Digital, Political Spur 9% Revenue Growth At Urban One In Q3.
With strong fourth quarter pacings capping off what has already been a robust year for the company, Urban One has raised its full year 2022 earnings guidance to about $165 million or what CEO Alfred Liggins called “the mid-160s” from its earlier forecast for $145-$150 million in 2022 earnings.
The company is coming off a strong upfront for its TV One cable television unit. And with campaigns and political groups targeting African-American voters, “our radio business, including political is going very well into Q4,” an upbeat sounding Liggins told analysts during its quarterly earnings call Thursday.
Fourth quarter radio division revenue is pacing up 26.5% including political and up 10.9% without it. “Our radio pacings are doing better than many of our other brethren and I think that we owe that to continued demand for our target audience and the move towards more diversity and inclusion in the advertising sector,” Liggins said. Decades of building a media company focused on super-serving the nation’s Black population is “proving to be very fruitful during this time period,” he said.
Urban One is also benefiting from “very robust growth” in its digital segment, where revenue surged 40% year-over-year and that trajectory is continuing in Q4.
Total company revenue and earnings grew year-over-year and were “significantly above pre-pandemic levels,” CFO Peter Thompson said. Net revenues for the radio segment were up 4.8% and grew 1.4% on a same station basis. Urban One bought three FMs and two translators in Indianapolis from Emmis Communication on Sept. 1. After spinning off one FM, it now owns six FMs in Indy.
Local radio ad sales were down 1.7% against a market that declined 2.1%, according to Miller Kaplan. Bucking the trend of depressed national revenue, Thompson said its national ad sales shot up 19.7% against a market that was up 0.8%.
“In the face of increasing headwinds, we thought this was a very, very solid performance,” Liggins said.
Political delivered a total $2.7 million bounty in Q3, of which $1.8 million went to its radio division. That made Government/Public Urban One’s biggest radio ad category for the quarter, up 6.7% year-over-year. Healthcare grew 35.5%. In a surprising turnaround, auto shot up 57.3%, although that was from depressed Q3 2021 levels. Telecom grew 14.5%. Services, entertainment, retail, financial, food and beverage and travel and transportation all declined during the quarter.
How big will political be for Urban One this year? The company has $5.6 million on the books so far for fourth quarter, bringing the annual total to $9.5 million. That’s 44% higher than the $6.6 million it did in 2018.
The company’s chances of winning approval to build a casino in Richmond are now at the mercy of which way the political winds blow. “It will be a battle in the upcoming General Assembly session, starting in January,” Liggins said. The session will determine whether the casino opportunity stays in Richmond, where Urban One was earlier chosen as the developer. Or if it moves to Petersburg, VA which has been working with the Cordish Companies, which already operates casinos under the Live! brand and was the runner-up to Urban One for the Richmond casino. “The legislature is tricky, and it will be highly political,” Liggins predicted. “I don't really have a good answer as to ultimately what happens.”
Urban One’s revenues grew 8.9% to $121.4 million in the third quarter from $111.5 million one year ago, driven by massive digital growth and nearly $3 million in political ad revenue.
Total operating expenses jumped by nearly one third to $102,429 million from $76,988. Adjusted earnings at the African American-owned and targeted media company grew 3.8 % to $44.3 million from $42.7 million in the comparable 2021 period.