No more political ads?

That makes most of us happy, but it's been sending chills down the spines of media executives, especially at the local level. Election ads were about the only bright spot these past few months – even in California, where airwaves have been filled with proposition-related advertising. Now that the money train is gone, there's not much to take its place - certainly not car dealerships and department stores that are often the mainstay of station revenues. From Marketbeat:

Jason Helfstein, analyst at Oppenheimer & Co., compared the current advertising environment to historically poor periods for advertising, such as in 1961, 1970 and 1991, and now expects a 3.2% decline in advertising in 2008 and a 5.8% decline in 2009. This was evident in Viacom Inc.’s results, after that company posted earnings after the close of trading Monday.

The Mouse House comes out with earnings on Thursday that could reflect the weak TV station market. Actually, Disney is better off than some of its competitors because advertising only accounts for 25 percent of total revenue. But there's weakness among other Disney mainstays, such as theme parks and resorts. On the plus side, Disney-owned ESPN is not as vulnerable to the weak ad market because most of its revenue comes from cable operator fees.


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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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