Some forecasts trailing radio pacings


Radio ad revenue pacings are picking up so rapidly that some forecasters are racing to keep up – while it appears others are just being left behind. Just as there were lots of downward revisions throughout 2009, we can probably expect upward revisions through 2010.

Last week’s update by Barclays Capital analysts Anthony DiClemente and George Hawkey put them at the head of the pack, with a 2010 radio revenue gain of 7.4% forecast.  It was the second revision of their forecast, having gone into 2010 expecting yet another down year for the medium.

Also last week, though, BIA/Kelsey forecaster Mark Fratrik reiterated his prediction that radio will gain a mere 1.5% in 2010.

Radio groups, however, had indicated in their Q4 Wall Street conference calls that pacings, particularly in large markets, are better than that in Q1 – and picking up steam. Cumulus CEO Lew Dickey said the publicly traded small and medium market group was down 4% in January, flat in February and expected to be positive in March. But for the large market group which Cumulus manages, Cumulus Media Partners, revenues rose 2% in January, 4% in February and March, Dickey said, was “pacing considerably higher.”

People are no longer snickering at Entercom CEO David Field’s comment last September that 2010 revenues could be up by a double-digit percentage. He told analysts that the first two months of the year were up 7%, with demand increasing and inventory tightening.

At Saga Communications, CEO Ed Christian and CFO Sam Bush told analysts that January was up just over 1%, with February and March pacing up over 5%. Saga, it should be noted, is mostly in medium and small markets.

CBS Corporation CEO Les Moonves told analysts that CBS Radio is pacing up in the mid single digits, but he also added that the top 10 markets are up more, with gains in the low teens.

While the Barclays analysts are currently the most bullish with their forecast of 7.4%, some others are not far behind at 6%

Jim Boyle at Gilford Securities recently raised his forecast to 6% growth, up from an earlier estimate of 4%.

Also out with a recent 6% forecast, up from a previous 2.2% number, are Wells Fargo Securities bond analysts Bishop Cheen and Davis Hebert. That is based in part on the improvement in the auto sector: “It is the mighty oak from which all good things come and auto is back big time,” they noted. They also see some spill-over of political from TV to radio. “We think the back half of 2010 will not be as strong as the first half year-over-year in terms of percentage change because the back half of ’09 was not as horrendous as the first,” the analysts said.

Their equity analyst colleagues Marci Ryvicker and Timothy Schlock at Wells Fargo Securities provided some detail on that 6% forecast. They’re expecting a flat year for radio networks, but gains for stations, with national spot up 10% and local up 5%. Also figured into the radio number is a 3% gain in non-traditional revenues.

Brian Wieser at MAGNA increased his forecast only slightly in January. He is projecting that network/satellite radio will grow revenues 2% in 2010, but pegged local radio for a 2.5% decline. He has not updated the forecast since January 19th.

RBR-TVBR observation:  The landscape has certainly changed since we published a compilation of 2010 forecasts back in December. Even so, if we were inclined to bet we’d be wagering that the forecasters will have to raise their radio numbers still more as the year progresses. That is, all except for David Field, who’s looking smarter every day.