He sees national revenues rising after moving the former ABC stations to Katz and Interactive revenues hitting 20 million bucks next year – and again promised to have to company back on track by 2010.
For the pre-merger Citadel stations, revenues were down only 2%, with national up and local down. But for the former ABC Radio stations in big markets, the revenue drop was 12%, with national plunging 35% and local 5%. Meanwhile, ABC Radio Networks grew revenues 3% for the period. Suleman said syndicating Don Imus is having a positive impact on the network and Hispanic programming paying off, but that Urban programming is slowing down considerably.
Is a potential legal battle brewing between Citadel and ABC Radio talk host Sean Hannity? Suleman confirmed that Hannity has exercised the “right he believes he has” to opt out of his contract with ABC Radio and take his show elsewhere. Suleman wants to hold onto that big name talent, but declared “the era of doing stupid deals is over.”
With the former ABC stations now repped by Katz, as are the other citadel stations, Suleman told analysts that the rep will be able to do group deals, plus Citadel will have a lower cost for national sales, so he sees a $15-20 million annualized pick-up in national business in the second half of this year.
At the station level, after already making staff cuts, Suleman said Citadel is assessing the profitability of every program on every station and has begun making cuts in non-profitable programming. He also noted format changes at stations in some markets, which he predicts will produce $10 million in annual cash flow within 12-24 months. Next up is a change to the company’s second Country station in Dallas, although he didn’t disclose the new format.
Meanwhile, the CEO was touting investments in programming which he said “will really pay off” at some big market stations: Imus on WABC-AM New York and with the Dodgers on KABC-AM Los Angeles. Suleman said both stations are pacing up in Q2.
Interactive media is another growth area, with Suleman predicting that revenues may hit $20 million next year.
While Citadel is not producing the EBITDA it had forecast with ABC Radio rolled into the company, Suleman says the changes that have been made should have the company back on track in 2010.
But what if revenue trends for radio don’t improve? Suleman says the company, excluding its major market stations, will have to adjust how it does business. “You can’t continue to invest in programming and sales if you can’t get the revenue for that. I think Judy [Ellis, COO] has always said that 50% of our revenues would come in with or without sales people. So, sometimes you have to say ‘Why are we paying commissions on that revenue?’ Maybe we would have a few salaried people who just sort of concentrate on service and fulfillment of that at a much lower cost, and maybe pay a higher commission for people who actually develop and bring in new business. So, we are continually evaluating a lot of those things,” Suleman told the analysts.