As the nation’s largest radio station owner, Clear Channel Radio, reported a substantial increase in ad sales in December and January on Friday, Citadel Broadcasting Corp., the No. 3 radio group, filed for bankruptcy protection.
“Together with some positive macroeconomic indicators and glimmers of a turnaround in magazine ad sales, the radio rebound holds out hope for a broader media recovery in the New Year,” Media Daily News said Friday in its Clear Channel report.
“‘The ongoing weakness in the economy and advertising spending, compounded by rising debt and leverage’ have left Citadel with an ‘unsustainable capital structure,’ Neil Begley, an analyst at Moody’s Investors Service, said December 11 in a report,” according to Bloomberg.
“Sales ‘will continue to decline’ this quarter, Citadel said in a November 6 filing with the U.S. Securities and Exchange Commission,” Bloomberg continues. “The company didn’t expect to meet January financial covenants, leading to a default and possibly forcing a bankruptcy filing, Citadel said at the time.”
At Clear Channel, “national spot ad sales increased 13.2 percent in December compared to last year; January 2010 is on track to deliver a 17.4 percent increase over January 2009’s dismal results.”
According to Bloomberg: “Citadel owns and operates 224 radio stations and produces programming for more than 4,000 affiliates. It is the third-largest U.S. radio company broadcasting from land-based antennas, behind Clear Channel and CBS Corp. Sirius XM Radio Inc., which charges subscribers for programming transmitted by satellites, is the second-largest radio broadcaster by revenue.”