“The only way out is through,” is the mentality at Saga Communications as CEO Chris Forgy and CFO Sam Bush presented the broadcaster’s third-quarter 2024 earnings, as the company walks the tightrope between digital growth and current economic challenges.
Forgy emphasized that Saga is navigating turbulent times by embracing a philosophy known as the “Stockdale Paradox,” which stresses resilience, honesty about challenges, and faith in eventual success. He says this approach has driven Saga to expand its digital efforts despite headwinds affecting advertising partners and economic uncertainties impacting businesses on Main Street.
“This type of discipline during the transformational change we chose to put ourselves through would be painful without political unrest, massive layoffs, economic downdrafts, and small business uncertainty on Main Street. And we consciously made that decision to chart a different path and expand our digital footprint in the midst of all this turbulence,” commented Forgy.
During the quarter, Saga reported a 3.5% year-over-year decline in net revenue to $28.1 million, largely due to pressures facing local advertisers in the current economic climate. While station operating expenses increased by 3.1%, the company posted a net income of $1.3 million. This is a noted decrease from $2.73 million in the same quarter of 2023.
Forgy noted that although Saga was late to digital adoption, this delay allowed the company to observe industry best practices and implement a more thoughtful digital strategy. Saga has spent the past year investing in training media advisors to provide local advertisers with the digital tools often available only to larger brands.
In the third quarter, digital segments such as e-commerce and interactive content showed steady growth. E-commerce revenue grew by 33% in Q3 and by 89% year-to-date. Interactive advertising increased by 4.5% for the quarter and 21.4% year-to-date, while non-traditional revenue (NTR) events rose 11% in Q3 and 1.5% year-to-date.
Looking ahead, Saga projects that same-station operating expenses will increase by 3-5% by year-end 2024 due to inflationary pressures and investments in digital and interactive services. Despite current challenges, Forgy expressed optimism, reaffirming Saga’s commitment to its mission of strengthening relationships with local advertisers and communities.
In that spirit, Forgy took a special opportunity at the close of the call to discuss the continued power of radio, as made evident by the recent impact of Hurricane Helene on Saga’s Asheville Media Group, which serves Western North Carolina. Despite severe flooding and widespread power outages, five of Saga’s seven stations in Asheville remained on air to deliver critical information to the community.
Forgy quoted Radio Ink‘s interview with Denise Potter, who was stranded in Hendersonville, NC, following the flooding; where radio became the sole lifeline with the outside world. Potter told us, “Radio is so critically important to people everywhere. I think sometimes we forget because you can flip on a TV or the internet. But when that’s not available, what would you do without radio? I honestly don’t know. So I’m very, very thankful. God bless radio.”
To which Forgy replied, “She didn’t say what we would do without streaming. She didn’t say what would we do without podcasting or audio. She said, what would we do without radio? Asheville’s disaster exemplifies how radio can serve as a beacon of hope. providing essential information and connecting communities in the darkest of hours. What other media can say that? Name one. Radio is the original audio, the number one reach medium that commands attention, deeply connecting with our listeners and driving outcomes for our customers.”
