Wash Post: Losses And Static At Radio One
May 9, 2008 at 5:43 AM (PT)
RADIO ONE yesterday said it lost $18.3 million in the first three months of the year, as a slump in national advertising sales overshadowed company efforts to revamp operations and hire on-air talent (NET NEWS 5/8). THE WASHINGTON POST reports the company's struggles have led it in recent months to sell stations in markets around the country, change programming, and invest in Internet offerings.
Still, its stock has fallen below $1 to its lowest levels since RADIO ONE went public nine years ago. Shares closed at 86 cents yesterday. "Our stocks have been crushed," CEO ALFRED C. LIGGINS III acknowledged in a conference call with investors. "Since we happened to be, my family, the largest shareholder, when the stock is below $1, it's very painful."
We need to have houses, we need to take care of our family members, and we need to get some liquidity in order to do things.
The company sought to explain why LIGGINS and his mother, RADIO ONE founder CATHY HUGHES, sold shares in APRIL. LIGGINS said the sales were required to satisfy a forward sale of stock for about $7 a share two years ago.
"Ms. HUGHES and I want to affirmatively allay any fears that we were selling into the stock's current weakness," LIGGINS said in a statement. "We want to assure all of our security holders that we stand firmly committed to RADIO ONE and these transactions were isolated sales triggered solely by historical events."
In the call, an analyst asked whether the company would follow through with a $150 million stock buyback program it had announced earlier this year. "We fully intend to buy back stock," LIGGINS said. Analysts also asked about a new compensation package that will give LIGGINS $1 million for having been underpaid for the past three years as well as a 70% raise that will bring his salary to $980,000 and the opportunity to match that in an annual bonus. HUGHES will receive a 75% salary increase, bringing her pay to $750,000 a year.
In the call, LIGGINS defended his decision to sell stock and alluded to the concern over the compensation packages.
"There's never been any dividends paid, we've never taken out huge sums in terms of current compensation and me and my mother . . . need to live," he said. "We need to have houses, we need to take care of our family members, and we need to get some liquidity in order to do things."