Stock price pictures remain worth more than a thousand words

Sinclair Broadcast Group and Granite Broadcasting continued the trend of broadcast companies reporting weak 2nd quarter revenues this week, due primarily to a drop in the big automotive advertising category and falling network compensation. While everybody tends to look at and write about trends in programming, distribution and advertising, underneath it all is the volatility of broadcast stock prices. Wall Street is plenty nervous, and here’s why.

Thanks once again to the good folks at Morningstar.com, here’s my annual presentation of the essential business problem for publicly-traded broadcast companies (or companies with broadcasting divisions). These are five-year stock price graphs:

BELO

EMMIS

FISHER

GANNETT

GRANITE

GRAY

HEARST-ARGYLE

MCGRAW-HILL

MEDIA GENERAL

MEREDITH

NEXSTAR

NEW YORK TIMES

SINCLAIR

TRIBUNE

YOUNG

As you can see, it pays to be a diversified group, such as McGraw-Hill and Meredith, but overall, the picture is pretty dismal. This is why I am so passionate about moving broadcasters to multimedia business models and why I come off as harsh from time-to-time in so doing. Every news story that shows advertisers moving money from broadcasting to the web (such as todays WSJ/subscription-required piece on Fosters moving all TV advertising to the web), for example, further erodes the confidence that investors have in broadcast stocks.

(Graphs courtesy Morningstar.com.)

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