Citadel Broadcasting executives are expecting Q3 to fall in line with Q2, with sluggish economic conditions leading to another drop from results achieved in 2006. However, Chairman/CEO Farid Suleman sees potential for positive results in Q4, and he had the company gearing up for revenue gains in 2008.
The basis for Q4 optimism is twofold. First, political cash should start flowing into station coffers, and second, program changes that have recently or are now are being implemented are expected to start paying off at about that time.
Suleman is willing to spend money to make it: "It's not about cost cuts, it's about revenue growth," he said. One example is the company's plan to expand the news operation at KABC-AM Los Angeles, which he feels will strengthen one of its new core properties.
Other big plans are in the works to turn interactive media into a revenue generator. Suleman is prepared to drop 3M-5M into a project to put most of the 232-station group on the same interactive platform.
The company intends to focus on debt paydown between now and the end of the year, a focus that will move any thought of dividends into 2008, unless the board of directors feels differently – but Suleman thought they would agree with this approach.
Citadel is now actively shopping its spin-off stations. Suleman said he just finished hiring bankers to move this inventory. Not surprisingly, he expects the properties to go in in-market strategic buyers rather than going in a package to a group or private equity player, and expects market values to hold at their present level for the foreseeable future.