• by Erik Sass  @eriksass1, May 13, 2008

The radio industry produced another round of weak results in the first quarter of 2008, with revenues slipping at most of the big national broadcasters, in line with analysts' expectations. While the overall slide is troubling, there is a bright spot for national radio groups: Many smaller radio markets excel despite the sluggish economy.

Clear Channel Communications, owner of the nation's largest radio group, announced last week that its first-quarter radio revenues were down 4%, compared to the same period in 2007, to about $770 million. The radio slump was offset by strong continued growth at Clear Channel Outdoor, where revenues jumped 12% to about $775 million. This marks the second quarter in a row in which Clear Channel's out-of-home revenues were larger than its radio revenues. It should be noted, however, that Clear Channel Outdoor, an international operation, benefited from favorable foreign currency exchanges.

On Wednesday of last week, Cox Radio said total first-quarter revenues fell 2.9% to $97.8 million, due largely to declines in local and national revenues. A day later, Citadel said its revenues fell about 4.8% to $202.8 million, also citing weakness in local and national advertising.

Radio One, serving largely urban markets, saw revenues fall 2% to $72.5 million in the first quarter, blaming softness in national advertising. And Westwood One, a radio syndication company, said revenues fell 6.5% to $106.6 million.

There were a few relative bright spots. On Monday, Emmis Communications announced that radio revenues rose 8% during its fourth fiscal quarter (covering December-February)--but the company also posted a net loss of $15.8 million--up from $10.7 million last year. Saga Communications said its overall revenues were basically flat, slipping 1% to $31.5 million, as net income rose 23%.

On May 2, Cumulus said its first-quarter revenues were up 1.3% to about $69.7 million. However, the company delivered some disappointing news on Monday, announcing that its plan to go private in a merger had been canceled. The agreement was terminated because the investors could not agree on the deal's financial terms. The merger's financing was torpedoed, in part, by the same credit crunch that has jeopardized Clear Channel's much larger private-equity buyout. Both deals also saw increased scrutiny by banks and private-equity investors made uneasy by the downturn in the radio market.

On the competing satellite radio front, XM said its losses grew 6% in the first quarter to $129.3 million, although revenues increased 17% to $308 million. The company blamed this, in large part, on an increase in royalty payments, mandated by the Federal government's Copyright Royalty Board.

XM's subscriber base grew 18% from 7.91 million at the end of the first quarter of 2007 to 9.33 million this year. Meanwhile, XM's potential merger partner, Sirius Satellite Radio, seemed to be faring somewhat better. Sirius CEO Mel Karmazin said revenue grew 33% to 270.4 million in the first quarter of 2008, as losses shrank 53% compared to last year, to $39.5 million. At the end of the first quarter Sirius had 8.64 million subscribers--up 31% from the year before, when it had about 6.58 million.