National Ad Sales Growth Boosts TV Station Results

National ad sales at TV stations rebounded from the deep lows of the recent recession during the first quarter and seem to be continuing this quarter, TV executives told investors this week. “It’s a broad, healthy market with people feeling there’s going to be more competition for market share and awareness that if you want to try to be in the game and build a brand, you've got to market it,” Chief Operating Officer Chase Carey of News Corp. said late Tuesday.

Advertisers that withdrew from TV marketing during the recession are back, said Steve Marks, chief operating officer of Sinclair Broadcasting’s TV division. “You have a lot of accounts that we're noticing on the national level that we didn’t have at this time last year,” he told an earnings call Wednesday. “I wouldn’t necessarily categorize it as new business, but it’s new business in the sense that they were sitting out on the sidelines for at least 12 months and are now coming back and at least placing dollars on the national level."

Advertisers that didn’t completely cut back during the downturn are expanding their budgets, Marks said. “Then you take a look at the guys that have always been there and stayed throughout the tough times, their budgets have increased pretty dramatically,” he said. “We're seeing a very strong national market right now and I would expect that to continue for the rest of the year."

Expanding ad budgets bode well for TV networks’ upfront ad selling season beginning soon, News Corp. Chairman Rupert Murdoch said on an earnings call. “There is a lot of money out there across the board and our advertising people are very optimistic about the upfront.” News Corp.’s cable networks are poised to benefit from declines in broadcast ratings, he said. “As free over-the-air audiences shrink, and ours have shrunk much less than anybody else’s, that money is finding its way to the cable networks."

Operating profit at News Corp.’s TV stations for the first three months of 2010 was $40 million, up from $8 million a year earlier. Sales at its TV stations were $350 million, up from $310 million a year earlier, Carey told investors. At Sinclair, total Q1 sales gained 9.6 percent from a year earlier to $169.6 million. Sinclair had a Q1 profit of $10.9 million vs. an $87.1 million loss a year earlier that resulted from a write down.