As Saga Communications reimagines its business model through what it calls “blended advertising,” CEO Chris Forgy revealed an ambitious future vision: one where 67% of Saga’s total revenue comes from digital within the next five years.
Speaking at the Noble Capital Markets Emerging Growth Virtual Equity Conference alongside CFO Sam Bush, Forgy described Saga’s approach as a cultural shift.
“Our business units are now called media groups. Our sellers are media advisors. Our program directors and on-air talent are directors of content and content creators,” he said. By integrating digital and radio rather than treating them as separate silos, Saga believes it can double its annual gross revenue by disrupting just 5% of the search and display markets within its local markets.
Digital currently represents around 16% of Saga’s total revenue, up from 13% the prior quarter, and the company aims to reach 20–25% in the near term. Over a three- to five-year horizon, Forgy envisions Saga’s revenue split one-third radio, one-third search, and one-third display.
Forgy acknowledged Saga’s late entry into digital, noting numerous times that the company benefited by observing other broadcasters’ early missteps.
Saga’s focus on smaller markets has been a strategic advantage, Forgy argued. These communities, he said, are “ripe for disruption,” with local advertisers seeking clearer, simpler digital solutions. “Businesses don’t know who to trust,” Forgy said. “There are too many conflicting solutions. Simplicity wins.”
That approach mirrors Townsquare Media, which presented earlier in the day. Since its formation in 2010, Townsquare has been the first major radio operator to fully embrace a “digital-first” model, aiming for 60% of its total revenue to come from digital sources by the end of 2025.
Unlike Beasley Media Group, the most recent broadcaster to adopt the “digital-first” label, Saga is choosing to stop just short of that distinction.
“You have to have radio to make it work,” Forgy said, describing his “blended advertising” game plan of selling radio, search, and display. “Radio gets them wanted. Search gets them found. Display gets them chosen.”
Digital wasn’t the only question on the table, as the potential for deregulation of radio’s ownership caps under the FCC’s just-opened 2022 Quadrennial Review was also broached.
Bush emphasized, “It’s going to be like pro sports. Team A trades someone to Team B, Team B trades to Team C. It’ll be multi-party deals. We’ll look at our portfolio the same way.” Bush added that Saga remains focused on in-market expansion and “will never risk the balance sheet” while maintaining dividends and share buybacks.
Bush also noted that deregulation could create a wave of station trades among operators and that Saga’s disciplined approach will allow it to take advantage of new opportunities without excessive leverage. “We’ve already had people approach us about acquiring bigger positions in the markets we’re already in,” he said.
Forgy pushed back on the notion that radio’s growth has peaked, saying that national and network revenues may stagnate, but local remains vital. “The more simplistic we can make it and easy to attribute, the better we are,” he said. “That’s where we’re building our strategy from.”
As Saga works to prove its blended model to investors, Bush said the company’s goal is to return to its historical position as a performance leader in radio. “We need to show the performance we’re beginning to see under the transition to blended sales,” Bush said. “Once we do that, we can prove to the market that the philosophy works.”
you have to have radio to make it work?
Tell that to Meta and Google.
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