LIN moves ahead with caution


Like most companies in the advertising business, LIN Television watched its Q2 2009 net revenues plummet, taking a -20% hit over the same period in 2008, based on a drop from $103.7M to $82.5M. It also sees no dramatic rebound in the near future and is taking steps to ride out a prolonged storm.

It’s been doing better with local than national, but both were down significantly. Excluding political, local was down 19%, and national 27%. Political dropped 83%, and automotive was down 44%.

A plus was in the digital and retransmission consent side of the business. Combined, they were up 52% from $6.7M to $10.2M.

LIN managed to cut costs in a realistic manner, bringing operating expenses for the quarter down from $69.7M to $61.4M, a savings of 12%. Execs said this was done without putting its focus on local news at risk, and it was primarily done with permanent moves rather than temporary expediencies, so the leaner expense profile should continue to provide benefits going forward.

Looking ahead, LIN expects Q3 net to come home in the $63M-$66M range, which would represent a loss of between -18% and -24%.

The company has seen glimmers of hope for a rebound, but nothing earth-shattering, and with nothing striking to rule out a prolonged continuation of the current recession, it amended its creditor covenants to provide breathing room and security.

Automotive business has been among the glimmers of hope. LIN says it has seen signs that the automakers’ decision to week out weak dealerships has helped, and they pumped in promotional cash to assure the survival of the remaining dealers. And Cash for Clunkers has been a boon.

LIN is a big believer of television duopolies, and certainly is willing to use LMAs to achieve the overhead benefits that they offer, as long as there is an opportunity built in to acquire an equity stake in the leased property down the road.

In 2010, the company is looking forward to a little bit of help from the Olympics, a lot of help from mid-term elections and continued benefit from a leaner operating structure.