There were some new faces but the same mixed results for Townsquare Media today as the company reported third quarter 2017 results.
The radio broadcaster with the multibusiness platform in October appointed Bill Wilson and Dhruv Prasad as new co-CEOs and both were on today’s conference call to discuss the Q3 financial results. Also present was former Townsquare CEO Steven Price, who is now executive chairman of the company.
Townsquare’s net revenue for the quarter that ended September 30, decreased by $1.6 million, or about 1.0%, to $164.1 million. That compares to $165.8 million the same period last year. The company’s local marketing solutions segment, which includes radio, delivered net revenue growth of 1.7%, but the company’s live events sector continues to drag on the bottom line.
“The highlight of Townsquare’s third quarter was, without a doubt, the strength of our local marketing solutions segment, which delivered net revenue growth of 1.7%, and 3.0% excluding political revenue,” Wilson said on today’s call. The drop in politically-oriented numbers reflects upon last year’s presidential election cycle in comparison to this year’s lower off-year numbers.
He added, “However, challenges in our smaller business segment, entertainment, offset these strong results, resulting in an overall decline to net revenue. Due to these challenges, we have begun a strategic review of our entertainment portfolio.”
Townsquare’s live event segment net revenue dipped $3.1 million, or 4.1% to $73.6 million in Q3 compared to a year earlier, the company reported. The company, which has embraced a diversified business approach to the broadcast business, owns side events like the Taste of Country Music Festival, America on Tap and The Insane Inflatable 5K. It also owns North American Midway Entertainment (NAME).
“Our 2017 entertainment results have been meaningfully impacted by the decline in revenue and profitability of The Insane Inflatable 5K, our touring fun run property, as well as the decline in our national digital business. Together, these two factors account for more than 100% of our decline in the entertainment segment,” Prasad said.
Prasad said while certain aspects of the entertainment segment may be reorganized, the company’s core segment, local marketing solutions, remains healthy. That includes the ramping up of Townsquare Ignite, the company’s programmatic digital advertising platform and Townsquare Interactive, its digital marketing business.
The company also announced today it closed on its purchase of six radio stations in Pittsfield, Mass., during the third quarter. The purchase price of the six radio stations and two translators from Gamma Broadcasting LLC and Berkshire Broadcasting Co. was not disclosed.
The senior leadership shakeup at Townsquare in October came with little explanation from the company. Industry speculation pointed to pressure for changes at the top from private equity investor and majority owner Oaktree Capital. Price and Prasad co-founded Townsquare in 2010. The company was formerly known as Regent Communications until it filed a prearranged plan for bankruptcy and emerged as Townsquare Media following a reorganization. Wilson joined the newly renamed company a bit later. In addition, Erik Hellum was appointed chief operating chairman of local media during the most recent management reshuffling.
Townsquare, which has 317 radio stations in 67 small- and mid-sized markets in the United States, reported $571.9 million in “outstanding indebtedness” at the end of September.
