Can Citadel Broadcasting survive?

[marklaurence@mac.com]

On Saturday, March 01, 2008, at 01:11PM, <kvahey@comcast.net> wrote:

>What is worse is PPM's now confirm what everybody knew anyways that
>people tune out as soon as a commercial comes on. This is not new as
>people in cars have been pushing buttons for decades but now there is
>proof which will scare off advertisers.

I don't believe this is actually true.  If you look at the actual PPM breakouts,
radio is proving to be quite good at holding listeners through even 
lengthy commercial breaks. 

Another piece of conventional wisdom is that radio is losing audience to
iPods, satellites, and other new media.  It's not as much as you'd think: 
Total 12+ Boston market cume in the Fall 2007 book was up from the 
cume of 2002.  Average quarter hours of listening were down, yes, but
only 9% over a 5 year period, which is nothing compared to newspapers, 
local TV news, or prime time TV.

>The major radio groups have enormous debt service to cover and this is
>what is killing Citadel right now.

This is the biggest problem in radio and a lot of other media.  It's like
the subprime mortgage crisis on steroids.  In the past 10 years, mega-
corporations have been buying small businesses with huge loans.  
Just as you can't continue to pay your household bills with credit, 
these businesses cannot continue to pay the huge interest payments
with what used to be the business profits.

>Print is even worse off as the cost of pulp and distribution continues
>to rise. Classifieds are pretty much extinct now and that was where
>the profits were.

Actually, I think the bigger problem for print is also consolidation 
financed by debt.  Twenty years ago many newspapers were family-
owned and largely debt-free.  Then they were bought out, by Gannett,
Media General, McClatchy, etc., financed by huge loans at high
interest rates.  And because all this borrowed money was floating 
around, the prices and the interest payments have kept soaring.

Until recently, that is.  Doesn't this all sound just like the housing 
mortgage foreclosure story?

Mark