Here's a great quote from Jerry Del Colliano's Inside Music Media, check it out!

After spending record amounts of their investors' money to put together groups of radio stations -- allowed for the first time by their friends in Congress -- it wasn't too long ago that stock prices of radio issues began their eventual steep decline.

A friend put together this list of key radio companies before yesterday's roller coaster ride on the Dow. Look how well they have built shareholder value for their investors.

Spanish Broadcasting
High 42.00 -- Recently 1.54 -- Loss of 96.33% (1.50 yesterday)

Emmis
High 62.34 -- Recently -- 2.47 -- Loss of 96.04% (2.62 yesterday)

Radio One
High 31.33 -- Recently 1.77 -- Loss of 94.35% (1.68 yesterday)

Citadel Broadcasting
High 22.79 -- Recently 1.69 -- Loss of 92.58% (1.52 yesterday)

Regent
High 14.19 -- Recently 1.49 -- Loss of 89.50% (1.32 yesterday)

Salem
High 33.65 -- Recently 4.63 -- Loss of 86.24% (3.93 yesterday)

Entercom
High 67.75 -- Recently 11.00 -- Loss of 83.76% (11.00 yesterday)

Cumulus (Private buyout in progress)
High 22.70 -- Recently 5.90 -- Loss of 74.01% (5.43 yesterday)

Saga
High 23.44 -- Recently 5.90 -- Loss of 74.83% (5.97 yesterday)

Beasley
High 19.34 -- Recently 5.05 -- Loss of 73.89% (4.48 yesterday)

Cox Radio
High 34.67 -- Recently 11.10 -- Loss of 67.98% (10.89 yesterday)

Entravision
High 20.31 -- Recently 7.27 -- Loss of 64.20% (6.03 yesterday)

Clear Channel (Private Buyout in Progress)
High 91.50 -- Recently 34.42 -- Loss of 62.38% (32.14 yesterday)

CBS
High 35.50 -- Recently 24.00 -- Loss of 32.39% (22.28 yesterday)
(New issue missing most of the loss).

Here's a link to the entire story,

http://insidemusicmedia.blogspot.com/2008/01/radios-recession-started-long-time- ago.html

That blog is excellent. Thanks for sharing.

The smell of a rotting corpse.
Thanks for the link.
Great story.

Yeah, talk about the "Money" demos! Here's the real audience of radio. These may be the most meaningful ratings out there! Sad to say.

I'm curious how many of the previous high numbers happened before stock splits and the like...

To be meaningful the "high" number should be taken from the point of the last split or at least have any split factored into the "high" price, IE: what would the "high" have been giving the new amount of shares available.

One should also factor in divedends paid out and huge bonuses.

Not that I'm defending the rotting corpse at all...

Obviously money was made in the radio industry and it has gone somewhere if not to the share holders.

If things like splits and divedends were taken into account then this information is an even worse indictment of the industry.

I second the thanks for the link to Jerry's blog -and this line from one of his posts says it all about the industry:

"Terrestrial radio doesn't have to worry about what Last.fm is doing. It needs to worry about what radio isn't doing."

I'd say the same is true when you talk about any of the other competitors for terrestrial radio listeners' attention. We gotta give 'em something they can't get anywhere else - and that means investing in, growing, and supporting talent and content.

I checked quite a few of these out, and they are accurate prices. Any stocks which might have split have had the split reflected in the high price. These ARE REAL. And virtually none of these companies pay dividends. (the few that do have very heavy "family" ownership, like Entercom and Beasley) which allows money to be funneled to the family insiders at dividend tax rates rather than income tax rates.

Current stock share prices for any company have little relationship to how a company performed in the past. It is a fairly precise estimate about how investors think those companies will perform in the future. Essentially, Wall Street has decided that radio doesn't have much of a future.

Almost all these highs came from 1999 when along with an internet bubble, there was a radio bubble due to consolidation changes. Euphoric, unrealisic, dumb. But look at these stock prices compared to 1999...

Cisco systems was $82...now $24.20
Intel was $75.81....now $20
Microsoft was $59.97... now 32.94

The Del Colliano piece tries to suggest that the price bubble was the fault of owner consolidation rather than investor insanity. The prospect of economies of scale might have nudged prices higher during consolidation, but widespread investor greed is the real reasons radio stocks once soared. It was a total disconnect from reality.

If these prices were truly an indictment of consolidation, smaller, more nimble, more locally directed companies would fare better than the larger mega corps. They really haven't.

It is Wall Street's attitude toward our future, not the inflated prices of a bubble in the past, that is a damning indictment of the entire business. Investors believe that radio's share of the advertising market is shrinking fast, and shows no signs of return.

Keep in mind that a stock price is simply a reflection of what an investor is willing to pay for a piece of a company's future. Neither the buyer nor the seller is generally inside the company... and the company never sees any money from higher or lower stock prices, unless it is an IPO (Initial Public Offering) or a (rare) secondary offering of additional stock. Both sides (buyer & seller) of a stock trade are individual or institutional investors. The price of the stock on a given day, multiplied by the number of shares of stock the company issued, is a company's "Market Capitalization"... what Wall Street thinks the company is worth going forward.

Also remember that many companies with huge market caps (and stock prices) make absolutely no money at all--- they lose it by the millions. But Wall Street investors bet that those companies will make money somewhere in the future, and they place their bets ahead of the swing to profitablity to get the best price.
(In the beginning, Amazon lost more than a dollar on every book they sold. The more they sold, the more they lost!!! But investors liked the model, and figured eventually Amazon would figure out how to make a profit. Smart investors.)

You can make chicken-or-egg arguments forever. "Radio revenues would return if stations got live and local." "Huge increases in human resource spending will fuel huge increases in revenue." But there's nothing to support those concepts. By its very nature - BROADcasting - radio is less able to do the discrete demographic, psychographic, economic, etc. targetting that advertisers want. Advertisers have more and better sources to reach their desired audience.

Western Union survived by completely reinventing itself. IBM survived by completely reinventing itself. The only way radio can survive is by completely reinventing itself. NOT by going back to old ways and old days.

Agreed.

However, I do believe one key element, going forward, is to produce and broadcast things people can connect and identify with, on a daily basis.

How that happens, is the future, of course, and is the reason I agree about not going back to the old days & ways.

Tdanner's business analysis is pretty blunt. As buyers we view radio as still a significant way to reach a specific audience. However, as mentioned in a previous post, we have other, newer, highly focused options in reaching a specific audience that is also more cost efficient. What is incredible to us, the buying community, is that most radio companies don't seem to realize the tremendous reach that they already have. It would be so easy to provide newer forms of programming, and achieve an even broader reach, rather than simply duplicate what is already being done across the street.

You have to start by de-commoditizing licenses. The prevailing mentality is similar to the history of fast food outlets. The pioneers had a successful burger stand, so they took the profits and built another stand on the other end of town. Then moved to the next town, etc. But what happened is that the big money interests saw the success the pioneers had, and decided they would just go to town, buy up every available burger joint that would sell, and they too would have a lucrative money making chain. Except they didn't have a clue about what made that original pioneer's stand so successful and soon found that in order to show a profit, they had to fire half their employees, find a cheaper meat to cook, and automate the process.

...

No, returning to yesteryear is not a solution any more. But the government, in it's infinite wisdoom, has made owning a broadcast license a commodity to buy, trade, sell. By eliminating ownership limits, a great disservice has been done not only to the small owners but also the thousands of people whose jobs have been eliminated. There is a much greater distance now between provider and listener, and this distance is full of machines and bottom-line driven practices.

....

Clearly, greed has doomed radio to continue rotting away. Its former role, that of being the "voice" of society, has moved to the ether. The internet has shaken a lot of business models. Whereas the bandwidth will continue to be modulated, it's pretty clear that listeners will continue to search for something different somewhere else.

If I follow Jerry Del Colliano's drift correctly (and I've been a subscriber for over two months now), one of the main reasons that radio faces a grim future is that it overlooked the needs and wants of Generation Y... Based on responses from his classes at USC, Gen Y doesn't bother with radio like we did even in the 90s.

Del Colliano struck me as a rabble rouser when he ran Inside Radio. Now he sounds like one of the few remaining voices of reason...and HE hasn't changed that much!

I highly recommend you consider subscribing to his blog...agree or disagree, he WILL make you think!

Understand - I in NO way meant to suggest a "return to yesteryear"...quite the opposite. No nostalgia for the old days here - I wholeheartedly agree the old business model for radio is dying, and we must reinvent. That was my point. Perhaps I should have said "investing in creativity"...just hiring more warm bodies won't do it.

Arbitron's Personal People Meter, a pager-like device that keeps track of what it hears, and phones home nightly, seems to be proving that radio's reach is actually better than it was thought to be.

Coming to the Portland market at the end of 2009.

>>Arbitron's Personal People Meter, a pager-like device that keeps track of what it hears, and phones home nightly, seems to be proving that radio's reach is actually better than it was thought to be.

Coming to the Portland market at the end of 2009.<<

Assuming they work the bugs out in the already-deployed markets. NYC had to revert to paper diaries for the fall book because of PPM issues.

Interestingly, Fisher Communications - who now owns only 8 radio stations, has been somewhat immune from the declining stock prices and was just upgraded to "positive" by Moodys (http://biz.yahoo.com/ap/080118/fisher_communications_moody_s.html?.v=1).

Maybe they knew something when they sold their PDX and WA properties.

Gen Y has grown up with exotic technology. The rest of us use the old and the new, some more of the old than the new.

Kind of like what ever they called the first generation that had telephones everywhere, rather than gettin' on a horse or a buggy or a stagecoach and visiting.

I remember my great grand parents pretty well, they lived well into their 90s. They only used the telephone when absolutely necessary otherwise they just wrote letters and postcards. And they had a Westinghouse TV set. In about 10 years I think I saw that thing turned on about 3 times !