Fisher finds silver lining in dark cloud


With the economy in a tailspin, broadcasting stocks have been particularly hard hit. In a letter to shareholders, Fisher Communications CEO Colleen Brown notes that while Fisher’s stock has fallen by not quite half from its 52-week high, its sector peers have fallen much more. Brown points to efforts that have been taken to position the company for the eventual recovery. She’s taken a voluntary 10% pay cut and notes that several other top managers have also stepped up to the plate.

“As you know, the financial, housing, automotive and credit crises have affected the entire U.S. broadcast industry, as advertising budgets have contracted in the face of lower consumer spending and the fear that is prevalent in markets we serve. As a consequence, small cap broadcast stocks are retaining a median of approximately 6% of their 52-week high. In comparison, Fisher has retained 53%, according to the latest Goldman Sachs report,” Brown said in her letter to shareholders.

The CEO insisted that the recent downward trend for stock prices is being driven by investor uncertainty about the economy, not the “long-term fundamentals of companies like Fisher.” She noted that some institutional investors have been forced to sell stocks to meet redemption requests from their own investors.

“While we are clearly disappointed in the recent performance of Fisher stock, we do not believe the current stock price accurately reflects the value of the assets we own and operate, the strength of our balance sheet, and the momentum and growth we are seeing in our stations and Internet business,” Brown wrote.

Despite the economic challenges, she noted that over the last three years Fisher has worked to return value to shareholders (a $3.50 per share special dividend earlier this year), increasing market share, improving content, diversifying its demographic reach, identifying new lines of revenue and integrating high-margin acquisitions.

With no way to know what is going to happen with the US economy, Brown said the company has been cautious about its cost structure and has taken a number of steps to reduce overhead. No 2008 cash bonuses will be paid to the executive management team and there will not be any general salary increases across the company in 2009.

“In fact, to help Fisher navigate through these challenging times and to demonstrate that accountability and actions matter, I have decided to take a voluntary 10% reduction in my base salary for 2009, and have been joined in my offer by Rob Dunlop, our Senior Vice President of Operations. Many of our station leaders and other selected key employees have followed my lead by volunteering to take a 5% reduction in their base salaries for 2009. And in keeping with the task of resetting expenses to align with the country’s current economic environment, the Company will continue to pursue additional cost-saving measures,” Brown told shareholders.

As Fisher prepares to celebrate its 100th anniversary in 2009 (it began in the flour milling business before broadcasting was invented), Brown said the company enters the New Year with a strong balance sheet and cash on hand.