On May 30, Spanish Broadcasting System (SBS) released its delayed fourth quarter 2023 and first quarter 2024 earnings results. Nineteen days later, well into its Q2, founder, President and Chairman/CEO Raúl Alarcón Jr. hosted a conference call for investors and the Wall Street community in which he doubled down on what he calls the company’s path to revenue growth in 2024.
On the call, which saw neither Alarcón nor interim Chief Financial Officer Frank Soricelli offer detailed analyses of the company’s Q4 2023 and Q1 2024 earnings reports, Alarcón said it was “gratifying” and an honor to serve once again as SBS’s day-to-day leader through its current “operational reset.”
This refers to the resignation of Albert Rodriguez as President/COO of SBS in late 2023 and the subsequent resignation of José Molina as CFO in early 2024. Speaking of Soricelli, a 32-year company veteran, Alarcón remarked, “I could not think of a partner to have beside me.”
SBS’ Board of Directors appointed Soricelli as interim CFO on April 25.
Alarcón’s discussion during the 30-minute conference call saw the Hispanic radio pioneer play up SBS’s “continued ability to connect brand partners with the massive audience that represents the ‘New American Mainstream’.” This, he said, is the main tenet of the company’s operational plan. Yet, Alarcón recognized that 2023 wasn’t easy, hence the initiatives that SBS is undertaking to bring further growth to the company.
While Q1 2024 saw signs of progress, “We still have much more work to do,” Alarcón said. This includes aligning SBS’s content across a broad range of platforms, so that “lifestyle companions” can engage with SBS stations no matter where and when they wish to do so.
“I can attest to the realization that our future has never been brighter,” Alarcón remarked. “I remain confident that we are moving along the right path. We have the brands. We have the talent. We have the passion and we have more than four decades of experience serving this audience.”
Alarcón then addressed e-mailed questions from stakeholders. Regarding the SBS Entertainment arm and the “cadence of events across 2024” and its Q1 performance. Alarcón said, “We want to be more prudent given softness in ticket sales and flood of events,” noting that the post-pandemic period led to “a lot of churn.” He added, “We have a solid lineup for the rest of the year. Concerts do well for us.”
With ticket giveaways and sponsorships singled out as plusses, Alarcón said, “We can scale up or down the size of our events, and we don’t want to lose that engagement. We want to make sure we are not on edge in terms of profitability. We are certainly going to participate in live events and I don’t think that is going to disappear as I consider it an outreach to our listeners.”
A POSITIVE REVENUE FORECAST
Alarcón was also asked about Q1 performance with respect to local versus national advertising. To little surprise, he said higher local and network sales were seen, and that was somewhat offset by weakness in national.
Furthermore, he said Q2 pacings “look good,” with local sales up mid-single digits. This improvement is “slightly offset” by some network and national sales during the quarter. “Again, our efforts regarding revenue across the board is intense and we cannot control the macroeconomic environment,” Alarcón said. “But this is a good harbinger of things to come.”
Stakeholders also inquired about SBS’s recent acquisition of FMs serving Orlando and Tampa, respectively. Alarcón would only reiterate that the purchase of WSUN-FM in Tampa and WPYO-FM in Orlando is integral to its ability to reach Hispanic audiences across Florida’s biggest markets. He also noted that a Nielsen “nuisance” regarding “inaccuracies” in Tampa were a factor with the launch of “El Nuevo Zol” at WSUN-FM 97.1. That has now been resolved, with “strong” performance “the company knew” now showing up in the ratings.
On the subject of political dollars, “We’re out there and we are looking for the business,” Alarcón shared. But, there’s only been “some” political dollars with no way to determine how that will shape up at the end of 2024.
In Houston, SBS is awaiting the closing of its announced purchase of KROI-FM 92.1 from Urban One. Alarcón says the acquisition is expected to be completed by the end of this year, giving no further details; closing was pushed back due to the aborted sale of Mega TV to VOZ Media. The television division of Mega TV remains very much for sale, and Alarcón expressed optimism that two parcels of land — in Hialeah, Fla., and in Guaynabo, Puerto Rico — will attract the right buyers and result in a profitable deal for Mega TV. “In the last few weeks we’ve had a tremendous amount of activity and we think it will end up pretty well for us,” Alarcón concluded.
