• by Jack Loechner , Staff Writer, September 10, 2010

According to a revised radio industry forecast from BIA/Kelsey, reported in the third edition of BIA/Kelsey's quarterly "Investing In Radio Market Report," the radio industry will see its over-the-air revenues in 2010 climb 4.4% over last year to $13.93 billion, with another $459.3 million in revenues coming from digital and online sources.

Stations in top 10 market cities will average a 6.26% increase from 2009, while San Francisco and Philadelphia can expect overall revenue growth of 8% due primarily to an increase in spending by national advertisers.

 Scattered cities in a number of markets will hit 7.5%or greater growth this year, including:

• Miami-Ft. Lauderdale-Hollywood, Florida (7.5%)
• Denver, Colorado (8.5%)
• Syracuse, New York, Little Rock, Arkansas, and Springfield, Massachusetts (8%)
•  New Haven, Connecticut (7.7%)

Markets 11 to 25 will raise an average of 4.0%, while others will see average revenue increases of between 2.73 percent and 3.66%.

Mark Fratrik, Ph.D., vice president, BIA/Kelsey, notes that "... the third and fourth quarters of 2009 were better than the first half of that year, so we do not expect change to be that large by the end of this year...  performance... will largely be driven by the success of the top markets... (and) resonate to smaller ones."

The report notes that the small volume of radio station transactions this year have been a function of the revenue and profit decline experienced in recent years, and a lack of bank financing. As of July there were only $168 million in transactions compared with $207 million in 2009.

Fratrik concludes, "Station owners are hesitant to sell at today's lower multiples, while potential buyers' view the growth potential conservatively... inability to get sufficient debt financing to lower the cost of capital leaves the transaction marketplace stuck in neutral... "

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