radios recession started long time ago

Radio's "Recession" Started A Long Time Ago

The Fed further cut interest rates by three quarters of a point in an

emergency move that is designed to help the U.S. economy avoid a deep,

dark recession.

The market lost 465 points before greed saved the day and buyers took

advantage of lower stock prices and bought back in.

The housing market is one of the major problems and the subprime

mortgage mess goes along with it.

As the vaudevillian comedian "The Old Philosopher" used to say, "is

that what's bothering you, bunky?"

The radio industry actually started its "recession" early.

After spending record amounts of their investors' money to put

together groups of radio stations -- allowed for the first time by

their friends in Congress -- it wasn't too long ago that stock prices

of radio issues began their eventual steep decline.

A friend put together this list of key radio companies before

yesterday's roller coaster ride on the Dow. Look how well they have

built shareholder value for their investors.

Spanish Broadcasting

High 42.00 -- Recently 1.54 -- Loss of 96.33% (1.50 yesterday)

Emmis

High 62.34 -- Recently -- 2.47 -- Loss of 96.04% (2.62 yesterday)

Radio One

High 31.33 -- Recently 1.77 -- Loss of 94.35% (1.68 yesterday)

Citadel Broadcasting

High 22.79 -- Recently 1.69 -- Loss of 92.58% (1.52 yesterday)

Regent

High 14.19 -- Recently 1.49 -- Loss of 89.50% (1.32 yesterday)

Salem

High 33.65 -- Recently 4.63 -- Loss of 86.24% (3.93 yesterday)

Entercom

High 67.75 -- Recently 11.00 -- Loss of 83.76% (11.00 yesterday)

Cumulus (Private buyout in progress)

High 22.70 -- Recently 5.90 -- Loss of 74.01% (5.43 yesterday)

Saga

High 23.44 -- Recently 5.90 -- Loss of 74.83% (5.97 yesterday)

Beasley

High 19.34 -- Recently 5.05 -- Loss of 73.89% (4.48 yesterday)

Cox Radio

High 34.67 -- Recently 11.10 -- Loss of 67.98% (10.89 yesterday)

Entravision

High 20.31 -- Recently 7.27 -- Loss of 64.20% (6.03 yesterday)

Clear Channel (Private Buyout in Progress)

High 91.50 -- Recently 34.42 -- Loss of 62.38% (32.14 yesterday)

CBS

High 35.50 -- Recently 24.00 -- Loss of 32.39% (22.28 yesterday)

(New issue missing most of the loss).

I am using the term "recession" loosely here to describe the receding

radio stock prices, however the real recession -- the one we're

sinking into deeper and deeper every day -- isn't going to do much to

improve the sorry performance of radio's consolidators. Their stations

are directly affected by the local economies. Now, it is no longer

just Emmis that must deal with softening in their major markets such

as New York and LA. Now it's Main Street USA.

I can just hear all those Apple haters out there. Apple's profit rose

a whopping 58% in the first quarter compared to last year but its

forecast going forward wasn't enough for analysts to stop running

scared -- the stock price fell to $155.64 (off 3.4%). Imagine if Apple

can't beat this market, how can Citadel?

It's getting ugly out there.

The usual way public companies deal with recessions is to layoff,

cutback, slice and dice. Hey, radio has been leading the way on this,

too. The radio industry still can't see the connection between reduced

expenses and reduced earnings.

What bothers me is that radio industry professionals know what to do

to make their situation improve. Even a few of the consolidators get

it. What they can't do is ignore Wall Street. After all, they owe Wall

Street investment banks for everything and when I say owe I mean owe.

The Street is in no mood for radio to spend money to make money.

One of two things is going to happen.

Either someone in a leadership role decides to make some hard and

tough decisions to grow terrestrial radio (to the extent it can

without the next generation listening) and get into the Internet and

mobile content business beyond simply doing websites and outsourcing

text messaging tie-ins with radio formats.

Or?

Radio companies will continue to become devalued with the sale of

assets and more economies of scale.

In that case, it will be a long farewell.

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