Broadcasters’ shares drop after warnings
Shares of TV and radio broadcasters fell sharply on Tuesday after Sinclair Broadcast Group warned that its third-quarter media revenue would miss its targets due to low political advertising spending rates including from the Trump campaign.
Sinclair shares fell 9 percent, as did shares of Gray Television, which owns KCRG in Cedar Rapids, E.W. Scripps fell 8 percent, and Nexstar Broadcasting was down about 4 percent.
Sinclair’s warning came ahead of the expected release on Tuesday night of campaign spending information.
Broadcasters typically expect a revenue windfall in a U.S. presidential election year as candidates spend heavily on advertising.
Sinclair said that while it previously anticipated a decline in presidential ad spending based on late fundraising by the campaign of Republican nominee Donald Trump, it has yet to see significant spending even at the levels it initially expected.
Leslie Moonves, chief executive of CBS Corp, played down Sinclair’s warning in remarks at an investor conference in New York.
“We have no revenue warnings here,” Moonves said at Goldman Sach’s Communicopia Conference. “While Mr. Trump does not appear to be spending much, there is a lot of advertising on the senatorial and congressional issues.”
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Moonves said CBS’s political ad spending is up, particularly in California and Pennsylvania, an important state for the national election.
“We have no worries,” he said.