Saga holds up better than some others


Q1 revenues were down 17.2% to $26.1 million (17.7% same station) for Saga Communications, which was at least a double digit number with only a “one” as the first digit. Both radio and TV were down and free cash flow declined to $939K from $1.7 million a year earlier. Asked about any hopeful signs, CEO Ed Christian said he was not willing to call a bottom yet.

“In talking with my stations, talking with our clients, I do see an occasional green sprout, but in truth I don’t see it blooming into spring flowers yet – that’s still not the case,” said Christian, who no doubt has been doing some gardening lately at his home in Michigan. He warned investors and analysts that there is still fear holding back consumer spending.

Asked whether Saga was interested in Nielsen’s new radio ratings service, Christian acknowledged having talked to Nielsen. However, he’s no fan of diary-based ratings, anyone’s diary-based ratings, and said his company prefers selling without ratings in small markets.

On to the numbers.

Radio revenues declined 17.1% n Q1 to $22.7 million – a 17.8% decline on a same station basis. Operating income was down 56.5% to $2.4 million – a 57.2% same station drop.

TV numbers were the same on an actual and same station basis. Revenues declined 17.4% to $3.4 million. The TV group posted an operating loss of $196K, compared to operating income of $643K a year earlier.

CFO Sam Bush detailed the impact of the 2008 elections. Radio had $365K of political advertising in Q1 last year, but only $33K this year. TV dropped from $192K to $5K. And Saga’s state radio networks had zero in the political column in Q1, compared to $95K a year ago.

Like other groups, Saga has been reducing head count. Christian said HQ officials went line by line, station by station with GMs on cuts to insure that stations could continue to operate efficiently in a difficult environment without compromising the integrity of the product. “Strained yes, we’ve had to do that,” but he insisted that services to audiences and advertisers have not been compromised.

Bush laid out details of the staff cuts that achieved a 5% cut in payroll. “We had approximately 6.5% reduction of our fulltime workforce and approximately 18% reduction of our part-time workforce,” Bush said. But he noted that some additions were made at the same time to the company’s sales force and that Saga still believes it must invest in its sales staffs to get through the economic downturn.