in profit in the third quarter of 2012 as political campaigns and automakers continued to deliver the advertising gift that keeps on giving.
The broadcaster saw net income of $26.2 million in the three months that ended Sept. 30, or 32 cents per share, compared with $19.2 million during the year-ago quarter or 24 cents per share.
Meanwhile, net broadcast revenue grew nearly 7% when excluding political ads. That was helped along by higher retransmission revenue from cable and satellite TV partners, the company said.
"Despite increased demand for air-time by politicians and political action groups, the core business showed solid growth," said Sinclair CEO David Smith in a statement.
Political revenue alone totaled $27.8 million in the third quarter, up from $2.4 million in comparable period in 2011. Overall sales from continuing operations spiked 49% to $226.4 million, from $151.9 million in the third quarter of 2011.
Advertising by political candidates, political action committees and other groups negated the impact of more traditional sources of bread-and-butter ad sales, like fast food, Sinclair said. "We expect this trend to continue through the Nov. 6, 2012 election day as political advertising reaches historic levels," the company said.
Also, anticipating an increase in dividend tax rates in 2013, Sinclair's board has approved returning about $81.2 million to shareholders in the form of a $1 per share special cash dividend, in addition to the regular 15 cents per share quarterly dividend, the company said.
The company recently announced that it is buying the assets of KBTV, the FOX affiliate in the Beaumont/Port Arthur, Texas, where Sinclair also owns the CBS station. Also, it is selling its ABC station in Lansing, Mich., "after identifying it as a non-strategic market," the company said.