Weekly News Recap July 2-6, 2018 Mid-Year Update: Adaptability, Digital Investments Pay Off. At 2018’s mid-point, some radio execs good digital strategies and are operating someone about buying a car is say the year has taken shape as good digital companies supporting our legacy in a car, period. And I think car dealers – or even better – than they expected. business are probably in a little better get that.” Digital investments are paying dividends shape than people who haven’t done while some big brands are taking a fresh that,” he said. Townsquare’s Wilson agreed, saying he’s look at how they divvy up their marketing seen some local dealers find the money dollars. But 2018 is also proving to be Galaxy Media president/CEO Ed Levine in their own pocket to buy radio when co- another year that’s testing the mettle of agreed “digital is starting to be real op dollars disappeared. “They know radio broadcasters’ ability to respond to how money” for his company in what he works so at the same time they’re looking the ground continues to shift under local describes as a “so far, so good” sort of for their own funds outside of co-op media. “I don’t think there’s a seminal year for his company. On the national money to put in broadcast so I think with change in the radio business, it’s just front, Gen Media Partners CEO Kevin the focus on attribution we’ll be in a good tough,” Alpha Media president/CEO Bob Garrity says 2018 opened with the sort of place moving forward,” he said. Other ad Proffitt said. Hubbard Radio executive combination that keeps radio managers categories, such as retail, are also facing VP/COO Drew Horowitz said there’s “a up at night with national radio clients like big changes in their businesses and that’s lot of volatility” in the marketplace. “It’s Bon Ton’s shutting its doors, sandwich impacting how they spend on radio. a little bit of a repercussion of what’s chain Jimmy John’s moving to network going on in the agency side of the radio and a new media agency cutting Mid-term election years have the prospect business. They are suffering very similar smaller markets off O’Reilly Auto Parts’ of outperforming presidential campaign dynamics,” he said. ad buys. The privately-held rep firm years on radio as congressional races posted year over year revenue growth often spend more with local stations than during both the first and second quarters. statewide and national candidates. As a “We have been able to show single-digit result, Borrell Associates projects radio growth in the first and second quarter will pocket $564.3 million in election- when most people predicted the year will related ad spending in 2018. Kantar be flat at best,” Garrity said. Media’s Campaign Media Analysis Group says radio has a good shot at capturing Auto Finds A Back Road To Radio more political ad dollars than it did during Automotive advertising still makes up the last midterm elections four years ago. 14% to 16% of radio’s overall billings and “With a lot of races that are closer to the category has been under increased home, maybe radio could do a little better pressure in 2018 as car sales have – given the dynamics of how the election slowed slightly and the automakers have works,” VP/GM Steve Passwaiter said. Kagan projects radio revenue will forced dealerships to spend increase 1% to $17.8 billion in 2018, more of their co-op advertising which would give the industry its dollars in digital. “People are best revenue year since before the still using radio and TV, but last recession. And for several radio maybe they’re not spending companies, 2018 got off to a strong start. as much and are allocating “We had a good first half,” Townsquare some of their budget to the Media co-CEO Dhruv Prasad said, digital side,” Horowitz said. pointing out the group had a better-than- But Proffitt said despite those average start to the year with revenue corporate edicts there are local up 6.6% in the first quarter. dealers who’ve concluded they can’t live without radio. “The Horowitz thinks the investments that car guys are still buying ideas broadcasters have made on the digital and people are still figuring out side of their businesses are now paying that you can’t live by search dividends. “What is growing is on the or Facebook alone,” Proffitt digital side and those of us that have said. “The best place to talk to Page 1 Weekly News Recap July 2-6, 2018 Mid-Year Report: ‘Slow But Steady’ Deal Market. Translators may be helping stimulate AM radio deals in 2018, but they’ve yet to make a significant impact on pricing. That’s according to a mid-year analysis by Kagan. It characterizes the 2018 deal market as “slow but steady” with multiples on par with a year ago. The average price paid for an FM so far this year is $1.5 million compared to $400,000 for an AM. “So far there is no statistical difference for AMs selling with a transla- tor compared to those that don’t have one,” Kagan research analyst Volker Moerbitz tells Inside Radio. Moerbitz notes that AM stations are still selling for less than $1 on a “per pop” price metric—the measurement of how much it cost for each person covered by the signal. Kagan calculates $254 million of radio transactions were announced during the first half of 2018, including $102.3 million worth of deals announced during the second quarter. The biggest deal in the first half of the year was Hubbard Radio’s $45 million deal in St. Louis to buy rock KSHE (94.7) and modern rock “105.7 The Point” KPNT from Nielsen, Bubba Attorneys Sharpen Their Knives For Trial. Emmis Communications. Overall, Moerbitz said multiples for While Nielsen and Bubba “The Love Sponge” Clem take most FM deals hovered between 6.0- and 6.5-times cash flow. another stab at negotiating an out of court settlement, both Kagan reports 387 radio deals were announced through last sides are sharpening their knives for an elongated ratings week, including 162 FMs and 95 AMs. In addition, 130 FM tampering trial should the latest attempt at mediation fail. translators changed hands. See more HERE Based on a court filing last week, Randy Michaels may spend more time testifying than any other witness called to the stand by Clem’s attorneys. Clem’s legal team intends to Mid-Year Report: What Formats Rule The Radio Dial? ask the former Jacor, Clear Channel and Tribune executive Country continues to dominate as the most programmed radio about everything from Nielsen’s in-tab rates and panelist format in the U.S., with 2,183 stations across the AM/FM dial. incentives to methodological deficiencies exposed by Voltair, There are 24 more country stations on the air as of the end of MRC accreditation and the overall accuracy of Nielsen ratings. June, compared to 2,159 in June 2017. Rounding out the top Michaels testimony could be key to Clem’s case that Nielsen 5 most pervasive formats at the mid-year point are news/talk, – not the syndicated morning man it is suing – damaged its religious teaching, contemporary Christian and Spanish, ac- own reputation through deficiencies in its ratings service. Near cording to Inside Radio/PrecisionTrak. Following those genres the top of the Nielsen exhibit list are photos of the Holmes are what might be considered more mainstream over-the-air oscillating table fan that Clem allegedly purchased for PPM formats (in order): variety, classic hits, sports, alternative/ panelists, to mount their ratings meters on while tuned into modern rock, CHR, AC, classic rock, hot AC, oldies and rock. his radio show, to fool the motion detectors embedded in the Thanks to a rash of recent sign-ons, modern rock/alternative meters. From there Nielsen will focus jurors on dozens of text now ranks as radio’s ninth most programmed format – and with messages between Clem and Tabachuk from July 29, 2015 good reason. The format has been pulling some of its best num- to Sept. 23, 2015, including one where Clem says, “I need u bers ever in PPM markets. In June Nielsen said the format’s more than ever.” The jury is also expected to be shown Clem’s Persons 25-54 share was at an all-time high since February, televised on-air apology where he says the allegations that he when it cracked a 4 share for the first time ever. Showing the influenced the activities of a PPM panelist are true. Nielsen’s greatest growth on the dial in June 2018, meanwhile, is the expert witness David Hass is slated to give a presentation catch-all “variety” format, which added +52 outlets over June on how much Clem’s alleged ratings hijinks cost Nielsen in 2017. Variety encompasses a wide array of non-commercial damages and out of pocket expenses. See more HERE outlets, AM stations and low power FMs, including many in unrated markets. Other formats that exhibited major year-over- year growth include classic hits, +32; and country, +24. Urban/ Smulyan Signs New Nearly 4-Year Employment Deal With hip-hop had 186 outlets over the air as of June 2018—only five Emmis. fewer stations than the year before. See more HERE Jeff Smulyan marked the Fourth of July with a new employment contract at the company he founded nearly four decades ago.