• by Paul Gough , December 2, 2003

In the wake of a third quarter of slight positive growth and a not-so-great November, the fog may be lifting for the radio industry at the end of the fourth quarter and into 2004.

Like a lot of local media this year, radio wasn't looking forward to comparisons to the unexpectedly profitable election advertising received in October and November of 2002 - which had an impact on the first six weeks of the fourth quarter. Victor Miller, a financial analyst at Bear Stearns, wrote in a research report Monday that revenues in the radio industry declined between 4 percent and 5 percent in November.

But Miller said that December pacings have turned toward the positive, with revenue gains in the low single digits, and the first quarter of 2004 seems to be looking good too.

On Monday, the Radio Advertising Bureau said that national ad sales rose 1 percent in October while local radio revenue dropped 2 percent, dragging total radio revenues down to a 1 percent decline. At the same time, a MediaDailyNews analysis of the financial reports of the publicly traded station owner groups finds that conditions improved slightly in the third quarter compared to the same period a year ago. Overall, the radio industry's revenues rose 2 percent, from $2.08 billion in the third quarter 2002 to $2.12 billion in the third quarter of 2003. Of the 11 companies that have significant holdings in the radio industry, all but two - giant Clear Channel and pure play Cox Radio - saw slight to modest growth, including Viacom, whose returns from its Infinity Broadcasting division seemed to drag down the rest of the TV-heavy company.

Clear Channel's radio revenues were flat in the third quarter, posting $963.63 million in revenues compared to $964.12 million for the same period a year ago. Clear Channel itself is a significant indicator of the health of the industry as a whole, as it is by far the largest owner of radio stations in the country. According to a MediaDailyNews analysis of the publicly traded radio companies, Clear Channel is responsible for 45.5 percent of revenues compared to the next nearest competitor, Viacom's Infinity, which represents about 26 percent of revenues. In a conference call last month to discuss financial results, Clear Channel executives said that national advertising outpaced local advertising, and larger markets outpaced smaller markets.

Viacom's radio revenues were $551.7 million, up 2 percent from the $539.3 million posted in the third quarter of 2002. But its radio unit's performance was down 1 percent year-to-date, to $1.54 billion.

Low double-digit increases were reported at Regent and Cumulus, with a rise in revenues in the high single digits for Citadel and Salem, an owner of Christian radio stations from coast to coast. Other station owners - including Saga, Radio One, Entercom, and Beasley - reported slight increases.

While Clear Channel reported stronger national revenues, another player in the national radio scene, Interep, reported that its ad pacings were strong in July and August, slowed in September, and continued the downward trend into the fourth quarter. But Interep executives said at the time that they expected national radio to become strong again when the national economy improved - as it has in recent months.