Tribune blames lower Trump spending, NBC Olympics for listless earnings


Tribune Media’s CEO Peter Liguori offered two clear factors for the company’s quarterly financial shortfall: Donald Trump and the Olympics.

“Our results would have been even better but for the Trump campaign's substantially lower than expected spend on television advertising and the fact that our station portfolio does not benefit from Olympic advertising because we have only two relatively small NBC affiliates,” Liguori said in a release from the company detailing its quarterly performance. “Adjusting for the significant impact of core dollars shifting into the Olympics, we estimate that core advertising remained essentially flat in the quarter, consistent with the first half of 2016. Similarly, despite lower overall political spending in the market versus 2012, we significantly increased our political advertising market share, and at this time we estimate that our full-year gross political advertising revenue will be about $161 million, or 97% of our record 2012 total.”

Indeed, Tribune wasn’t the only TV broadcaster suffering from unexpectedly sluggish political spending. Just yesterday Gray Television reported similarly sluggish quarterly revenues. “Actual spending by candidates, political parties and third-parties fell far short of expectations, especially in Gray's markets,” Gray CEO Hilton Howell said in a release detailing the company’s earnings. “The political revenue results and uncertain macro environment make it more likely that Gray will place the highest priority on debt repayment over the next four to five quarters."

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Media General also reported lower-than-expected revenues today, driven partly by lower political ad spending. The company continues to expect to close its merger with Nexstar.

Overall, Tribune reported operating revenues of $518.1 million, up 6 percent from the same period a year ago, but lower than expectations. The company also lowered its guidance for the rest of the year.

While Hillary Clinton’s campaign advertised mostly as expected, Trump’s campaign benefitted from “unprecedented celebrity use of free media,” explained Tribune’s Liguori during the company’s conference call with investors, according to a Wall Street Journal article on the event. The result, Liguori said, was that Trump lowered his spending on traditional ads.

Trump was elected president in a surprise victory last night.

Interestingly, as the WSJ pointed out, Liguori and Tribune’s management team are “discussing the implications” of Trump’s election, and noted the company could be affected by market volatility. However, he added that “We have tremendous flexibility and that will help us if the waters get choppier in the next coming months.”

Tribune Media in February announced it was exploring “strategic alternatives,” corporate jargon that often indicates possible mergers or acquisitions. However, in its earnings the company said that it “has nothing definitive to report at this time.”

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