The San Antonio, Texas-based media giant posted a 9 percent rise in revenues to $2.34 billion, including $963.6 million in radio that was flat from the same period a year ago. Like a lot of the radio industry these days, Clear Channel's national advertising has performed better than local. National advertising rose 7 percent in the third quarter on the strength of auto, retail, finance, telecom and travel. But, said Clear Channel president and chief operating officer Mark Mays, the rise in national advertising came at a cost. Mays said some of the same categories - including retail, auto, financial and telecom - were down locally. Advertising rep firm Katz was up for the quarter as well, although further detail wasn't available.
Stations in larger markets were also performing better than ones in smaller markets, with the top 50 markets up 2 percent ($11.8 million) in the third quarter compared to the same period a year ago. Revenues fell 2.5 percent ($6.8 million) in Clear Channel's smaller markets, which are more dependent on local advertising. Executives also said that a slackening in demand for local TV inventory is causing advertisers to shift dollars from radio.
Mays said that Clear Channel was focused on maintaining pricing, a point that Viacom's Mel Karmazin has also been stressing loud and often in his discussions about the radio industry. Viacom owns Infinity Radio, which is a distant second to Clear Channel in radio station ownership.
"We believe it's in the very good, long-term interest of the radio industry and specifically ourselves," Mays said regarding maintaining pricing. He said that its focus on maintaining pricing might have hurt Clear Channel in the third quarter but that it was in position to reap gains in 2004. Clear Channel expected another round of flat radio revenues in the fourth quarter but said that it was expecting a better 2004.
John Hogan, chief executive officer of Clear Channel Radio, said that pricing is increasing in Los Angeles and New York.
"Unfortunately, in the majority of the market, the demand is not strong enough at this time to really drive pricing," Hogan said. Orders are being placed late, he said, which is another common complaint of the radio industry in the current downturn.