Wednesday, January 1, 2020

Dialed In..With David Field, Entercom CEO

Conference Room at the new headquarters of Entercom Communications in Philadelphia
Entercom CEO David Field sat down recently with Jeff Blumenthal of  the Philadelphia Business Journal for an interview.  It was  a day after the second anniversary of the CBS deal and he  discussed how the company has dealt with the speed bumps of the past few years and its plans for the future.

The past few years have been somewhat rocky for Entercom, which has seen its stock price fall from $13.99 a share the day the merger was announced to less than $5 a share, as Wall Street has been underwhelmed by some disappointing quarterly performances and the amount of debt the company had to raise to close the CBS deal. There was also the collapse of the traffic partner it inherited from CBS, United States Traffic Network. And in September, Entercom’s entire computer network suffered severe damage in a ransomware attack.

After a strong third quarter, though, Entercom believes it has turned a corner, with the thorniest integration issues in the rear view mirror, new investments in podcasting, its app and more than 40 sports talk stations across the country.

On whether the CBS Radio integration was more difficult than projected

David Field
Nothing that was more difficult. Things are growing nicely. If you look at our latest quarter, revenues were up 2%, but really 3% [not including political advertising], which is really the apples to apples measurement ... If you look at the past year, our revenues are up 3% from the past 12 month period. Earnings are up over 40%. What surprised us was that right out of the gate, is the challenge of one of our largest partners [United States Traffic Network] going belly up on us just before our first earnings call as a merged company. And that of course put a $50 million hole in our income statement but also created a bad surprise for investors at the worst possible time. That was, of course, not a great way to get rolling. But like any organization or any person, you dust yourself off, you pick yourself up and you move ahead.

On where he sees Entercom in two years

I think we will see nice growth going forward in our business. We want to continue to build on the outstanding content we have and continue to enhance the experiences our listeners have in accessing our product. We would like to have not just the best local personalities but also the best podcasts and an outstanding user experience on And you put that together with our events and our other products, and we are able to use that to not only become an important part in hundreds of millions of American lives but also to drive consistently solid growth across the organization, and build and innovate and do exciting things. And frankly, having fun is an important part of it.

On whether the company is making money from podcasting

Podcasting, with the combination of Cadence13 and Pineapple Street Studios, we now have a business that is representing 150 million downloads a month. It includes some of the best and highest-rated podcasts in the country. The marketplace is now a $600 million market. And the estimates are that it will be a $1 billion market by the end of 2020 or in 2021. And we will have a nice chunk of that. We announced that the businesses we purchased are now doing $48 million to $50 million a year in sales. But that market is growing by a 25% rate. Those are public analyst estimates. So we feel we’ll be able to grow nicely as we continue to build on that business. What’s really nice is how it works symbiotically with our core business. Pineapple Street and Cadence have done great work. But they have not had the benefit of a discovery platform that we have. So when you think about the crowded world of podcasting today and how you get new podcasts discovered, how do you build audiences. And there’s no better place to build audiences than broadcast radio.

On whether podcasting cannibalizes listenership at radio stations

There’s not much. What we have found is that most podcasting is incremental. For example, if people are working out, they might have been listening to their personal music collection. And now they are listening to a podcast. Of course, there’s probably some cannibalization. But we think the bulk of it is going to come from personal music collections or from time that was not being spent listening to audio in the past.

On the future of terrestrial radio with the growth of other technologies

We think it’s a real opportunity for us. Think about the world was like three or four years ago. If you missed the Doug Peterson interview, you missed it and you never get to listen to it. Today, as a subscriber, you would get a push notification coming down to alert you that Doug Peterson is about to come on the air. So if you are like many, you would say thank you, you click on and you listen. But it turns out you’re busy with a conversation with me or someone else and you can’t listen. So you go back. Or maybe you listen to one of the podcasts you have. Or maybe you go back and rewind and listen to the show.

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