Saga spared worst of downturn


Saga Communications saw Q1 revenues decline 2% to $31.2 million on a same station basis, but that’s less painful for the small-market focused group than what many of its large market radio brethren endured. Also, gains by its small TV group helped soften the revenue decline at Saga’s radio group.  

Radio revenues, as reported, fell 1.8% to $27.4 million and operating income declined 1.6% to %.5 million. Same station radio revenues were off 2.9% to $27.1 million and operating income was down 0.3% to $5.4 million.

For TV, there was no change in holdings, so no difference between same station and as reported results. Revenues were up 4% to $4.2 million and operating income jumped 26.6% to $643,000.

Repeating his observation from previous calls that “it is two worlds” in radio, CEO Ed Christian noted that small and medium markets are the place to be. CFO Sam Bush had noted earlier that the poorest performers in the radio group were Saga’s largest markets, with Norfolk revenues down 18% and Columbus, OH down 23%.

As usual, Christian had some interesting comments to make on issues concerning the radio industry.

On the Cumulus ratings RFP for 100+ markets: Whether Saga will be interested in joining depends on what they come up with.

On posting: Christian noted that posting for radio would be based on two sets of measurement. He didn’t question the idea of posting for PPM markets, but noted “wild swings” for the diary methodology. He also charged that a radio industry “cabal” is drawing up the posting plan and Saga is not a part of it, so it remains to be seen whether most broadcasters will approve of the proposal when it is presented. Also, Christian noted, his company has been dropping Arbitron ratings in its smaller markets, so it would not legally be able to give rating guarantees for ad buys.

Miller Kaplan: Christian has been lamenting the discontinuation of Miller Kaplan ad revenue reports for many smaller markets, blaming some unnamed large groups for trying to be secretive. Christian said Saga has offered to pay the Miller Kaplan fees of competitors to continue the service, but price is not the issue – they don’t want to participate.

When will the recession end? Christian noted that the housing industry still has a surplus of inventory to work through and the financing markets remain troubled. He’s also a bit concerned about the unemployment rate. Still, he’s hoping for a return to economic growth in Q3 and Q4 of this year.