Amid a sluggish radio advertising market, minority media company Urban One suffered a disappointing second quarter, although company executives say conditions are looking up for its radio and TV properties. The main reason for the optimism: sequential improvements, and positive trends in June.
At the company’s Radio One radio division, revenue was down 5% for the quarter compared to a year ago, with the biggest declines in its Cincinnati, Dallas, Houston, Philadelphia and Washington DC markets. Radio One said April revenue was down 12.9% and May was off 7.2%, although the stations rebounded in June to produce 2.3% growth. While Radio One outlets underperformed their Miller Kaplan market averages for the quarter, company executives noted that Radio One outlets outperformed those averages in June, signaling a positive trajectory.
“Second quarter was a tough quarter across the business, led by downward trends in the radio business and the Reach Media syndication business,” chairman Alfred Liggins noted on a conference call with investors. “The good news is it feels like radio is improving. It is sequentially improving.”
Overall, Urban One’s total revenue declined 4.1% for the quarter to $117.6 million, compared to $122.7 million for the same period in 2016. The company recently changed its corporate name from Radio One to Urban One to better reflect its portfolio of African-American-targeted TV, radio and digital assets.
For the quarter, the Reach Media radio network unit was also down 5%, hampered by lower ad rates and a weakened multicultural ad market, the company said. In one positive outcome, the “Tom Joyner Fantastic Voyage,” which took place in Q2, generated $9.4 million in revenue for Reach Media. TV One revenue was off 5.9% for the quarter and the company said ratings were soft. Urban One recently made an executive change at TV One, ousting president Brad Siegel and promoting network veteran Michelle Rice to the post of interim general manager.
Digital revenue was up 11.1%, compared to a year ago, thanks largely to three recently acquired national websites, Bossip, Madame Noir and HipHopNation.
Among radio advertisers, local advertising was down 7.8% in Q2, while national spot slipped 2.8% compared to a year ago. Retail, government, auto and services advertising were all up, while telecommunications, food, financial, entertainment, travel and health care were all down.
As Urban One looks to grow its revenue and improve value for shareholders, Liggins said he does not see any obvious acquisitions on the horizon, but added, “We’re open to creative ideas.” The company recently made some moves on the radio side, including selling news/talk WCHB Detroit (1200) to Crawford Broadcasting for $2 million and then buying a pair of stations from Red Zebra Broadcasting, WWXT in the Washington, DC metro (92.7) and WXGI Richmond (950), for that same amount.
Liggins said he believes there will be more consolidation in the radio industry and says that station swaps could be a good way for companies like his to improve their positions. Noting that Urban One is only brushing up against its FCC cap in the Raleigh and Richmond markets, Liggins said, “We could get bigger in almost every market we’re in.”
But with many radio station owners seeking top dollar for their assets, Liggins said he doesn’t expect a large wave of M&A activity, even if it is prudent, noting that consolidation could help station clusters boost market revenues and spread around expenses. “There should be consolidation, there should be some swapping. Our industry has a revenue trend that needs to be stabilized,” he said.