Entercom Reports 3 Percent Revenue Gain

Entercom Communications Corp. has reported 3 percent revenue gains in the first quarter and a small profit.

CEO David Field said that the local advertising market for radio remains weak but that national advertisers have boosted radio budgets. The best first-quarter markets were New York, Houston, Atlanta, Denver, Sacramento and Washington, D.C.

Entercom, the nation’s No. 2 radio group, is seeking to diversify its revenues base through podcasting, the radio.com digital app, and a national network that stitches together more than 200 Entercom-owned radio stations. About 45 percent of Entercom’s advertising revenue is generated through news, sports or talk stations.

According to philly.com, legalized sports gambling is a big potential growth opportunity for all-sports radio station advertising and eventually could bring in an additional $100 million a year in new advertising, Field said.

Eight states have approved sports wagering and 30 states are looking at legalizing sport wagering, according to an analyst on the Entercom conference call on Tuesday.

Entercom’s battered stock closed up 1.78 percent, or $0.12 cents, to $6.88 a share. It is up from $5.24 on March 28. But the company’s stock has not fully recovered from the company’s decision in 2017 to acquire the CBS Radio empire, which included Philadelphia stations.

David Field

“We have a strong conviction that our stock is undervalued,” Field said in response to an analyst’s question.

Entercom executives estimated that they would have more than 4 percent revenue growth in the second quarter, with about 80 percent of this advertising booked.

Field said that “we believe we are on track for a strong year of growth.”

First-quarter Entercom revenues were $309 million compared with $300.6 million in the year-ago period. Net income was $3.1 million, a turnaround from the $13.9 million loss of a year ago.

In February, the Company announced a definitive agreement to acquire NASH FM 94.7 in New York City, and two stations in Springfield, MA from Cumulus Media Inc. in exchange for Entercom’s three-station cluster in Indianapolis. The transaction is immediately accretive to Entercom. Entercom and Cumulus began programming the respective stations being acquired under Local Marketing Agreements on March 1, 2019. The exchange transaction is expected to close in the second quarter of 2019.

During the first quarter, the Company completed the sale of surplus land, buildings and towers to a third party for $25 million in cash and used this cash and cash on hand to fully pay off the $180 million outstanding balance on its revolving credit facility.