An industry-wide settlement with music licensing organizations ASCAP and Broadcast Music, Inc. (BMI) resulted in a $2.1 million bump in expenses from January 2022 through the end of the third quarter, directly impacting the P&L for Saga Communications in Q3 as the company led by Chris Forgy swung to a net loss.
Station operating expense would have decreased by $120,000 in Q3 without the settlement. Instead, it rose to $24.67 million from $22.71 million as net operating revenue declined to $28.17 million from $28.69 million amid continued softness for core advertising across the broadcast media sector — coupled with diminished political advertising from Q3 2024.
The net revenue was below the estimate of $28.3 million offered by one analyst reporting to Yahoo! Finance, as Saga swung to a net loss in Q3 of $532,000 (-$0.08) from net income of $1.27 million ($0.20) in the year-ago quarter. Station Operating Income fell to $3.49 million, from $5.99 million.
With just $5 million in debt and total assets of $218.35 million, Saga remains one of the broadcast radio industry’s brighter profit-making operations, with much digital growth still to be realized given its late-to-the-game approach of building out nontraditional revenue in the streaming and online space.
Yet, it has been a mixed 12 months for Daniel Tisch-led Towerview LLC, the longtime lead institutional investor in Saga, with the company’s Nasdaq-traded stock down 12.7% from November 5, 2024 but up 10.9% year-to-date. Aside from Towerview, which holds 18% voting interest in Saga, Gate City Capital Management maintains a 13.4% interest.
As previously reported, Q3 revenue was positively impacted by the sale of telecommunications towers and related property and other assets located at 22 sites to Tony Peduto-led GTC Towers for approximately $10.7 million in cash. Sales proceeds, net of brokerage commissions and certain adjustments in the amount of approximately $8.7 million were paid to Saga, with the remaining cash proceeds of $1.8 million (representing 4 sites) being deposited into an escrow account pending final landlord consents to assign the ground leases where the towers are located.
SAGA COMMUNICATIONS Q3 2025 BY THE NUMBERS
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Net operating revenue fell to $28.17 million, falling short of the analyst estimate provided to Yahoo! Finance
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Station operating expense increased to $24.67 million, from $22.71 million, due to a settlement over music licensing fees with ASCAP and BMI, respectively
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Without the settlement, operating income of $1.5 million would have been seen, compared to $1.6 million. Station operating income would have been $5.6 compared to $6.0 million for the same quarter last year
Looking ahead, CFO Sam Bush said Saga is pacing down 11% (4.7% ex-political) in Q4, but interactive pacing is up 32% in the quarter “as of now,” he said on the earnings call.
