The radio business is off to an uncertain start in the new year, with the Citadel bankruptcy filing and other filings sure to follow soon. With major radio operators in Chapter 11, will the prospects for the overall radio business improve in 2010? Will the Citadel bankruptcy have an impact on the radio broadcasting industry? Is there a solution to the woes of the radio business?
My short answer to the first two questions is, “Probably not.” For the third question, “Yes, there is a solution but it remains to be seen whether or not the industry has the will to embrace it.”
The fundamental challenge to operators in 2009 – an excess of advertising time inventory – will remain firmly in place throughout 2010 and probably beyond, as operators struggle with deteriorating cash flow and increasingly burdensome interest expense and debt levels.
Sadly, it’s unlikely that the lessons to be learned from Citadel and other filings will spur operators to change harmful past behaviors and therefore, more will likely be forced to file for Chapter 11 or undertake a restructuring in 2010 or 2011.
Radio stations are still selling only 40 percent to 60 percent of total available advertising time
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