Q2 revenues came in below Wall Street expectations for Westwood One, down 17.4% to 111.1 million. CEO Peter Kosann says there are signs that demand for the company's programs and services will improve by Q4. "We are far from satisfied with our performance.
That said, we are now seeing signs of increased advertising demand, and thus we begin planting new seeds for future growth by making incremental investments in infrastructure and programming in the back half of the year," Kosann told analysts in his quarterly conference call. He also said that he is optimistic that WW1's new 10-year agreement with CBS will be completed this month, so it can then go to shareholders for approval. The new contract, as previously described, will end the contract to have CBS Radio manage WW1, but commit CBS Radio stations to carrying WW1 inventory for another 10 years. Kosann, who is a CBS employee, will be leaving and the search is underway for his successor. Once WW1 is set free from CBS many on Wall Street expect it to hang out a for sale sign.
WW1 still expects revenue percentage declines in the high single digits to low double digits for the second half of this year.
SmartMedia observation: These are tough times for the network radio business, but Kosann was welcoming new ABC Radio Networks owner Citadel to the business. In his view, Citadel is likely to be an aggressive player and help drive up CPMs for everyone. The CEO is celebrating the success of the recently launched "Dennis Miller Show." With most of the analysts on the call in the New York market, he invited them to lobby their favorite radio station to add Miller to their lineup. Which station does he want? Kosann says he'll take any highly-ranked station in New York. The CEO also noted that Miller's show has quickly become profitable for WW1 in part because the talent cost is not outrageous. Kosann said WW1 has passed on other proposed projects with big name stars because they simply want too much money.