Flash: Ad Sales Rise Nicely for Television Networks High Revenues Spark Rumors of Possible Takeovers of TV Companies
Guy Halverson, writer of The Christian Science Monitor, The Christian Science Monitor
THE broadcast television industry - generally looked upon as a wallflower just a few years ago - is suddenly finding itself at the top of corporate America's dance card.
With the total viewing audience for network TV either up or holding steady, and the United States economy on the rebound, advertisers are pouring dollars back into the mass media.
The upshot: The national television networks, with their steady cash flows from ad revenues, are now perceived as especially attractive takeover candidates.
"No question, they're now hot," says Arthur Gruen, of Wilkofsky, Gruen Associates Inc., a New York consulting firm that follows media companies. "Hardly a day goes by without another new rumor about the takeover of a network."
And given rising ad revenues, "it wouldn't surprise me" if some of the networks "were to change hands sometime in the next year," Mr. Gruen says.
The economist sees advertising dollars for broadcast TV - which include the networks and local stations but not cable TV - increasing at a steady rate. Advertising dollars will finally come out at around $28.5 billion for broadcast television in 1994, he says, up from $26.6 billion in 1993. Advertising revenues should reach $29.6 billion in 1995, Gruen adds.
Advertising on cable television is also expected to increase, he says, from $2.5 billion in 1993 to $2.9 billion this year and $3.2 billion in 1995.
But ad revenues are not just climbing for television. According to projections by Veronis, Suhler & Associates, a New York investment-banking firm, total advertising revenues for all communications media - including networks, local television stations, cable TV, radio, magazines, and newspapers - should reach about $96 billion next year, up from about $91 billion this year and some $76 billion in 1991.
And barring a new economic downturn in the US, total advertising revenues could top $114 billion by 1998, the company predicts.
Gruen, who conducts economic projections for Veronis, Suhler & Associates, says the projected increase in advertising for broadcast television between now and next year is actually much greater than it appears. Although TV ad revenues rose from $26.6 billion in 1993 to $28.5 billion this year, 1994 must be considered a "special situation," he says. …