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Liggins Shocked by Poor Q4 Performance


You could hear the frustration in his voice as Radio One CEO Alfred Liggins reported the poor numbers on his quarterly conference call yesterday. "We had an awful 4th quarter. We dropped millions of dollars in cash flow off our radio division and 60% of it came in Q4. It was shocking to me." Radio One reported radio revenue dropped 9.4% in Q4 with Baltimore, Columbus, Dallas, Houston, Philadelphia and Washington D.C taking the biggest hits. D.C. dropped nearly 17%. Liggins blames the poor performance in his radio division on tough political comps, several major accounts like Kodak and Comcast that spent money in 2010 but not in 2011 and several format changes.

Liggins commented "it was a very tough quarter and it was due to the radio division." Radio One implemented several format changes because, according to Liggins, the company had our strategy had outgrown the industry. His point was that Radio One had too many formats aimed at the African American community which wasn't working in a PPM world. So the company changed formats in several markets, including turning one FM into an all news station in Houston which they are spending heavily on to promote. Liggins said "We got our game together and changed things. The negative impact of PPM has cycled through. We can take PPM off the table as a reason for non-performance."

Liggins also said, I've been a bear on the radio industry. I've been saying it's going to be flat to slightly up over the next five years and I'm being proven right." At the same time, Liggins sounded very excited about his other two businesses, TV One and the Internet. "We're in a good space with these two businesses." Liggins expects ad dollars to shift from broadcast TV to cable TV and also expects the shift to digital to continue.

Liggins also doesn't believe radio experiencing much new digital revenue, indicating its more of a shuffle from one pocket to another. "If there was new money, you'd see top line growth. I don't think radio is getting into the ad shift yet. Most digital ad shifting is occurring nationally, which is why bigger markets are getting hurt. Advertisers are shifting funds from radio to digital."

And on one other topic, HD, Liggins said, "we don't spend any money programming our HD channels."

(3/16/2012 4:34:21 PM)
How can he be "shocked"? Did he not receive weekly and monthly financial reports? If not....someone else should be running the radio company.

- L. Justice

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