Radio One had already indicated that Q1 revenues would be up 10.2%, but we got details Thursday on how little of that came from the radio stations. Radio One has also cut back on its Q2 pacing guidance, with radio pacing now looking flat.
Most of the Q1 revenue gain came from Reach Media, where the “Tom Joyner Fantastic Voyage” cruise brought in $6.6 million in March. Reach Media’s net revenues were up 83.8% for the quarter to $14.7 million.
For the radio stations, revenues were up only 1.8% to $48.3 million. That contrasted to 4.5% revenue growth for the markets where Radio One operates. CFO Peter Thompson noted that for the company’s four largest markets, Houston was up 1.7%, Atlanta up 15.3%, Washington up 1.2% and Baltimore down 6.9%. For the entire portfolio of 16 markets, half were up and half down in the quarter. Notably on the negative side, Dallas was down 20.3%, the three Ohio clusters (Cleveland/Columbus/Cincinnati) were down 9.7%, Indianapolis down 8.9% and Philadelphia was down 8.8%.
“Now there were four principal reasons for our Q1 underperformance,” said Radio One Radio Division President Barry Mayo in the company’s conference call with Wall Street analysts. “First, management changes and the timing of them. Second, ratings. We’ve got four markets in that last traunch of markets to go currency in PPM. And then pricing. Frankly, we were too aggressive in pricing our inventory in a few markets and we lost share to competitors just frankly underpricing us.” Mayo added that 2010 included $1 million in advertising by the US Census Bureau, which general market stations did not participate in.
“Our Q2 pacings are being led by very strong performance by Atlanta, Charlotte, Cincinnati, Detroit, St. Louis and Washington, DC,” Mayo told the analysts.
Having previously told Wall Street that Q2 was pacing up in the mid to high single digits, CEO Alfred Liggins noted the subsequent impact of the earthquake/tsunami in Japan on auto supplies and advertising. “Those pacings have since flattened out due to the unforeseen business advertising disruption resulting from the disaster in Japan. We now expect to be relatively flat for revenue year over year, similar to what other radio companies in the sector are all now reporting,” he told the analysts. However, Liggins noted that TV One will be fully integrated into Radio One’s financial results for Q2 for the first time, which will increase both revenues and EBITDA. Radio One increased its stake in the cable channel to a majority early this month.