Sinclair Broadcast Group said yesterday that it has eliminated 200 jobs, or 7 percent of its work force, and suspended its quarterly dividend to cut costs as it expects falling advertising revenues this year amid a recession.
Besides layoffs, the Hunt Valley broadcaster is cutting back on capital expenditures, freezing salaries, and reducing promotional spending and travel.
David Amy, Sinclair's chief financial officer, declined to provide further details yesterday.
Such moves are expected to save the company $19 million but are not enough to offset the decline in advertising, particularly in a nonelection year, Sinclair said.
The company, one of the largest independent television station owners in the country, said it decided to suspend its 20-cents-per-share dividend because Sinclair's "board of directors felt that the company's ownership should make a financial sacrifice just as our employees have done."
The company reported yesterday preliminary fourth-quarter net income of $20.3 million, or 24 cents per diluted share, compared with a profit of $13 million, or 15 cents per diluted share, in the year-ago period. The earnings do not include a $460 million writedown for good will and FCC licenses, which has not been completed.
Net broadcast revenues were $164.4 million, down slightly from $165.7 million in the corresponding period last year.
Revenue from political advertising during a presidential election year climbed to $25.6 million in the three months that ended Dec. 31, from $2.2 million in the year-ago period.
Excluding political revenue, local advertising and national advertising dropped 14.2 percent and 24.7 percent, respectively, in the fourth quarter.
Advertising spending in automotive, which represents nearly 15 percent of time sales, was down 31.6 percent in the quarter because of the recession, the company said.
Spending also was down in services, retail, medical and movie advertising.
Sinclair owns or operates 58 television stations in 35 markets and reaches 22 percent of U.S. television households.
Sinclair shares fell 9 cents, or 6.5 percent, to close at $1.29 yesterday.