Report from 2010 National Association of Broadcasters convention in Las Vegas:

*While the television and radio industries have a long way to go to return to normalcy, there was certainly a great optimism reining at the convention that had been lacking for a few years.  Most operators are reporting strong second quarters (several double digit revenue growth vs. 2009).  Many industry analysts are revising TV/radio 2010 industry estimates upward from their original estimates done only a few months ago. 

The broadcasters generally recognize that the 2010 growth that will ultimately be achieved (perhaps 5-8%) still does not make up for the very large drops in 2009 and that present valuations are significantly off 2008 levels.  The broadcasters also know well that any recovery is tied directly to continued improvements in the overall economy and the specific regions they happen to own stations.  However, the broadcasters have every right to feel vindication in their present success and the upward movement of advertising pricing in the present market.   After being left for dead with doomsday predictions and public stock valuations (radio industry bellweather and very well-run company Entercom, now at $14.50, traded under $1.00 less than 18 months ago), many inside and outside the broadcasting industries wondered about future relevancy.  With competitive threats being launched and continuing changes in delivery methods of both audio and video, there was doubt among analysts that the broadcasting industries would ever show gains again, even in improved economic conditions.  General consensus from many conversations at NAB: “Neither television nor radio will ever again be a fast-growing industry, but evidence is mounting that the predicted demise was oversold.   During the economic downturn, which continues in many parts of the country, advertisers simply couldn’t afford to advertise and were off the air.  Now they are coming back, …albeit tentatively.  These media still work to move products and remain very relevant, especially in mass campaigns, as advertising itself becomes more fragmented.”

*A big conversation topic at NAB was the Crestview/Cumulus announcement that Crestview was commiting $500 million to back Cumulus management to purchase $1 billion in radio properties.  Not sure why the need to make announcement (as opposed to just executing plan in more stealth-like manner) but nonetheless this is good news for radio and mounting evidence that large equity sees good entry point at present time.  With 2009 fading into rearview mirror, purchase discussions will be based on projected 2010, giving this venture greater chance of finding willing sellers.

*Conversations with bankers present made me believe this necessary component of the deal equation are having real discussions about providing debt to the broadcasting equation.   I was a banker long enough to recognize the difference between bankers at 2009 NAB (”we”re still open for business”) and 2010 NAB (”we’re still open for business”) because there was no twitch when they said it this year.  Seriously, several banks seem to be considering live transactions; this was not the case last year.

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