December 31, 2016 at 1:46 pm #25884Andy BrownParticipant
Well it’s a new year starting tomorrow and although the numbers won’t be in for months, it appears that radio revenues continue to sink for a multitude of reasons that have been thoroughly discussed over the last ten years on this board. Radio had such large losses in the first decade of the 21st century that the small gains that revenues made in the beginning of the second decade were highlighted by the pundits but the truth in the numbers is that they haven’t yet nor will they ever return to the numbers of the late 90’s – the numbers upon which Clear Channel’s model was created. This article from late September of this year pretty much sums up why radio has become a no growth industry no matter how many people get fired, no matter how automated, how boring, and how stale radio programming has become.
It’s clear many people in and around the radio business believe the debt issues both iHeartMedia ($20 Billion) and Cumulus ($2 Billion) are facing is a drag on the entire industry. At the Broadcast Finance Forecast panel at the Radio Show Wednesday morning, the issues facing those two companies came up several times during the 90 minute session.
Capital One’s Ray Shu said, “Two of radio’s largest operators are over-levereged (10-11X). They need to correct that soon because it affects the entire industry.” Garret Komjathy of U.S. Bank added, “You cannot outgrow your capital structure. When you have modest leverage, you have flexibility.” He said at some point there will need to be a restructuring. He also said the companies are just too big to manage.” That was a sentiment echoed by several radio CEO’s who appeared on the panel as well.
Alpha Media CEO Larry Wilson said, “We have two companies terribly underwater—that’s really what’s bogging down this business because I think a lot of broadcasters are doing well. Wilson also said the firing of former Cumulus CEO Lew Dickey one year ago sent “a shockwave through the banking community.” Wilson said Dickey’s firing was the reason it took his $264 million deal with Dean Goodman’s Digity so long to close.January 2, 2017 at 1:20 pm #25918DanOregonParticipant
Radio seems to be where newspapers were five years ago. The bottom-feeders have scavenged all there is to scavenge and all of the “savings” through clusters/mergers etc. have been realized and spent.
I don’t think audience/revenue growth was ever part of the plan.January 4, 2017 at 8:12 pm #25986cbaravelliSpectator
Gotta agree with Mr. Wilson. Clear Channel and Cumulus have been here before. Internal gripes were too much control and money at the top.
Gotta disagree about 2016 revenues and earnings. They were both good for most, returning to 2008 levels. However, this year may be a one trick pony. But, who knows.
Broadcast, period. Doing the same things again and again and expecting different results is the layman definition for being stupid. Local news and content has never been better considering over half of staffs in front of and beyond the camera don’t get it and the near half who do are about to leave or retire from the industry.January 4, 2017 at 11:37 pm #25994semoochieParticipant
Not stupidity, insanity
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