With professional services fueling advertising revenue at Meredith Corp.‘s local media division, comprised of 17 over-the-air TV stations, and the automotive category highly impacted, segment ad-related revenue slipped by 1.6%.
That said, an 8.9% gain in “consumer related” revenue — namely, retransmission consent fees — helped cushion a dip in operating profit for Meredith Local Media in fiscal Q3 2020.
For the period ending March 31, local media ad dollars fell to $99.7 million from $101.3 million, as consumer-related local media revenue increased to $92.2 million from $84.7 million.
Factor in “other” revenue, which increased to $3.3 million from $2.4 million, and total local media revenue increased to $195.2 million, from $188.4 million.
However, Meredith Local Media fiscal Q3 operating profit declined to $24.4 million, from $41.6 million.
Adjusted EBITDA grew, however, to $56.8 million from $52.2 million — a net positive for Meredith Local Media.
Still, the COVID-19 pandemic-impacted fiscal report for the media company was far from pleasant. In Meredith’s case, the novel coronavirus’ wrath on revenue led the company to register a $22.3 million goodwill charge on its local media assets.
But, that’s nothing in comparison to its national media assets, comprised largely of female-friendly lifestyle brands such as PEOPLE and Better Homes & Gardens. Meredith registered a $361.8 million impairment charge for its national media assets in its fiscal Q3.
This, tied with a revenue dip, led the national media division to experience an adjusted EBITDA decline to $103.2 million, from $120.9 million.
Total revenue for Meredith Corp. fell to $701.7 million, from $750.1 million.
POLITICAL POWER
With “40” being the not-so-magical number being shared by many media companies — as in, fiscal Q4 is pacing down 40% for Meredith — market share growth is a goal President/CEO Tom Harty has put in place in the absence of advertising improvement visibility.
Elaborating on the local picture during the company’s Thursday morning earnings call was Local Media Group President Patrick McCreery. He shared that automotive is the most impacted category for the company’s 17 broadcast TV stations.
But, he also said political dollars were doubled that seen in the 2016 election campaign.
According to the company’s financial report, some $10.5 million in political spots were registered for Local Media in fiscal Q3.
“Our performance for the fiscal 2020 third quarter was largely in-line with our expectations until mid-March when the outbreak of COVID-19 created an extremely challenging advertising environment,” said Harty. “In response, we took a series of proactive steps to strengthen our liquidity and enhance our financial flexibility in the near-term to effectively navigate the current environment.”
How did investors react to the results? As of 3:48pm Eastern on Thursday, MDP was down 7.7% to $11.32 on heavy volume of 2.92 million shares; average volume is 1.73 million.
MDP is down from a year-to-date high of $34.90, seen on February 6. And, shares are off a whopping 80.1% year-to-year.
