What's Missing From The Coverage of Yesterday's News From The New York Times Co.

Posted by: Jon Fine on September 13, 2006

From the New York Times Co.’s Sept. 12 press release announcing the sale of its nine TV stations:

Last year, the Broadcast Media Group accounted for approximately 4% of the Company’s total revenues. In 2006, the Company expects the Group will have revenues of approximately $150 million and operating profit of about $33 million. Depreciation and amortization is expected to be approximately $10 million for the year.

That gets you to $43 million in EBITDA (earnings before taxes, interest, depreciation and amortization) on revenues of $150 million, for an EBITDA margin of 29%.

To put this as simply as possible, 29% is an extremely low margin for TV. TV stations generally post profit margins in the thirties and forties. If I may toggle to a slightly different profit metric, in 2005 Gannett’s 21 broadcast station posted operating profit margins of 42.2%.

The Times’ projected operating margins for ‘06: 22%.

The first thing any buyer is going to do will be to get the Times stations’ margins to look a lot more like Gannett’s, and fast.

Reader Comments

Don

September 15, 2006 10:05 AM

What are the techniques that other companies used to improve bottom line for these stations? Is the issue overhead expenses or did these stations not pay for the best talent (or syndicated shows) and their ratings/advertising slid?

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