Clear Channel Communications (CCU) the giant radio broadcaster and outdoor advertiser (billboards) that owns SFX Entertainment has definitely felt the pinch from the advertising recession over the past few months, according to analyst reports. Earlier, analysts had predicted that such companies as CCU and Viacom were diverse enough and rooted deeply enough to weather such downturns with little concern.
But dips in the auto and retail industries are now reflected in the broadcaster's financials, thus extending the earlier effects of the broad "advertising recession" and the collapse of many dot.coms.
While reporting “historical net revenues of $1.6 billion, up 108 percent over the first quarter of 2000,” and “historical EBITDA (defined as operating cash flow less corporate expenses) of $404 million, up 70 percent over the first quarter of 2000,” CCU also saw its radio industry revenue dip by eight percent, a full point more than the industry average of seven percent for the first quarter of 2001.
Accounting for roughly 20 percent of radio advertising business in this country, CCU’s radio division “continues to be the company's largest operating segment.” In addition to the eight percent drop in first quarter revenue, CCU says that its “operating expenses were down nine percent.”
SFX’s entertainment division, which includes SFX Theatrical, reported a “decrease of 13 percent in revenues in the first quarter of 2001” but predicts it will post “double-digit pro forma operating cash flow growth during the second quarter and full year of 2001.” SFX Entertainment was acquired by Clear Channel on Aug. 1, 2000. Clear Channel has also purchased radio broadcaster AMFM. The company now operates 1,140 radio and 18 television stations in the United States and has equity interests in over 240 radio stations internationally. Clear Channel also operates more than 750,000 outdoor advertising displays, including billboards, street furniture and transit panels across the world.
After an aggressive acquisitions campaign in sports and entertainment, SFX Entertainment established an early lead in marketing “live experiential” events. SFX develops and manages touring Broadway shows, and sells Broadway subscription series and individual productions in 55 markets. An integrated franchise that promotes and produces a broad variety of live entertainment events locally, regionally and nationally, SFX has 122 venues overall, and owns or operates venues in 31 of the top 50 domestic markets.
For further information on CCU visit www.clearchannel.com.
—By Murdoch McBride
