Greenwich firm covets iHeart, Cumulus stations
Even as Townsquare Media absorbed a loss for 2017, an executive said Tuesday the Greenwich-based firm has the resources to buy additional radio stations should any be freed up as a result of the financial struggles of two industry giants.
Townsquare lost $27.1 million in the fourth quarter, wiping out profits from 2016 that had been bolstered in part by election-year advertising on its stations.
Regardless, shares of Townsquare jumped 7 percent Tuesday after the company revealed plans to pay a quarterly dividend starting this May at 7.5 cents a share, with the issue losing some of that ground Wednesday to trade at about $7.80 a share.
Townsquare operates nearly 320 radio stations in 67 markets, including the Danbury-area stations WDBY 105.5 and WRKI 95.1 on the FM dial and WINE 940-AM. It was ranked the seventh largest radio station operator as of 2016 by the industry publication IndustryRadio, with two of the largest combining in November after Entercom Communications took over CBS Radio.
In a Tuesday conference call with investment analysts, Townsquare co-CEO Bill Wilson said the company is keeping its options open should radio stations nationally be put up for sale by bankrupt Cumulus Media; by iHeartRadio, which has been racing the clock this week to find ways to reduce $20 billion in debt; or other owners.
In February, Townsquare committed $4 million to acquire a Utica, N.Y., classic rock station, with the company listing cash and liquid assets of $138 million as of December, and $675 million in long-term debt and other liabilities.
“As it relates to iHeart (and) Cumulus — yes, our hope is that the processes that are ongoing there will result in asset sales,” Wilson said Tuesday. “Obviously, those two companies have been largely on lockdown from an asset-sale perspective given their leverage over the last several years, so we think there will be opportunities. We are pretty familiar with the market list and the assets that those two companies and have a sense for which markets would be attractive for us inside of those companies, ... and hopeful that we will have an opportunity.”
Townsquare revenue was off 4 percent in the fourth quarter from a year earlier to $114 million, with revenue down 2 percent for all of 2017 to $507 million. Despite a $13 million benefit for income taxes, Townsquare reported a $10.3 million loss for the year after booking $23.3 million in profits in 2016.
In the last non-presidential election year in 2014, Townsquare generated $8 million in revenue from political ads on its radio station, with an executive stating Tuesday it is difficult for the company to predict what 2018 will bring.
Townsquare employed 2,900 people as of December, 50 fewer than a year ago excluding another 900 seasonal workers it hires for some 550 events it produces each year that bring in 18 million attendees, to include concerts, fairs and beer festivals.
“On the entertainment side, we have made reductions in staffing and ... overhead,” said Dhruv Prasad, co-CEO of Townsquare alongside Wilson, speaking Tuesday. “On the local marketing solutions side, we are investing in sales people and service people across the business in our local markets, so on a net basis we would expect the headcount to increase.”
Alex.Soule@scni.com; 203-842-2545; @casoulman