TV station owners are ripping up their revenue forecasts because Donald Trump isnt spending as much as theyd hoped.
Gray Television Inc., the owner or operator of 51 stations, said late Tuesday its withdrawing its forecast for political ad spending for the rest of the year because outlays wont meet guidance. Earlier, Sinclair Broadcast Group Inc., the largest U.S. station owner, fell 9.4 percent after saying third-quarter political ad sales would miss forecasts by up to $22 million.
The presidential campaign, while great for ratings at Fox News Channel and CNN, is proving less of a boon to local broadcasters like Gray, which operates TV stations affiliated with CBS, NBC, Fox and ABC. Media analysts have been concerned for several weeks about such a Trump effect — with the Republican presidential candidate relying on news coverage and social media rather than ads to reach voters.
Presidential political advertising has continued to come in lighter than expected, which will likely impact all broadcasters to some extent, Wells Fargo analyst Marci Ryvicker said in a research note Tuesday.
Grays stations are receiving orders for political spots later than usual, the company said, sometimes only a few days before broadcast.
The campaigns future spending is currently impossible to predict, the company said in a statement.
Shares of Atlanta-based Gray fell 9.4 percent to $10 at the close in New York, the biggest drop since May 2015. They were little changed in extended trading.
Sinclair, based in Hunt Valley, Maryland, said its political ad revenue in the third quarter would be about $46 million, down from as much as $68 million the company had forecast last month. The company operates 173 stations, also affiliated with the major networks.
Sinclair said even its forecast for lower presidential ad buys in the third quarter fell short.
We have yet to see significant spending, even at the levels we initially anticipated, the company said in a statement.
CBS Corp. Chief Executive Officer Leslie Moonves said in February that the 2016 presidential campaign would be damn good for CBS. At an investor conference in New York on Tuesday, he clarified that view, saying that the broadcaster was seeing tremendous spending on local issues at its stations.
We have no revenue warnings here, Moonves said at a Goldman Sachs Group Inc. conference. Theres probably not as much at the top of the ticket because Mr. Trump doesnt appear to be spending as much as people may have thought. But down below, in terms of senatorial, gubernatorial, congressional, issues, we have five stations in California. Five TV stations. The issue spending is tremendous.
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