The company is calling it “flat,” but revenues slipped $300K in Q2 at Westwood One to $83.4 million. Both the Network Radio and Metro Traffic divisions were down slightly in the quarter.
“As many radio companies have reported, advertising spending during the recovery from the 2009 recession slowed down in the second quarter of 2010. While this affected our second quarter revenue trajectory, revenue increased for the first six months of the year, driven by a strong first quarter,” said President Rod Sherwood. The first half of the year saw revenues increase 4% to $176.3 million.
Sherwood told analysts that WW1 is currently experiencing “significant increases” in pacing for Q3 and Q4 for both Network Radio and Metro Traffic. “Network advertising revenue is pacing positively in Q3 and is currently up 126% over last year in the 4th quarter in terms of bookings at this time. Our sports programming, which gets underway with the official kickoff of the NFL season in September, is currently pacing at 150% of 2009 bookings levels. Pacings for our music and entertainment programming and our business radio network also reflect double-digit increases,” he said. “Metro Traffic is pacing significantly ahead of last year for the 3rd and 4th quarters. Metro Traffic’s radio revenue has exceeded its actual 3rd quarter revenue in 2009 and advertising bookings are currently 122% for the 3rd quarter and 140% for the 4th quarter, compared to a year ago.”
WW1 announced that it renegotiated its capital structure on August 17th and modified its debt covenants with its lenders. The company’s largest shareholder, The Gores Group, is infusing additional capital of up to $20 million in the form of $15 million of equity and $5 million by guaranteeing an increased revolver. $10 million of this capital will be provided by September 7th. The remainder will be provided by Gores no later than February 28, 2011 unless WW1 receives net cash proceeds of at least $10 million from the issuance and sale of company equity from any other party.
As for revenue details of Q2:
Network Radio revenue was $40.0 million in the second quarter of 2010, a decrease of $0.2 million, or 0.3%, compared to $40.2 million in the second quarter of 2009. “Although advertising revenue was up in sports, music and entertainment programming, it was offset by declines in talk radio and other news programming,” the company said.
Overall, Metro Traffic revenue for the second quarter was $43.4 million, a decrease of $0.1 million, or 0.2%, from $43.5 million in 2009. “Revenue for Metro Traffic radio increased, particularly in the key categories of automotive, financial services and restaurants, but this gain was offset by declining revenue for Metro Television,” WW1 stated.