Cumulus Revenues Drop, Limbaugh Blamed
Political controversy surrounding conservative talk radio host Rush Limbaugh helped drag down advertising revenues at Cumulus Media, according to CEO Lew Dickey, who also cited the loss of ad revenues associated with discontinued L.A. Dodgers broadcasts, and strategic format changes at some stations as additional reasons for the decline.
Including results from Citadel Broadcasting Corp. stations acquired by Cumulus, total revenues slipped 3.5% from $254.2 million in the first quarter of 2011 to $245.3 million in the first quarter of 2012. Dickey indicated that the Limbaugh flap cost Cumulus “a couple million” in lost ad revenue in both the first and second quarters, but added that he expects the effects to fade by the middle of the year.
On the positive side, Dickey said automotive and wireless advertising were leading growth, adding that Cumulus expects to take in about $30 million from political advertising this year.
Excluding Citadel from the prior-year comparison, total revenues jumped 324% from $57.9 million to $245.3 million. Cumulus completed its acquisition of Citadel in September 2011 in a transaction valued at $2.3 billion, including $1.4 billion in cash and 23.6 million Cumulus shares.
Results from other radio broadcast groups have been somewhat more encouraging for the radio business, with a number of companies posting respectable growth. Clear Channel Media and Entertainment, the country’s biggest broadcast radio group, saw total revenues increase 6% from $633 million in the first quarter of 2011 to $671.5 million in the first quarter of 2012. A large part of this increase -- about $32 million -- was due to the company’s acquisition of Westwood One’s traffic business in April of last year.
However, CCME also saw advertising revenues grow in categories including financial services, political and retail. Salem’s total revenues increased 6.1% from $51.2 million to $54.3 million, with broadcast (radio) revenues increasing 2.9% from $42.7 million to $44 million.
Online advertising was especially strong, with revenues jumping 33% from $5.6 million to $7.4 million. Last but not least, urban broadcaster Radio One made a major recovery following a very weak fourth quarter, with core radio revenues up 6.4%, due to increases in the Atlanta, Cincinnati, Cleveland, Detroit and Raleigh markets; Dallas and Houston both saw declines.