Media Counts Storm's Cost; Future Cloudy

DALLAS Losses to Gulf Coast broadcasters and cable operators in the wake of Hurricane Katrina are estimated at $250 million by one trade journal, and the road to recovery is still hidden by debris, industry experts said."We're entering into the fall, which is a really important time for television with the new fall season," said analyst Mark Fratrik, vice president at media research firm BIA Financial. "I'm going to need to do this [analysis] over the next few weeks. I have yet to figure it out."Industry trade journal Broadcasting & Cable estimates that reconstruction costs and lost revenue for Gulf Coast media companies could hit $250 million.Spot ad revenue for the New Orleans broadcast market surpassed $115 million in 2004, according to Nielsen Monitor-Plus. In the 43rd-largest media market in the U.S., only one of New Orleans seven television broadcasters—Belo Corp.'s WWL-TV—managed to continue broadcasting throughout the storm and subsequent flooding.To help Belo investors anticipate the blow to revenue, Belo chairmain, president and CEO Robert W. Decherd said in a statement that he expects WWL's annual operating expenses to remain at the pre-Katrina level of approximately $22 million for the next 12 to 15 months. Decherd said that it is not presently possible to estimate how long it will take for the market to stabilize and for predictable revenue patterns to be defined."The company encourages analysts and investors to take a conservative approach toward the recovery of the New Orleans advertising market," Decherd said. "As a point of reference, WWL's revenues for the year ended Dec. 31, 2004, were approximately $35 million, which represented 2.3 percent of Belo's consolidated revenues."Hearst-Argyle Television, owner of WDSU, the city's NBC affiliate, withdrew its third-quarter earnings guidance last week. For the three months ending Sept. 30, the New York-based company had expected revenue to range from $163 million to $172 million, with per share earnings of 15 cents to 18 cents."The extraordinary impact of Hurricane Katrina will obviously have severe economic consequences in the region, and adversely affect WDSU's business operations for some time," Harry T. Hawks, the company's chief financial officer, said in a statement. "The station expects to continue to provide comprehensive news coverage and support for the community, regardless of the expected absence of revenues for weeks or months."The Tribune Co., which owns New Orleans TV stations WGNO, the city's ABC affiliate, and WNOL, a WB affiliate, has not estimated the impact of the storm.Broadcasters expect insurance to cover business losses due to the storm, but the prospects for the market to regain its original size are uncertain, executives say.Atlanta-based Cox Communications vowed to rebuild its 270,000-subscriber cable network, half of which was under water last week. The company also said it would not bill subscribers until service is restored. Rebuilding the system could cost as much as $300 million, engineers outside the company told B&C.Broadcasters won't venture a guess on when paid advertising will resume, but WWL took one tentative step toward normalcy with the broadcast of the Louisiana State University football game Saturday night. Commercial breaks were all devoted to messages about relief efforts, according to a Belo executive.

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Media Counts Storm's Cost; Future Cloudy

Richard Williamson

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