Tegna Earnings Down 65% Amid Absence of Political Ads

Tegna building in McLean, Virginia
(Image credit: Andrew Harrer/Bloomberg via Getty Images)

The drop in political ad spending in 2023 sharply reduced Tegna’s fourth-quarter profits and revenue.

Net income fell 65% to $76.1 million, or 40 cents a share, from $218.6 million, or 97 cents a share, a year ago, the company reported.

Revenue fell 21% to $726 million, mainly due to less political advertising, the company said. Comparted to the previous non-election year of 2021, revenue was down 6%. The company blamed macroeconomic headwinds in the ad market.

Advertising and marketing services revenue edged down 0.3% to $351.9 million, while political advertising plunged 87% to $22.9 million.

Subscription revenue was down 9% To $339 million, mainly due to the six-week blackout that resulted when Tegna’s contract with DirecTV expired at the end of November.

The company said it plans to return 40% to 60% of free cash flow to shareholders over the next two years.

Last year, Tegna’s agreement to be acquired by Standard General fell apart because of a regulatory review that took so long that Standard General’s financing expired.

“Tegna is back on offense, operating from a position of strength,” said CEO Dave Lougee.

“Our new capital allocation framework positions us well to execute our business strategy to drive shareholder value in a continually evolving media landscape,” Lougee said. “This new framework maintains our flexibility to pursue organic investments, bolt-on M&A, and prepare for long range debt maturities.”

Lougee said that 93% of Tegna’s Big 4 network subscribers are now under network agreements  that run through late 2026 or longer. The majority of these subscribers are tied to a variable payment model when it comes to our reverse compensation payments, tying payments to subscriber counts, he said.

“Our high-margin, recurring revenues from subscription and political advertising drive confidence in our outlook, as demonstrated by our multi-year free cash flow guidance announced today,” Lougee said.

Jon Lafayette

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.

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