While Americans have been enjoying political advertisement-free television following the 2012 election, broadcasting companies such as Belo Corp. see it differently. Belo experienced a fiscally successful year due to the election, but with political advertising no longer filling the coffers, the company must be resourceful in order to make up for lost revenue.
On Wednesday, March 6, Belo released its fourth quarter results, highlighting the significant revenue increase in 2012. Belo’s total revenue was $205 million in the fourth quarter, which was $25 million, or 14 percent, higher than the fourth quarter of 2011. The company also reported that the closing price for its stock in the fourth quarter was $8.64 per share, up 22.4 percent from the 2011 fourth quarter closing price of $6.80. That’s nearly double the gain of the market as a whole, as measured by the S&P 500.
Paul Fry, vice president for investor relations and treasury operations of Belo, attributed Belo’s 10 percent revenue increase for all of 2012 to two key factors.
“Belo had a record high of $61. 2 million in political advertising revenue in 2012 but we also had $13.4 million in revenue due to the 2012 Summer Olympics, which was broadcasted at NBC network affiliated stations,” Fry said.
Without another Olympics or major political election for at least two years, Fry admitted that total revenue will be down for 2013, which will force Belo to concentrate on its core spot advertising.
“We will see a little political revenue in 2013, but it is always hard to make up $61.2 million,” Fry said.
Dunia Shive, chief executive officer of Belo, released an optimistic statement on the lack of political advertising revenue in the company’s first quarter of 2013.
According to Belo’s fourth quarter earnings report, Shive stated, “Based on recent pacings, we currently estimate total revenue to be up 2 to 2.5 percent versus the first quarter of 2012, with increases in core spot, retransmission and Internet revenue partially offset by lower political revenue.”
Although Belo expects total revenue to be up in the first quarter of 2013 in comparison to 2012, the company will have a tougher time making up for lost political revenue in the later quarters of this year. In 2012, political revenue did not increase significantly until the second, third and fourth quarters, as the election approached. Belo posted just $1.6 million in political ad revenue in the first quarter of 2012; that soared to $9.5 million, $17.7 million, and $32.4 million in the second, third and fourth quarters respectively.
Belo is one of the nation’s largest publicly-traded pure-play television companies and owns 20 television stations that reach more than 14 percent of U.S. television households across the nation. Each Belo station was affected differently by the 2012 political election and will make varying adjustments for 2013.
