Anticipated Q4 2024 Local Media Income from Sinclair Expected to Fall Slightly Short of Estimates
In the world of local broadcast television, the outlook for 2025 is showing signs of resilience, with core advertising revenue projected to remain stable or even grow slightly, despite the challenges posed by the collapse of political ad sales and the broader shift towards digital media.
Recent earnings reports provide insights into this trend. Gray Television, for instance, reported a 7% revenue decline primarily due to a significant drop in political ad sales. However, the company's core advertising and retransmission revenue remained stable, indicating a level of resilience in non-political ad segments.
Sinclair, another major player in the industry, experienced a 5% year-over-year revenue decline to $784 million. Yet, its core advertising revenue (excluding political) actually rose by 4% to $316 million, demonstrating growth in local non-political ads despite the broader advertising headwinds.
These trends suggest that the traditional local broadcast ad market is under pressure from the lack of political ads and the shifting TV ad environment. However, core local advertising excluding politics is not shrinking and may even grow modestly.
Digital transformation and integration of data-driven ad targeting, especially through connected TV (CTV) platforms, are playing a crucial role in this development. These tools are helping local broadcasters to maintain or increase core ad revenue by offering more precise and measurable campaigns to local advertisers.
It's important to note that these projections are based on current information. Industry-wide upfront TV ad spending is forecast to decline by about 4.5% in 2025, reflecting broader challenges in the TV ad marketplace. However, these figures aggregate national and cable upfront commitments rather than local core broadcast alone.
As for Sinclair, preliminary estimates for its fourth-quarter 2024 results show distribution revenue higher than expected. The company expects its Local Media segment's media revenues to be between $931 million and $933 million for the three months ended Dec. 31, 2024. Sinclair's preliminary figures for its political advertising revenue, core (nonpolitical) advertising revenue, and other media revenue for the same period have not been disclosed yet.
Sinclair plans to report its fourth-quarter 2024 earnings results at 4 p.m. ET on Wednesday, Feb. 26, 2025. The company expects its Local Media segment's combined preliminary media programming and production expenses and media selling, general and administrative expenses to be between $580 million and $582 million for the quarter, which is lower than the previously disclosed guidance of $589 million to $590 million.
The conference call for Sinclair's fourth-quarter 2024 results will include a discussion of the results. Sinclair's core (nonpolitical) advertising revenue is expected to be between $300 million and $301 million. The company will hold a conference call to discuss its fourth-quarter 2024 results at 4:30 pm ET following the earnings report.
In summary, for local broadcast-TV core advertising excluding political ads, 2025 trends point to stability or slight growth, with digital tools helping to offset the loss from political ad revenues and the shifting TV ad environment.
1) The FCC and broadcasters are focusing on video content production and distribution, with the aim to maintain or increase core ad revenue through digital transformation and data-driven ad targeting, such as connected TV (CTV) platforms.
2) Sinclair, a major broadcaster, reported a 5% year-over-year revenue decline to $784 million, but its core (nonpolitical) advertising revenue rose by 4% to $316 million, indicating growth in local non-political ads.
3) Gray Television reported a 7% revenue decline, primarily due to a significant drop in political ad sales, but the company's core advertising and retransmission revenue remained stable, showcasing resilience in non-political ad segments.
4) The financial outlook for local broadcast television in 2025 reveals signs of resilience, with core advertising revenue projected to remain stable or even grow slightly, despite the challenges presented by the collapse of political ad sales and the shift towards digital media.
5) Investing in core (nonpolitical) advertising for local broadcast TV may be a sound business decision, as digital tools help offset the loss from political ad revenues and the shifting TV ad environment, resulting in stable or modest growth in 2025.
