Proceeds from retransmission consent drove a 3% increase in revenue for Tribune Media in the first quarter, but the company also saw a 3% gain in expenses due to higher network affiliate fees.
The quarterly report is likely one of its last as a stand-alone company. Nexstar Media’s pending $4.1 billion acquisition of Tribune is on track to close by the end of the third quarter, Tribune said in announcing the financials. Due to the pending deal, Tribune did not conduct a conference call with analysts.
CEO Peter Kern attributed the increase in affiliate fees to a renewal with Fox, and said the uptick had been expected. “Importantly, all other remaining expenses in total were down compared to the same time period last year, reflecting our ongoing commitment to containing costs,” Kern said in the earnings press release.
Total revenue for Tribune reached $455 million in the quarter, which ended March 31. A pre-tax gain of $133 million from the sale of broadcast spectrum in the year-ago quarter cut into profits in the current period. Operating income dipped to $54.7 million from $187.3 million in the spectrum-aided, year-earlier period.
Tribune is “very pleased with the progress being made toward closing” the Nexstar deal in the third quarter, Kern said. The acquisition came about last December, replacing a prior deal with Sinclair Broadcast Group that fell apart last summer due to regulators’ concerns about Sinclair’s proposed divestitures of stations required by federal law.
While Tribune has been tightening up its portfolio in recent quarters, selling off assets including real estate and a longtime stake in the Chicago Cubs, it remains a minority investor in the Food Network, which is now owned by Discovery. Tribune announced a multi-year renewal of the partnership in October 2016. In the first quarter, the position yielded a $153 million in revenue, and Kern said the network “continues to be a strong performer, delivering robust cash distributions and equity results for us.”