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Monday, Jun 5, 2023

Radio Sales in Decline, With Little Relief in Sight

San Diego County’s radio stations will finish 2008 with a 10.5 percent drop in revenue, according to an estimate from BIA Advisory Services. That’s worse than the projected 7 percent revenue decline for the radio industry nationwide.

Felicia Hansen, owner of Hansen Marketing & Media, thinks San Diego fell below the national average because presidential campaign advertising dollars that were expected to pump more revenue in California’s media outlets, including radio, went elsewhere.

“I feel that the decline was bigger here because California was already in Barack Obama’s corner,” she said.

Meanwhile, she says stations are showing “a lot of flexibility” for clients buying spots for long-term campaigns in the fourth quarter of this year and the first quarter of next year.

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“I wouldn’t say there are deals, but there’s a lot of give and take,” she added.

BIA Advisory Services, a subsidiary of BIA Financial Network of Chantilly, Va., released its report Dec. 2.

For the county’s 28 FM and 17 AM stations, it predicted that revenue would dip from $198 million in 2007 to $179 million this year.

Individual stations do not report revenue, and the public companies that own radio stations do not break out earnings station by station.

“On the one hand, Craigslist.com has pretty much ruined it for everybody,” said Dean Nelson, director of the journalism program at Point Loma Nazarene University, referring to the online advertising site that lists classified ads for free.

“That’s how business cycles work,” he said. “Everyone has to adjust. People have been writing radio’s obituary for 60 years. People said radio was done as soon as TV started, but it ended up having to shift. Radio has always been resilient and it will be resilient again.”

BIA is somewhat optimistic.

The company projected that industry revenue nationwide will be $16 billion by the end of 2008. That’s “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,” the report stated.

Bland Forecast

BIA estimated that San Diego County’s 45 stations will see revenue of $160 million in 2009 and sales would rebound slightly to $162 million in 2010 and increase again to $166 million in 2011 and again to $171 million in 2012.

But the 2012 estimate is lower than the estimate of $178 million for 2002. In 2003, radio revenue for the county rose to $188 million, then to $204 million in 2004. It dropped to $202 million in 2005 and then increased to $203 million in 2006, according to BIA.

Nelson said he thinks that some radio stations will be sold or shut down. “Some will go away just like some newspapers go away,” he said.

But Mark Fratrik, vice president of BIA Advisory Services, expects that they will have a difficult time getting a good price if they put themselves on the block.

“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,” Fratrik said.


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