|Townsquare speaks up for the heartland
In 2016, “We learned as a country that the heartland has been ignored for far too long.”
Areas ranging “from politics to advertising and marketing,” says Townsquare Media Chairman/CEO Steven Price in his annual Shareholder Letter (read it here). Price says “these often-ignored people shop, eat, drink, consume and enjoy, just like their coastal counterparts.” He believes that “people, particularly in America’s heartland, crave authentic and shared local experiences, and they want real social interactions” – appetites that radio can help satisfy. Townsquare is based in Greenwich, CT, a citadel of East Coast wealth. But Price says “the newfound realization that people in middle America matter is not a new concept to us...In fact, it was our founding thesis: to employ the key strategic assets of stations in small- to mid-sized markets across the heartland to become the dominant local media and entertainment company, the ‘town square.’” (Let’s add that some of Townsquare’s largest properties are in New Jersey and other northeastern markets.) All politics aside, Steven Price clearly means his Shareholder Letter as a wake-up call and perhaps a poke in the ribs. More about Townsquare coming in today’s NOW Newsletter.
Pandora rolls out its on-demand “Premium” product, says it intends to be profitable.
CEO Tim Westergren appears on CNBC to tout the virtues of the $9.99-per-month music service that gives Pandora an interactive-license product comparable to Spotify and Apple Music – and from a business standpoint, he vows that “we intend to be profitable this year.” That would be a notable turnaround. Last year Pandora reported a $343 million loss, twice what it lost in 2015. Pandora built “Premium” using many of the tools from the defunct Rdio service (which Cumulus once had a relationship with). Westergren doesn’t think he’s late to the party. He says “These are early days...and listeners don’t know what a real premium product looks like yet, and that’s what Pandora is.” The co-founder CEO says Pandora’s advantage is the knowledge base it already has from more than 112 million Pandora users. He tells CNBC “There’s no cold-start problem.” Would Pandora accept new financing from a private source? Yes, but “from a position of strength,” says Westergren. He doesn’t see the company being for sale – despite activist investor Corvex. See the Pandora Premium tryout page here.
Nielsen pulls the Tampa high-streaming-listening household – but why?
The March 6 NOW Rumor Mill item here asked if the household that catapulted the stream of Beasley’s Spanish tropical “Maxima 92.5” WYUU to the very top of the adult 18-34 demo had been lopped off the PPM panel. Speculation here was that one or more subscribers had complained. Yesterday came confirmation from Nielsen that it had indeed cut the household out of the sample – which elicited a statement from “Maxima” owner Beasley. COO Brian Beasley said “Our company and other broadcasters play no role in selecting panelists and households for inclusion in PPM data gathering.” In this case, Brian says it was Nielsen’s choice to put those two PPM-carriers on the panel. He really wants us to know that “We do not and have never had any relationship or contact with the household.” And he insists that Beasley has “never had users removed from Nielsen’s panel.” So who – if anybody – did? The speculation was that another Tampa station owner/subscriber spoke up. But as one observer tells NOW, “If that’s what occurred, we’ll never have that confirmed, in a million years.”
The standout Tampa PPM household had a “compliance” problem that resisted “coaching.”
Here’s the Nielsen statement about why it dropped the two Hispanics who were such keen listeners to the stream of “Maxima 92.5” WYUU – “In early February, we identified a household whose meter-wearing compliance warranted additional coaching. Per our standard operating procedure, we conducted an on-site visit of the household and provided subsequent training to ensure proper usage of the PPM device. Following the training visit, the household’s meter wearing compliance behavior did not change, and per our quality assurance procedures, we removed the home effective with the start of the March survey.” So it appears that household’s listening to “Maxima” stays in for the January and February books – and it was speculated that the sudden rise of listening to the online stream might’ve been because somebody unwrapped an Amazon “Echo”-style digital assistant for Christmas. Consultant Randy Kabrich highlighted that possibility on his blog. Now he notes that Nielsen originally said the panelists “met our compliance standards in January.” He asks “what changed in two weeks?” Kabrich’s concerned about what might’ve happened – and the precedent it would set. He says “Who’s next? How about the 17-year-old female in a top-ten market who powered the NPR station to #1 in teens for a year?” He says “outliers are a fact of all research surveys, and to remove outliers because you just don’t like their response is bad research.” He implores Nielsen to “come clean,” as you can read here. Nielsen subscribers will be watching their in-boxes today – Tampa’s February-Week 3 data is out.
Townsquare revenue from “local marketing solutions” – “radio ads, mobile ads or digital ads” – grew about 5% in fourth quarter.
Since last year, Chairman/CEO Steven Price has been lumping in radio spot revenue with everything else in the “suite of products we are selling to local advertisers.” Price tells yesterday’s fourth quarter call “If they buy a radio ad or mobile ad or a digital ad, we’re happy…That’s how we think about it.” Analysts now seem comfortable with the concept, and one group head has told NOW “maybe that’s just the way things are going.” Connecticut-based Townsquare, operating in mostly smaller and medium markets, has always based its business around local plus digital. All told, fourth-quarter “local marketing solutions” topline revenue was 5.1% higher, to $91.3 million. Though the gain was much thinner “ex-political.” Putting aside the political category, revenue grew 1.1% to $86 million. We didn’t get information on the call about specific advertising categories or markets. Though Steven Price admits there’s been “a drag” from national business and “our energy markets,” meaning the Dakotas and Texas. They “feel optimistic about a turnaround in our energy markets,” with managers saying that “sentiment seems to be better.” Price was happy to report “our twelfth consecutive quarter of positive organic growth in ‘local marketing solutions.’” For the full year, net revenue rose 17.1% to $516.9 million – with most of that gain contributed by the NAME midway business, acquired in Fall 2015.
“The bubble has cracked a little” with the music festival business, says Townsquare.
That’s a good thing – Answering a question from Barrington analyst Jim Goss, Townsquare’s Steven Price explains that “There have been a lot of people starting festivals over the last few years,” and that’s led to promoters having to bid more for talent and lower their ticket prices. Now the business “bubble” is starting to normalize, and Price says there’s “a less crowded competitive landscape [that] will benefit our music festivals.” Townsquare likes its position, since it can promote music festivals – and its other events – using local radio stations. Another part of Townsquare’s portfolio is NAME, the “North American Midway Entertainment” unit for which it paid $75.5 million. NAME suffered in the second half of last year from inclement weather during some key days, but that’s part of the business. Steve Price says “we won another significant contract, with the Arkansas State Fair.” It also “has the benefit of falling in the fourth quarter. (Most outdoor carnivals are concentrated in the late second and third quarters.) Townsquare reports in two large segments, Local Marketing Solutions (up 5.1% for the quarter, remember) and “Entertainment.” That latter category’s up 8% to $28.2 million.
Townsquare “hasn’t spent a lot of time looking at” the threat from state ad taxes.
Doesn’t sound like that issue is troubling management, at this point. Answering one analyst, Steven Price says “To be candid, we haven’t spent a lot of time looking at that issue, state by state.” They’re hoping for good weather, so Americans and Canadians flock to their outdoor events and other promotions. And hoping that the Townsquare digital business continues to grow. (Townsquare digital products now reach over 50 million unique visitors a month.) Thinking about the company’s overall situation, Chairman/CEO Steven Price is proud of having “reduced net leverage by half a turn to below 5-times.” That’s “half a turn” in the debt to cash flow leverage, from about 5.5 times to 4.9-times cash flow. The medium-term goal is pushing that down to about 4-times – and inevitably, that gets the analyst corps asking about acquisitions.
Could Townsquare buy stations from “stressed peers” like Cumulus or iHeart? Not likely.
Gabelli analyst Barry Lucas is the one who mentions “your more stressed peers,” naming Cumulus and iHeart. But Steve Price explains why those companies aren’t selling stations – If they sold assets at the levels Townsquare and others could pay, “it wouldn’t be deleveraging for them.” Price says “We haven’t seen either of those companies willing to enter into discussions with us” at valuations that make sense for Townsquare. How about family-owned stations? The Chairman/CEO says “A lot of those folks we’ve talked to…they’re feeling pretty good,” because their stations are “throwing off cash flow, and they want high prices” to sell. Townsquare did some selling of its own in late 2015 – towers. But Price says not to expect much more of that. Townsquare got nearly $23 million from the sale of some aerial real estate to Vertical Bridge Holdings, and it gave Vertical the right to rent space on the more than 250 towers that it didn’t sell. Townsquare is sitting on about $579.2 million in debt. With its $111 million in tax-loss carry-forwards “and other tax shields,” it “won’t be a material tax-payer until 2021.” Fourth quarter revenue grew 5.8% to $119.5 million, and net income improved from $2.4 million to $3.2 million. Investors liked the package – “TSQ” stock jumped 14% yesterday, up $1.42 a share to $11.55.
“WAMU in Washington DC was the 800-pound gorilla,” says consultant Gabe Hobbs.
Gabe means “from a pure persons-listening standpoint, with adult 25-54 Average Quarter Hour persons for the January 2016 through December 2016 Nielsen PPM markets. He’s got access to the Nielsen 25-54 stats and presented his third annual “Hobbs Report” on news/talk performance at last week’s Talk Show Boot Camp. If you’re thinking that American U.-owned news/talk WAMU/88.5 is a not-for-profit operation, you’re correct. In fact Gabe concludes that for 2016, “the overwhelming majority of any ‘Trump bump’ went to non-commercial radio.” Here’s his top ten, ranked by 25-54 AQH persons – WAMU (15,800). L.A.’s talk KFI (13,500, owned by iHeart). San Francisco’s not-for-profit news/talk KQED (12,100, Northern CA Public Broadcasting). Atlanta’s talk WSB/WSBB-FM (12,000, Cox). New York’s not-for-profit news/talk WNYC-FM (10,200, NY Public Radio). Chicago’s talk WGN (7,200, Tribune). Houston’s talk KTRH (6,900, iHeart). NYC’s talk WOR (6,500, iHeart). And two not-for-profit news/talkers tied in ninth place at 6,300, Portland, Oregon’s KOPB-FM (Oregon Public Broadcasting) and Boston’s WBUR (Boston U.). More from Gabe’s scan of news/talk across the PPM markets – “Based on average quarter hour growth and cume growth, news/talk radio, particularly commercial news/talk radio, did a better job at getting their existing listeners to use the station more, as opposed to attracting new listeners.” Gabe’s at email@example.com and 859-523-9655.
Communications towers in rural areas between 50 feet and 200 feet tall might be subject to new FAA rules about tower-marking. That’s a consequence of Congress’ “FAA Extension, Safety and Security Act of 2016,” and FCC Commissioner Mike O’Rielly blogs that “If implemented literally, the provision will force expensive retrofits to potentially 50,000 existing towers...including certain broadcast towers. Read Mike O’Rielly’s blog post (“new tower marking provision could use tweaks”) here. Communications attorney David Oxenford has been tracking the law since lasts year, and spotlights something in O’Rielly’s post – that “There appeared to be only two accidents last year involving small planes and a communications tower, and it was unclear in either case whether questions of visibility of the tower contributed to those incidents.” Read Oxenford’s latest comments here.
A future L.A. move-in translator at 98.3 is taken silent, due to interference worries. Saul Levine’s Mt. Wilson FM Broadcasters has a nice situation developing in the medium-term, once it spirits translator K236BK out of Monterey down to Los Angeles. But short-term, the translator’s gone dark because Alfredo Plascencia’s Lazer Licenses has finally succeeded in moving a full-power FM close enough that Levine’s translator would cause interference. Lazer has spent years trying to move KMLY from Carmel Valley/105.9 to new city of license Gonzales/95.1, as a Class A. That frequency is where Levine’s translator has been living, so it’s now signed off, pending a southward move. In Los Angeles, it will materialize as a 250-watt signal at 98.3, paired with Levine’s “Unforgettable 1260” standards-and-more KBOQ – the station formerly known as KMZT.
A friendly audience awaits new FCC Chair Ajit Pai at next month’s NAB Show, where he’ll address a general session on Tuesday, April 25. FCC Chairs traditionally appear at the Las Vegas show – and we’ll see whether Commissioners Mignon Clyburn and Michael O’Rielly also make the trip. Ajit Pai is so familiar with the convention scene that he’s one of the few FCC Commissioners who’s actually moderated (not just spoken at) a panel.
Long Island has its own free newspaper about country, part of JVC Broadcasting’s effort to promote its Suffolk County WJVC Center Moriches, NY, known as “My country 96.1.” JVC Principal John Caracciolo says “at a time when most print publications are struggling, publications that super-serve a loyal core audience are still thriving, and there is no demographic more loyal than the Long Island country music fan.” He’ll publish “This is Country” on a quarterly basis, beginning in mid-April. See what else JVC is doing with “Long Island Country” here.
Just two new-car advertisers in the Top-100 users of national radio. Yes, car-shopping service TrueCar bought 13,582 spots detected last week by the Media Monitors service, to rank at #25. But the first actual automotive advertiser on the list is #42-ranked Ford Lincoln Mercury (8,293 spots). The only other new-car account in the top 100 is #82-ranked Toyota Dealer Association (4,737 spots). The car fix-up/cleanup category still has #7 AutoZone and #26 NAPA. The wireless category’s okay, with #12 Sprint, #16 Boost Mobile, #17 MetroPCS, #19 Cricket and #34 T-Mobile. And two job-hunting sites make the Top-15 ad-users on Media Monitors - #4 Indeed and #15 ZipRecruiter.
iHeart’s “Pride Radio Philly” puts an LGBTQ-oriented format back on an HD Radio channel in Philadelphia. This time they’ll augment the national iHeart Pride Radio service with contributions from local talent like Casey Reed (from CHR “Q102” WIOQ), Muthaknows (from urban “Power 99” WUSL and the cluster’s longtime Director of News and Community Affairs, Loraine Ballard Morrill. Philadelphia Senior VP/Programming Brian Check says the area “has an exciting, passionate and growing LGBQ community, and we hope to amplify their voice” on the service heard on Q102’s HD2 channel.
Portland, Oregon’s “Tailgate Country” is re-targeted to classic country “The Legend.” iHeart’s intention with this HD Radio-fed translator in Fall 2014 was to siphon off a little listening from Entercom’s country “Wolf” KWJJ (ranked third in the January Nielsen PPMs with age 6+ total-week AQH share) and Alpha’s country KUPL, ranked tenth. But commercial-free “Tailgate” never caught on, and tied for 29th place among listed stations. Radio Insight reports the surprise flip to classic country “103.7 the Legend.” The signals are the HD3 feed of iHeart-owned KFBW Vancouver, Washington (105.9) and a translator iHeart’s leasing from “K-Love” and “Air1” parent Educational Media Foundation. That’s K279BO Portland at 103.7, running 99 watts from the high hills west of downtown.
True, Washington DC is blanketed by snow this morning, but it’s still Cherry Blossom time around the Tidal Basin. So iHeart offers a pop-up format named “Cherry Blossom Radio” on a translator/HD Radio combo. They’re feeding iHeart’s recently signed-on W284CQ at 104.7 from the HD2 signal of “DC 101” WWDC, per Radio Insight. iHeart’s kept a rotating menu going on the combo – rebroadcasting CHR “Hot 99.5” WIHT, then running rock and Washington Caps hockey, and now Cherry Blossom Radio, with 1980s music, announcements about the annual Cherry Blossom Festival, plus traffic and weather.
Around Macon, Georgia, there’s the sale of talk “The Patriot” WNNG/99.9 to the not-for-profit Augusta Radio Fellowship Institute. That’s a switch-up in the typical M.O. of the buyer, which does business as the Christian “Good News Network.” In recent years it’s mostly been a seller of translators. But it has extensive interests in the Southeast, and this time it’s buying Class A WNNG, licensed to Unadilla, Georgia. Seller is Georgia Eagle Media, which recently filed to sell classic hits “Qixie 103.9” WQXZ Hawkinsville, Georgia to “K-Love” parent EMF (March 6 NOW). The price for “Patriot” WNNG isn’t exactly straightforward. The sale agreement says “The value of the total consideration shall be not less than $313,000, the purchase price…representing $50,000 for the land, transmitter building and tower, and a charitable contribution in the amount of $263,00 for the station license and miscellaneous equipment.” (Georgia Eagle Media bought then-WQSA Unadilla from Toccoa Falls College a decade ago for $350,000.) Augusta Radio Fellowship Institute, controlled by members of the Barinowski family, has “GNNRadio” network stations like Christian teaching WKTM Soperton, GA/106.1. It also distributes a Spanish-language Christian format under the name “Radio Amistad.”
A Tampa daytime AM that’s changing frequencies and adding a nighttime signal sells for $175,000. That’s silent WTIS, which was previously broadcasting a 10,000-watt daytime signal at 1110. But seller Ron Roseman of WTIS-AM Inc. obtained the construction permit for a 10,000-watt daytime signal at the new frequency of 1100, plus a 150-watt nighttime signal. Also included in the sale is translator W266CW at 101.1, a 250-watter licensed to St. Pete. Buyer is George Arroyo’s Q-Broadcasting Corporation. Arroyo’s other Florida interests include Tampa’s regional Mexican “La Ley 1550” WAMA.
Take 2 on the frequency for Buffalo’s just-sold “Timeless” WECK Cheektowaga – as buyer Buddy Shula (a.k.a. William Ostrander) points out, it’s at 1230, not 1320. NOW Reader Dave Schutz adds that “when I was working in central New York radio, there were numerous stories about WECK, then called WNIA, was haunted.” Haunted or not, WECK and its translator at 102.9 are going to Buddy Shula’s Radio Buffalo for $655,000.
“We caught them red-handed” – This week’s heavy snow forecast across the Midwest and East coast reminds a NOW reader of a snow-closing story – “Over the years, our station had invested a lot in a system where local school superintendents and principals were given a specific number and a code word (which changed every year). For some time, we had suspected that a competitor was stealing our information and using it on their air, because we didn’t think they’d devote the resources necessary to pull it off. So we executed a sting operation. One morning, we planted a phony high school name in a long list of school closings, and sure enough, we monitored the competitor and taped them using it. The kicker is that we used a variant of their station name for the ‘high school,’ and they didn’t catch it. We confronted them with the ripped-off information, and they stopped doing school closings. We still laugh sometimes, about catching them red-handed.” Ready to share your own true radio story, the one that only your friends in the business really get? Email “You Can’t Make This Up” – Tom@RTK-Media.com.
“Sometimes I learn things about my own company from you before I hear it from them,” says one NOW Reader. And thanks to lots of “you didn’t hear this from me” readers who pass on news tips and questions. Just email Tom@RTK-Media.com. Got a product or service to promote to the radio industry? Our Kristy Scott can come up with solutions. She's at Kristy@RTK-media.com or phone 818-591-6815. If you’ll be in Las Vegas for the NAB Show, you can touch bases with her there. See you back first thing tomorrow - Tom