The Radio Equalizer: Brian Maloney

30 January 2008

Citadel- ABC Radio Shares Again Plunge


Darker Clouds Form Over Citadel- ABC Radio

How much longer can the owner of the nation's largest news- talk stations survive? After another mysterious share plunge today, even darker clouds have formed ABC Radio owner Citadel Communications.

During a relatively modest overall market pullback following Fed Chairman Ben Bernanke's wise decision to cut interest rates by a full 50 basis points, Citadel shares suddenly tumbled, closing down over 13% for the day.

With the 22 cent drop, CDL now trades for a mere $1.45, its lowest price ever. When we last wrote about Citadel's troubles in December, it was trying to bottom out near $2, but that proved only a temporary floor.

While there's no known trigger for today's big move, it isn't the week's only mystery involving Citadel: two days earlier, Chief Financial Officer Robert Freedline suddenly resigned, with no reason given by the company. It's not unusual for a CFO to make the first jump off of a sinking ship.

For news- talk radio, the ramifications are enormous: Citadel owns our medium's largest stations, all in major markets such as New York, Los Angeles and Chicago. A major financial meltdown could greatly damage an otherwise successful format.

Even more peculiar has been the company's slow pace in making expected job cuts and converting local morning shows into "Imus In The Morning" franchises, which the firm previously said it intended to do. All of that was expected to occur before the end of January, but there's no sign yet of a major realignment.

Even if a potentially bankrupt Citadel were to put its stations up for sale, the market is already flooded with unwanted land- based radio outlets and the ability to attract buyers at a decent price would be questionable.

Let's hope Citadel's coming downfall doesn't severely damage the news- talk format along the way.

FOR New England regional talk radio updates, see our other site.

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CDL chart: AOL Finance


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