Ex-WILD owner: Hub not part of big picture
In Radio One’s first public comments about its sale of WILD-FM last week, President and CEO Alfred C. Liggins III said in an investor news release that while Boston was a “wonderful” radio market, “it is not of great strategic importance to us.”
Saddled with adjustable interest rates on $364.5 million worth of debt, Radio One has embarked on what Liggins described as an “asset disposition process.” He said the sale of its Boston property was “a very good start.”
According to the release, Radio One purchased the station in October 1999 for about $10 million. Liggins explained that the station had barely operated on a break-even level, with $2.3 million in annual net revenues.
Radio One sold the FM station last week for $30 million in cash to Entercom Communications Corp., the Philadelphia-based company that also owns sports radio station WEEI.
Entercom promptly transformed the urban music format on WILD-FM to head- banging rock music.
Radio One has been struggling financially of late. In its most recent filings with the Securities Exchange Commission, the publicly traded company painted a bleak picture. Interest payments alone have increased by $6 million during the last six months.
Net broadcasting revenue was down four percent from this time last year, with station operating income down 15 percent during the same time period. Operating income was off by 24 percent and net income dropped a staggering 59 percent to $8.1 million.
“…This quarter was pretty disappointing,” Liggins stated in a press release. “We are clearly facing some challenges in certain markets, over and above the general softness in the radio industry.”
Though Radio One has branched into several new projects, most notably TV One, it rolled the dice with the ill-fated Tom Joyner television show. That cost Radio One about $1.2 million in the last quarter alone. The company owns 51 percent of Reach Media Inc., the company that owns the Tom Joyner Morning Show.
Radio One’s stock prices have also taken a hit over the years. In 2000, Radio One stock sold for about $25 per share. A year ago, that number was down to $14 per share. It was trading for $5.76 earlier this year and is now trading at $6.04.
“Historically, when Radio One encountered a [bump], they were able to recover pretty swiftly and grow through it,” Stuart Kagel, an equity research analyst at Janco Partners Inc. in Greenwood Village, Colo. told the Washington Times. “This time, investors are concerned about their ability to grow through it.”
Another analyst agreed. “… We think a recovery will be slow in coming,” Wachovia Securities analyst Marci Ryvicker told a reporter.
What has been quick in coming is the almost universal condemnation of the sale of Boston’s only black-owned FM radio station programmed for the community. Left unclear is whether Radio One wants to sell its WILD-AM station. It was not spared by the recent purchase of its FM sister station. Jimmy Myers’ “Talk To Me” program, which formerly aired between 6 and 10 a.m., was canceled and replaced with the Tom Joyner Morning Show and gospel music.
Alan Howard spoke for many when he questioned Radio One’s commitment to urban areas.
“For me this sale demonstrates a lack of commitment by Radio One to an Eastern MA regional audience,” Howard wrote in a letter to the Banner. “ Radio One trumpets its role as ‘The Urban Media Specialist’ that focuses on the top 53 African American media markets. Isn’t Boston one of the top 53 black media markets? How can TV One, Tom Joyner or the Radio One family ask for our loyalty to their media product when they offer us (their audience) none?”
In a letter sent to Radio One founder Cathy Hughes, Sondra Newman wrote about a different perspective.
“A few months ago,” Newman wrote, “my radio scanner landed on WILD-FM. I heard something fresh, new, uplifting and intelligent. I preset 97.7 and looked forward to listening again. No longer.”
Newman went on. “Lest you think that blacks in the Boston area are the only listeners feeling the loss of the REAL (read: previous) WILD-FM, take it from a 40-year-old professional white woman too,” Newman wrote. “With the utmost respect for all you have accomplished, I do wish you’d have given WILD more time. This station seemed to be going places and added value by helping to bridge a cultural gap between the black and other communities in our historically white-bread town.”