December silver lining: Easy 2008 comps


What else can you say about a quarter in which business continued to be recorded in red ink? The combination of a -4% performance in local and -12% showing from national produced a traditional business loss measured at -6% by the Radio Advertising Bureau and Miller Kaplan Arase & Co. Non-spot business provided a positive 12% to counterbalance national’s negative 12%, but it was only enough to shave one percentage point off the overall loss, bringing the month of December home at -5% compared to December 2006.

CL King & Associates analyst Jim Boyle says the December expectation on Wall Street was a 2% drop, so news of the 5% deficit may be an indicator of a coming recession. He said Q4 will likely come in at -4. Boyle says "it’s time to monetize the P-1s, time for dual-revenue streams." That means enticing loyal fans to interact with the station on its website, utilizing the tech savvy and cultural intimacy of its youngest employees to lead the way.

To Victor Miller at Bear Stearns, on the other hand, the December drop was within the expectation zone, and he further refined his guess as to overall Q4 performance to a -4.3% drop, with a 1% non-tradition bonus on top of a -5.3% combined local/national result. For 2007 as a whole, those numbers are expected to be -3% for traditional, leavened to -2% when non-traditional is factored in.

Miller also provided Q4 projections for key public companies. None seem likely to escape red ink when recording comps. The projections include Entercom (-1%); Cox (-2.5%); Clear Channel (-3%); Cumulus (-3.5%); Salem (-3.7%); Radio One (-5%); Citadel (-5.5%, stations only); Beasley (-6%, same station); and CBS (-7%).

RBR/TVBR observation: The good news: 2007 is over. The bad news: 2008 looks like more of the same despite the expected shot in the arm from political. Miller thinks the business projects flat, and while nobody is likely to be thrilled about duplicating a bad set of results, it does beat drilling down further.