Has the Web and the Blogosphere Ushered in the Death of Radio?

By: Reggie Middleton | Mon, Nov 17, 2008
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Radio broadcasting companies, an out-of-favor sector with investors and media consumers, are extremely leveraged and facing difficult business environment.

With the advent of the internet, audio related media distribution barriers to entry have come down dramatically. The dissemination of news has encountered a paradigm shift with the advent of blogs, including the one owned by yours truly. With arguably better content, easier and more customizable access, and a rapidly changing business model that is difficult to grasp by the traditional MSM (mainstream media) management, the Web has literally painted a R.I.P. sign on the coffin covers of many a once might radio station holding company. Are TV station companies next? Did this truly have to come to pass, or was the changing of the guard inevitable? Should Bloomberg, or Murdoch or Curtco Media buy a stake in BoomBustBlog.com to hedge their future?

Radio broadcasting companies had significantly increased their debt levels during consolidation phase that narrowed the industry to just a few big players. Due to difficult capital markets situations borne from the Asset Securitization Crisis these companies are now facing a liquidity squeeze. To add to the fray, the industry is facing new competition from iPods, satellite broadcasters, Web streaming services/technology and mobile phones. In addition to growing competition, the financial crisis which is affecting the U.S. economy is leading to lower demand for advertising, thus adversely affecting the sector's ability to register growth in advertising revenues. Huge debt levels and declines in advertising revenues for radio broadcasters have led to a sharp decline in valuations of the sector players. While the radio broadcasting companies continue to face a difficult operating environment and are under huge debt liabilities, most of these companies have already witnessed a decline of more than 90% in their stocks and are trading at less than a dollar per share suggesting that much of the negative outlook regarding their future prospects is already factored in their current share price. Registered users can download the accompanying spreadsheet with additional metrics. Radio Broadcaster Snapshot (1017 kB 2008-11-17 12:55:13)

Ticker Last
1 m 3 m 1 yr EV /
P/E P/S P/B P/ Adj
US Equity
0.40 35.6 14.5 0% -2% -91% 10.48 N/A 0.04 0.06 -0.16
US Equity
0.18 263.9 48.6 -10% -1% -93% 8.63 N/A 0.05 0.13 -0.22
US Equity
0.70 38.7 26.5 -50% -6% -96% N/A 1.03 0.06 0.05 -0.69
US Equity
5.11 355.5 1,817.6 -16% -12% -81% 5.12 8.64 0.53 0.28 31.26
US Equity
0.62 43.6 26.3 -70% -85% -94% 73.11 N/A 0.08 0.19 -0.46


Ticker Debt /
Market Cap
Debt /
Debt /
Debt /
Debt /
Debt /
EMMS 3026% 174% 38% 7.9 11.0 9.4
CDL 4590% 593% 66% 8.7 14.0 13.0
ETM 3470% 168% 54% -27.2 10.9 9.8
CCO 143% 117% 42% 2.9 6.2 3.7
CMLS 2751% 492% 67% 62.4 17.6 15.7

Citadel Broadcasting:

Gross margin
Ticker 2005 2006 2007 2Q-07 3Q-07 2Q-08 3Q-08
EMMS 33.2% 28.8% 25.3% 27.2% 27.9% 27.4%  
CDL 71.7% 71.3% 64.8% 71.4% 63.3% 61.9% 59.4%
ETM 42.2% 40.9% 39.5% 40.1% 41.5% 39.8% 38.3%
CCO 47.4% 45.5% 45.1% 48.7% 46.9% 46.4% 43.1%
CMLS 30.5% 35.7% 35.6% 38.5% 37.7% 36.3% 36.5%
Net income margin
Ticker 2005 2006 2007 2Q-07 3Q-07 2Q-08 3Q-08
EMMS 94.8% 31.6% -0.4% 14.7% 0.1% 3.7%  
CDL 16.6% -11.1% -178.6% 2.7% -186.4% -109.8% 13.1%
ETM 18.1% 10.9% -1.8% -10.0% 11.4% -77.8% 3.7%
CCO 2.3% 5.3% 7.5% 8.2% 6.7% 8.8% 1.1%
CMLS -64.9% -13.2% -68.2% 2.9% -83.8% 36.2% 7.5%


  Revenue growth Gross profit growth Net Income growth
Ticker 2006 2007 2Q-08 3Q-08 2006 2007 2Q-08 3Q-08 2006 2007 2Q-08 3Q-08
EMMS -5% 0% -2% N/A -17% -12% -1% N/A -68% N/A -75% N/A
CDL 3% 66% 62% -11% 3% 51% 41% -16% N/A -2577% N/A N/A
ETM 2% 7% -1% -6% -1% 3% -2% -13% -39% N/A -671% -70%
CCO 9% 13% 9% -1% 4% 12% 4% -9% 149% 61% 17% -83%
CMLS 2% -2% -4% -5% 19% -2% -10% -8% N/A -407% 1093% N/A

Clear Channel:

Cumulus Media:



Reggie Middleton

Author: Reggie Middleton

Reggie Middleton

Reggie Middleton

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