Another losing season for Chicago's baseball teams contributed to another quarter of declining revenue for Tribune Co.
The Chicago-based media company reported third-quarter consolidated operating revenue of $695 million, down 5 percent from the same quarter last year, according to financial results released Monday.
The broadcasting division registered a 6 percent revenue decline for the quarter, in part because of "significantly lower ratings" for baseball at WGN-TV and WGN-AM 720, according to the company.
Revenue for the publishing division, which accounts for nearly two-thirds of Tribune Co.'s revenue, declined 4 percent for the quarter.
Despite declining revenue, Tribune Co. had an operating profit of $69 million for the quarter, up 23 percent year over year. Reduced operating expenses -- from lower staffing levels to decreased newsprint and ink costs — helped keep the company in the black.
Tribune Co. reported a net income of $49.8 million, or 50 cents per share.
"While we are pleased with the progress we have made on key strategic initiatives in the third quarter, our financial results in the period did not meet our expectations," Peter Liguori, Tribune Co. president and CEO, said in a statement.
Consolidated operating revenue has declined 6 percent through the third quarter for Tribune Co., which emerged under new ownership Dec. 31 after four years in Chapter 11 bankruptcy. Under the terms of the reorganization agreement, the company is required to release its financial statements.
Tribune Co. owns 23 television stations, including WGN-Ch. 9; national cable channel WGN America; WGN-AM 720; eight daily newspapers, including the Chicago Tribune and Los Angeles Times; and other media assets.
In July, the company announced the acquisition of 19 television stations from Cincinnati-based Local TV LLC for $2.73 billion, pending approval by the Federal Communications Commission. That same month, it announced plans to spin off its publishing division into a separate company, likely by mid-2014.
While Tribune Co. is banking its future on the fortunes of broadcasting, its publishing division fared somewhat better during the quarter, as it has throughout the year.
Publishing posted operating revenue of $446 million for the quarter, down $18 million. Advertising revenue fell 7 percent, accounting for most of the decline. That was partially offset by circulation revenue, which was up 3 percent, boosted by higher digital subscription sales at most Tribune Co. newspapers, and rate increases at some.
The publishing division recorded an operating profit of $45 million for the quarter, up from $1 million a year ago. Expenses were reduced 13 percent, with much of the savings coming from lower compensation costs. About 230 publishing positions were eliminated during the third quarter.
Broadcasting revenue was $248 million for the quarter, a decline of $16 million. Advertising was down 4 percent, with the largest declines at WPIX-TV in New York, WDCW-TV in Washington and WGN's TV, radio and national cable channel.
Retransmission fees remained broadcasting's bright spot, up 19 percent for the quarter and 21 percent for the year.
Third-quarter operating profit for the broadcast division was $42 million, down 39 percent from last year. Broadcasting revenue has fallen 11 percent this year. Tribune Co. pointed toward Chicago's losing baseball teams to explain some of the declines at WGN for the third quarter.
WGN-TV broadcasts a large number of Chicago Cubs and Chicago White Sox baseball games, while WGN-AM is the radio home for the Cubs. The two teams lost nearly 200 games combined this season, with both finishing in last place in their respective divisions. Lower broadcast ratings during the quarter led to reduced advertising revenue, according to the company.
Last week, the Cubs notified WGN-TV that the team was planning to opt out of its agreement with the station after the 2014 season in pursuit of substantially higher broadcast rights fees.
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