Mayday: 3 Big Radio Broadcasters Dive In 1Q

radio arrow downA half-dozen of the nation's biggest radio broadcasters reported their first-quarter results this week, and the news was not good. With double-digit percentage declines across the board in revenues, the near future looks grim, as radio executives concede that there is limited visibility for the rest of 2009.

Clear Channel Radio, the country's single biggest radio station owner, saw total revenues fall 22% in the first quarter of 2009 compared to the same period in 2008, from $770 million to $604 million. Together with a steep decline in out-of-home advertising revenue, the radio decline contributed to a total drop-off of $400 million at parent company Clear Channel Communications, from $1.6 billion to $1.2 billion.

This is the third straight quarter to see revenue declines in both the radio and outdoor divisions for CC, and the seventh straight quarter posting a decline in radio.

These results were typical for the industry overall.

Citadel broadcasting reported that total revenues fell 23% in the first quarter of 2009 compared to the same period in 2008, from $205.8 million to $158.9 million. This includes the separate results of Citadel's main station business, which brought in $121 million (down 19% from $161 million), and Citadel Media, formerly ABC Radio Networks, which brought in $29 million (down 60% from just over $46 million).

In addition to the recessionary economy -- now the favorite culprit of corporate earnings announcements -- Citadel said the company's bottom line was hurt by the loss of Sean Hannity, the popular conservative talk-show host.

Cox Radio said its revenues were also down 23% in the first quarter of 2009, dropping to $75.5 million from $98 million in the first quarter of 2008. The Cox results were typical of the industry, as the company took big hits in the traditional core revenue areas of radio -- including local advertising, which fell 21%. National revenue, another important prop of radio finances, tumbled 32%.

Cumulus Media said its total revenues fell 24% in the first quarter of 2009 -- sinking to $55.3 million, compared to $73 million last year. This drove a 40% decline in station operating income -- despite a sustained cost-cutting program that has lowered operating expenses by 17%. Also this week, Westwood One's first-quarter revenues fell 19.4% compared to the same period last year, from $106.6 million to $86 million.

Finally, urban format station owner Radio One said total revenues fell 16%, from $72.5 million in the first quarter of 2008 to $60.7 million in the first quarter of this year -- due mostly to a 24% decrease in radio revenue specifically, from $62 million to $47 million; station operating income tumbled 43%. On the positive side, its Internet and publishing revenues grew substantially. However, looking at the big picture, CEO Alfred Liggins conceded that "Q2 revenues will experience declines similar to those in Q1."

In recent months, the financial distress of some big radio players has spurred warnings of potential default from credit ratings agencies. "The Bottom Rung" -- a new hall of shame-type feature from Moody's Investors Service that lists companies with a credit rating of B3 or lower -- and therefore considered at high risk for default, included Citadel, Cumulus and Radio One.

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