The newspaper business continues to drag, but both radio and TV saw core revenues (excluding political) grow in Q4 for Journal Communications – and radio was even up with political included. For the entire company, revenues were down 8.3% to $95 million.
Q4 revenues for Journal Broadcast Group were down 9.4% to $50.9 million. That was all due to the lack of a federal election. Political and issue advertising was only $800K, down from $9.4 million in Q4 of 2010. Excluding political, the company said broadcasting revenue was up 7%.
Local advertising revenue increased 5.7% primarily due to an increase in automotive advertising. National revenue increased by 2.7% primarily due to an increase in the financial services advertising. Retransmission revenue was $2.4 million compared to $1.6 million. Broadcasting operating earnings of $9.7 million decreased 40.1% compared to $16.2 million primarily due to lower political and issue advertising revenue.
Revenue from Journal’s television stations for Q4 decreased 15.4% to $31.6 million. TV political and issue advertising revenue was $700K, compared to $8.8 million. Excluding political and issue advertising revenue, television revenue increased 7.9%. Operating earnings for the TV unit were $4.9 million, including a $0.9 million non-cash impairment charge for broadcast licenses in 2011, compared to operating earnings of $13.0 million. Television operating expenses increased 9.3% primarily due to higher employee-related expenses. Excluding the $0.9 million non-cash impairment charge for broadcast licenses, operating expenses increased by 5.7% to $25.8 million.
Radio revenues for Q4 were up 2.3% to $19.3 million. Radio political and issue advertising revenue was $100K, compared to $700K. Excluding political and issue advertising, radio revenue increased 5.5%. Operating earnings from radio stations were $4.7 million compared to $3.2 million. Excluding the $1.8 million non-cash impairment charge for a building in Omaha in 2010, operating earnings were $4.7 million compared to $5.0 million. Radio operating expenses decreased 7.1%. Excluding the Omaha building impairment, radio operating expenses increased 5.0% primarily due to higher employee-related expenses and audience promotion costs.
For the full year, broadcasting revenue decreased 4.3% to $186.1 million. Excluding political, issue, and Olympic advertising revenue, broadcasting revenue increased 3.3% in 2011.
Journal is now more a broadcasting company than a newspaper company, but print is still a big component. Publishing revenue declined 6.9% in Q4 to $44.2 million. The company said that was “largely due to continued decreases in the retail, classified and national advertising categories, partially offset by an increase in other revenue.” Operating earnings from publishing were $5.9 million compared to $5.1 million, an increase of 14.8%. Excluding workforce reduction related charges of $0.3 million in 2011 and $2.0 million in 2010 and Florida community newspaper and shopper operating earnings of $0.1 million in 2010, operating earnings were $6.2 million compared to $7.0 million, a decrease of 10.7%.
Q4 revenue at the Milwaukee Journal Sentinel declined 3.2% to $38.7 million, with retail advertising down 3.7%, classifieds down 18.6%, interactive advertising up 4.1% and circulation essentially flat. Revenue for the community newspapers and shoppers fell 26.3% to $5.5 million, due in part to the sale of the company’s former Florida community/shoppers operations.
“We ended the year with outstanding borrowings under our credit facility of $41.3 million, a reduction of $33.3 million from the end of 2010, reflecting a leverage of less than one times EBITDA. This gives us the flexibility to use our strong balance sheet to invest in our business and grow through acquisition opportunities,” said CEO Steve Smith ahead of his quarterly conference call with Wall Street analysts. He had previously indicated that Journal was most interested in acquiring additional broadcast properties in markets where it already operates.
“Looking ahead to 2012, our goal is to continue to build our local market brands by providing relevant and differentiated content across our television, radio, digital and newspaper platforms. We will continue to focus on building local market share of advertising revenue and plan to take advantage of political and issue advertising in key battleground states such as Wisconsin and Nevada. Our priority in publishing is to continue to provide a significant, high impact daily newspaper and leverage our new JS Everywhere brand. We will introduce our new tablet application and mobile platform later this year, opening up additional growth opportunities for our digital business. We will continue to seek in-market growth opportunities in traditional or digital media, make capital investments that drive growth and look for broadcast acquisitions,” he added.
RBR-TVBR observation: Remember when Journal was a newspaper company that happened to own some broadcast stations? There seems to be no way to swim against the tide in the print business, but Journal has been aggressive in growing its radio and TV operations, both internally and through acquisitions.