By Adam R Jacobson
RBR + TVBR
The best thing about iHeartMedia‘s third-quarter results: Releasing them as a groggy nation digests the news that Donald J. Trump is the president-elect of the United States of America.
It’s a great way to perhaps bury the news that one of the nation’s most visible owners and operators of radio stations is flat as a pancake, with respect to its fiscal trends.
iHeartMedia revenue improved by 1.2%, from $846.9 million to $857.1 million, in Q3.
The company delivered in a release distributed prior to the opening bell on Wall Street and a conference call with investors that started a few minutes after its scheduled 8:30 a.m. start time.
But, iHeartMedia famously reports its financials in a complex manner, using “OIBDAN” — defined by the company as “consolidated operating income adjusted to exclude non-cash compensation expenses, included within corporate expenses, as well as the following line items presented in its Statement of Comprehensive Loss: Depreciation and amortization; Impairment charges; and Other operating income (expense), net.”
Furthermore, there is consolidated revenue that put iHeartMedia with its Americas and Outdoor operations.
So, how did iHeartMedia do?
Consolidated OIBDAN moved from $451.2 million to $468.7 million, in Q3.
Consolidated revenue was statistically flat, slipping 0.6% from $1.58 billion to $1.57 billion.
This includes $18.6 million in political dollars, which came in lower than anticipated due to the extraordinary nature of the 2016 presidential election campaign, iHeartMedia President/COO and CFO Rich Bressler noted in a conference call with investors held prior to the opening bell on Wall Street Tuesday.
Excluding the effects of political revenue, consolidated revenue fell by 1.3%, from $1.57 billion to $1.56 billion.
Meanwhile, that iHeartMedia revenue gain — once the effects of political advertising are removed from the equation — becomes non-movement, with dollars shifting ahead just 0.4%, from $842.5 million to $846.3 million.
Growth in iHeart’s network businesses, including the syndication business driven by growth in its News/Talk stations and its Total Traffic and Weather Network (TTWN), as well as higher revenue from events such as the iHeartRadio Music Festival, accounted for much of the fuel for flat revenue at iHeart.
The increase in revenue was partially offset by lower local broadcast radio advertising revenue.
This may not sit well with investors, as this is a key revenue driver for the entire company.
Bressler opened the company’s conference call with investors touting radio’s continued power to connect with audiences, in particular through its iHeart-branded events and its digital platforms.
He also noted that programmatic buying platforms are a key focal point for iHeartMedia in working with clients.
On a down note, Bressler said, Americas outdoor’s revenue and operating income declined as the result of the sales of nine non-strategic markets; excluding the impact of the sales, revenues increased.
He also stressed that investments are “enhancing” iHeart’s business, allowing it “to keep developing and delivering innovative new products to our consumers, all while staying focused on tight operating and financial discipline.”
These new products include a Pandora-like option for iHeartRadio app users.
In prepared comments in its earnings release, iHeartMedia Chairman/CEO Bob Pittman Chairman and Chief Executive Officer of iHeartMedia said, “This quarter, we were excited to announce the reimagining of live radio with our two new subscription services, iHeartRadio Plus and iHeartRadio All Access, set to debut in January 2017. In addition, at both iHeartMedia and outdoor, we continue to invest in programmatic buying platforms and research analytics tools to leverage our assets for the benefit of our marketing and advertising partners, and at Americas outdoor and International outdoor, we continue to realign our resources to expand our digital out-of-home networks.”