It’s been a year since Cumulus Media acquired Cumulus Media Partners and Citadel Broadcasting, and Cumulus’ third quarter financial results still reflect the full impact of those decisions.
Cumulus Chairman/CEO Lew Dickey says the integration is largely complete. The merged company is making progress in turning around 10 underperforming stations that “account for 100% of our revenue decline.” He expects those facilities to post positive revenue growth in 2013.
Cumulus reports pro forma third quarter net revenue fell 4.5% during the quarter, to $276 million, compared to $289 million for the same period a year ago.
Dickey says the company is disappointed with the amount of political advertising it received but believes other radio groups are, too. “In a robust political year a hoped-for mid-teens to 20% gain in the third quarter turned into a decline. I think a general softness in the economy caused that and it’s impacted everybody.”
Cumulus reported some $4.3 million in political ad revenue in the quarter, compared to $5 million in political advertising for the same quarter in 2010.
When asked by a Wall Street analyst whether radio did or did not sell itself aggressively during this political cycle, Dickey said there was more experimentation this time with social media than there was in 2008 or 2010. “A lot of money was raised in this cycle. We assumed radio would maintain its share, but in reality radio’s share of political dropped.”
Television had an “excellent windfall” from political advertising, he said.
In general, radio can do a better job of selling itself, according to Dickey, saying radio can help a candidate respond to a virtual attack within a couple of hours.
“Radio is a formidable weapon for campaigns to use. I don’t think they’ve used it properly” in this cycle. “Perhaps we can change that in the next cycle,” he said.
Overall, Wells Fargo analyst Marci Ryvicker estimates radio will pull in $270 million from political ads, some 5.2% of the overall spend.