Radio One is focused on turning around poor performing stations in several markets. President/CEO Al Liggins tells Wall Street analysts during Thursday’s earnings call “The bad news is our radio business was soft” in the fourth quarter. But he’s got a plan.
Radio advertising revenue was down 5.2% for the final quarter of 2015. Liggins said the company underperformed in Atlanta, Baltimore and Houston, but outperformed in Washington DC. Audience ratings have generally shown strong growth year over year, and he anticipates monetizing these audience gains in 2016.
Net revenue was approximately $109.4 million, a slight decrease of 0.3% from the same period in 2014. Station operating income was approximately $41 million, a decrease of 3.5% from the same period in 2014. The company reported an operating loss of approximately $11.3 million for the quarter, compared to operating income of $19.4 million for the same period in 2014. Net loss was approximately $24.3 million or $0.50 per share compared to $13.5 million or $0.28 per share, for the same period in 2014.
In Atlanta, the company launched a fourth brand on a “significant signal” and “we’re hopeful we’ve got a strategic plan there,” said Liggins, also noting ratings have stabilized now in Indianapolis.
The company is focused on building cash for it “war chest.”
Radio One needs more salespeople, said Liggins: “As the radio industry has matured, it’s become more difficult to recruit folks into the business.” Younger people have more options now with the advent of digital he noted. “We got caught flatfooted” in terms of account managers and the company has not “monetized ratings as fast as we would like.”
“This story works. We’re continuing to pull expense levers,” said Liggins, adding that “I feel better about the radio business today in terms of long-term health. It’s specific to us. We’re not doing a good job right now and we’re going to fix it.”
The company could de-lever though M&A or tower sales. Liggins said the company “has had conversations with people about in-market opportunities that would allow us to de-lever” but there have been no decisions made about that. Tower sales are another option on the table.
The company also is expecting an eventual revenue stream from its casino investment; that could open in the fourth quarter.
