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Monday, November 11, 2019

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Radio Industry Forecast – 2020: Beasley On Digital, Political And The Next Game Changer.

Radio’s revenue trajectory in 2020 will largely be shaped by continued digital growth, along with a welcome influx of political dollars in a presidential election year expected to set new ad spending records. That’s the prognosis from Caroline Beasley, CEO of Beasley Media Group, who shared her outlook for the year ahead with Inside Radio for the first installment of “Radio Industry Forecast – 2020,” a special weeklong series featuring an elite group of industry execs discussing the revenue, digital and general business trends that will have the greatest impact on our business next year.

“Looking ahead, I expect to see the most ad growth next year in digital, which is up 31% in our markets and don’t see this changing or slowing down,” Beasley says. With national spending at her company up almost 7% in 2019, Beasley also expects 2020 to be a solid year for national business, helped by a major infusion of political dollars. According to Magna, a staggering $6 billion will be being spent on election advertising in 2020 and Beasley believes radio stands to pocket 6% of that or around $350 million. That could help offset declines anticipated in other categories, such as retail and automotive. “We see retail being flat to down as the sector continues to struggle with online,” Beasley says. Automotive, too, could be challenging due to declining sales. Beyond political, other categories that Beasley believes could provide some upside next year are financial services and telecom.

Of course, radio’s economic trends typically mirror those of the overall economy and there are some potential red flags on the 2020 horizon. “A weakening in macroeconomic indices, waning business confidence and rising geopolitical tensions could have an impact on all categories,” Beasley warns.

With local revenues having largely flattened out, Beasley says digital is of paramount importance in 2020 and beyond. “I see future industry growth coming from digital and other non-traditional efforts. As we look to the future, it’s really not an option,” she says. A major growth catalyst, she believes, lies in new hardware becoming a fixture on a growing number of kitchen counters, in living rooms and bedrooms. Smart speakers, along with growth in streaming and podcasting, “will play a big role in the continued growth of radio and audio,” Beasley predicts. “Not only have they helped increase listening to our content, but have also made audio top of mind again and something that all advertisers want to learn more about. All three provide new and creative ways for advertisers to reach consumers.”

Just over one in five Americans 18+ (21%) now own a smart speaker, or around 53 million people, according to the Spring 2019 edition of The Smart Audio Report from Edison Research and NPR. Broadcasters see the devices as a modern day equivalent of the clock radio and the latest data shows nearly four in ten owners (37%) use their device weekly to listen to AM/FM radio station streams. “They have become the new in-home radio in living rooms, kitchens and bedrooms,” Beasley says, noting that hers was one of the first radio companies in the U.S. to launch Alexa skills across the entire company.

The CEO, who oversees 65 stations in 15 large and mid-size markets, believes looming tech advances will make it easier to access podcasts and locate spoken word content via search. And that could help the podcast medium expand its reach with mainstream America. “It’s another way for us to garner a greater share of ear of our listeners,” she contends. And that could have a positive impact for radio, as long as it provides the content listeners are looking for. “It’s important for us as an industry to make sure that we offer great original content on the air so that on-demand content doesn’t have a negative impact on radio listening.”

As part of our weeklong “Radio Industry Forecast – 2020” series, we asked each participant what they believe the next digital game changer for radio will be. For Beasley it’s Radio Data Display (RDS) bolstered by advertiser logos. Beasley Media Group recently launched “ad sync” technology from Quu, Inc. across most of its stations. It allows broadcasters to offer advertisers “multi-sensory marketing solutions” on the radio via sound, such as jingle, voice, or sonic logo; and sight, including design, packaging, style and color. The result, says Beasley, is “commercial messaging being encoded in a more complex, deeper, longer-lasting fashion.” That means an advertiser can synchronize both a call-to-action text message and a 200x200 client logo with a radio commercial, “transforming the automobile radio into an ‘outdoor billboard’ and text message machine all rolled into one.”

For years radio has received a disproportionately low share of the advertising pie relative to its share of media usage. Beasley believes broadcasters can chip away at the deficit by speaking with one unified voice. “Companies need to collectively target specific accounts that are either non-radio users or have cut back on utilizing radio in their media mix to highlight the many exciting and unique capabilities our industry has to offer in 2020 and beyond,” she says.

More from Radio Industry Forecast – 2020 in Tuesday morning’s Inside Radio.

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Organic Growth Opportunities Have Entercom Feeling Optimistic.

The combination of 2% revenue growth and expanding profit margins drove Entercom’s earnings up 13% in the third quarter. Over the past 12 months, revenues ticked up 3% and earnings increased 18%. These numbers have CEO David Field feeling optimistic heading into 2020. “We feel good about our outlook for 2020, based on the strong set of organic growth opportunities we have across the business,” Field told analysts during the company’s third quarter earnings call last week. “We except to generate solid topline and bottom line growth in 2020.”

Among the upsides he identified for the company over the next 12 months are podcasting, streaming and other digital products; the unwired Entercom Audio Network; and revenue from events, sports gambling and the 2020 elections.

Thanks in part to a growing podcast business, digital experienced double-digit growth during the quarter. Network billings were also up by double digits. But local spot radio revenues have been soft and growth there now hinges on gaining share. Entercom grew its share of radio dollars by 2.2% in most of its largest markets, Field said, including New York, Los Angeles, Philadelphia, Dallas, Atlanta, Houston and Washington, DC. In total Entercom’s spot radio revenues, minus political, were up 1%.

Ad sales from both political and events were down and the company has begun trimming some events from its portfolio while adding a small number of new ones.

Best performing categories in the quarter were professional services, financial services, insurance, TV/cable, telecom, drug store/pharma and home improvement. Of its top 15 ad categories, 12 were up and two were down: automotive and concerts/movies. July and August were Entercom’s strongest months, with soft September sales.

Looking ahead to the fourth quarter, CFO Rich Schmaeling said they expect revenues to finish between -1% and +1% including $10 million-$12 million in podcasting revenue from its recent acquisitions. Factoring out political revenues, Entercom is on track to be up by 2% to 4%.

During the call, Schmaeling put some numbers against a September cyber-attack that took the company’s email system offline and wreaked havoc in some markets with other systems the company relies on to conduct business. Disruption from the cyber-attack cost the company $400,000 in lost revenue and compelled it to invest $2 million in IT improvements “as we rapidly fortify our defenses” Schmaeling said.

‘Great Deal Of Momentum’ In Podcast Business.

After Entercom spent last year digesting its platform-changing merger with CBS Radio, 2019 has been marked by a focus on growing its digital business. Most notably, that’s included a rapid expansion into podcasting, by not only leveraging assets it already had but also spending tens of millions of dollars to acquire outside companies. Entercom says its podcast business is already break-even and now expects it will be a profitable endeavor beginning next year.

“Even though it is early, we see a great deal of momentum across our podcast business. In fact, our total podcast downloads grew by 72% during the third quarter,” CEO David Field said Friday. That’s translating into revenue. Entercom expects between $10 and $12 million in podcast-related revenue during the fourth quarter.

The podcast push has come as Entercom has rebooted the Radio.com app, which had languished under previous CBS ownership, launched several owned podcasts like Campaign HQ and Long May They Run, and forged alliances with brands including HBO and Netflix. The result is monthly active users of the app grew 60% during the third quarter compared to a year ago. The results are promising, Field said. “Digital, including podcasting, now represents 12% of our total revenues,” he told analysts.

Entercom has so far spent nearly $50 million to acquire outside assets to grow its podcasting business. In July it closed on an $18 million deal to buy the podcast studio Pineapple Street Media. And then in October it closed on a deal to buy the 55% of Cadence13 it did not already own.

Entercom did not initially disclose what it paid for Cadence13 but it has now shared that information with investors. The company said it paid $38.3 million as part of the latest deal. That’s in addition to the $9.7 million it handed over for a 45% stake in 2017. Field said the transactions came with a price multiple of one-time the projected 2019 revenue for the companies, which he noted was “well below” what a number of other recent podcast transactions have involved. “The combined transactions establish Entercom as one of the three largest podcast enterprises in the U.S. with aproximately 150 million downloads per month of programming that we create or represent for ad sales,” he told analysts.

Forecasts the podcast market will exceed $1 billion in revenue by 2021 are giving Field confidence they have made the right decision by investing in podcasting. “The economics of the business are going to continue to improve, particularly for players like Entercom where we have a wealth of symbiotic advantages,” he said. “It is very much an extension of our core business.” Schmaeling also noted that among the top genres within the podcast space is sports, which fits nicely with Entercom’s portfolio of sports talk radio stations.

Like other radio group heads, Field believes podcasting will not only help deepen the company’s relationship with ad buyers but also help reinvigorate ad sales for AM/FM content. “At a time when there is so much disruption across all forms of advertising, the appeal of podcasting is absolutely getting some advertisers to pay attention to audio,” said Field.

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Broadcasters Applaud FCC’s Appeal Of Decision Blocking Media Rule Changes.

Federal appeals court rulings striking down media ownership rule revisions during the past decade have sent the Federal Communications Commission back to the drawing board. But this time, the FCC is pushing back—and broadcasters are happy to see it.

The Commission last week asked the full Third Circuit Court of Appeals to review the order released by a three-judge panel in September. The 2-1 decision struck down changes adopted by the Commission in November 2017 that, among other things, abolished the newspaper-broadcast and TV-radio cross-ownership bans and relaxed several television ownership restrictions, including allowing the same company to own two of the big network affiliates in a single market.

In its appeal, the FCC said the Third Circuit has overstepped its bounds in repeatedly striking down decisions made by the agency as part of its quadrennial review process, stepping on the authority given to the FCC by Congress. It also said the Third Circuit was ignoring a Supreme Court decision that said federal agencies don’t need to generate original data or studies before changing a policy. The FCC asked the full Third Circuit to take a “fresh look” at the case and restore the FCC to its “proper role” as the “overseer of media ownership regulation.”

Bill Wilson, CEO of Townsquare Media, is applauding the FCC’s request for a rehearing. He said the Third Circuit decision has resulted in a “significant and unnecessary” delay in the ability of the FCC to move forward with its latest quadrennial review. Many broadcasters, including Townsquare, are hoping to see the Commission approve further rollbacks in its media ownership limits as part of that pending review. Wilson says the advancement of that review process is crucial to the continued ability of radio broadcasters to compete with newer digital technologies.

“The competitive landscape has changed dramatically since the inception of the FCC's broadcast ownership rules,” he said. “For radio broadcast companies to remain competitive with the various digital advertising platforms and other newer technologies, it is essential that the regulatory playing field is more level and that the FCC's broadcast ownership rules are relaxed or repealed.”

Connoisseur Media is one of five companies that joined with the National Association of Broadcasters in asking the Third Circuit to review the decision. The company had been the leading advocate for one of the changes thrown out by the judges. The revision would have made it easier for companies like Connoisseur operating in embedded markets to grow their suburban radio portfolios. “This common-sense reform, which was not specifically opposed by anyone before the FCC or before the Court, was thrown out like the proverbial baby with the bathwater in the panel’s misguided decision,” the company said in a statement.

In its decision two years ago the FCC didn’t completely eliminate the embedded market rules. Instead, by a 3-2 vote the Commission decided to embrace a presumptive waiver approach for the time being. That means any company contemplating adding a station in an embedded market would need to secure a waiver to the FCC’s ownership limits. But that waiver process is also no longer allowed under the Third Circuit’s decision.

Connoisseur said Friday the judge’s approach to broadcast ownership regulation should be overturned, because if left in place, it would stop any further efforts of the FCC to bring its ownership rules in line with the modern media marketplace. “The FCC will be forced to try to meet the panel’s impossible standard of assessing the history of broadcast ownership regulation before it can make any of the much-needed changes in the current rules,” the company’s statement said. “The failure to review the panel’s decision will likely put on hold further changes in the radio ownership rules to allow radio owners to strengthen their businesses to survive the onslaught of unrestrained competition from digital media.”

If the full panel of Third Circuit judges refuses to take up the case, the FCC could then file an appeal with the Supreme Court. FCC Commissioner Michael O’Rielly said the agency should take that step, if necessary. “There is no amount of evidence or data we can give them,” he said in an interview with C-Span last month. “Multiple administrations, Republican and Democrat, have not been able to get past the threshold the Third Circuit has set.”

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Gratitude, Stories And Lots Of Laughs At Radio Hall Of Fame Ceremony.

The Radio Hall Of Fame honored its Class of 2019 Nov. 8 in New York with WFAN New York afternoon drive host Mike Francesa MC-ing the 31st Annual Induction Ceremony and prior inductee Jim Bohannon serving as announcer of the event. Following are some of the night’s highlights, according to a press release issued over the weekend.

Jim Rome, host of “The Jim Rome Show” on CBS Sports Radio, was first to receive his honor. Rome said his best work is ahead of him expressed “deep, deep gratitude…I’ve always had people around me who are better than me…who told me what I needed to hear, not what I wanted to hear,” Rome said.

Next up was Joe Madison, heard on SiriusXM Radio’s Urban View channel and formerly on WXYZ Detroit; WWRC and WOL Washington, DC. Madison thanked Sharon “Sherry” Madison, his wife and executive producer. He also told the crowd that when he dies, “I will ask God, is Sherry here [or will she be]? Because if she’s not, it certainly can’t be heaven.”

Adding some outside-the-industry star power to the proceedings, actor Christian Slater appeared via video, introducing Sean “Hollywood Hamilton,” host at iHeartMedia’s WKTU New York and the Premiere Networks-syndicated weekly “Weekend Top 30 Countdown.” Slater said: “This man was a huge influence on me…thank you for being a part of my life.” Hamilton proceeded to thank all the other inductees before saying, “I want to dedicate this to my love of my life, my incredible wife Marina.”

Inductee Harry Harrison, former morning man at New York’s WMCA, WABC and WCBS-FM, received a standing ovation when he said, “I always loved radio…to be a part of it [radio] is very exciting. I appreciate this.”

Kevin Ryder and Gene “Bean” Baxter shared sentimental remarks on the heels of Bean’s last day on air Nov. 7 as part of “Kevin and Bean” at Entercom’s KROQ-FM Los Angeles. “I’m here because Bean chose me as his partner…he would’ve been here [RHOF] with whoever his partner was and I’m happy it was me,” Ryder offered. Bean then said, “I could’ve been on the radio with anyone but there wouldn’t be magic. The universe brought us together. We were so darn lucky that happened.”

Connie Selleca introduced her husband John Tesh, host of “Intelligence for your Life,” syndicated by Compass Media Networks. She thanked all their radio partners and talked about being in a family business. Tesh said he was diagnosed with cancer in 2015 and credited being cancer free now to his “faith in divine healing.” He went on to express his gratitude for his family and for the honor of being in the Radio Hall of Fame.

Dr. Ruth Westheimer, former host of “The Dr. Ruth Show” on NBC Radio and “Sexually Speaking” on WYNY New York, called radio the best medium, “even better than TV.” And while she said “it’s nice to have become a celebrity…I see it as passing on correct information about human sexuality.”

Jimmy Fallon, host of “The Tonight Show," entertained attendees with his comedic and heartfelt introduction of his friend Ryan Seacrest, morning man on iHeartMedia’s KIIS-FM Los Angeles and host of Premiere-syndicated shows “On Air with Ryan Seacrest” and “American Top 40 with Ryan Seacrest.” After much laughter, Seacrest said, “We truly do it [radio] because it’s in our blood. We do it because it’s something we can’t live without…I never imagined this room, these legends, this career.”

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Broadcasters Continue To Get Slapped With Copyright Lawsuits For Website Photos.

Some radio stations apparently still haven't gotten the memo that if you use a copyrighted photo without permission, the law is coming for you. By name, that often means Long Island-based attorney Richard Liebowitz, who Inside Radio readers—and many radio groups—know quite well. In the latest trifecta of suits, Entercom, Cumulus and Cox Media Group are named.

The first two come courtesy of Liebowitz. The plaintiff is Denis Lambert, a professional photographer living in Le Mans, France. He photographed a particularly horrific race car accident, which was registered with the United States Copyright Office.

In December 2016, Liebowitz writes that his client discovered use of his photograph on the website of Entercom regional Mexican “La Grande 107.5” KMVK Dallas. “Lambert is the author of the Photograph and has at all times been the sole owner of all right, title and interest in and to the Photograph, including the copyright thereto,” say court papers obtained by Inside Radio.

In the second recently filed copycat Liebowitz complaint, Astoria-based plaintiff Matthew McDermott accuses Cumulus news/talk WABC New York (770) of utilizing the photog’s image of Craig Carton that originally appeared in the New York Post… and not offering a photo credit.

As usual, in both suits, the attorney demands “statutory damages up to $150,000 per work infringed,” as well as costs and attorney’s fees, and a jury trial.

The third lawsuit comes from attorneys Joshua Spector and Kenneth Norwick, representing law firms in Coral Gables, FL and New York City, respectively. Their client, NYC-based Justin Goldman, is going after Cox for the use of a photo he took of three men. While the image is shared in court documents, it is neither identified nor captioned.

His image was allegedly used on the websites of Cox’s “1073 Solo Exitos” WCFB-HD2 Orlando, which simulcasts on the Orlando licensed translator W297BB at 107.3; along with classic hits “1073 The Eagle” WXGL and alternative 97X WSUN in Tampa. Specific URLs are not shared in the documents.

“On July 2, 2016, plaintiff created the Photo and he is the owner of a duly-issued registered copyright in it,” the attorneys write. “Without plaintiff’s knowledge or consent, the Photo was uploaded that day to the Internet” by the Cox radio stations.

The lawyers are demanding a permanent injunction preventing Cox from “any further unauthorized use or display of the photo,” as well as statutory damages, costs and attorney fees, and a jury trial.

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Stitcher Revenue Grows 41% During Third Quarter.

Podcast and digital audio investments are paying off for the E. W. Scripps Co. which reported third quarter revenue on Friday. It said Stitcher revenue soared 41.4%, compared to a year ago, to $18.9 million. Through the first nine months of the year Scripps says Stitcher revenue is up 49%, totaling $34.3 million.

“We’re really pleased with the progress the market is making. The marketplace in digital audio is obviously growing quickly as consumer habits change,” CEO Adam Symson said on a conference call. “We expect podcasting to be a billion dollar marketplace in the next year or two.”

Scripps pointed to Conan O'Brien Needs A Friend and Getting Curious with Jonathan Van Ness for helping boost revenue. In a conference call, National Media Senior VP Laura Tomlin also noted the new Stitcher Original Office Ladies is already a top 10 show. It features real-life best friends Jenna Fischer and Angela Kinsey dissecting a television show one episode at a time.

“Office Ladies’ first episode has already had nearly two million downloads,” Tomlin said. “A new generation is watching classic TV shows such as ‘The Office,’ and they’re big podcast listeners too. This is another great example of why Scripps is investing in businesses that cater to changing consumer media habits.”

Scripps reported Triton Digital revenue totaled $10 million, a figure that the company said was down more than 10% compared to a year ago, when the streaming measurement and ad-insertion company was owned by Vector Capital. But Triton’s core business is growing according to Tomlin, who said the decrease was the result of a decision to spin off the Audience Management Platform (AMP) business to Frankly Media for $3 million. The deal included the AMP content management platform system that’s used by about 800 stations. “It gave the team the ability to focus on the two core revenue streams: infrastructure and measurement,” said Tomlin on the call with analysts.

Scripps has also shown it’s willing to spend to grow Triton’s business. It purchased the Australia-based podcast software company Omny Studio in June for $8.5 million. Omny has now been absorbed into Triton’s operations and its billings are not broken out separately. “We continue to benefit from the move of terrestrial radio companies onto digital platforms,” said Tomlin. “And now Triton is able to offer these companies an end-to-end podcasting solution as well. It’s a natural extension of our current services and Triton is now also powering Stitcher’s technology platform.”

Scripps’ growth into digital audio comes a year after it finished selling its 34 broadcast radio properties. Now it faces some familiar competitors as more radio companies expand into podcasting. Asked whether the company might be willing to take advantage of the high multiples being paid for podcast companies and part with its audio business, the company kept the door open.

“We’ve seen the same numbers you are, and that’s why we’re so bullish about the opportunity for Scripps in the space,” Symson told analysts. “We’ll continue to look at all opportunities as they present themselves in the digital audio space and take the marketplace’s development as it comes.”

Scripps reported overall revenue of $350 million during the third quarter, an increase of 16% from the prior year, driven mainly by its 60 television station group and its cable television networks, which include Bounce and the recently relaunched CourtTV.

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Veritone Says Podcast Q3 Ad Billings Grew 39%.

Veritone, the provider of artificial intelligence (AI) technology and solutions, says it just had its strongest-ever quarter for its advertising business. The combination of organic growth in the podcast marketplace and its August 2018 acquisition of the podcast agency Performance Bridge are now paying off. “Our podcast gross billings were up 39% year-over-year and now nearly equal our broadcast-based business,” said Veritone President Ryan Steelberg. “We are very confident that our investments in this vertical will pay significant dividends in 2020 and beyond,” he told analysts on a conference call. Veritone says it now believes it is the largest U.S. podcast advertising agency.

Veritone reported overall revenue growth of 70% to a record $12.8 million during the third quarter. “Our advertising business continued to deliver outstanding growth, with net revenues in the third quarter reaching a record $6.3 million,” said CEO Chad Steelberg. “Within advertising, our highest growth was in podcasting and YouTube, where our gross billings increased more than 47% on a year-over-year basis.” He said ad sales in podcasts and YouTube accounted for 56% of the company ad-related billings during the quarter.

Looking ahead, Ryan Steelberg said, based on conversations he had at the IAB Podcast Upfront last month, he’s optimistic about the year ahead. “Our initial upfront bookings for 2020 were very strong, leading us to expect additional growth in this business,” he said. “We believe we will again post double digit year-over-year growth in our advertising business in 2020.”

Veritone’s aiWARE ingests and indexes audio and video, which can then be analyzed by podcasters, broadcasters and advertisers looking to measure interactions and exposures. It allows users to target ads programmatically based on the content of an individual podcast episode or video clip. The platform is already utilized by the likes of Art 19, Beasley, Bonneville, Cumulus, Entercom, iHeartMedia, Townsquare and Univision, among others.

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FCC Okays Long Island AM Sale, But There’s A Five-Grand Catch.

It will take some subtraction from the bank account before Universal Broadcasting will be able to remove a Long Island AM from its portfolio. The Federal Communications Commission says Universal will need to pay what amounts to a $5,000 fine for operating without a license before it will clear the pending sale of WTHE, Mineola, NY (1520) to Cantico Nueveo Ministry.

The headache for Universal dates to January 2018, when it lost the transmitter site for WTHE. The Media Bureau granted the station permission to go silent for six months while it worked to find a new site with a warning that it could lose its license if the AM wasn’t back on the air by Jan. 26, 2019. But things got complicated last January when a shutdown of the federal government prevented Universal from securing FCC permission to return to the airwaves using a long-wire antenna to preserve its license. When the FCC reopened in late-January with the rest of the government, the Media Bureau approved the temporary setup. But the station’s license had technically expired. And just days later, WTHE went silent once again as Universal looked for a permanent transmitter site.

Then in March, the FCC received a complaint filed by WIN Radio Broadcasting that called into question just how long WTHE was on the air in January. It also suggested issues of “equity and fairness” were at stake since WTHE’s license would have expired.

In its defense, Universal argued the situation was beyond its control and it wasn’t able to secure the necessary approval from the FCC during the government shutdown. It also alleged that WIN interfered with the effort to get WTHE back on the air by entering into an exclusive lease of the station’s transmitter location with a new owner of the site starting August 15, 2019. WIN called that irrelevant, and said Universal lacked the required transmission equipment at the site with which to resume licensed operations.

In a ruling issued Thursday, the Media Bureau agreed with WIN and concluded that using unauthorized facilities isn’t enough to save a station’s license from automatic expiration. It said Universal’s decision to power WTHE back up last January with a “self-declared ‘emergency’ antenna” came despite any actual emergency as defined in agency rules.

But despite that slap and rather than cancelling the station license, the FCC said the 23-day government shutdown presented an extenuating circumstance. Bureau Chief Michelle Carey also said Universal faced a challenge in securing an appropriate site for the AM station operation in a densely-populated area like Long Island. She added that WIN’s lease of WTHE’s licensed transmitter site was also a “complicating factor” beyond Universal’s control. Based on what Carey said was a combination of “unique factors,” the Bureau concluded it was appropriate to reinstate WTHE’s license. But because Universal violated FCC rules, Carey said the FCC has determined the company should pay a fine.

Once that $5,000 penalty is paid by Universal, the FCC said it will approve the pending $200,000 sale of WTHE to Cantico Nueveo Ministry. The religious broadcaster already owns Spanish contemporary Christian “Radio Cantico Nuevo” stations WNYG (1440) and WLIM (1580) as well as two FM translators in the Long Island market. It also operates WNYH (740) under a time brokerage agreement with Win Radio Broadcasting.

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Entercom Stock Jumps 17% Following Q3 Earnings Report.

Updated

Entercom’s stock rallied in Friday trading after the company narrowly beat Wall Street estimates in its third quarter earnings report. Shares of “ETM” jumped 17% to close at $4.32 on the news that the company’s earnings increased 13% to $98.0 million, up from $86.7 million in the prior year period. Q3 revenues rose 2.0% to $386.1 million, up from $378.5 million in the same period one year ago. Revenues grew just under 3% excluding the impact of political advertising.

In a press release ahead of the company’s earnings call, Chairman, President and CEO David Field said billings from the company’s digital, network and national businesses were the primary growth drivers.

Station operating expense fell 2% to $272 million while operating income increased 1% to $79.5 million.

On a per-share basis, Entercom had a profit of 32 cents, up 26% from 26 cents for the same quarter last year.

Entercom ended the quarter with $1.725 billion in total debt and $45 million of cash on hand.

“I am pleased to report that Entercom delivered strong organic growth in the third quarter with Adjusted EBITDA up 13% and Adjusted Net Income Per Share up 23%,” Field said. “Revenues increased 2% (just under 3% ex-political) driven by digital, national and network. In October, we announced the launch of DVRlike functionality for live radio on our Radio.com app, becoming the first company to offer that important product feature. This new feature and our recent acquisitions of podcasters Cadence13 and Pineapple Street Studios highlight the multiple ways we are working to enhance our product line and grow our relationships with our listeners and customers.”

Look for more color and commentary from Entercom’s third quarter 2019 financial results in Monday morning’s Inside Radio.

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Coming Next Week: Radio Industry Forecast – 2020.

Updated

You don’t have to pay $2,000 to hear predictions for 2020. Starting Monday, Inside Radio will publish Radio Industry Forecast – 2020, featuring a full week of forecasting the year ahead from top industry leaders. Each day, we’ll bring you a fresh outlook from an elite group of industry execs on the revenue, digital and general business trends that will have the greatest impact on our business in 2020.

This high profile series will delve into the biggest growth drivers for radio/audio, how the deal market may pan out and what the industry can do in 2020 to get a larger share of ad dollars. Our panel of industry leaders will also size up the political ad market for radio, discuss how podcasts, smart speakers and streaming audio fit into the growth of radio, and offer their predictions for radio’s next digital game changer.

Get the straight scoop from top thought leaders in Radio Industry Forecast – 2020, starting Monday morning in Inside Radio.

Story

Coming Next Week: Radio Industry Forecast – 2020.

Updated

You don’t have to pay $2,000 to hear predictions for 2020. Starting Monday, Inside Radio will publish Radio Industry Forecast – 2020, featuring a full week of forecasting the year ahead from top industry leaders. Each day, we’ll bring you a fresh outlook from an elite group of industry execs on the revenue, digital and general business trends that will have the greatest impact on our business in 2020.

This high profile series will delve into the biggest growth drivers for radio/audio, how the deal market may pan out and what the industry can do in 2020 to get a larger share of ad dollars. Our panel of industry leaders will also size up the political ad market for radio, discuss how podcasts, smart speakers and streaming audio fit into the growth of radio, and offer their predictions for radio’s next digital game changer.

Get the straight scoop from top thought leaders in Radio Industry Forecast – 2020, starting Monday morning in Inside Radio.

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Deal Digest

Deal Digest – November 7, 2019

Updated

SALES – STATIONS

Fayetteville, AR – Horne Broadcasting files a $3,425,000 deal to buy five stations in market No. 119 from Bunyard Broadcasting. The stations include country “96.7 The Coyote” KCYT, classic hits “Star 101.5” KFMD-FM, adult standards “Lite 106.5” KBVA, sports “ESPN Radio’ simulcast of KAKS (99.5) and KUOA (1290). The deal also includes the Johnson, AR-licensed translator K237GR at 95.3 FM that simulcasts KAKS/KUOA.

Indiana – James Schliemann’s Iron Horse Broadcasting files a $780,000 deal to buy “Hoosier Country 103.7” WHZR, classic hits “102.3 The River” WLHM, adult standards WSAL (1230) in Logansport, IN from David Keister’s Mid-America Radio Group.

Michigan – Bud Walters’ The Cromwell Group files a $450,000 deal to buy country “Q-95” WQTE and “News Talk 1490” WABJ in Adrian, MI from Bob Eliot’s Friends Communications. The stations will become the first in Michigan for The Cromwell Group. Broker: Larry Patrick

Vermont – The not-for-profit Music Guild International files a $275,000 deal to buy classic hits “101 The One” WEXT, Brandon, VT (101.5” from Ken Squier’s Radio Vermont Group. Music Guild International will operate the station under a local marketing agreement until closing. Squier has a pending deal to sell his four other Vermont stations to director of sales Steve Cormier.

Bakersfield, CA – American General Media expands its cluster in market No. 79 with a $262,500 deal to buy KKCA from Colt Comm Partnership. KKCA is a construction permit for a Class A station at 95.7 FM. American General Media already owns six stations in the market including AC “Mix 101.5” KGFM, rhythmic CHR “Hot 94.1” KISV, CHR “Hits 93.1” KKXX-FM, regional Mexican “96.9 La Caliente” KEBT, “News Talk 1180” KERN, and sports KGEO (1230). Broker: Fowler Media Consulting

Tennessee – Hopkins Farms Broadcasting files a $265,000 deal to buy country “1580 The Leader” WLIJ and talk “Zinger 1400” WZNG in Shelbyville, TN from Jax Broadcasting. The deal includes the Shelbyville, TN-licensed translator W254DW at 98.7 FM that simulcasts WLIJ, and the Shelbyville, TN-licensed translator W265EE at 100.9 FM that simulcasts WZNG. The sale follows the Aug. 2018 death of Rusty Reed, who had owned Jax Broadcasting.

Mississippi – Gregory Adams’ Epic Communications files a $250,000 deal to buy “Live 97.7” WTJY and blues/gospel WMIS (1240) in Natchez, MS from Diana Nutter’s Natchez Broadcasting.

Dallas – Radio Punjab Dallas files a $225,000 deal to buy the currently-silent KTXV (890) from James Su. Radio Punjab Dallas is a Washington-based company headed by Sukhdev Dhillon. The 20,000-watt daytime-only AM went silent in October due to a copper theft. After the sale Su will still own stations in the Atlanta; Portland, OR; Riverside-San Bernardino; Salt Lake City; Las Vegas and Honolulu markets. Broker: Kalil

Louisiana – Brenda Floyd and James Allwood’s Misslou Media files a $200,000 deal to buy classic hits “107.1 The River” KFNV-FM, Ferriday, LA and classic country “104.7 The Gator” KWTG, Vidalia, LA from Tom Gay’s Riverside Radio Group of Louisiana. Gay previously sold his other radio properties in the region and following the closing of this sale he will have no other broadcast interests. Misslou doesn’t own any other stations. Broker: Bill Whitley, Media Services Group

Orlando – Salem Media Group continues to scale back the size of its cluster in market No. 30. It has struck a deal to sell business news “1520 The Biz” WBZW to Sam Rogatinsky for $185,000. The deal also includes the Apopka, FL-licensed translator W264DU at 100.7 FM. Rogatinsky already owns the currently-silent WTPA (1590) in the Tampa market and ethnic WPBR (1340) in the West Palm Beach, FL market. Once the sale closes Salem will still own religious “990 The Word” WTLN and talk “950 The Answer” WORL in Orlando market. Earlier this year it sold what is now talk “Florida Man Radio” WDYZ (660) and the Oviedo, FL-licensed translator W288CJ at 105.5 FM to JVC Media for $900,000. Broker: Eddie Esserman

Bend, OR – David Harms and Brent Hample’s H&H Broadcasting files a $170,000 deal to buy alternative KURT (93.7) from Rubin Broadcasting. H&H Broadcasting will operate the station under a local marketing agreement until closing. It doesn’t own any other stations. Broker: MCH Enterprises

Laurel-Hattiesburg, MS – Lee Airwaves files a $12,000 deal to buy news-talk “The Legend” WHSY (950) from C.W.H. Broadcasting. The deal also includes the Hattiesburg, MS-licensed translator W290DQ at 105.9 FM. In addition to the purchase price, the contract says Lee Airwaves will pay all the outstanding FCC regulatory fees, property taxes, and other outstanding debts against WHSY. Lee Airwaves will operate WHSY under a local marketing agreement until closing. Timothy Lee already owns talk/classic hits “Cool 104.9” WCJU-FM, country “Nash Icon 98.3” WJDR and talk WCJU (1450) just outside the Laurel-Hattiesburg market.

Tennessee – George Hudson files a $2,500 deal to buy the currently-silent WBIN, Benton, TN from Pioneer Health and Missions. Hudson already owns oldies “Homegrown 1220” WCPH and gospel WENR (1090) in the area.

CLOSINGS

Illinois & Indiana – The University of Northwestern-St. Paul closes a $4,101,558 deal to buy 13 contemporary Christian stations in Illinois and Indiana from fellow religious broadcaster Illinois Bible Institute. The portfolio includes FMs that cover parts of the Chicago, St. Louis, Peoria, and Terre Haute markets. The Illinois stations include WBGL, Champaign, IL (91.7); WBMV, Mt. Vernon IL (89.7); WCBW, East St. Louis, IL (89.7); WCFL, Morris, IL (104.7); WCIC, Peoria, IL (91.5); WIBI, Carlinville, IL (91.1); WIMB, Murphysboro, IL (89.1); WNLD, Decatur, IL (88.1); WPRC, Sheffield, IL (88.7); WSCT, Springfield, IL (90.5); WVNL, Vandalia, IL (91.7); and WZGL, Charleston, IL (88.1). And in Indiana, the University buys WCRT, Terre Haute, IN (88.5). The sale also includes a portfolio of seven FM translators. Broker: Greg Guy, Patrick Communications

Dallas – Linda Hammond’s Farmersville Investments closes a $2 million deal to buy Spanish religious KFCD (990) from Vikram Shah Broadcasting. The deal also includes the McKinney, TX-licensed translator K260CX at 99.9 FM.

Pennsylvania – Seven Mountains Media closes a $1.1 million deal to buy hot AC WSBG (93.5) and sports “ESPN 840” WVPO in Stroudsburg, PA from Connoisseur Media. The deal also includes the Stroudsburg, PA-licensed translator W276DG at 103.1 FM. Seven Mountains Media owns a number of other stations in Pennsylvania but none overlap with the latest additions. Connoisseur Media previously spun its stations in the nearby Allentown-Bethlehem, PA market to Cumulus Media as part of a cash-free swap.

Toledo, OH – Taylor University Broadcasting closes a $500,000 deal to buy religious WTPG (88.9) from Penfold Communications. Taylor University Broadcasting already owns contemporary Christian WBCJ (88.1) in the Lima, OH market and the Findlay, OH-licensed translator W258CE at 99.5 FM.

Wisconsin – Marcus Jeager’s Heart of Wisconsin Media closes a $350,000 deal to buy “Wisconsin 106” WCWI from Casper Communications. Under the terms of the deal, if WCWI has gross sales of more than $220,000 in any fiscal year between Nov. 1, 2019 and Oct. 31, 2022, Casper will be paid an addition $5,000 per year. If sales hit $245,000 the bonus will total $7,500 per year. And if sales top $270,000 the bonus will increase by $5,000 for each $10,000 achieved.

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