• by Erik Sass  @eriksass1, March 18, 2009

Double-digit quarterly drops in revenue are now par for the course in the radio business. Feeling the effects of the recession, Citadel, Cumulus and Westwood One all reported substantial drops in revenues during the fourth quarter of 2008. Ominously, this round of revenue reports included warnings that loan defaults might be coming down the pike.

The default warning came from Citadel--one of the nation's biggest broadcasters--which said its total revenues fell 12.7% in the fourth quarter 2008 compared to the same period in 2007, sliding from $245.5 million to $214.2 million.

For the full year, its revenues slipped 9.4% to $860.6 million. In the fourth quarter, it also recorded an impairment charge of $836.5 million, reflecting the decreasing value of radio station assets. While the company met its debt requirements in the fourth quarter, looking ahead, it warned that "the expected continuing decline in radio revenues... creates uncertainty regarding the company's ability to continue to comply with its debt covenants under its senior credit facility through 2009."

Cumulus Media also took a hit in the fourth quarter, with revenues slumping 11% to $75 million. As a result, station operating income fell 14.3% to $26.8 million. For the full year 2008, Cumulus revenues slipped 5.1% to $311.5 million. Although Cumulus didn't issue any warnings about default, the company was recently included by Moody's Investor Services on a list of companies most likely to default on their debts in 2009, along with some other big names: Citadel, Emmis, Radio One and Salem.

Finally, Westwood One said that its revenues declined 14.5% in the fourth quarter of 2008 compared to the year before, to $101 million. This was responsible for an operating loss of $224.1 million in the fourth quarter of 2008; the company recorded an impairment charge of $224.1 million as well. In the full year 2008, the company's revenues slid 10.4% compared to 2007, falling from $451 million to $404 million.

These three companies are not alone, as the beleaguered radio industry reports big revenue drops and asset writedowns across the board. Last week, Salem Communications, Beasley Broadcast Group and Fisher Communications reported fourth-quarter revenue declines of 6.3%, 12.9%, and 18.3%, respectively.