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Editorial: Positively Cautious

We're all for green shoots and happy thoughts and sunshine, but some of the relatively giddy prognoses coming out of the Wall Street earnings calls last week gave us at least a little pause.

In case you missed it, amidst a slew of economy-battered earnings reports from several media companies, Rupert Murdoch said on May 6 of the economic crisis that “it is increasingly clear that the worst is over.” He also told analysts that “there are emerging signs in some of our businesses that the days of precipitous declines are done and that revenues are beginning to look healthier.”

Coming from Murdoch, who has been relatively bearish about the economy recently, that is downright glowing. And the next day, CBS boss Leslie Moonves echoed the optimism, saying, “Indications are we've seen the bottom of this downturn. It's still premature to call it a full recovery, but the trends are encouraging, particularly for the back half of the year.”

And media execs are even backing off from using the tattered economy as an excuse for all wrongdoing. For instance, Disney chief Bob Iger last week said his film studio's financial challenges weren't as much a result of the bad economy as the fact that his movie guys just need to make better movies.

We want to believe the economy has hit the floor—we really do—but we also have to be skeptical, and not just because it is our sworn oath as journalists.

First of all, many economic indicators don't reflect a floor yet, though they do show a slowing of the once seemingly unending fall. Second, anyone connected to the television business who says things are turning around has to arouse at least a little suspicion of posturing for the upfront season.

Plus, hitting the floor by no means ensures advertisers will immediately open up the coffers. When the economy finally does bottom out, it then needs to begin to grow again, enough so that companies are confident enough to increase their ad spend. And that is assuming they haven't realized they can do just fine with a lower marketing budget.

Now, we're by no means trying to douse any optimism that came out of the big-media earnings calls last week. Anyone remotely connected to the television business would do just about anything to get the economy turned around again and ad dollars flowing, present company included. Besides, in addition to being audacious, hope and confidence can sometimes be self-fulfilling prophecies.

But realistically, the turnaround won't be as quick as the fall, even when things do finally hit bottom and start to inch back up. So it may take big media just a little longer to feel the positive effects than we would like.

That said, here is hoping we are dead wrong.