(By Ed Ryan) April 2020 could go down as the worst revenue month in the history of radio. When the government told businesses to close and the people to stay home, it also slammed the door shut on the U.S. economy. When businesses close they have no need to advertise. That’s bad for radio. However, there is cautious optimism in the air. Take Entercom CEO David Field for example.
Yes, revenue was down for Entercom in Q1. That was not a surprise to anyone. We all know what’s coming when radio companies report earnings from the first quarter. January and February started strong, the bottom fell out in March, and April was catastrophic. When you know the news is going to be bad all you can do is hope for a trickle of good news.
While there are still many unknowns, such as, will there be a second wave or how quickly will states open, it does appear things are getting better. Field said May is looking better than April and June looks better than May. He said that with understandable caution because who knows if that will stick. But hey, we’ll take any good news right now.
Field’s analysis of the situation aligns perfectly with Pierre Bouvard’s opinion that April was the bottom, and, at least for now, the road ahead looks better. Bouvard explained his analysis with solid research on our Facebook Live interview Thursday.
Everyone, including local advertisers, are being cautious. Governors around the country move the game pieces regularly by holding press conferences nearly every day that affect every business in their states.
Sports is another industry that impacted Entercom. Entercom is radio’s biggest player in sports. Who could have ever predicted that all major sports leagues would go dark, ending every play-by-play broadcast and limiting what sports stations have to talk about? And while there’d no revenue coming in for Entercom for in-game advertising, at least they’re able to offset the expense of the rights fees to all the teams they pay to broadcast the games.
The only good news so far on that front is that both Florida and Arizona have announced they are ready for sports to resume. However, the millionaires and billionaires in Major League Baseball are now fighting over salaries, so there’s a possibility the baseball season might not even take place, fans or no fans. If it’s not one thing, its another.
Back to Entercom. Revenue was down 4% in the first quarter with March doing most of the damage after a strong start in January and February. Entercom was the second company to give a shout out to Michael Bloomberg for spending so much money trying to win the Democratic nomination for President. That helped Entercom bank $7.7 million in political spending in Q1, compared to $1 million last year.
Podcasting remains strong for Entercom as does digital advertising. It’s the local advertising, radio’s bread and butter, that took the big hit, and that all radio companies need to see recover. And Field says the chatter from advertisers is starting to sound more positive. More anecdotal evidence that there’s light at the end of the tunnel, and hey, we’ll take that too.