The equation is simple, Bill Stakelin says nearly all advertisers are reducing spending in the current economic downturn, so his radio station sales staffs have to go out and find more advertisers. Regent, with its smaller market focus, has weathered the storm better than most so far, with Q4 revenues down 5% and all of 2008 down 1.6%. Two Regent clusters were even up in Q4. But Q1 is pacing down in the mid-teens for the company.
Stakelin said his company’s out-performance of the radio industry was due to three things: “First of all, certainly the capability of our people. Once again, they have performed exceptionally well, as I said, in the face of probably the most depressed advertising marketplace that most of our people have had to work in. Secondly, the continuation of our very aggressive local strategy in both programming and sales, that has caused us to be able to perform ahead of the industry continuously over the last 20-25 months. Thirdly, I would attribute it to the markets in which we operate. Radio continues to have a very large presence with advertisers and listeners in the medium to small markets and continues to be a part of the fiber, not only of listening habits and media habits, but of advertising habits in those sized markets.”
Stakelin noted that Regent now derives over 30% of its revenues from local direct selling – and the company continues to focus on aggressive local selling. “I don’t know any other way in a downturn like this to increase business other than to have more clients on air spending more dollars. All advertisers are continuing to reduce their existing budgets. They’re not going away. We’re not losing advertisers to other radio stations, TV or another medium. They are simply reducing the size of their advertising pies within the Regent Communications family. And as we look at that, we also know that during this deep recessionary period there’s a sale everywhere. You don’t have to go to the clothing store to get 60% off – that’s true also in advertising. So our people continue to face demands for lower average unit rates, which also has an impact on the total revenue stream,” said Stakelin. So, his sales teams are out prospecting to bring in new advertisers, both for radio spots and for exposure on the company’s websites, where Regent’s clusters are developing and promoting local, pure-play Internet brands.
Q4 revenues for the company declined 5% to $23.7 million, with same station revenues down 5.1%. Station operating income (SOI) was down 8.2% to $8.9 million, with same station SOI down 8.7%.
For all of 2008, revenues were down 1.6% to $96.3 million, with SOI up $134,000 to $35 million.
RBR/TVBR observation: Medium and smaller markets with good solid operations always seem to be over looked but in all reports RBR receives these operators are the true operators in the radio business today. The larger markets should take a few lessons from the real radio operators today.
Editors note: For a full analysis on how the investment community is viewing our media right now see RBR/TVBR Financial Roundtable 2009: Part I