Current quarter pacing up for Clear Channel


Now that we know the results for Q4, the more immediate question for Clear Channel Communications is how are pacings for Q1? It’s the old “What have you done for me lately?” question from Wall Street. There is good news on that front.

In his conference call with analysts, CC Media Holdings CFO Tom Casey (pictured) said Q1 is pacing up 1% for Clear Channel Media & Entertainment (CCME, the former Clear Channel Radio) excluding Metro Networks, which wasn’t part of the company a year earlier.

That’s an improvement from Q4. Although CCME revenues had been up 2% for the quarter, that would have been a decline of 3% excluding Metro, but about flat if you also exclude the impact of political advertising.  Political revenue in Q4 of 2011 was only $7 million, compared to $32 million a year earlier.

Strong categories for radio in Q4 were financial services, retail and restaurants, while there were declines in telecommunications, travel & tourism and, of course, political, Casey told analysts.

Digital revenues continue to grow. iHeartRadio claimed more than 48 million downloads of its app and CCME reported about 37 million monthly unique visitors across its digital platform.

Noting that the custom radio portion of iHeartRadio is still commercial free, one analyst wanted to know when the company plans to begin to monetize that investment. But Casey wouldn’t tip his hand as to when iHeart might stop going ad-free against ad-supported rival Pandora. Rather, he said, digital revenues are growing nicely from streaming Clear Channel radio stations via the iHeart platform and from display advertising.

“Moving ahead, while the economic recovery has been slower than expected, we are optimistic about growth trends we are seeing so far in 2012 and believe our businesses are well positioned to continue to deliver strong OIBDAN and cash flow,” Casey said about the current outlook for CC Media and its subsidiaries.

The 1% decline in Q4 domestic outdoor revenues had been a surprise for Wall Street, with most analysts projecting modest growth. The miss certainly explains the recent management shake-up at Clear Channel Outdoor. Casey said Tuesday (2/21) that domestic outdoor is pacing up 5% for Q1.

As he had indicated in the Q3 conference call, new CEO Bob Pittman left the quarterly discussion session to Casey. He did, however, provide a pithy quote for the company’s earnings release:

“We are pleased with our business performance in the quarter and throughout 2011. In the last year, we have made great strides:  putting our leadership team and strategic plans in place, strengthening our relationships with consumers globally and developing new strategies to better serve our advertising and marketing partners.  I believe we are well positioned for new successes in 2012, as we continue working toward realizing the full potential of our businesses.  We are continuing to build on the strengths of our national radio and digital content platform, including iHeartRadio, and further developing and executing new strategies for our outdoor businesses around the world, especially our unique digital products,” said Pittman.

RBR-TVBR observation: Thus far having the custom music channels on iHeartRadio commercial free doesn’t seem to have slowed subscriber growth for Pandora, where users have to listen to spots to receive the non-subscription service. But Clear Channel is able to generate digital revenues from streaming its AM & FM stations and those of other broadcasters on the iHeart platform to cover those crippling royalty payments to SoundExchange, while Pandora has no such supplemental revenue streams. We’ll be interested to find out in two weeks whether Pandora managed to turn cash flow positive for the year.