Radio+Television Business Report

The Media Financial Management Association (MFM) has revealed the speakers for its two-day Media Tax Summit, scheduled for March 2-3.

The virtual event will be held from 11am-1pm Eastern on each of those days.

The summit was formulated specifically for media tax professionals. Its focus is the specifics of how technological advances, the evolving workplace environment, and recent and proposed legislation have converged to transform the expectations for, and responsibilities of, the media tax department. MFM has assembled expert speakers to delve into each of these topics.

The event is co-chaired by Sinclair Broadcast Group SVP/Tax Paul Nesterovsky, TEGNA Sr. Director of Tax Sean Hetzler, and Dan McGuire, a Partner for State and Local Tax with KPMG LLP.

The Summit schedule is as follows:

Tuesday, March 2, 11:00 a.m. – 1:00 p.m. ET

CFO Panel – Expectations for Successful Media Tax Department

Moderator: Dan McGuire, Partner, State & Local Tax, KPMG LLP

Panelists: Lucy Rutishauser, EVP & CFO, Sinclair Broadcast Group; Stephen P. Gibson, VP, CFO, The Washington Post; others TBA

Federal Stimulus and Relief Legislation – Media Industry Impacts

Moderator: Louis Lazar, Tax Partner, PwC

Panelists: Paul Nesterovsky, SVP Tax, Sinclair Broadcast Group, Andrew Prior, Tax Policy Services, PwC US

March 3, 11:00 a.m. – 1:00 p.m. ET

Intersection of Tax and Corporate People Strategy

Moderator: Sean Hetzler, Senior Director, Tax, TEGNA Inc.

Panelists: Jean Nechvatal, Vice President, Human Resources, Tribune Publishing; Kristin Hansen, Director, Human Resources, Hearst Television; John Montgomery, Partner, KPMG

Trends, Opportunities, and Threats in State Taxation

Moderator: Duane Dobson, Director, Ryan

Panelists: Stephanie Do, Senior Tax Council, Council On State Taxation (COST); Alexandra Sampson, State Tax Council, Hearst; Alesia Lewis, Global Head of Tax, The Washington Post

“We are excited about the experts and topics we’ve assembled for our inaugural MFM Media Tax Summit,” said Mary M. Collins, president and CEO of MFM and its BCCA subsidiary, the media industry’s credit association. “Realizing 2021 will present unique challenges; our co-chairs have been deliberate in identifying media-specific challenges along with thought leaders to address them.”

Registration is free for MFM corporate members, $200 for each of the first two attendees from a non-corporate industry member organization and complimentary for each subsequent media industry registrant. Others, including those who work for companies that offer products, goods, or services to the media industry, must pay either the member rate of $100 (if they are members) or the non-member rate of $250 (which includes a one-year trial membership) for each Summit attendee. No refunds or credits will be given after February 26, 2021.

Registered participants are eligible to receive up to four (4) CPE credits toward their certified public accounting (CPA) license. MFM is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors.

For more information, visit the MFM website.

Sinclair Broadcast Group on Wednesday was the latest owner of over-the-air television stations to release its fourth quarter and full-year 2020 results.

Sinclair’s performance was good: Earnings per share exceeded Wall Street analyst estimates, while revenue came in line with forecasts.

Why, then, were Sinclair shares down nearly 4% upon the release of the financial report card?

Sinclair Broadcast Group on Wednesday declared a $0.20 dividend payable March 24 to holders of Class A and Class B shares of record at the close of business March 10.

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WASHINGTON, D.C. — The FCC today announced the winning bidders and the final bid totals in Auction 107— also known as the “C-Band Auction.”

Auction 107 net winning bids totaled $81,114,481,921 and gross winning bids totaled $81,168,677,645.  Twenty-one bidders won all of the available 5,684 licenses.

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Here’s some obvious news from Kantar: Total TV advertising declined in 2020.

But, just how bad was the carnage at broadcast television created by the COVID-19 pandemic?

There was none.

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Is it ensuring false information that can incite and create violence and insurrection is blocked from receipt by the American public, or is it an extreme violation of Freedom of Speech?

That’s the big question emerging from Capitol Hill, where Democrats and Republications in the House of Representatives have drawn a line in the sand on how “disinformation and extremism” can be prevented from dissemination by broadcast and cable media outlets.

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An “enterprise-wide partnership” that will bring Futuri’s growth products, including TopLine, TopicPulse, Futuri Streaming, and Futuri Mobile, to all SummitMedia stations, has been forged.

“Broadcasters that want to grow their content, grow their audience, and grow their revenue are at a huge disadvantage if they don’t harness technology to compete,” said Futuri CEO Daniel Anstandig. “SummitMedia knows this and acted on it to revolutionize their go-to-market strategy with listeners and advertisers. The SummitMedia leadership team is among the best in the business, and we’re honored to partner with them.”

Randy Chase, who recently succeeded the late Bill Tanner as EVP of Programming at Birmingham-based SummitMedia, added, “SummitMedia is committed to delivering the best content to our consumers and exceptional results to advertisers, and Futuri technology like TopLine, TopicPulse, and their other solutions give us an advantage in today’s highly competitive environment. Expanding our partnership with a best-in-class technology company like Futuri helps us evolve and innovate at a time when stasis is not an option.”

With Greg Walden now retired as a Member of Congress and at the helm of brand-new K Street strategic advisory firm Alpine Advisors, the Ranking Member of the influential House Energy & Commerce Commission has become Republican Cathy McMorris Rodgers, from the state of Washington.

She’s making her mark in fast fashion. And, she’s steaming mad at her Democratic colleagues for actions she and Communications and Technology Republican Subcommittee Leader Bob Latta (R-Ohio) believe put a threat to freedom of speech, and Freedom of the Press.

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One week ago, the wife of influential talk radio pioneer Rush Limbaugh announced that he had lost his battle with Stage 4 Lung Cancer.

With iHeartMedia offering The Best of Rush for the foreseeable future, is there an opportunity for other radio broadcasting companies — including Entercom Communications — to snag some of Limbaugh’s listening audience?

It’s a question presented by a top financial analyst to CFO Rich Schmaeling and CEO David J. Field during Entercom’s Q4 earnings call on Wednesday morning.

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During its “Stream On” event, Spotify announced that it plans to launch a Hi-Fi streaming plan offering lossless streaming in CD quality later this year in selected markets.

This announcement is significant. But, is it noteworthy and of concern to radio broadcasting companies in the U.S. and Canada?

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WASHINGTON, D.C. — Until now, the Northern Virginia-based broadcast TV station owner once known as Gannett has been largely known for owned-and-operated stations including the CBS affiliate serving the Nation’s Capital and two digital multicast networks.

Now, True Crime Network and Quest are getting a sibling. And, it’s putting its focus on women — and perhaps LGBT audiences, too.

RBR+TVBR OBSERVATION: Is TEGNA too shy with who this new multicast network is really appealing to? C’mon, TEGNA — get out of the closet and say this offering is for the LGTBQ crowd. The name alone suggests it. [More below, for Members Only].

TEGNA Inc. this spring will officially launch its third multicast network.

Welcome to Twist, which TEGNA describes as “a women-oriented channel featuring lifestyle and reality programming.”

Initially, Twist will include home, food, and reality content, “much of it featuring exciting reveals – or twists – at the end of each show.”

Programming will be comprised of unscripted TV programs including Clean House, Top Chef Masters, Queer Eye for the Straight Guy, Dance Moms, Tabatha Takes Over, Tiny House Nation, and Flipping Out.

In a regular feature on the network, Twist will encourage viewers to submit their own videos of twists they’ve been thrown in life and how they persevered through them in a positive segment called “Share Your Twist.”

Brian Weiss, President/GM of TEGNA’s multicast networks, commented, “Twist will provide an exciting new viewing option for our female audience with content that has not been available through a multicast channel until now. The launch of Twist will enhance TEGNA’s leadership among non-fiction multicast networks, delivering the kinds of free content that over-the-air viewers crave.”

Carriage will be seen in 41 TEGNA markets. And, to bring it to New York, Los Angeles, Chicago and Philadelphia, a newly reconstituted Univision Communications has agreed to add it as a digital multicast offering. Seven other Univision markets have committed to Twist.

Even more, Twist will be added to 31 stations presently owned by HC2 Broadcasting.

These arrangements will bring Twist to DMAs covering 70% of U.S. television households.

And, additional distribution agreements are expected to be announced by summer, TEGNA says.

A preview reel can be seen at www.watchtwist.com.

— Editing by Adam Jacobson, in Boca Raton, Fla.

RBR+TVBR OBSERVATION: Is TEGNA too shy with who this new multicast network is really appealing to? C’mon, TEGNA — get out of the closet and say this offering is for the LGTBQ crowd. The name alone suggests it.

For a generation of LGTBQ adults, Twist was a popular nightclub in the heart of Miami’s South Beach. And, some may recall its association with the “Men on Film” skit as seen on the FOX sketch comedy program In Living Color some 30 years ago.

Yes, some may believe it is stereotypical to simply assume Twist is LGTBQ friendly because of Queer Guy. But, all of this programming isn’t singularly enjoyed by women. And, given the disposable income and show preferences of the LGTBQ community, particularly among gay men, TEGNA could see bigger riches and, believe it or not, free promotion from any group that may protest its arrival.

Strictly catering to women is limiting and not exactly a slam dunk, revenue-wise. Just talk to Meredith Corp.’s national media leadership. By bringing a LGBTQ-friendly, if not laser-targeted, digital multicast network to life, TEGNA could only further bring over-the-air TV’s longevity story in a world where cord-cutting stories have been hijacked by deep pocketed AVOD, SVOD and OTT platforms in a place no different than podcasters were in 2018.

Be bold, TEGNA. Give viewers a new twist by fully realizing Twist’s audience potential. 

One of the nation’s largest audio media companies, with investments in podcasting and a growing streaming app, is rapidly recovering from not only COVID-19 fueled detriments to its revenue, but also from challenges largely associated with the November 2017 tax-free merger it successfully completed with CBS Radio.

Entercom Communications early Wednesday released its Q4 and full-year 2020 earnings report. While its revenue was down 22.8% year-over-year, it surpassed Wall Street estimates. Entercom’s earnings per share? That’s another story.

Entercom’s adjusted net income shriveled to $23.04 million (translating to a non-GAAP earnings per share of $0.17), from $53.38 million ($0.40).

Wall Street analysts expected non-GAAP EPS to come in at $0.18.

On a GAAP basis, Entercom’s EPS was negative, at -$1.21. That was far off from Street prognostications, as profit of $0.02 per share was forecast.

Total net revenue came in at $319.5 million, compared to $414.12 million in Q4 2019.

That said, year-over-year comps are being downplayed by the radio industry, which is intent on showing sequential quarterly improvements from the worst of the COVID-19 pandemic. And, those sequential improvements paint a positive picture for the owner of key Sports Talk properties as WFAN-AM & FM in New York and podcast players Cadence13 and Pineapple Street.

Total net revenue in Q2 2019 was $175.87 million, off from $380.67 million in the second quarter of 2020.

Of course, perspective is everything: Revenue was down 22.8% year-over-year in Q4. Revenue was down a steep 53.8% in Q2.

What was Entercom’s non-GAAP Station Operating Income (SOI)? In Q4 2020 it totaled $80.69 million, slipping from $129.66 million.

Then, there are the non-adjusted numbers, which show a diminished net loss in Q4 2020 of $162.4 million, from a net loss of $487.54 million in Q4 2019.

Lastly, Free Cash Flow, a largely important figure for the radio industry, came in at $37.97 million. While that’s down from Q4 2019’s FCF of $59.52 million, it’s a big swing from negative FCF of $47.87 million seen in Q2 2020.

POLITICAL PROWESS

The Q4 2020 results, while pointing to positive growth, are propelled by something that likely won’t be repeated for some time: incredibly strong political ad dollars.

Entercom in Q4 saw political revenue of $18.89 million — a record high that dwarfs Q4 2018’s revenue of $12.3 million.

Importantly, the record-crushing political didn’t diminish Entercom’s sequential improvements in spot revenue, or its network revenue.

Then, there is Entercom’s digital story. Not only has the company returned to growth, something finally seen in Q4 2019 after months of mediocre revenue trends, but it established a new division record in Q4 2020 — finishing at a mighty $58.8 million.

It’s extremely encouraging news for Entercom, which has invested heavily in its Radio.com streaming app and platform, inherited from the CBS Radio merger and completely rebooted.

The other interesting positive for Entercom: Sponsorship and event revenue isn’t totally comatose, with sequential gains pushing it to $9.6 million in Q4 from $7.24 million in Q2 2020. Year-over-year? That’s ugly, given the loss of holiday-themed live events Entercom would normally stage during the final three months of the year.

In a Securities and Exchange Commission filing, Entercom offered revenue by “format,” splitting its music stations from its Sports and News/Talk broadcast properties. The improvement in revenue on a sequential basis is most noticeable at its music stations.

EXPENSE CONTROL

Entercom’s C-Suite, ahead of its earnings call for investors and financial analysts, also pointed to a slash in station expenses in Q4 as a key factor in achieving revenue growth.

Station expenses for the fourth quarter declined 16% to $238.8 million year-over-year and corporate expenses declined 6% to $20.2 million.

The big black mark for Entercom in Q4: Operating loss for the quarter was $204.9 million, as this includes a non-cash impairment charge of $247.4 million. Yet, this compares to an operating loss of $455.5 million in the fourth quarter of 2019.

In prepared comments ahead of Entercom’s 10am Eastern quarterly earnings call, Entercom President/CEO David Field pointed to “strong sequential operating improvement,” with podcasting and sports betting contributing to across-the-board revenue growth.

“While the pandemic continues to hobble a large number of our advertisers, particularly locally, we are optimistic about a strong recovery in our local ad sales later this year driven by vaccinations, fiscal stimulus and pent-up consumer demand in heavily impacted categories,” he said.

In particular, Radio.com enjoyed 34% year-over-year growth in monthly active users in the fourth quarter and 53% growth in smart speaker listenership.

Comcast-owned FreeWheel Advisory Service’s latest research report, “The Definitive Guide to Video,” explores the differences between linear and digital TV advertising.

Author David Dworin examines the progress the industry has made in bringing these two worlds together, specifically across two dimensions, in this report.

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Where Arkansas meets Oklahoma via U.S. Highway 412 sits a dormant broadcast tower that’s home to a transmitter for a 5kw daytime/31 watt nighttime AM that has been owned by regionally known licensee Jay Bunyard for nearly 13 years.

Most recently, this station was an ESPN Radio affiliate. Now, it’s being sold — and a change in language is most likely on the way for this forlorn station.

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With the last broadcast transaction of the year — a $55.8 million TV deal — the broadcast deal volume for 2020 passed the $1 billion line, closing with a total of $1.02 billion.

That’s an 87% drop from 2019, Volker Mörbitz of S&P Global Market Intelligence notes, clearly highlighting the challenges of the COVID-19 pandemic.

It is, however, a volume 27% higher than that of 2010 when the deal market felt the full impact of the 2008-2010 financial crisis.

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February 11 saw the release of the second in a series of Borrell Associates reports that examine 2021 spending plans for a dozen different types of local ad buyers.

This 14-page analysis, drawn from a survey of 373 local businesses that buy TV ads, shifts focus to Broadcast TV Advertisers.

To share additional insights into the findings, Gordon Borrell spoke exclusively with RBR+TVBR in this fresh InFOCUS Podcast presented by DOT.FM.

Listen to “The InFOCUS Podcast: Gordon Borrell” on Spreaker.

WASHINGTON, D.C. – The NAB has officially launched a new digital campaign highlighting stories of local broadcasters through first-person accounts.

The “Voices From the Field” campaign, part of NAB’s “We Are Broadcasters” initiative, is designed to spotlight how broadcasters are using their expertise, experience and dedication to local broadcasting to serve their audiences and “uplift” their communities.

Using first-person storytelling features such as podcasts, video interviews and Q&A dialogue, “Voices From the Field” seeks to provide a platform for subjects to describe why they became broadcasters, what makes them passionate about their career and what they love most about being a local broadcaster.

The campaign, the NAB says, will focus on local reporters, on-air radio talent, photojournalists, broadcast engineers, producers and editors to highlight the people responsible for delivering news, weather, emergency information and public affairs programming to local communities.

“Every day, thousands of local broadcasters work tirelessly on-air, online and behind the scenes to deliver invaluable service to their communities,” NAB President/CEO Gordon Smith said. “This campaign will celebrate the real people who are providing vital information from the front lines to keep Americans safe, informed and engaged, even when they themselves are in harm’s way.”

The first “Voices from the Field” story focuses on Shomari Stone, the distinguished general assignment reporter at NBC O&O WRC-4 in Washington, D.C.

In the report, Stone shares the moment he knew he wanted to be a broadcaster, his insights into how he views his role as a journalist and his experiences covering the January 6 attack on the U.S. Capitol Building.

New “Voices from the Field” segments will be regularly available at WeAreBroadcasters.com.

With some companies, focusing on net revenue and earnings per share Street beats is core to determining just how healthy a company is. But, that’s not the arbiter for investors of Dish Network stock.

In the case of Dish, subscriber gains or losses is key to where the company’s health is, even as it swiftly tilts away from DBS television services to 5G telephony player. And, with the revelation Monday that Dish lost more subscribers than financial analysts expected, the company’s stock slumped.

That dip in value will likely continue in the short term, as a key analyst just downgraded DISH on that poor subscriber report.

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Record performance. It’s a statement some companies may state, yet only tells part of a story that’s inclusive of some blemishes and bruises.

That’s not the case with respect to Nexstar Media Group. With founder and Chairman/CEO Perry Sook beaming as he discussed “another year of record financial performance” as he opened the company’s quarterly earnings call, Nexstar surpassed consensus expectation by delivering impressive Q4 and full-year 2020 results.

With CFO Tom Carter on the call, Sook reviewed the key Q4 highlights.

Net revenue jumped to $1.38 billion, from $1.1 billion. Analysts expected revenue of $1.34 billion.

Net income attributable to Nexstar soared to $364.25 million ($7.97 per diluted share), from $113.21 million ($2.36), thanks in large part to the addition of Tribune Media properties into the fold.

The EPS smashed the analyst forecast of $6.07.

Total funded debt declined in 2020, to $7.67 billion from $8.49 billion. However, Nexstar’s unrestricted cash also fell, to $152.7 million as of Dec. 31, 2020 compared to $232.1 million a year earlier.

The debt includes partner Mission Broadcasting, licensee of such stations as WPIX-11 in New York.

“Despite the challenges presented by the pandemic, 2020 was a year of historic financial growth for Nexstar,” Sook said, noting that “sequential improvements in core advertising” — a story heard across the radio industry — is also a tale being told by Nexstar’s broadcast media properties and its WGN America TV network, soon to be rebranded as NewsNation.

Those challenges are reflected in a 9.9% Q4 core ad revenue dip to $473.5 million, from $525.5 million. That said, political displacement was significant, with political advertising revenue of $298.27 million against Q4 2019 political dollars of $36.53 million. Ownership of stations such as NBC affiliate WSAV-3 in Savannah, Ga.; the CBS affiliate in Columbus, Ga.; and the ABC affiliate in Augusta, Ga., helped in achieving this feat.

Then, of course, there is retransmission fee revenue, noted in the Q4 and full-year 2020 report as “Distribution Fee Revenue.”

For Q4, this increased by 18.4% to $527.99 million from $445.83 million.

What’s in store for Nexstar in the months ahead?

“While we continue to operate in a dynamic environment, full year 2020 free cash flow was in line with our pre-pandemic expectations and 2021 is off to a solid start,” Sook said. “As a result, we are reinstating guidance and expect to generate pro-forma average annual free cash flow of approximately $1.27 billion over the 2021/2022 cycle which supports our view that Nexstar’s path to growth, expanded returns of capital and enhanced shareholder returns remains on plan.”

How did investors respond to the results? Nexstar shares started Tuesday’s trading session with a 6.5% rise, to $136.81 as of 9:37am Eastern.

No matter where Nexstar finishes, it will be a new record high.

With the growth seen this morning, Nexstar has now surpassed its 1-year target estimate set by financial analysts. And, it marks a return to strong, steady growth that began at the start of 2013 and was only briefly squelched by the COVID-19 pandemic.

On that note, Nexstar shares have grown by roughly $85 per share since March 30, 2020.

In September 2019, NBCUniversal first announced a move to impressions. But, clients and agencies who were not trading on impressions were granted additional time to transition while they evaluated the impact the change would have on their business and clients.

That evaluation period is coming to an end very soon.

With the close of the transition period at the end of Q1, all of NBCUniversal’s owned TV stations and regional sports networks will be measured using CPMs only.

This means that as of April 1, all 42 NBC and Telemundo owned-and-operated broadcast TV stations and seven NBCUniversal-owned regional sports networks will officially move to 100% impressions-based buying for all local advertising campaigns.

“Our local businesses were among the first to put a stake in the ground around the move to impressions-based ad buys more than a year ago, giving local marketers a better currency for measurement,” said Frank Comerford, NBCUniversal Owned Television Stations’ Chief Revenue Officer. “Utilizing impressions puts local TV on a level playing field with digital, since advertisers will no longer need to convert ratings to impressions in order to evaluate an overall ad buy. As always, our teams are ready to work hand-in-hand with local advertisers to deliver successful campaigns across all DMAs.”

The move to 100% use of impressions, instead of traditional ratings points, by stations and RSNs will, in NBCUniversal’s view, “enable marketers to plan holistically across platforms and screens, and will more accurately showcase the increase in viewers as a result of the addition of BBO households.”

As it turns out, Nielsen‘s introduction of broadband-only (BBO) homes into local market samples begins on April 1, answering questions one may have about Nielsen’s involvement or perhaps that of rival Comscore.

“Moving to impressions brings the added benefit of eliminating zero cell quarter-hours, which had previously resulted in a reduction in inventory,” EVP of NBC & Telemundo Owned Television Station Sales Michael Chico said. “Ratings, unlike impressions, are held to Nielsen’s minimum reporting standard thresholds. Ratings that do not meet these minimums are reported as zero viewership, while impressions are reported when viewing occurs in all quarter hours, effectively adding back anywhere from 5-20% of viewers depending on the daypart. This provides additional inventory for agencies and clients to reach their impressions goals on buys.”

NBCUniversal in December 2020 said it would expand its available digital inventory, addressable products, and advanced targeting by scaling NBC Spot On across One Platform. As a result, sales teams at NBC and Telemundo owned stations gained greater access to digital inventory from both NBC owned and operated properties and third parties.

That came following the February 2020 launch of advanced video advertising business NBC Spot On, which the company says is designed to give local, regional Connected TV and OTT access to premium video inventory.

“Given 2020’s extenuating circumstances, I am extremely proud of the company’s performance and the efforts of the entire Cumulus team to meet the challenges posed by COVID-19.”

That statement from Cumulus Media President/CEO Mary Berner set the tone for the audio media company’s release of its year-end and fourth quarter 2020 financial bill of health.

Just how healthy is Cumulus and all of its divisions, including Westwood One?

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