Tegna’s media segment revenues during the first quarter managed to hold mostly steady despite tough comparisons with the year-ago quarter.
Media segment revenues hit $446 million, up 0.6% year-over-year thanks to a $35.5 million increase in retransmission revenues and a $4 million increase in digital revenues. The small increase in revenues came in despite the impact of “significantly lower” politically-related advertising, the move of the Super Bowl to Fox from CBS (for which Tegna has more affiliates) and one less day in the quarter. Taking out the impact of the Super Bowl shift and lower political advertising, media segment revenues rose 5.9%.
Meanwhile, the media segment’s operating expenses rose to $306.7 million, up from $273.5 million in the year-ago quarter primarily due to “substantially” higher programming fees and continued investment in growth initiatives. Media segment operating income totaled $140 million while on a non-GAAP basis operating income in the quarter was $142 million.
Tegna is expecting the percentage increase in media segment revenues next quarter to be in the low to mid-single digits compared to the second quarter of 2016.
“TEGNA generated revenue in the first quarter of 2017 comparable to the first quarter last year, despite a significantly lower level of political and Super Bowl spending, a softer advertising environment and one less day in the quarter. At TEGNA Media, we benefited from strong growth in retransmission revenue and at TEGNA Digital, Cars.com benefited from an increase in advertising sold directly by the company and the acquisition of DealerRater, partially offset by a decline in fees from advertising sold by newspaper affiliates,” said Gracia Martore, president and CEO, in a statement.
Overall, Tegna’s operating revenue dropped to about $778 million, down from around $782 million in the year-ago quarter. Operating income declined steeply from $203 million a year ago to $153 million during the quarter.