Westwood One’s Q4 revenue for was down $17.2 million, or 14.5%, to $101.1 million from $118.3 million in the same period of 2007. Net loss, including an impairment charge of $224.1 million, was $(222.5) million, or $(2.22) per share, compared with net income in Q4 2007 of $8.3 million, or $0.10 per share.
Revenue for the year was $404.4 million compared to $451.4 million in 2007, a decrease of $47.0 million or 10.4%. Broken down, FY, Metro Traffic revenue was $194.9 million compared to $232.4 million in 2007, a decline of $37.5 million or 16.1%. Network revenue for 2008 was $209.5 million compared to $218.9 for 2007, a decline of $9.4 million or 4.3%. The decrease is primarily the result of the general decline in ad spending, lower revenue from RADAR inventory and lower barter revenue.
Westwood One’s new CEO Rod Sherwood recently negotiated an agreement in principle with lenders to refinance the company’s outstanding debt ($214 million in principal), renewing programming deals with NFL and the Masters Tournament, launched The Fred Thompson Show, and signed an exclusive partnership with TrafficLand.
The proposed refinancing says that all of WW1’s outstanding debt would be converted into $117.5 million of a single series of new senior secured notes maturing in July 2012. As part of the contemplated refinancing, current $100 million dollar investor Gores Group would invest an additional $25 million and guarantee a new, unsecured $20 million subordinated term loan and a $15 million unsecured revolver provided by a third party lender.
“Upon closing, the company would be significantly more de-levered and would have more flexible financial covenants that would provide the company with the opportunity to enact further changes in the business and take advantage of growth opportunities,” said Sherwood. “Strategically, the company will be able to increase its focus on key drivers of the business which are based on delivering superior content and service, cost effectively, to its customers. The Company also views this as an opportune time to assess the landscape from an M&A perspective, and to selectively explore opportunities that may be available,” said Sherwood.
Sherwood also said Westwood One will continue to drive its turnaround efforts in 2009 by focusing on three key strategies: “1) Generating revenue from branded programming in network radio and an enhanced technology-based product in traffic. 2) By maintaining a single-minded focus on reducing operating expenses and reducing our operating breakeven point and 3) By taking advantage of growth opportunities in the marketplace.”
RBR/TVBR observation: Indeed, Sherwood has done a good job for Westwood—keeping the company afloat in these rough times; getting refinancing at a crucial time; cutting costs; adding programming; keeping the NFL and beefing up technology—especially in the traffic side with the Trafficland deal and furthering copy splitting and accountability on the network side. Now as to the rumors we’ve heard that the job he set out to do is done and he may be replaced, that could still well hold true—but why, we ask.