L.A. Broadcasters Setting Dials for Growth Above Billion-Dollar Mark
By PAT MAIO
Staff Reporter
Coming off a record-breaking revenue year, early strength in 2004 has operators of radio stations in the Los Angeles-area projecting another strong year.
The L.A. market last year became the first to eclipse the $1 billion revenue mark, and the Southern California Broadcasters Association is forecasting revenues in 2004 would be as much as 7 percent higher than 2003’s $1.04 billion.
“The market in Los Angeles is up slightly for the first two months of the year, but not quite at the pace of last year,” said George Nadel Rivin, partner in charge of broadcast services at accounting firm Miller Kaplan Arase & Co. in North Hollywood.
The market started last year at a torrid 13 percent rate of increase over the year earlier, he said, noting: “It is not as hot of a growth rate this year as last year. It’s difficult to sustain double-digit growth.”
Mary Beth Garber, president of the association, added: “We think the market will be up 6 percent to 7 percent.” Garber said early indications show that money booked for March ad purchases could actually fall above that range.
Donna Grigsby, director of research for BIA Financial Network Inc. in Chantilly, Va., estimated that radio revenue growth in 2004 will fall in the 6 percent range, and she sees 5 percent growth annually through 2008. Grigsby said the overall radio market would be aided by ad spending associated with the November presidential election.
Charlie Rahilly, a senior vice president in charge of Western operations for Clear Channel Communications Inc., declined to comment on specific ad revenue projections, but noted that Clear Channel’s eight stations in the L.A. market appear to be falling in a 3 percent to 5 percent growth range in the first quarter, compared with the year-earlier period.
“It’s tough to extrapolate anything for 60- to 90-days in the future. But we are clearly close to an economic recovery. Instead of stumbling along, people are committing more in advance,” he observed. “We saw some of the same signs last year.”
Besides political ads, Rahilly said he expected revenue gains from the telecommunications and automotive sectors.
Karl Alonso Meyer, general manager for six stations in Santa Monica-based Entravision Communications Corp.’s Los Angeles radio cluster, including KLYY-FM (107.1), KSSE-FM (97.5), said he sees growth ahead with “very few exceptions.”
He points out that an ad revenue gap continues to exist between what Spanish-language radio networks receive and what general, or English-speaking, radio stations receive for similar advertising. “The next surge will be to close that gap,” but it won’t be an overnight process, he said.
Last year’s gains came as stations were able to command higher ad rates, a result of longer commutes that had listeners at the expense of other media, such as newspapers and television. Few outlets put more ads on the air. That trend is not seen abating.
The revenue increases last year was seen in all formats and station sizes not just major station groups.
