Cumulus Media pacing down 25%


CEO Lew Dickey provided that report on Q1 as the company reported Q4 revenues down 11.1% to $75.1 million, or 10.8% on a pro forma basis. Even so, Dickey noted that five markets were up double digits. Station operating income was down 14.3% to $26.8 million, or 14.2% pro forma.

Dickey noted that Q4 operating expenses were down 9.2%, “well ahead of our guidance of down 5%.” Going into the year, he said the company took an extensive review of its cost structure. As a result, overall fixed costs have been reduced by 15%. “These cost cuts were primarily the result of the implementation of proprietary technology, enterprise technology that we have been developing over the past two years, that has enabled us to reduce headcount and increase operational efficiencies,” Dickey said.

The CEO said weakness in Q4 was from the “obvious categories,” automotive, financial services, home improvement and furnishings, and then retail and general.

Asked about the recent test in Lexington, KY of Nielsen’s new sticker diary, which Cumulus has subscribed to for 51 markets this year, Dickey was upbeat. He declared that the pilot test went “extremely well” and showed an increase in the number of quarter hours that people are consuming radio, compared to Arbitron’s diary service.

“What we found across the board is that Nielsen has been sampling cell phone-only households – up to 20% of the population, right now, which we have not been sampling with Arbitron. Immediately, what we found is that the cell phone-only have a greater propensity to consume radio than not,” Dickey said.

He noted that cell phone-only households tend to be younger people. “It refutes the point that radio has lost its relevance to young people and that terrestrial radio is a medium of Ludites,” Dickey said. “It just shows that the industry has left a lot of money on the table because there’s been an inaccurate methodology for sampling consumption, because literally a fifth of the population has been left out of the sample frame,” he said.