Looks like the down economy is starting to hit Hispanic Radio as well: Spanish Broadcasting System’s Q1 net revenue was 36.4 million compared to 38.9 million for the same prior year period, a decrease of 2.5 million or 6%. The decrease was blamed on their radio segment which had a net revenue decrease of 3.8 million or 10%, offset by an increase their television segment net revenue of 1.3 million or 62%.
SBS’s radio segment had a decrease in net revenue primarily due to lower local and national sales. The decrease in local sales occurred primarily in the Miami, Los Angeles, New York, and Chicago markets, offset by an increase in their Puerto Rico market. The decrease in national sales occurred in Miami, Chicago, and New York, offset by an increase in LA.
SBS’s television segment net revenue growth was primarily due to increases in subscriber revenue related to the DirecTV affiliation agreements, local spot sales, and local integrated sales.
Operating loss totaled (2.8) million compared to 6.0 million for the same prior year period. The loss was attributable to the continuing effects of a soft economy and increases in programming and marketing investments during the quarter.
Said Raul Alarcon, Jr., SBS CEO, “Our first quarter results reflect substantial growth momentum at MegaTV, offset by decreased revenues at our radio group due to the effects of a sluggish advertising environment…Although the radio advertising market remains difficult primarily due to the impact of the economic downturn, we are successfully building on our loyal listener base in the nation’s top markets and continue to operate the leading Spanish-language radio outlets in the country, including the #1 Spanish-language station in America.”
Alarcon also said SBS’s board has rejected calls from investor Discovery Group, to sell the company or take it private. “After studied deliberation, including the analysis and advice of a major Wall Street investment bank, our board has decided to ratify the company’s existing strategic agenda and operating philosophy. [The board] has determined that no further action/comment is warranted with respect to Discovery Group’s strategic recommendations."
Despite the less than favorable ad market, Alarcon noted new ad clients have been secured in the quarter, including Advance Auto Parts, Nationwide Insurance, PNC Bank and the IRS. He also noted online advertisers now include Volkswagen, Disney World and the Hallmark Movie Channel.
Going forward, SBS expects net revenue in Q2 to decrease in the mid single digit range over the comparable prior year period.