Radio One's CEO Alfred Liggins: Radio is ‘Shining Star’ of Traditional Media

Story by Inside Radio
Photo left: Radio One CEO Alfred Liggins

Calling the broadcast radio industry the “shining star” of traditional media, Radio One President and CEO Alfred Liggins says the industry is holding up well in a highly competitive media landscape. He cited radio’s ability to hold steady, revenue-wise, as a plus compared to print and, to an extent, television.

“Radio has hung in there being kind of flattish, even if it is down 1% or 2%, that’s way better than newspapers or magazines and even, if you look at the broadcast television advertising numbers, my understanding is TV’s success is largely driven by retransmission and the actual advertising number is flattish to up a bit,” Liggins said Tuesday on a conference call with analysts to discuss fourth-quarter results.

Liggins’ enthusiasm for the broadcast radio business’ future was somewhat tempered however by what he called “the current structure of the industry” where he said iHeartMedia, which owns and operates 850 radio stations, has a lock on a lot of national advertising dollars.

“My personal view is that the industry needs to be restructured. You can’t have [one company] controlling that much national revenue,” Liggins said, adding the rest of the industry should consider attempting to offset iHeart’s place atop the market. “The current structure, given iHeart’s dominance, is problematic for those of us who are smaller,” Liggins said.

Still, buoyed by strong political advertising, its niche cable channel and improved ratings at several key radio clusters, Radio One did report an uptick in Q4 2016 revenue Tuesday and predicted that its diversifying portfolio will help lift 2017 into positive territory.

Factoring in about $5.7 million in political money, Radio One’s radio revenue increased 1.2% in Q4 2016, compared to the same period in 2015. Excluding political, radio revenue was down 8.5% to $51.02 million, compared with Q4 2015. “Q4 political was a good tail wind for us,” Liggins said. The company’s Charlotte, Cleveland, Indianapolis, Raleigh and St. Louis markets posted solid revenue growth, while Dallas, Houston and Washington DC suffered declines. Syndicated radio unit Reach Media’s revenue was down 5.5%, a drop the company said resulted from lower ad revenue.

Compared to its Miller-Kaplan market averages, which were down 0.9%, Radio One stations fared better, up fractionally at 0.1%. In Q4 2016, Radio One says local revenue dropped 4.1%, while national ticked up 7.3%.

Among advertising categories, Radio One said that government and public, driven by political, was strong in Q4, as was entertainment, health care and travel/transport. Retail, automotive, telecom and food services all decreased in the quarter, executives said.

Radio One was also boosted by positive results for its cable network TV One, which increased ad revenue 18%. The company is seeing the first injection of revenue from its investment in the new MGM National Harbor casino-hotel, which opened in December. Under its terms, Radio One will receive 1% of the Maryland operation’s gaming revenue, which Liggins said is pacing to be about $6 million in 2017.

Those injections of revenue should help offset what Radio One executives expect to be a softer year for radio. Looking ahead to Q1, Radio One says its radio stations are pacing down low- to mid-single digits, excluding political, while Reach Media is off double digits, largely because two major advertisers, including Wal-Mart, scaled back their Q1 campaigns compared to a year ago. (Radio One says Wal-Mart will return to normal advertising levels later in the year.)

“We think there is going to be enough upside on TV One and MGM to offset any negative swings on radio and Reach Media,” Liggins said.

The company plans to close on a $25 million sale of 15 FM towers in late March or early April, which will provide another cash infusion for 2017.

Liggins said that Radio One is continuing to evolve beyond its radio roots to both serve its audience more broadly and weather market fluctuations. When asked by analysts if the company plans to make future acquisitions, Liggins was measured, saying he expected to make smaller moves rather than any large purchases. “We will continue to look at areas where we can find cost synergies,” he said.