Q4 revenues were down 8.9% for Saga Communications, but December was up and the up trend is continuing. CEO Ed Christian says he’s grateful 2009 is over. All three months of Q1 are pacing up.
With total revenues down 8.9% to $31.8 million, Saga’s radio division fared much better than TV, where the bulk of political spending inflated the 2008 comps.
Radio revenues weere down 8% to $27.4 million, or down 9.3% on a same stations basis. Station operating income (SOI), as calculated by RBR-TVBR, declined 2.6% to $7.1 million, or a drop of 5.9% on a same stations basis. The radio numbers include Saga’s state news and farm networks.
TV revenues fell 14.3% to $4.4 million and SOI dropped 20.6% to $871K. The TV station portfolio was the same for both periods.
For radio and TV combined, CFO Sam Bush reported that October revenues were down 19.3%, November was down 5.7% and December moved up 1.1%. That trend of monthly improvement has continued into Q1. January was up 1.1%, with February and March pacing up 4-5%, the CFO said. But CEO Christian chimed in that Bush was being conservative, since February and March are both now pacing up slightly over 5%.
Asked about pricing in Q&A, Christian told analysts that there is really no standard for what pricing should be in broadcasting. “In markets where we have relationships we have much more pricing power in terms of the person [being] able to measure what we’re doing and then can assess value in terms of radio advertising. Where it has turned out to be very difficult is in national business. And that has been exacerbated a little bit, because if you really look at what’s happened, you have one company now that represents virtually every radio station in the United States. One national rep firm. And though they will say within that, that they have three or four different divisions, in certain of their offices they have cut back to one person representing all of the stations. For Katz Media Group, in certain of the smaller offices there is one person in there who then represents every radio station in the market. So the pricing power theoretically should increase. I haven’t seen that yet. And at the same time you have this other convergence with national media buying shops who have decided they are going to try to become the ‘collective Borg’ and share rate information across platforms so that they can use this as a club to evaluate and then hold in front of various radio groups – ‘here’s your rate that we anticipate for 2010 if you put all of your stations in and reduce your rate we’ll give you more money.’ So, that is troublesome,” Christian said. But, looking back on Google’s failed attempt to get into packaging radio inventory, the Saga CEO found some solace, although he’s still concerned about the attempt to impose a national rate structure on radio. In any case, Saga gets 86% of its revenues from local, not national.