US TV station house owners are dealing with a blended promoting market, with energy in key classes like native, auto and sports activities programming offset by weak point in others.

The auto class, traditionally broadcasters’ prime native advert income driver, continues its lengthy rebound from pandemic-related stock challenges and chip shortages. Local advert purchasers total have continued to spend, serving to station teams enhance their core promoting standing. However, nationwide spot spending has fallen amid decreased budgets, particularly in classes like media, sports activities betting, healthcare and insurance coverage.

“Local is strong, and it’s been strong. The national ad market has struggled pretty much the entire year,” stated Gray Television Inc. President and co-CEO Pat LaPlatney, including that the automotive class is “coming back with a vengeance, not just in local but also national spot.”

The E.W. Scripps Co. President and CEO Adam Symson on the corporate’s Nov. 3 earnings name stated that whereas the nationwide upfront market was weak throughout the business, the corporate is seeing some inexperienced shoots within the fourth-quarter scatter market, the place spots are purchased a lot nearer to a program’s air date. Looking throughout the most important station teams — together with Nexstar Media Group Inc., Sinclair Inc., TEGNA Inc., Gray and E.W. Scripps — the printed firms by and enormous anticipate to complete 2023 with fourth-quarter positive aspects in core promoting.

Core promoting assumes extra significance in odd years, when advertisers aren’t crowded out by political spending.

Shifting gears

In phrases of areas of energy, station teams all benefitted from the continued enchancment within the auto market.

At Nexstar, the nation’s largest operator of TV stations, auto spending was up 13% 12 months over 12 months and was the highest core performer. President and COO Michael Baird stated there may be nonetheless runway forward for the class. Auto advert spending stays beneath 2019 ranges and extra autos can be found on the market. But, Baird famous Nexstar will face harder comparisons within the fourth quarter as a result of it is going to lap the class growth that has occurred for 5 consecutive quarters.

Auto was additionally up 7% 12 months over 12 months within the third quarter for Sinclair, the nation’s second-largest proprietor of TV stations.

At E.W. Scripps, auto was forward 13% 12 months over 12 months. CFO Jason Combs stated auto accounted for 18% of the station group’s promoting take within the interval, its highest share “in quite some time.”

The constructive auto development continued into October: COO Lisa Ann Knutson stated auto grew 10% throughout that month. If the class continues on that course, Knutson stated it could characterize a sixth consecutive interval of progress for auto spending.

The enhancements come as automakers look to ramp up manufacturing and gross sales within the wake of the pandemic and associated chip shortages. In 2022, gentle car gross sales totaled 13.8 million within the US, the bottom in a decade, in response to S&P Global Mobility. In 2023, that determine is about to leap to nearly 15.5 million after which hit 15.9 million in 2024, based mostly on S&P Global Mobility’s October forecast.

Scoring with sports activities

Beyond auto, broadcast station house owners additionally discovered promoting success with elevated reside sports activities programming.

In the 12 months since Nexstar took management of The CW (US), the community has secured rights for LIV Golf; Atlantic Coast Conference Football and Basketball; and most lately, WWE NXT, which is about to start airing on The CW in 2024. In 2025, The CW will even turn out to be the unique residence to the NASCAR Xfinity Series starting in 2025

“Ratings of ACC Football on The CW have been very positive, attracting new advertisers to the network,” Nexstar CEO Perry Sook stated on the corporate’s Nov. 8 earnings name.

Overall, core promoting at Nexstar fell 2.3% to $391 million within the third quarter. COO Baird stated excluding The CW, core promoting was down 6.8%.

Scripps can be seeing a profit from reside sports activities. The firm expects native core advert income will enhance within the low- to mid-single digits within the fourth quarter, benefiting from a 4-percentage-point acquire tied to its two native NHL offers: with the defending champion Vegas Golden Knights and the Arizona Coyotes.

“Linear television, specifically broadcast TV, is made for this. The leagues know it, the teams know it, the fans know it and so do distributors and advertisers,” Scripps CEO Adam Symson stated. “And that’s the reason Scripps is leading the broadcast renaissance in live sports.”

While sports activities programming is scoring with advertisers, spending on sports activities betting was down within the third quarter.

At Gray, sports activities betting was the class with the most important lower. Gray COO Sandra Breland McNamara stated sportsbooks that spent closely final 12 months as their platforms have been first launching are actually shifting to upkeep outlays.

Testing know-how

With sports activities betting down, Gray highlighted new enterprise positive aspects, as the corporate’s native direct phase registered year-over-year progress within the first, second and third quarters of 9%, 15% and 16%, respectively.

To assist navigate a few of the smooth spots within the advert market, another station teams are turning to know-how.

Sinclair CFO Lucy Rutishauser stated the corporate has been refining its providers, tapping a unified advert gross sales platform tying linear and digital collectively. The firm can be utilizing AI for shopper prospecting, to assemble extra tailor-made communications.

Sinclair’s fourth-quarter steering requires core promoting to enhance within the mid-single digits on a professional forma foundation, boosted by digital spending, Rutishauser stated.

Of course, know-how bets don’t at all times repay. At Tegna, core promoting was off 2.6% to $312.4 million on the firm’s Advertising and Marketing Services unit, due partially to the beforehand disclosed lack of a single nationwide account for Premion, the corporate’s linked TV, OTT advert enterprise.

“Similar to last year, Premion revenue was down year-over-year, impacted by the loss of a single large national account,” Tegna CFO Victoria Dux Harker stated on a Nov. 7 earnings name. “However, Premion’s primary focus is on the growth in local OTT revenue, where it’s uniquely positioned to win. Premion local revenue was strong, up double digits year-to-date.”