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.
