Cox comes up short


Cox Radio is the first pure-play radio company to report Q2 results – and the first to fall short of Wall Street expectations. It probably won’t be the last. Revenues fell 8.3% to $108.2 million and station operating income was off 13.6% to $41.3 million. CEO Bob Neil, however, noted that his stations outperformed their markets in a tough quarter.

Due to the SEC’s accounting rules on valuing assets, Cox Radio took a non-cash impairment in Q2 to reduce the carrying value of the intangible assets of its stations in Greenville, Honolulu, Houston, Jacksonville, Louisville, Miami, Richmond, San Antonio, Southern Connecticut and Tulsa totaling $147.6 million. That resulted in a net loss for the quarter of $75.4 million, compared to a net profit of $20.3 million a year earlier.

Delving into the Q2 details, local revenues were down 6.1% and national a whopping 17.5%. Other revenues, including Internet and other NTR, declined 4%. Neil said political spending was “negligible” for the quarter.

But not all Cox clusters posted declines. Long Island, Birmingham and Tulsa were up. But their gains were more than offset by declines in Atlanta, Orlando, Miami, Tampa, Houston and Jacksonville.

RBR/TVBR observation: One of the joys of being a public company – having to take a write-down when the market value of your FCC licenses and other intangible assets declines in a soft market. It doesn’t affect your operating results one bit, but it sure scares some investors. And then, when the market recovers, you don’t get to reclaim that intangible value. Don’t you love accounting rules?