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David Field Challenges Radio's Critics
BALA CYNWYD, PA -- February 21, 2008: Entercom Communications CEO David Field said Thursday afternoon that the criticism the radio industry takes from investors concerned about tepid revenue growth overlooks the strong free cash flow the business generates.
"The ability to generate outstanding free cash flow has always been one of radio's strongest characteristics," Field said during a late afternoon conference call with Wall Street analysts. "Unfortunately, investors appear to have largely discounted, or ignored, radio's outstanding radio's free cash flow generation."
Turning to his own company's Q4 FCF performance, which increased 73 percent, to $30.2 million from $17.5 million, Field added, "It is worth noting that even in a difficult economic environment, we are able to not only produce enormous free cash flow, but to grow it further."
Turning to the current tepid ad market, which he attributes not to radio but to the overall advertising landscape, Field said the industry can offer clients an increasingly wide-ranging array of options.
"Radio and its integrated capabilities offer far more horsepower today as a marketing vehicle than ever, particularly at a time when so many other marketing competitors face great challenges," he said. "Radio has always had ubiquitous reach; now we also have a powerful arsenal of diverse marketing tools and increasingly creative marketing ideas for our customers."
While Field acknowledged that the early part of this year has been challenging, he's hopeful looking down the road. "For the first quarter of 2008, unfortunately, business conditions are soft," he said. "Based on current market conditions, we expect to finish the quarter down mid-single digits. Comments from other media leaders lead us to believe that this is not a radio issue -- it is a broad-based economic challenge affecting a wide variety of media companies."
However, Field stated that while it's still early, Q2 is looking better. "There is no way to determine how the general economy will perform over the rest of the year, but there is a sliver lining to the story," he said. "We are somewhat encouraged by considerably stronger Q2 pacings that are currently up low single digits, although it is far too early to determine meaningful conclusions from Q2 data."
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