For at least the next few weeks Farid Suleman is still CEO of a large radio company. As he reported on Q2 results Monday the Citadel Broadcasting head honcho was asked whether he’s seeing any indication of economic conditions such as in 2008 which would raise fears of a double-dip recession.
Citadel had reported that Q2 revenues were down 4.8%, with the network business worse than the local stations. However, Suleman told analysts that the network side is actually pacing up in Q3 for the first time this year. The stations are pacing about the same as Q2.
2008 no doubt still seems fresh in Suleman’s mind. After acquiring ABC Radio in 2006 in a deal estimated at $2.7 billion, Citadel was hard hit by the advertising recession that began even before the entire economy plunged into recession in 2008. The radio company filed for Chapter 11 bankruptcy in December 2009. It emerged from the process in June 2010 with far less debt, but also with a bunch of vulture capital funds as restless shareholders. When Cumulus Media and Entercom came calling with buyout offers, the new board had little choice but to accept the highest offer.
The acquisition of Citadel by winning bidder Cumulus is expected to close next month, with Citadel shareholders in line for nearly $2.5 billion in cash and stock. Suleman will be out of a job, but he and other top execs do have golden parachutes to make their landing softer.
RBR-TVBR observation: Although the idea that a double-dip is upon us was the top pick in an RBR-TVBR poll a couple of weeks back, there’s not a lot of hard evidence to support such a scenario. The stock market has been quite volatile, yes, mainly due to the debt ceiling battle in Washington, DC, but actual businesses continue to report that the economy is slowly rebuilding – with the emphasis on slowly.