Wells Fargo Securities analyst Marci Ryvicker has the largest portfolio of pure-play broadcasting companies on Wall Street. She heard this week from a number of other forecasters who are more bullish on the 2012 radio revenue outlook for 2012 than she is. But Ryvicker is sticking to her guns.
Having attended the Radio Ink conference in New York, Ryvicker noted that most of the forecasters present were anticipating mid single digits percentage growth for radio revenues in 2012, driven primarily by digital and political revenues, with core spot up low single digits. “Given the short term nature of the business and an uncertain economy, we stick with our +3% forecast, with ‘core’ flat, political contributing 200bps [basis points] and digital contributing 100bps to overall growth,” Ryvicker. said in a note to clients.
The analyst said she did pick up some data points on recent trends. “At this point, national is pacing better for 2012. Specifically, we heard that a handful of large, national annual contracts have been placed for 2012 at levels which are in line with 2011. This implies a flat ‘base’ (ex-political); and while not necessarily exciting, ‘flat’ is a better trend than the negative growth national radio posted the past few quarters.
On the local side, business is ebbing and flowing. While recent economic data points (i.e. Black Friday, car sales and unemployment) have been positive, they are not having a material impact on pacings. One of the best quotes we heard to describe the current environment is ‘business is not bad, and it’s not great.’ We would say the industry is looking to be flat overall for Q4,” Ryvicker concluded.