Radio Industry Unsure About Future, Say CEOs
The radio industry doesn’t know what to expect going forward, said Hubbard Radio CEO Ginny Morris and Connoisseur Media CEO Jeff Warshaw during the virtual Pillsbury Broadcast Finance panel Wednesday for the Radio Show. “We don’t think we have much visibility” into the industry outlook for the rest of this year and afterward, said Warshaw. “We don’t expect '21 to be a year like '19,” he said. “We don’t know what a norm is.”
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Warshaw said his company is no longer tying employee bonuses to company performance because of COVID-19 uncertainty -- he doesn’t want employees’ compensation to be based on something they have so little control over.
The pandemic has been "a devastating event for everybody," said Morris. Warshaw said Connoisseur was down "north of 80%" during the first month of the COVID-19 pandemic. "It's a long way to come back." The largest markets and those most dependent on national business were hit the hardest, Warshaw said. Companies with more of an investment in digital and in smaller markets appear to have done better, he said. How each radio group fares in 2021 and 2022 will be an indicator of how well they handled the pandemic, Morris said.
Morris and Warshaw agreed with the comments of radio CEOs made Monday (see 2010050059) that listenership for their stations was approaching pre-pandemic levels. “I’m thankful to see listening levels returning,” said Morris. She said that four days into this week, Hubbard has billed advertisers for the same amount of money as it did for the same full week in 2019.Radio ad revenue was still down 30% as of a few weeks ago, said Pillsbury broadcast attorney Scott Flick during the panel discussion.
The pandemic caused radio companies to focus on digital offerings and diversification, the CEOs said. Morris said the industry was already moving into those areas, but the downturn “accelerated some trends for sure.” The radio industry made some changes that are likely to be beneficial, but radio groups “shouldn’t be overly optimistic that there won’t be some negative impacts,” Warshaw said. Listeners may not return to commuting as they once did, he noted.
Morris and Warshaw said they had higher hopes than usual about an eventual loosening of radio ownership rules, but they also said deal flow is likely to be extremely low during the pandemic. “Nobody is thinking about acquisitions right now,” Warshaw said. “I’m not thinking, ‘Gee, I wish I had five times as many radio stations to run.'” No financing is available for such deals, Warshaw said. No one's “knocking on our door” looking to deal for stations, Morris said.
Their hopes for an eventual relaxation of the ownership rules are pegged to the U.S. Supreme Court's recent grant of cert for the FCC’s Prometheus IV appeal. “I think that with the Supreme Court looking at ownership issues, there is more hope than there has been in quite awhile,” Morris typed in a chat window during the panel. “Not sure I’d bet on it but ... I think there is hope,” he wrote. “I am hopeful,” messaged Warshaw. “Long term it is needed.”
Warshaw and Morris agreed that, pandemic aside, the radio industry will see a growing separation between companies that focus on local and those geared to a national footprint.