While there were some bright spots, the radio business as a whole had a mediocre third quarter, with revenue growth lower than expected during a hotly contested election season. This
bodes ill for radio’s prospects in 2013, when it will not have the benefit of political spending to shore up the bottom line.
Cumulus announced that total revenues declined 3.7% from $280 million in the third quarter of 2011 to $269 million in the third quarter of 2012. CEO Lew Dickey attributed much of the decline to 10 major market stations that suffered a variety of woes, including the cost of talent, losing the rights to sports coverage, and format changes. Removing these stations, the rest of the company’s 525 stations were flat year-over-year.
Saga Communications also posted lackluster results, with total revenues of $32.4 million, up just 1.2% from $32 million in the third quarter of 2011. Admitting that the third quarter of 2012 was “very trying,” Saga CEO Ed Christian noted that political advertising at Saga was lower than forecast, while national advertising posted a 19% slump. Saga owns 61 FM and 30 AM radio stations, in addition to a number of broadcast TV stations.
Entercom -- which owns over 100 radio stations in 23 markets nationwide -- fared slightly better, with revenues increasing 2% from $100 million in the third quarter of 2011 to $102 million in the third quarter of 2012. However, Entercom CEO David Field noted that after a strong July, results for August and September were weaker than expected, in part due to political ad spending that was lower than anticipated. Conversely, Field said the fourth quarter is pacing up by about 6%.
Some of the strong results were posted by Radio One, which caters to mostly African-American audiences in urban markets. After hitting a rough patch in previous quarters, Radio One came back strong in the third quarter, when total revenues increased 5.4% to $110 million -- in part because political advertising came through. Noting that the company’s core stations continue to outpace the markets where they operate, CEO Alfred C. Liggins III said record political ad revenues of $2 million made a significant contribution to third-quarter growth.