• by David Goetzl  @dgoetzl, March 19, 2009

A top executive at a private-equity firm that is well-rooted in ad-supported media said Thursday that the struggling economy may be beginning to tread water. Performance is still down year-over-year--but the past month to six weeks have brought signs that the slide may have slowed.

"At least it appears it has stabilized," said Richard Bressler, managing director at Thomas H. Lee Partners, which owns stakes in Clear Channel, Cumulus Radio and Univision.

In contrast to the active merger-and-acquisition days pre-Bear Stearns meltdown, Bressler said Lee Partners is committed to spending the next two to three years operating its media portfolio to weather the storm and emerge stronger.

"Over the long-term, we are still bullish on advertising," he said at the McGraw-Hill Media Summit. "You still need ways to reach people out there."

Lee Partners may find itself aggressively managing Clear Channel and Univision for some time. Along with multiple partners, it paid enormous sums for the companies, which would be difficult to recoup in the all-but-ossified M&A market.

Bressler has experience in helping to steer at least one major company through troubled times, having joined Viacom as CFO in May 2001. He served in that post for four years.

Emphasizing just how much the M&A market is hamstrung, former AOL CEO Jonathan Miller said there is a vast divide in company valuations across the table. "Sellers still think they're worth what they were a year ago, and buyers still think they're worth half of what they were a year ago," he said.

Miller co-founded investment firm Velocity Interactive Group in late 2007 to focus on the digital media and communications sectors. The group made 13 investments last year, including online TV provider Next New Networks and social-marketing company Mixercast.

Speaking on a panel with Bressler, Miller said there are still attractive investment opportunities in the digital arena--with many successful entrepreneurs launching new ventures. But investment firms have lost some patience. Traditionally, promising start-ups could count on multiple rounds of financing.

But now, Miller said, "you've got to be able to get to your break-even point in your first round or maybe early in your second round ... in effect, the bar goes up."

Looking ahead, Miller offered support for Google's Tim Armstrong, who just took over his former AOL post. "A terrific hire," he said.

He still expects some form of consolidation among the patchwork of search providers challenging Google. And he said more ad dollars will inevitably flow online. But what's needed is "a holy grail"--a measurement system that can gauge online video and traditional TV on an apples-to-apples basis, which will facilitate the buying process.

While Lee Partners has an immense stake in the future of the limping radio business with Clear Channel, Cumulus and Univision, Bressler reiterated what top radio executives have said for some time: The industry has a perception problem, not a consumption problem. He said 92% of Americans listen to radio, but advertisers have somehow soured on it, making it one of the "most misunderstood" media segments.

He added, however, that Clear Channel is finding success via Internet streaming. And he said the company is benefiting from another reinvigoration of a traditional business: its out-of-home division.

The company has been moving aggressively to launch digital billboards, where the messages can be altered at will. Bressler said airlines that tightly manage their available inventory have been increasingly using the platform to post special deals and offers as needed, much as they do online.