Local television broadcaster TEGNA saw its revenue decline to $710 million during the second financial quarter (Q2) of the year, representing a 3 percent decrease on a year-over basis, the company revealed on Wednesday.
TEGNA CEO David Lougee said overall revenue was in line with the company’s guidance range, and reflected its “ability to effectively manage what we can control in the current macroeconomic environment.”
During the quarter, TEGNA saw its operating revenue dip to $141.8 million, representing a 50 percent decline on a year-over basis. Non-political advertising revenue dropped 5 percent to $301 million. Political advertising revenue was $31.6 million for the quarter, TEGNA said.
Like other local television broadcasters, TEGNA has been impacted by a shift of advertising dollars away from traditional local and cable channels toward connected TV platforms, particularly streaming services.
TEGNA has done what it can to offset the pain by charging more money to cable and satellite distributors in exchange for the privilege of distributing their local ABC, CBS, Fox and NBC affiliates to pay TV subscribers — a move that has led to higher customer bills and increased churn within the pay TV industry.
As more customers churn out, broadcasters see less distribution fee revenue, prompting them to increase fees charged to pay TV companies — and the cycle repeats. Distribution revenue during Q3 fell to $367 million, representing a 7 percent drop on a year-over basis.
TEGA has shifted its strategy somewhat over the past few quarters by pursuing more local sports rights that help make its suite of channels more attractive to viewers, advertisers and pay TV companies alike. It recently announced deals to offer games from the WNBA’s Indiana Fever and the NHL’s Seattle Kraken teams through some of its local stations in the Indiana and Washington areas. A partnership with Gray Television will allow TEGNA to broadcast Kraken games in Alaska as well, further expanding its reach.
TEGNA is also expecting gains in its TV advertising business from the 2024 Summer Olympic Games, which are airing on its NBC affiliates in key markets like Atlanta, Denver, Phoenix, Seattle, as well as an uptick in political ad spending as the November presidential election approaches.
“Looking ahead, we remain focused on utilizing our disciplined capital allocation framework and organic growth engine to maximize long-term value for our shareholders and execute strategic initiatives to drive profitable growth,” Lougee said.
Lougee has one week left as the top executive at TEGNA. He will be succeeded by Mike Steib, who was announced by the company as its newest CEO in June. The transition takes place on August 12.
“I look forward to following Mike’s journey closely and to being a trusted advisor to him through this transition,” Lougee said.
