U.S. commercial radio revenue will fall 7% this year, according to the latest estimate this week from BIA Financial Network.
The decline (or what BIA calls “negative growth”) will be more dramatic than last year’s falloff. The estimate comes from the company’s latest “Investing in Radio Market Report.”
“BIA estimates radio station revenues will hit $16.7 billion in 2008, the lowest in more than five years and the beginning of a downward spiral that will go as low as $15 billion next year before possibly rebounding in the next decade,” it reported.
“Revenue percentages will fall another 10 percent in 2009 yet will have a chance for positive growth by 2010.”
BIA also said that 641 stations have been sold in transactions valued at $698 million this year; that’s a drop of 34% from the same period in 2007 in number of stations sold and of 44 % in value. The research company predicts the lowest level of activity since 1992.
The company’s Mark Fratrik stated, “The already low forecasts for growth in radio coupled with a generally dismal economic climate have also placed a particular strain on the valuations radio stations need to maintain their financing or to be sold. The waters are very rough right now but the general profitability of radio keeps us optimistic that the industry will weather the storm providing it strategically invests in its online presence, which will prove to be its rescue as ad budgets continue to shift to more measurable online media.”
He said sellers and buyers are taking a “wait and see” perspective on station sales.