• by Erik Sass  @eriksass1, January 10, 2008

Citing "unprecedented challenges," Emmis Communications reported a 7.0% decline in domestic radio ad revenue during the third quarter of 2007 covering September-November, compared to the same period in 2006. This was offset by an increase in publishing revenues, up 4.6%, for a total $91.7 million--essentially flat on a year-over-year basis.

 

Emmis Chairman and CEO Jeff Smulyan noted that Emmis recently changed its ad sales representation duties from Interep National Radio Sales to Katz Communications, absorbing a substantial contract-termination fee as part of this shift. The contract-termination fee took another bite out of the company's bottom line, with operating income dropping to just $2 million in the fourth quarter of 2007, compared to $17.6 million in 2006.

The company owns 21 FM and 2 AM stations in the country's largest markets, including New York, Los Angeles and Chicago. It recently sold 15 of its 16 television stations.

The Emmis results are roughly in line with the radio industry overall, with September-December proving especially difficult. Last week, Miller Kaplan Arase, which tracks radio ad revenues, reported a 6% decline in total revenues during November 2007 compared to the same month in 2006, fueling more gloomy forecasts for 2008.

For the fourth quarter overall, radio analyst Jim Boyle of CL King sees radio revenues dropping 3%.