Multimedia company Urban One Inc. said Tuesday that its fourth quarter 2017 overall net revenue was down 4.0% compared to the same period in 2016. Net revenue decreased to approximately $109.0 million for the quarter ending Dec. 31, 2017.
The numbers from the company’s radio segment show core radio revenues were up slightly in Q4 2017 if you exclude the impact of political revenues. It recorded just over $51 million in radio advertising in the quarter. But when you include political advertising in the mix, the radio group was down 7.5% year over year in the last quarter of 2017.
The sluggish end to the year was most notable at its radio clusters in Charlotte, Cincinnati, Detroit, Indianapolis and St. Louis. The shining stars, according to the company’s fourth quarter report, were the Houston and Richmond markets, which experienced net revenue growth, according to the company’s fourth quarter report.
Urban One, formerly known as Radio One, breaks quarterly revenue down into multiple segments including radio, digital, cable television and events. The company made about $19.3 million in interest payments toward its debt in the final quarter of 2017. The broadcaster’s “net debt” measures about $947 million, according to its CFO Peter Thompson, but that’s down from approximately $965.8 million about a year ago. Urban One CEO Alfred Liggins today said today the broadcaster will continue to “work to aggressively try and deleverage its debt” in 2018.
The broadcaster recorded a benefit from income taxes of approximately $117.2 million in Q4 2017, according to its financial filing today, primarily attributable to the reduction of the deferred tax liability due to the federal tax rate change from 35% to 21%.
Thompson described radio operating expenses as on the upswing for the quarter “up some 0.8% mainly due to the GMR music licensing fees and tower lease back” expenses. GMR, Global Music Rights, is an upstart performance royalty organization aggressively pursuing higher music licensing fees from broadcasters.
Urban One a year ago completed the sale of 14 FM radio towers to American Tower Corp. for approximately $25 million. In turn the radio broadcaster has entered lease agreements with ATC, according to the company’s financial statements.
Liggins also described a rough start to 2018 for Urban One, describing January as “an awful month.” He noted the poor start on today’s earnings conference call and specifically mentioned McDonald’s restaurants, which recently changed advertising agencies, as one of the reasons. “They switched agencies and advertising strategies and as a result there was a significant cut in the local radio budget and that hit us particularly hard because they are a big urban advertiser.”
Urban One owns and operates 57 radio stations in 15 markets and considers itself the largest distributor of urban content in the United States.
