Hernan Cortes famously “burned the ships” so his men could not turn back, and Saga Communications CEO Chris Forgy is borrowing the story to defend its pivot to a digital blend, even as a license write-down and slowed revenue weighed heavily on Q3 results.
Saga reported third-quarter net revenue of $26.7 million, down 5.4% from $28.2 million a year earlier. Station operating expense fell 1.7% to $24.2 million, and station operating income was $2.4 million compared with $3.5 million last year. Adjusting for the sale of 24 telecommunications towers, net revenue would have decreased 4.7%.
The company posted an operating loss of $9.8 million, compared with $626,000 a year ago, after recording a $9.2 million non-cash impairment charge based on an evaluation of FCC license values. Without the charge, the operating loss would have been $563,000. Saga said the impairment was driven by an increase in interest rates that raised the discount rate in its fair value calculation, lower operating margins in its business and the industry as a whole, and reductions in market revenue projections.
Net loss was $7.1 million, compared with $532,000 in the same quarter last year. Without the impairment, the net loss would have been about $240,000.
On the call, Forgy said the company is not satisfied with its results and that its digital transformation is taking longer than it would like. He pointed to blended digital, which includes search, targeted display, SEO, social, managed email, and video, as the area gaining ground. Blended digital revenue rose 24.9% in the quarter and 55% year to date, and digital reached 19% of gross revenue for the nine months, up from 16%. Local revenue fell 11%, and national revenue fell 13.2% for the quarter.
“The fact is,” Forgy said, “We need a little more time for the strategy to completely take hold. And although the results don’t reflect it yet, we remain very encouraged.”
Gross political revenue was $1.2 million for the quarter, with approximately $3.6 million of gross political revenue sold for the fourth quarter.
Looking ahead, Forgy said fourth-quarter revenue is pacing up 9%, and digital is pacing up 10.7%, while revenue without political is pacing down 5.7%. As of November 9, first-quarter 2027 revenue is pacing up 5.8% without political, with digital up 29.5%. Saga expects $5.7 million in gross political revenue for 2026, compared with $650,000 in 2025 and $3.3 million in 2024.
He said in closing, “The middle of the journey where we are right now is supposed to be a little hard. That’s not proof we’re lost. It’s proof we’re on our way.”
