Cox, Clear Channel Dial Down Radio Revs

The news from two major radio broadcasters was bad but not surprising. In the fourth quarter, Cox Radio and CC Media Holdings, the parent of Clear Channel Communications, both saw revenues tumble by double digits. Their results reflect growing competition from the Internet and the worst economic downturn in decades.

Cox Radio said Wednesday that revenue in the fourth quarter of 2008 fell 13% to $99.4 million, down from $114.3 million in the same period of 2007. This came in slightly below the expectation of analysts surveyed by financial information service Thomson Reuters.

The drop in overall revenue was driven by a 14.4% drop in local revenue, traditionally the mainstay of the radio business, as well as a 10.3% drop in national revenue. Internet and other revenues fell 9.4%. In making its results public, Cox also said it took a $601.6 million charge to write down the value of assets, including FCC licenses and goodwill.

On Monday, CC Media Holdings said that fourth-quarter revenues fell 14% to $1.6 billion, when compared to the same period in 2007, due mostly to a 13% drop in radio revenue, which came in at $789 million.

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For the full year, CC Media's revenues slipped 3% to $6.7 billion, with the radio division falling 7% to $3.3 billion. Like Cox, CC Media took a $5.2 billion impairment charge to write down the value of FCC station licenses. It also took an impairment charge of $722.6 million on its outdoor advertising permits, and a $2.5 billion charge to reflect reduced goodwill.

Last week, Standard & Poor's downgraded the credit rating of CC Media Holdings, lowering its credit rating from a B to a B-. It was concerned that the holding company might not be able to keep up with payments on nearly $18 billion in debt assumed in the deal to take Clear Channel Communications private last year.

Also Wednesday, the Gores Group said it is taking a controlling stake in Westwood One as the latter moves to restructure its debt of about $241 million. With the cash infusion from the Gores Group, the private-equity firm now owns 72.5% of Westwood. This follows a high-level executive switch between the companies in October, when former Gores Group CFO Rod Sherwood moved to Westwood, taking up the reins as president and CFO.

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