BIA Financial Expects Losses Of 7%

2009 Forcast Grim

By the end of 2008 the radio industry will have experienced its second year of negative growth, with station revenue losses tripling to -7%, according to the estimates of BIA ADVISORY SERVICES. BIA's fourth edition of the quarterly "Investing In Radio Market Report" also reports that 641 stations have been sold in transactions valued at $698 million from JANUARY through OCTOBER 2008, a -34% change from the same period in 2007 in the number of stations sold and a -44% in the value. When the year ends, this will be the lowest level since 1992.

Last year's period of strategic acquisitions may have led to this year's shutdown of any significant transactional activity.

BIA estimates radio station revenues will hit $16.7 billion in 2008, the lowest in more than five years and the beginning of a downward spiral that will go as low as $15 billion next year before possibly rebounding in the next decade.

"The already low forecasts for growth in radio coupled with a generally dismal economic climate have also placed a particular strain on the valuations radio stations need to maintain their financing or to be sold," said BIA ADVISORY SERVICES VP MARK R. FRATRIK, Ph.D. "The waters are very rough right now, but the general profitability of radio keeps us optimistic that the industry will weather the storm providing it strategically invests in its online presence, which will prove to be its rescue as ad budgets continue to shift to more measurable online media."

"Last year's period of strategic acquisitions may have led to this year's shutdown of any significant transactional activity," added FRATRICK. "There exists a wait-and-see perspective from sellers and buyers simply because of current station valuations and the hope that things won't get worse."

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