Cumulus CEO Mary Berner believes the broadcaster is gaining a foothold on a turnaround citing a 6.1% jump in revenue in the second quarter for syndicator Westwood One despite a dip in revenue for its radio station group during the same period. WWO revenue in the quarter measured $81.2 million.
For the three quarters ending June 30, the company reported total net revenue of $290.5 million, which was up overall 1.2% compared to Q2 2016. The radio station division ate into that positive number by being 0.7% lower from $210 million to $208.6 million. Berner said the environment is “weak” in general for radio but applauded a seventh straight quarter of PPM ratings growth for its larger market stations.
However, Berner did point out rating declines in paper diary markets during the spring 2017 ratings book. “We gave back overall ratings share in our four book markets driven by some fairly isolated challenges. Six markets out of 27 drove the entirety of the decline with two markets representing nearly half of the impact. We are focused on righting the ship in those situations,” Berner said during Monday’s earning call.
The broadcaster’s C-Suite digital services platform is on the upswing, according to Berner, giving “local advertisers the ability to integrate digital more seamlessly into their core radio buy.” In addition, WWO is positioned to grab a large share of the podcast space where “industry revenue is projected to grow from $150 to $200 million last year to as much as $500 million by 2020,” according to Berner.
“With its massive promotional reach, high-quality audio production capabilities, relationships with clients spending on podcasting and significant connections to talent, WWO brings to the table all of the necessary elements to be a significant player in the (podcast) space,” Berner says.
Cumulus CFO John Abbot noted expenses increased by $300,000 in the second quarter from the year previous and addressed several nagging NASDAQ issues on Monday that continue to plague Cumulus, including that lower than acceptable stock price which could to get it delisted. The deadline to get Cumulus stock back to $1.00 or better is October 2, 2017. Cumulus stock closed Monday at $0.43 per share.
Cumulus, still mired in debt totaling $2.4 billion, continues to address its significant debt levels in a way to minimize impact on the business while maximizing momentum gained from its turnaround efforts, Abbot said.
Berner looked ahead during Monday’s earnings call and described September as “showing softness” and overall revenue pacing being down slightly for third quarter. Two major initiatives are being undertaken, Berner says, that will see Cumulus replace its legacy traffic and billing systems at the station group and at WWO over the next 18 months. Additionally, she says the company is building out a “formal revenue management function to enhance pricing and yield management over time.”
Cumulus, which owns approximately 447 radio stations and operates in 90 U.S. media markets, is still expecting a late 2017 closing of its Bethesda, Md., property sale “with gross sales proceeds of $75 million,” Abbot said “barring any appeals of the final approval of the preliminary plan.” The property sale involves the former WMAL(AM) tower site.