• by Erik Sass , March 4, 2008

After reporting an enormous net loss of $848 million, or about $3.4 per share, in the fourth quarter, Citadel Broadcasting's chairman and CEO Farid Suleman promised a major shakeup last week, including "management changes, format changes, programming changes, and sales management changes."

The fourth-quarter loss was due, in part, to a 5.1% decline in revenue to $245.3 million--as well as a big increase in operating expenses, to $2.1 billion for the full year, stemming from the acquisition of ABC Radio last June. Some radio stations, like WPLJ in New York, saw revenues plummet 70% and cash flow tumble 50%. Conceding that national ad sales were a "complete disaster," Suleman said they will be a special focus in 2008.

The company's performance is so bad that it won't issue 2008 forecasts or guidance for the time being, indicating that management fears worse is to come. Wachovia analyst Marci Ryvicker seemed to concur in a note to investors, writing: "It sounds like a tough year ahead."

While exceptionally bad, Citadel's terrible fourth quarter reflects the broader downward trend in the radio industry, which saw Clear Channel fourth-quarter revenues fall 3%, CBS revenues fall 10%, Cumulus decline by 3.8% and Emmis (with its financial quarter ending Nov. 30) fall 3.2%. The trend is continuing into 2008, as overall radio revenues dipped 6% in January compared to the same month last year.

Like many of these companies, Citadel saw larger markets taking the biggest hits, while small and mid-sized markets generally fared better. Citadel's major stations in New York, Los Angeles, Chicago and Philadelphia led the declines, while Harrisburg, Pa. and Little Rock, Ark., did very well.

Suleman has moved to bolster Citadel's programming in recent months, including bringing shock jock Don Imus to broadcast "Imus in the Morning" at the company's WABC flagship station in New York. The move was controversial, as Imus had recently been outsted by CBS Radio for making racist and misogynist remarks on the air.