2007 ended badly for Citadel Broadcasting, with pro forma revenues down 5.1% in Q4 to 245.3 million, so CEO Farid Suleman focused in his quarterly conference call on his plan to get the company back on track in 2008 and beyond. “The time for talk is over and it’s time for the walk,” he said, with a restructuring now underway in major markets and people put on notice that if they underperform they may lose their jobs. In response to an analyst’s question, Suleman said overall he feels “really good” about the team of managers in Citadel’s markets, although there will be some changes made. “What you want to do is give everybody an opportunity to perform,” he said following the merger that brought ABC Radio into Citadel. “The environment is such that you don’t have the luxury of too much time,” he added.
Citadel expects to sell about 100 million worth of stations in each of the next two years to reduce debt, but Suleman isn’t giving Wall Street any revenue guidance for 2008 because he doesn’t know how the overall radio industry will perform. Make no mistake about it, though, he doesn’t want to see Citadel stations continue to underperform their markets. He noted that every major market was down in Q4 for Citadel and that national advertising was “a complete disaster.” However, he praised his national rep, Katz, for its efforts underway to bring new national advertisers to radio.
ABC Radio Networks was a bright spot in Q4, with revenues up 600K to 49.8 million. Suleman said the network business is also pacing a little ahead in Q1. Radio station revenues declined 13.1 million to 197.5 million. The company said its worst performing markets were San Francisco; Washington, DC; Chicago; Atlanta; New York (WPLJ-FM’s cash flow fell by more than 50%); Birmingham, AL; Dallas; and Los Angeles.
RBR observation: When it comes to talking about losing your job for underperformance, we have to wonder how secure Suleman is in his own job. For some time we’ve been hearing buzz about just how long Ted Forstmann is going to be willing to stick with the big name CEO he recruited to head Forstmann Little & Company’s first (and, to date, only) equity investment in radio. To call that investment a disaster would be an understatement. Acquiring ABC Radio was supposed to be the masterstroke that would rebuild Citadel’s crumbling stock price back toward its 2003 IPO price of 19 bucks. Instead, the poor performance of ABC’s big market stations, which has been even worse than the pre-merger Citadel stations, has helped drag the share price into penny stock territory and now below the one buck mark, which could result in a Nasdaq deslisting.