• by Erik Sass  @eriksass1, November 9, 2009

The hits kept on coming for the radio business, with more weak results from Citadel Broadcasting and Salem Communications in the third quarter.

Although overall revenue figures are not due out from the Radio Advertising Bureau until later this month, with most big radio groups having reported their results, the radio business looks to have suffered a 15% to 20% decline in ad revenue in the third quarter of 2009 compared to the same period last year.

Citadel Broadcasting reported total revenues of $184 million in the third quarter of 2009, down 14% from $214 million in the third quarter of 2008. This resulted in a net loss of just over $21 million.

Even worse for Citadel, the company revealed in a filing with the Securities and Exchange Commission that it probably will not be able to comply with the revised terms of lending covenants agreed upon in March. Specifically, it won't be able to fulfill the amended covenant's requirement that it have $150 million cash on hand in January of next year.

Thus, Citadel faces the prospect of becoming a serial defaulter, or near-defaulter, apparently unable to anticipate its performance or manage its finances in even the short term. The company is said to be discussing Chapter 11 bankruptcy protection with its lenders.

Meanwhile, Salem Communications reported total revenue declines from $54.4 million in the third quarter of 2008 to $48.8 million in the third quarter of 2009, a 10.2% drop. This resulted from an 11.4% drop in broadcast revenue, from $47.5 million to $42 million, which in turn resulted in an 8.2% drop in operating income, from $16.4 million to $15.1 million.

The Citadel and Salem results round out another weak quarter for the radio business in general. Revenues dropped 19% at CBS Radio, 19.1% at Cumulus, 14% at Entercom, 26.5% at Emmis, 12% at Radio One and 20% at Beasley. On a straight percentage basis, that yields an average drop of about 16.9% for these eight broadcast groups.