Looking at his own market-by-market research following RAB's report of a 3% decline in June radio revenues, CL King analyst Jim Boyle says it was yet another month of small markets outperforming big markets. "Analyzing nearly fifty markets' June data, the variance by market size is remarkable and consistent. The Top 25 markets we have seen plunged an average 4% in June, whereas the small-mid markets were up an average of 3%," he told clients. "Furthermore, the smaller markets of #76-plus were on average up an impressive 6% for June. If one is to operate, or invest, in radio stations, it seems much better to be in small-mid markets, like Saga and Regent," Boyle noted.
Wall Street, however, has not rewarded those small market owners for outperforming their large market brethren. Saga was a 10 buck a share stock back in June, but has lately been trading below seven. Regent has been in penny stock territory for some time. Its stock price is so far below its private market value that one major shareholder has been trying to force a sell-off. As threatened (8/10/07 RBR #156), Riley Investment Management filed suit on Friday to try to force Regent to call a special shareholders meeting at which Riley hopes to put three of its nominees on the board of directors.
SmartMedia observation: We like Boyle's style and his put it on the line but RBR will also add most of these markets are run by radio broadcasters that are operators not portfolio managers. These operators are paying attention to the day to day work that needs to be done today like right now. Unlike some high in their ivory towers these local small market operators are held accountable for their duties as it is called payroll as these operators are not guaranteed mega salaries while their stock is in crapper. We also notice more innovation from these small market broadcasters and they do it with passion. Passion and Innovation again is something RBR does not see coming from the Ivory Tower dudes. RBR's estimation of small market does not mean market 250, but look around in markets like Fresno, Kansas City etc. where there are independent group operators making it work today.