The Radio Equalizer: Brian Maloney

10 November 2009

Near-Bankruptcy, Broadcaster Faults Loss Of Hannity Revenue


Political Bias Could Lead To Citadel-ABC Radio's Bankruptcy

In a textbook example of the dangers of placing personal politics ahead of good business sense, past mistreatment of a top conservative talker is partly to blame for a major radio operator's impending bankruptcy.

But don't take our word for it: stunningly, Citadel Broadcasting (which absorbed ABC Radio into its operation several years ago) admits the loss of Sean Hannity's syndicated radio show has cost it millions in desperately-needed cash flow at a time when corporate debt and slow ad sales are crippling its operations.

In the same filing with regulators, the company has disclosed that it may file for protection from creditors in January.

Until now, though, Citadel (OTC:CTDB) had avoided mentioning Chapter 11 as a likely scenario.

The company owns major talk stations including WABC/ New York, WLS/Chicago, KGO-KSFO / San Francisco, WBAP Fort Worth-Dallas, WJR/Detroit and WMAL/Washington.

As we'd reported in 2008, a fed-up Hannity dumped the firm's syndication arm, then called ABC Radio Networks, for Clear Channel's Premiere Radio after disturbing incidents behind the scenes, including the refusal of one Citadel exec to board a plane with the longtime conservative talker.

In addition, Citadel took a hit from the passing of Paul Harvey. While that may have been unavoidable, chasing away Hannity was inexcusable.

From RBR:

The big drop came in the radio network business, now called Citadel Media. Net revenues plunged 31.5% to $29.4 million. The loss of Paul Harvey, who died, and Sean Hannity, who took his show elsewhere, accounted for $8 million of the $13.5 million decline. Segment operating income dropped 92.3% to $500K from $6.5 million a year earlier. The drop in revenue was slightly offset by an 18% reduction in costs.

Citadel has been warning of covenant compliance problems ahead since it reworked its credit agreement with its lenders back in late March. Facing a requirement that it have $150 million of available cash as of January 15, 2010, Citadel has admitted in several SEC filings that it does not expect to be able to meet that requirement and will likely face a financial restructuring which would dilute or wipe out the equity of current shareholders.

And according to Inside Music Media, failed CEO Farid Suleman is currently hoping to work out a deal that would keep top management in place post-bankruptcy. Only in radio (or perhaps banking) could the very people who destroyed the firm have a chance at remaining in their jobs.

Citadel's shares are currently trading at six cents on the over-the-counter bulletin board.

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  • "Only in radio (or perhaps banking) could the very people who destroyed the firm have a chance at remaining in their jobs."

    Not so. Also: banking and government.

    By Blogger Doug, at 10 November, 2009 19:16  

  • Haaaah ha!

    /Nelson Muntz

    By Anonymous Anonymous, at 10 November, 2009 22:42  

  • Citadel, broadcasts all conservative degenerates all day 25/7. Hannity probably wanted more $$$ than he was worth so they dropped the hack. Citadel is all RNC radio , all the time. What bias?
    Hannity has crappy numbers, it is amazing he has a radio job. Now his TV show does fine, his radio show is another story

    By Anonymous LongIslandHatesHannity, at 11 November, 2009 13:48  

  • LongIslandHatesHannity: You don't know anything about the subject, apparently you didn't read the article and you are talking out of your azz. Democrat, right?

    By Anonymous Anonymous, at 11 November, 2009 14:46  

  • LongIslandHatesHannity hates him so much that having almost 14,000,000 listeners, second only to Rush Limbaugh and far ahead of the rest of the gabbers, means he has "crappy numbers."

    Every liberal talker would love to have half of those numbers. Ain't self-delusion grand?

    By Anonymous Vladtheimp, at 11 November, 2009 16:23  

  • Re Long Island Hates Hannity;
    If you did some research a$$hat, you'd find Sean Hannity's radio ratings are second only to Rush Limbaugh's. Also, Citadel/ABC boadcast conservative talkers ONLY because liberals like yourself don't support your fellow liberal talk show hosts with numbers even remotely close to those of Sean Hannity. Why broadcast programs no one listens to. Airhead America proves liberals don't like talk radio period, regardless whether it is liberal or conservative. Get a clue nitwit.

    By Anonymous LIBSTOMPER, at 11 November, 2009 19:17  

  • he wouldnt get on the same plane as Hannity? what a jealous little man. Libs are so predictable.

    By Anonymous Anonymous, at 11 November, 2009 22:24  

  • Isn't it weird how the libturds will listen to the degenerates over at MSNBC all day long. Of course their numbers are dwindling.

    They just can't allow others to speak, it's the Marxist in them.

    By Anonymous Anonymous, at 15 November, 2009 10:01  

  • Hannity's numbrs in most markets SUCK, bottom line. 1 shares and .7 shares are not impressive, 14 million listeners on what 600 stations?

    give me a break

    Nope, not a Democrat, economic socialist, social moderate

    By Anonymous LI hates Hannity, at 17 November, 2009 16:02  

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